Kyowa Kirin Co., Ltd. · TSE:4151
Kyowa Kirin — FY2023 Earnings Presentation
56 slides from Kyowa Kirin's earnings presentation, February 2024
Slide 1: Results Presentation Fiscal 2023
Results Presentation Fiscal 2023
Slide 2: Agenda
Agenda 2021-2025 Medium Term Business Plan - FY2023 Review, Story for Vision 2030,FY2024 Plans, Revision of Financial KPI - Shareholders Return Commercial Update R&D Update News Flow Q&A President and Chief Executive Officer Masashi Miyamoto, Ph.D. Senior Managing Executive officer Takeyoshi Yamashi
Slide 3: Forward-looking statements disclaimer
This document contains certain forward-looking statements relating to such items as the company’s (including its domestic and overseas subsidiaries) forecasts, targets and plans. These forward-looking statements are based upon information available to the company at the present time and upon reasona
Slide 4: 2021-2025 Medium Term Business Plan - FY2023 Review
2021-2025 Medium Term Business Plan - FY2023 Review - © Kyowa Kirin Co., Ltd. 4
Slide 5: Qualitative Review for FY2023
Qualitative Review for FY2023 Provide pharmaceuticals for unmet medical needs Address patient-centric healthcare needs ◼ Maximize the value of global strategic products ✓ Initiated own sales of Crysvita in North America and keep steady growth ◼ Patient Advocacy ✓ Focused on Crysvita and Poteligeo an
Slide 6: Quantitative Summary of FY23 Results
Quantitative Summary of FY23 Results ( Billion Yen / Rounded ) FY2022 FY2023 2023 Changes Achieved Results Results Revised Plans Revenue 398.4 442.2 +43.9 (+11%) 426.0 104% [Overseas Ratio] [61%] [65%] [64%] Gross Profit 311.5 331.0 +19.6 (+6%) 326.0 102% [Gross Profit Margin] [78%] [75%] [77%] SG&A
Slide 7: FY22 vs FY23 -Revenue-
FY22 vs FY23 -Revenue- ⚫ Japan -1.7 Although Duvroq, Romiplate, and Crysvita increased, revenue in Japan region decreased by +43.9 billion yen 1% due mainly to negative impact by annual NHI price-cut and shrink in Nesp-AG affected by competitive products. (incl. forex effect +18.9) ⚫ North America +
Slide 8: FY22 vs FY23 -Revenue of Major Items in Japan-
FY22 vs FY23 -Revenue of Major Items in Japan- ( Billion Yen / Rounded ) FY2022 FY2023 2023 Item Changes Reasons Achieved Results Results Plans Nesp + Nesp-AG1 21.1 17.1 -3.9 (-19%) 16.6 103% NHI price-cut & Nesp 3.4 3.2 -0.3 (-8%) 2.8 112% Biosimilars’ penetration Nesp-AG 17.6 14.0 -3.6 (-21%) 13.8
Slide 9: FY22 vs FY23 -Revenue of Major Items outside Japan-
FY22 vs FY23 -Revenue of Major Items outside Japan- ( Billion Yen / Rounded ) FY2022 FY2023 2023 Item Changes Reasons Achieved Results Results Plans Crysvita 118.2 142.0 +23.7 (+20%) 138.0 103% [North America] Market penetration North America 87.0 105.2 +18.2 (+21%) [EMEA] Geographical expansion & A
Slide 10: FY22 vs FY23 -Core OP-
FY22 vs FY23 -Core OP- +10.1 billion yen ⚫ Gross Profit +19.6 (incl. forex effect +16.5) Increased in conjunction with the 43.9 rise in revenue. COGs have increased due to the (incl. forex effect +6.5) North America Crysvita Sales royalty after Apr 27, 2023. Hence, gross profit % declined YoY. (78.2
Slide 11: FY22 vs FY23 -Profit-
FY22 vs FY23 -Profit- Profit (Jan-Dec) +27.6 billion yen • EMEA established medicines portfolio: Gain on sales of 51% shares plus gain on valuation of remaining 49% shares +14.8 • Impairment losses +7.1 [FY22] ME-401 IPR&D 14.3, irofotase alfa IPR&D 3.2 [FY23] RTA 402 8.3, Ardelyx 1.1 • Foreign exch
Slide 12: 2021-2025 Medium Term Business Plan - Story for Vision 2030
2021-2025 Medium Term Business Plan - Story for Vision 2030 - © Kyowa Kirin Co., Ltd. 12
Slide 13: Our Vision toward 2030
Our Vision toward 2030 Provide pharmaceuticals for unmet medical needs We are focused on developing medicines for diseases where there is a Our Vision toward 2030 clear patient need for new options. We make full use of multiple therapeutic modalities, including biotechnology Kyowa Kirin will realize
