Nippon Shinyaku Co., Ltd. · TSE:4516
Nippon Shinyaku — Investor Presentation (May 2024)
87 slides from Nippon Shinyaku's investor presentation, May 28, 2024
Slide 1: The 7th Five-Year Medium-Term Management Plan (FY2024 - FY2028)
The 7th Five-Year Medium-Term Management Plan (FY2024 - FY2028) -For Global Growth Beyond the Cliff- May 28, 2024 Nippon Shinyaku Co., LTD. Toru Nakai Representative Director, President
Slide 2: Agenda
Agenda 2 • Review of the 6th Five-Year Medium-Term Management Plan • Corporate Philosophy and Vision for 2035 • The 7th Five-Year Medium-Term Management Plan
Slide 3: Review of the 6th Five-Year Medium-Term Management Plan
3 Review of the 6th Five-Year Medium-Term Management Plan
Slide 4: Six Actions
The 6th Five-Year Medium-Term Management Plan 4 As "a company playing a meaningful role in the global healthcare sector“, we took on the challenge of six actions to enhance our presence in the society. Creation of new value through R&D (Pharmaceuticals) Launch at least one new product per year on av
Slide 5: Products Planned to Be Launched During the 6th Medium-Term Management Plan
Products Planned to Be Launched During the 6th Medium-Term Management Plan 5 Products planned to be launched by FY2023 In-licensing In-house NS-065/NCNP-01 NS-089/NCNP-02 NS-018 DMD Viltepso DMD myelofibrosis domestic and overseas domestic and overseas overseas NS-73 Defitelio domestic NS-73 domesti
Slide 6: Major Management Issues
Major Management Issues 6 ❶Speed and success probability ❷R&D speed for new modalities in clinical development • Delay of start of the studies for NS-089/NCNP- • The length of time for development of next- 02 and NS-050/NCNP-03 generation nucleic acid drugs and gene • Prolonged clinical trials and t
Slide 7: Targets of the 6th Medium-Term Management Plan
Targets of the 6th Medium-Term Management Plan 7 Among FY2023 targets in the plan, we have achieved functional food segment revenue an company ROE. Target in FY2023 Results in FY2023 Revenue 150 billion yen 148.2 billion yen Pharmaceuticals 133 billion yen 125.1 billion yen Functional Food 17 billio
Slide 8: Summary of Review of the 6th Medium-Term Management Plan
Summary of Review of the 6th Medium-Term Management Plan 8 In the 6th Medium-Term Management Plan, we established a foundation for global expansion through working on our own marketing in the U.S. and China, and achieved growth with record high revenue and respective profits. Operating profit and pr
Slide 9: Corporate Philosophy and Vision for 2035
9 Corporate Philosophy and Vision for 2035
Slide 10: Environmental Recognition
Environmental Recognition 10 External environment Internal environment <Global> <Nippon Shinyaku> • Population growth • Management issues from The • Advancement of R&D <Japan> 6th Medium-Term • Development of AI and • Declining birthrate and aging Management Plan digital technology population • Uptr
Slide 11: Vision for 2035
Vision for 2035 11 A global healthcare company from Kyoto creating various types of new ways of life for each person around the world Today, when the environment is changing rapidly and the future is uncertain, what is needed is a discovery for a new form of happiness and a new way of life. Nippon S
Slide 12: Realization of Management Philosophy and Vision for 2035
Realization of Management Philosophy and Vision for 2035 12 In two business segments of pharmaceuticals and functional food, we will differentiate ourselves from competitors and achieve continuous new product launches globally. Through these initiatives, we aim to resolve issues of materiality and a
Slide 13: Toward the Realization Vision for 2035
Toward the Realization Vision for 2035 13 Toward realizing Vision for 2035, we aim to resolve issues of materiality by integrating management policy and sustainability policy in our operations. Management Policy Materiality Basic Policies to achieve Vision for 2035 ①Realizing a healthy future a • Su
Slide 14: Overview of Management
Overview of Management 14 Management Philosophy Values and decision criteria for our business Helping People Lead Healthier, Happier Lives Slogan A catchy phrase for the management philosophy A new way of life A shareable vision of how to provide our value to society over a specific long-term period
Slide 15: The 7th Five-Year Medium-Term Management Plan
15 The 7th Five-Year Medium-Term Management Plan -For Global Growth Beyond the Cliff-
Slide 16: Positioning of the 7th Medium-Term Management Plan