Slide 14: Environmental changes since 2021-2025 MTBP planning
Environmental changes since 2021-2025MTBP planning Internal External Change Change ⚫ Established global our own sales and marketing system for orphan drugs such as Crysvita and Poteligeo. ⚫ Global trend of tighter policies and regulations to ⚫ Bone & mineral, intractable hematological reduce health
Slide 15: Story for Vision 2030
Story for Vision 2030 Strategies for creating and delivering life-changing value Disease Science Value Global deployment of delivery on products developed by Focus disease areas: bone & mineral, intractable taking full advantage of our own hematological diseases/hemato oncology, and rare diseases th
Slide 16: 2021-2025 Medium Term Business Plan - FY2024 Plans
2021-2025 Medium Term Business Plan - FY2024 Plans - © Kyowa Kirin Co., Ltd. 16
Slide 17: Strategic Investment
Strategic Investment ～For successful creation and delivery of life-changing value Licensing-in and M&A investments to strengthen the portfolio 2021-2025 Cash Allocation* ● Priority will be given to the focus disease areas ➢ bone & mineral ➢ intractable hematological diseases/hemato oncology ➢ rare d
Slide 18: Qualitative Plans for FY2024
Qualitative Plans for FY2024 Provide pharmaceuticals for unmet medical needs Address patient-centric healthcare needs ◼ Maximize the value of global strategic products ◼ Patient Advocacy ✓ Conduct evidence-based marketing to penetrate into patients. ✓ Consider LCM to provide further value and streng
Slide 19: Quantitative Summary of FY24 Plans
Quantitative Summary of FY24 Plans ( Billion Yen / Rounded ) FY2022 FY2023 FY2024 FY2024 Plans Changes Orchard Results Results Plans Excl. Orchard Revenue 398.4 442.2 473.0 +30.8 (+7%) 4.5 468.5 [Overseas Ratio] [61%] [65%] [70%] [70%] Gross Profit 311.5 331.0 348.0 +17.0 (+5%) 3.0 345.0 [Gross Prof
Slide 20: FY24 -Revenue of Major Items in Japan-
FY24 -Revenue of Major Items in Japan- ( Billion Yen / Rounded ) FY2022 FY2023 FY2024 Item Changes Reasons Results Results Plans Nesp + Nesp-AG1 21.1 17.1 14.4 -2.7 (-16%) NHI price-cut & Nesp 3.4 3.2 2.8 -0.4 (-13%) Biosimilars’ penetration Nesp-AG 17.6 14.0 11.7 -2.3 (-17%) Duvroq 6.6 9.9 12.2 +2.
Slide 21: FY24 -Revenue of Major Items outside Japan-
FY24 -Revenue of Major Items outside Japan- ( Billion Yen / Rounded ) FY2022 FY2023 FY2024 Item Changes Reasons Results Results Plans Crysvita 118.2 142.0 175.9 +33.9 (+24%) North America 87.0 105.2 [North America] Market penetration [EMEA] Geographical expansion EMEA 31.0 35.1 & Additional indicati
Slide 22: FY2023 vs FY2024 -Core OP-
FY2023 vs FY2024 -Core OP- ⚫ Gross Profit +17.0 While gross profit will grow with the 30.8 rise in revenue (Japan-12.9, North America -11.8 billion yen +27.7, EMEA+1.2, APAC+4.8, Other+9.8 (Orchard+4.5) ), COGs will also increase due to the Crysvita-related scheme change from ‘Profit-sharing (SG&A)’
Slide 23: FY2023 vs FY2024 -Profit-
FY2023 vs FY2024 -Profit- Profit (Jan-Dec) -18.2 billion yen • SG&A -2.9 • R&D -27.9 Tax burden ratio 16.5% → 25.9% Tax exemption effect on EMEA established medicines portfolio Core Operating Profit -11.8 Profit Before Tax -12.2 © Kyowa Kirin Co., Ltd. 23
Slide 24: 2021-2025 Medium Term Business Plan - Revision of Financial KPI
2021-2025 Medium Term Business Plan - Revision of Financial KPI - © Kyowa Kirin Co., Ltd. 24
Slide 25: Revision of Financial KPI
2021-2025 Medium Term Business Plan - Revision of Financial KPI - ◼ Record high in Core operating profit for FY2023. Achieved KPIs such as “ROE of 10%” and “CAGR of 10% or higher” ◼ Due to the restructuring of our business model to adapt to environmental changes, the continuous achievement timing of
Slide 26: Shareholders Return
Shareholders Return © Kyowa Kirin Co., Ltd. 26
Slide 27: Shareholders Return: FY23 dividend 56 yen, FY24 plan 58 yen
Shareholders Return ✓ FY23 dividend is 56 yen, and FY24 to be 58 yen (plan) ✓ Plans 8-year consecutive rises since FY17 ✓ FY21-24 weighted average payout ratio is 40.8% (plan) (Mid-term guidance for payout ratio “Targeting sustained dividend hikes with 40%”) Dividend (yen) Payout Return on Year *1 I
Slide 28: Share buyback and cancellation of treasury shares
Share buyback and cancellation of treasury shares ✓ To improve capital efficiency and shareholder returns, the company has resolved share buyback and cancellation of treasury shares ✓ Up to 40.0 billion JPY, largest ever (Up to 17 million shares) ✓ Total return ratio for FY2024 will be 109.5% (plan)
Slide 29: Commercial Update
Commercial Update © Kyowa Kirin Co., Ltd. 29
Slide 30: 2023 Review & 2024 Key Actions
2023 Review & 2024 Key Actions 2023 Review 2024 Key Actions ⚫ North America: ⚫ Strengthen evidence-based marketing activities. Started own sales (Established and started own operation of the direct sales force) ⚫ North America: Steady growth continued to be achieved through seamless sales transfers.
Slide 31: 2023 Review & 2024 Key Actions
2023 Review & 2024 Key Actions 2023 Review Sales Revenue Launched Countries ⚫ Utilizing evidences including blood compartment (Billion Yen) / Regions ⚫ Raising awareness of importance of blood testing among early-stage 39 34.4 patients Japan 30.3 1.9 ⚫ North America: Promotional activities based on
Slide 32: R&D Update
R&D Update © Kyowa Kirin Co., Ltd. 32
Slide 33: Story for Vision 2030
Story for Vision 2030 Strategies for creating and delivering life-changing value Disease Science Value Global deployment of delivery on products developed by Focus disease areas: bone & mineral, intractable taking full advantage of our own hematological diseases/hemato oncology, and rare diseases th
Slide 34: Upcoming Events: Main Development Pipeline Products
Upcoming Events: Main Development Pipeline Products As of February 7, 2024 Code Events (Completed are in bold) Timeline Generic Name (Completed are in orange) Atopic Dermatitis P3（ROCKET Program） In progress KHK4083/AMG 451 Asthma P2 initiation H1 2024 rocatinlimab Prurigo nodularis P3 initiation H2
Slide 35: Main Development Pipeline Products (After Ph2)
Main Development Pipeline Products (After Ph2) As of February 7, 2024 Planned Approval Total addressable Diseases under development*1 Development status No. of Patients*4 Year*2 market*3 KHK4083/AMG 451 Moderate and severe 2026/2027 P3 (Global) ★★★★★ 16M rocatinlimab Atopic Dermatitis KHK4083/AMG 45
Slide 36: Main Development Pipeline Products (nonclinical ~ Ph1)
Main Development Pipeline Products (nonclinical ~ Ph1) As of February 7, 2024 Diseases under development*1 Development status Modality, technology KK4277 SLE, CLE P1 (JP, Asia) Antibody, POTELLIGENT® Advanced or metastatic solid P1 (JP: in progress, US: in KK2260 Antibody, REGULGENTTM tumors prepara
Slide 37: License agreement for infigratinib
License agreement for infigratinib To strengthen our pipeline in the bone and mineral areas, Kyowa Kirin has entered into a license agreement with BridgeBio Pharma for the development and commercialization of infigratinib in Japan. ◼ Secured exclusive rights for the development and commercialization
Slide 38: News Flow in 2023
News Flow in 2023 © Kyowa Kirin Co., Ltd. 38
Slide 39: Year-to-date Key News Flow
Year-to-date Key News Flow Category Date Headline As of November 1, 2023 ESG Mar 8 Kyowa Kirin Selected for a “Health & Productivity Stock” and awarded as a “Certified Health & Productivity Management Outstanding Organization”(White 500) (Japan) R&D Mar 17 Presented New data from Phase 2b clinical s