Positioning of the 7th Medium-Term Management Plan 16 During the 7th Medium-Term Management Plan, 2035 we willSeventh The grow sustainably with overcoming Medium-Term Management Uptravi’s Plan patent cliff as well as strengthen is the foundation for providing Overcomingour products and services the
Slide 17: Establishing a Foundation for Growth Overcoming the Patent Cliff
Establishing a Foundation for Growth Overcoming the Patent Cliff 17 The patent of Uptravi, which has supported Nippon Shinyaku‘s growth, will expire in FY2027, and royalty revenue, which accounts for the majority of revenues from the licensing of industrial property rights, are expected to decline s
Slide 18: Establishing a foundation for growth overcoming the patent cliff
Establishing a foundation for growth overcoming the patent cliff 18 We plan to achieve revenues of 300 billion yen in FY2030 by promoting investment in R&D pipeline, in-licensed products, M&A, etc. during the 7th Medium-Term Management Plan period. ＜ Image of revenue development ＞ To be a company wi
Slide 19: Overview of the 7th Medium-Term Management Plan
Overview of the 7th Medium-Term Management Plan 19 During the 7th Medium-Term Management Plan, we will promote "three key themes and strengthening five management foundations" to realize Vision for 2035. In each of the Pharmaceuticals and Functional Food segments, we will thoroughly allocate managem
Slide 20: Our Business Strategies
20 Our Business Strategies
Slide 21: Business Strategy for Pharmaceutical Segment
Business Strategy for Pharmaceutical Segment 21 Launching an average of two or more new products per year Business through the three pillars of in-house drug discovery, in-licensing, Strategy and PLCM, prioritizing response to the patent cliff. ■In-house drug Focusing on nucleic acid and small molec
Slide 22: Business Strategy for Functional Food Segment
Business Strategy for Functional Food Segment 22 Transition to a stable highly profitable structure by providing Business high quality, unique and high value-added materials and Strategy final products. Focus on preservatives, for which demand is expected to increase due to ■B to B Business the focu
Slide 23: Three Key Themes
23 Three Key Themes
Slide 24: Three Key Themes
Three Key Themes 24 I. Fostering growth drivers to replace Uptravi As growth drivers during the 7th Medium-Term Management Plan, we will launch various DMD products globally (CAP-1002, NS-089/NCNP-02, NS-050/NCNP-03, NS- 051/NCNP-04), new hematologic cancer products in Japan (Vyxeos, pirtobrutinib,
Slide 25: Key Theme I: Fostering Growth Drivers to Replace Uptravi
Key Theme I : Fostering Growth Drivers to Replace Uptravi 25 As growth drivers during the 7th Medium-Term Management Plan, we will launch new products in the DMD group, the hematology group, and the PLCM group. DMD Hematology PLCM CAP-1002 : P3 in progress Vyxeos : Launch Uptravi : Under application
Slide 26: Key Theme I: Target for Launching New Products
Key Theme I : Fostering Growth Drivers to Replace Uptravi 26 Within the period of this plan, we plan to launch an average of at least two new products per year. We aim to acquire at least one in-licensed product each year. We will conduct an additional P3 study of Viltepso and aim to launch it in Eu
Slide 27: Key Theme I: Domestic Sales Strategy
Key Theme I : Fostering Growth Drivers to Replace Uptravi 27 Domestic Sales Strategy - Establish an organization that can act quickly and efficiently to achieve market penetration of a wide range of products. - The areas of greatest focus are hematology, pulmonary hypertension, and pediatric neurolo
Slide 28: Key Theme I: Global revenue of three focus areas in FY2028
Key Theme I : Fostering Growth Drivers to Replace Uptravi 28 Global revenue of three focus areas in FY2028⇒ Aiming for over 130 billion yen Image of sales growth during the 7th Medium-Term Management Plan Revenue (billions of yen) 130 Pediatric Neurology 60 Pulmonary Hypertension (excluding Uptravi
Slide 29: Key Theme II: Growth Strategies for Overseas Subsidiaries
Key Theme II : Expanding Global Development 29 Growth Strategies for Overseas Subsidiaries U.S. subsidiary (NS Pharma, Inc.) In addition to Viltepso, other DMD investigational drugs (CAP-1002, NS- 089/NCNP-02, NS-050/NCNP-03, NS-051/NCNP-04) to be launched • Increase sales quickly, marketing efficie
Slide 30: Key Theme II: Expanding Global Development
Key Theme II : Expanding Global Development 30 Further global expansion, establishment of optimal supply chain Promote global expansion by in-house sales, alliances, and M&A in order to provide Viltepso and other development products in the pipeline to patients around the world. In the U.S. and
Slide 31: Key Theme III: Continuous Pipeline Expansion
Key Theme III : Continuous Pipeline Expansion 31 Licensing in products in the clinical stage and strengthen in-house drug discovery by leveraging open innovation and AI drug discovery system to continuously expand the pipeline. In-house drug discovery ・Promotion of nucleic acid drug discovery DMD In
Slide 32: Promotion of Nucleic Acid Drug Discovery
Key Theme III : Continuous Pipeline Expansion 32 Promotion of Nucleic Acid Drug Discovery Nucleic acid drugs act on genetic information ・ Able to act on previously unapproachable targets ・ Enables treatment of the root cause Work on development of nucleic acid drugs for disease of the central nerv
Slide 33: Strengthening Five Management Foundations
33 Strengthening Five Management Foundations
Slide 34: Promoting Sustainability Management for Realizing a Sustainable Society
①Promoting Sustainability Management for Realizing a Sustainable Society 34 To realize a sustainable society, we will engage in activities to resolve our five materialities. A new department dedicated to investor relations was established to strengthen information disclosure. With promoting initiati
Slide 35: Speeding Up R&D: Drug Discovery Research
② Speeding Up R&D 35 Increase efficiency and speed of drug discovery research Establish a system to launch one in-house product per year Resource allocation and project prioritization to determine which and how much of the limited resources will be invested in which areas. ・Achieve a balanced R&D
Slide 36: Speeding Up R&D: Clinical Development
② Speeding Up R&D 36 Speed up clinical development by flexibly changing the global development system according to the pipeline, strengthening the response to regulatory authorities in each country, accelerating the timing of investment with an eye to the next phase, and creating robust study plans
Slide 37: Promoting Human Capital Management
③ Promoting Human Capital Management that Allows Each Employee to Grow and Diverse Human Resources to Play an Active Role 37 Maximizing individual potential without increasing the number of domestic human resources, we will become a small but unique team. • Acquisition and development of human resou
Slide 38: Business Process Reengineering and Productivity Improvement by Digitalization
④Business Process Reengineering and Productivity Improvement by Promoting Digitalization 38 Since digital technology is advancing rapidly, we will invest in digital systems and human resource development to take advantage of it proactively. We will take data-driven responses quickly to issues from R
Slide 39: Financial Strategy for Sustainable Growth
⑤Financial Strategy for Sustainable Growth 39 Develop a capital allocation and make strategic investments necessary for sustainable growth while ensuring financial soundness. cash resource allocation R&D expenses Active investment to promote Investment for growth global development 5-year operating
Slide 40: Management Targets
40 Management Targets
Slide 41: Targets in FY2028
Targets in FY2028 41 We will achieve our targets by strategically investing our management resources to strengthen our three key themes and five management foundations. To lay the foundation for a company with sales of 300 billion yen in FY2030, and beyond that, a company with sales of 500 billion y
Slide 42: Shareholder Returns
42 Shareholder Returns
Slide 43: Shareholder Returns Policy
Shareholder Returns Policy 43 The Company‘s policy is to maintain stable dividends while taking into consideration the dividend on equity ratio（DOE）. Dividend Payout Ratio and Dividend per Share DOE and Shareholders' Equity 200 40 4.3 4.4 34.3 33.7 4.1 4.1 Dividend 34.1 4.0 180 32.2 32.2 32.3 35 pay
Slide 44: Toward a society where good health is enjoyed by everyone around the world
Toward a society where good health is enjoyed by everyone around the world
Slide 45: Safe Harbor Statement
Safe Harbor Statement • Materials and information provided during this presentation may contain so-called “forward-looking statements.” These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties which could cause actual outcomes and resu
Slide 46: 7th Five-Year Medium-Term Management Plan Meeting
Nippon Shinyaku Co., Ltd. 7th Five-Year Medium-Term Management Plan Meeting May 28, 2024
Slide 47: Presentation transcript: introduction
Presentation Nakai: I am Toru Nakai, President of Nippon Shinyaku, Co., Ltd. Thank you very much for taking time out of your busy schedule to participate in our 7th Five-Year Medium- Term Management Plan Meeting. I appreciate it very much. I will now give an overview of our 7th Five-year Medium-Term
Slide 48: Transcript: review of the 6th plan
To begin, I would like to review our 6th Five-Year Medium-Term Management Plan, which began in April 2019 and ended in March of this year. In the 6th Five-Year Medium-Term Management Plan, we have taken on the challenge of the six initiatives shown here with the aim of enhancing our significance in
Slide 49: Transcript: products planned for launch
This slide shows the items planned for launch at the time of disclosure of the 6th Medium-Term Management Plan and the status of achievement for each item. By launching Viltepso, Defitelio, Monover, and Fintepla, as well as expanding the indications for Uptravi and Vidaza to a total of six new produ
Slide 50: Transcript: management issues
We believe that the 6th Medium-Term Management Plan clarified issues such as "speed and probability of success in clinical development, speed of R&D for new modalities, and overseas sales capabilities," and we will work to resolve these management issues in the 7th Medium-Term Management Plan.
Slide 51: Transcript: quantitative plan results
Regarding the quantitative plan, the functional foods segment and ROE achieved their targets. On the other hand, in the pharmaceuticals segment, royalty income from Uptravi exceeded the plan, partly due to the weak yen, but fell short of the plan due to the implementation of the annual revision of N
Slide 52: Transcript: summary of the 6th plan
Although we did not reach the quantitative targets of the medium-term management plan, we believe that we were able to achieve sustainable growth, with record-high sales and respective profits in the final year of the plan, by achieving the establishment of a foundation for global expansion, includi
Slide 53: Transcript: business environment
We believe that the business environment surrounding our Company will continue to change drastically in the future: on a global scale, with the advancement of R&D, the development of AI/digital technology, and the diversification of values; and in Japan, with the low birthrate, aging and declining p
Slide 54: Transcript: two businesses and materiality
In order to contribute to people's "to live," we will continue to work on two businesses: pharmaceuticals and functional foods. Through both businesses, we will deliver a new way of "to live" to the world by providing products and services that differentiate us from our competitors, with an awarenes
Slide 55: Transcript: corporate philosophy and vision
In summary, we will conduct our business to contribute to the creation of healthy and affluent lifestyles, which is our corporate philosophy, and aim to realize our vision of what we want to be in 2035. To this end, we will manage our business by integrating our management policy and sustainability
Slide 56: Transcript: positioning of the 7th plan
I will now begin to explain our 7th Five-Year Medium-Term Management Plan, "For Global Growth Beyond the Cliff." The 7th Medium-Term Management Plan is positioned as a scenario for overcoming the patent cliff and achieving future growth, as well as a scenario for further solidifying the foundation f
Slide 57: Transcript: patent cliff
Although we have achieved significant growth with Uptravi, we expect a significant decrease in royalty income in FY2028, the final year of our medium-term plan, due to its patent expiration. During the 7th Medium-Term Management Plan period, profits are expected to temporarily decline due to prior i
Slide 58: Transcript: FY2030 revenue target
During the 7th Medium-Term Management Plan period, we will invest in R&D, acquisition of in-licensed products, M&A, etc., promote sales of CAP-1002 and nucleic acid drug groups, and grow overseas sales more than domestic sales to become a company with sales revenue of JPY300 billion and overseas sal
Slide 59: Transcript: FY2028 targets
As part of the process of achieving the targets for FY2030, we target sales revenue of JPY230 billion, operating profit of JPY30 billion, EPS of JPY341, ROE of 8% or higher, and ROIC of 9% or higher for FY2028, the final year of the medium-term management plan. To this end, the 7th Medium-Term Manag
Slide 60: Transcript: pharmaceuticals segment strategy
I will now outline our business strategies for each of the pharmaceuticals and functional foods segments. In the pharmaceuticals segment, we will launch an average of two or more new products per year through the three pillars of in-house drug discovery, in-licensing, and PLCM, and will develop the
Slide 61: Transcript: functional food strategy
In the functional food segment, we will focus on BtoC sports supplements and BtoB quality stabilizing preservatives, and aim to transform the business into a stable and highly profitable structure by providing high-quality, unique, and high-value-added ingredients and finished products, targeting ne
Slide 62: Transcript: three key themes
The following section describes the three key themes of the Seventh Medium-Term Management Plan that will be addressed in overcoming the patent cliff and moving toward subsequent growth. The "Three Key Themes" are to nurture growth drivers to replace Uptravi, which include the steady launch and earl
Slide 63: Transcript: new product launches
As growth drivers during the 7th Medium-Term Management Plan, we will launch four new products for DMD, three new products for hematologic cancers, and new products with expanded indications for Uptravi, Fintepla, and Gazyva. Our detailed launch target, including schedule, is to launch an average of
Slide 64: Transcript: Viltepso and domestic sales strategy
We will conduct an additional P3 study of Viltepso and aim for approval and launch in Europe and China during the mid-term plan period. Next, regarding our domestic sales strategy, we will focus on the hematology, pulmonary hypertension, and pediatric neurology fields, aiming to launch products as e
Slide 65: Transcript: hematology and focus areas
In the hematology area, we will promote Vyxeos, as well as pirtobrutinib and NS-401 in Japan, and in pulmonary hypertension, we will further maximize the value of Uptravi by adding pediatric indications. In the area of pediatric neurology, in addition to expanding the indications for Fintepla, we ai
Slide 66: Transcript: US and China subsidiaries
With regard to the second priority theme, expansion of global business development, our US subsidiary NS Pharma plans to launch new DMD treatments such as CAP-1002 in addition to Viltepso. We will focus on effective and efficient marketing and patient-support services with the aim of launching these
Slide 67: Transcript: global expansion
In addition to strengthening our sales structure in the US and China, we will accelerate our global expansion into Europe and other regions by considering means such as in-house sales, alliances, and M&A in order to provide Viltepso and other items in our pipeline to patients worldwide. To this end,
Slide 68: Transcript: pipeline expansion
The third key theme is to continuously expand the pipeline based on the three pillars of in-house drug discovery, in-licensing, and PLCM. For in-house drug discovery, we will work to strengthen the combination of our strengths and other companies' technologies by utilizing open innovation and AI dru
Slide 69: Transcript: nucleic acid drug policy
As for the future development policy for nucleic acid drugs, they are characterized by the fact that they act on genetic information and can act on targets that are difficult to approach with small molecules or antibodies, thus making it possible to treat the underlying cause. We have been engaged i
Slide 70: Transcript: sustainability management
The next section describes the strengthening of the five management foundations. To begin with, we can only survive if we have a sustainable society. We promote sustainability management to realize a sustainable society and engage in ESG activities to resolve the five materialities. With regard to I
Slide 71: Transcript: speeding up drug discovery
The second way to strengthen the management foundation is to speed up research and development. First, in drug discovery research, we aim to shorten the time from the conception of a theme to its entry into clinical trials, and to establish a system that will enable us to launch one in-house product
Slide 72: Transcript: speeding up clinical development
To speed up clinical development, several clinical trials were delayed during the 6th Medium-Term Management Plan period. To resolve these issues, we will focus on strict progress checks by the entire management, strengthening project management by enhancing our response to regulatory authorities in
Slide 73: Transcript: human capital management
The third is the promotion of human capital management. In order to promote global development and expand our pipeline, it is necessary for each and every employee to grow and for diverse human resources to play an active role. While the volume of work will increase as we expand globally, we will ma
Slide 74: Transcript: digitalization
To strengthen the fourth management foundation, "business process reengineering and productivity improvement by promoting digitalization," we will also aggressively invest in systems and human resource development. We will respond to issues that arise in R&D and sales promotion activities based on d
Slide 75: Transcript: financial strategy
The fifth is a financial strategy for sustainable growth. The basic policy of capital allocation is to actively make the investments necessary for sustainable growth while ensuring financial soundness. We are considering a total of JPY190 billion for R&D investment over five years, JPY38 billion for
Slide 76: Transcript: management targets
In terms of management targets, we aim to achieve sales revenue of JPY230 billion, operating profit of JPY30 billion, EPS of JPY341, ROE of 8% or higher, and ROIC of 9% or higher in the final year of the plan, FY2028. On this basis, we will work to strengthen our three key themes and five management
Slide 77: Transcript: shareholder returns
Next is our shareholder return policy. The Company's policy is to continue to pay stable dividends while taking into consideration the dividend on equity ratio (DOE), and to return profits to shareholders. In addition, the Company will consider the share buyback within the framework of flexible allo
Slide 78: Q&A on the 7th Medium-Term Management Plan (summary)
Presentation Q&A on the 7th Five-Year Medium-Term Management Plan (summary) May 28, 2024 No. Questions Answer. 1 I believe that the data from the global P3 trial (RACER53 study) of Viltepso Clinical trials 201 and 202 are to compare to the natural history of North is currently being analyzed. Is the
Slide 79: Q&A: RACER53 trial results
6 The global P3 trial (RACER53 study) presented that while there was a trend As announced on May 27, 2024 in the press release of Viltolarsen (NS- toward increased TTSTAND (time to rise from the floor) velocity in the 065/NCNP-01) for the treatment of Duchenne Muscular Dystrophy Preliminary active d
Slide 80: Q&A: steroid use in trial cohorts
9 In your analysis to date, have you identified significant differences in We have been able to ascertain the specific steroid use for each patient and steroid use between the active drug cohort and the placebo cohort? are currently analyzing the data. Has it been confirmed to any degree at this sta
Slide 81: Q&A: steroids and motor function
11 Do steroids boost motor function by reducing inflammation? In the early stages, inflammation in the DMD patient's body damages the muscle, which turns muscle into fibers and fat, and his muscle is gradually wasted. Because steroids have the effect of reducing inflammation and delaying muscle loss
Slide 82: Q&A: Sarepta gene therapy PDUFA date
12 PDUFA ※ date of Sarepta's gene therapy drug is approaching (June 21, Steroids are given to most DMD patients in the U.S. In the global P3 trial 2024). What do patients and doctors think about DMD treatment based on (RACER53 study), Viltepso was added as a treatment for patients who were the globa
Slide 83: Q&A: gene therapy competition
14 Is there a risk that more patients might choose gene therapy because of If Sarepta's gene therapy is granted full approval in June, while Viltepso was the results of the global P3 trial (RACER53 study)? Before the results were granted accelerated approval, we expect an impact, although we cannot
Slide 84: Q&A: FDA meeting
18 Assuming that information sharing with the authorities began around the The authority advised us to first do a proper data analysis and then set up the end of April, I assume that the date for the meeting with the FDA has meeting based on that. already been set. Do we have a general idea of what
Slide 85: Q&A: Viltepso market withdrawal risk
24 As it relates to the 7th Five-Year Medium-Term Management Plan, CAP- Please understand that we cannot rule out the possibility that Viltepso will be 1002 appears to be making a substantial contribution to the planned withdrawn from the market. However, as announced yesterday, we have figures. I b
Slide 86: Q&A: Uptravi patent expiration
25 In terms of the Uptravi patent expiration, I think the pediatric exclusivity We have already considered this, but, as far as Uptravi is concerned, no will easily add six months to the Uptravi’s expiration, but are you also measures have been found to extend its exclusivity. pursuing the possibili
Slide 87: Q&A: Capricor P2 and P3 trials
29 We now understand that Capricor Therapeutics would file an application The P2 and P3 clinical trials have the same study design, with the P3 enrolling based on the results of the P2 clinical trial even if the P3 clinical trial were a larger number of patients. We, too, believed that the P3 clinic