Slide 40: Year-to-date Key News Flow
Year-to-date Key News Flow Category Date Headline As of November 1, 2023 LCM Aug 23 Approval for partial change of LUMICEF® for Palmoplantar Pustulosis (Japan) LCM Aug 30 Approval for Calcimimetics Agent ORKEDIA® TABLETS 4mg (Japan) LCM Sep25 Approval for Partial Change of Romiplate® for Aplastic An
Slide 41: Year-to-date Key News Flow
Year-to-date Key News Flow Category Date Headline As of November 1, 2023 LCM Nov 22 Launched Calcimimetics Agent ORKEDIA® TABLETS 4mg (Japan) LCM Jan 5 Out-licensed the exclusive and worldwide rights to Boehringer Ingelheim of developing first-in-class treatment for fibro-inflammatory diseases. SI J
Slide 42: Plans for Orchard Therapeutics Post Merger Integration
Plans for Orchard Therapeutics Post Merger Integration ⚫ Completed acquisition of Orchard Therapeutics on January 24th, 2024. ⚫ Build PMI (post-merger integration) team comprised of members from both companies, and initiate activities for successful synergy creation. Learning & process integration b
Slide 43: Accounting treatment of share acquisition of Orchard Therapeutics
Accounting treatment of share acquisition of Orchard Therapeutics (Tentative) ✓ Completed the share acquisition on January 24, 2024, and will be consolidated starting from the February 2024 ✓ Recognized intangible assets of $201M and goodwill of $254M ✓ Intangible assets will be amortized over 20 ye
Slide 44: Appendix
Appendix © Kyowa Kirin Co., Ltd. 44
Slide 45: Strategic Rationale of The Transaction
Strategic Rationale of The Transaction Our purpose of the acquisition: ◼ To enrich our pipeline to address the UMNs* for which there is still no cure * ◼ To obtain capabilities in Cell Gene Therapy R&D to address the future UMNs * Unmet medical needs • Strengthen the business following Crysvita and
Slide 46: Acquisition of Orchard Therapeutics plc Shares - Transaction Overview
Acquisition of Orchard Therapeutics plc Shares - Transaction Overview - Items Summary ◼ Orchard Therapeutics plc (London) Target — Listed on NASDAQ ◼ $16.00 per ADS / approx. $387.6 million (approx. JPY 57.4 billion) — Orchard shareholders will hold additional contingent value rights (CVR) of $1.00
Slide 47: Acquisition of Orchard Therapeutics plc Shares - Expected Synergy
Acquisition of Orchard Therapeutics plc Shares - Expected Synergy - Further Development as a Global Specialty Pharmaceutical Company ◼ To be a Japan-based Global Specialty Pharmaceutical Company providing life-changing value to high unmet medical needs in concert with our existing business through C
Slide 48: P/L Impact on EMEA established medicines portfolio
P/L Impact on EMEA established medicines portfolio Before 2023 2023 2024 2025 2023 Q2 Q3 Q4 Until the end of July Product sales (for Tostran, until Oct 12) From August Established portfolio Revenue 13 brands Sales Royalties & license fees Tostran IP transfer Disposal contingency （ADVANZ PHARMA） proc
Slide 49: P/L Impact on North American Crysvita Business
P/L Impact on North American Crysvita Business Based on the Collaboration and License Agreement in 2013, Kyowa Kirin takes over the field activities in North America from Ultragenyx, starting from April 27, 2023 (6th year from launch). FY2022 FY2023 FY2023 FY2024 FY2024 JAN 1 – APR 26 APR 27 – DEC 3
Slide 50: Main Development Pipeline Products: Future plans
Main Development Pipeline Products: Future plans As of February 7, 2024 T : Topline data D : Detailed data Code Generic Name Target Disease 2024 2025 2026 ＋ P3 IGNITE P3 HORIZON P3 SHUTTLE KHK4083/ P3 ASTRO Moderate and severe AMG 451 Atopic Dermatitis rocatinlimab P3 ORBIT P3 VOYAGER P3 ASCEND P3 O
Slide 51: FOREX Information
FOREX Information Average FOREX Rates (yen) FY2022 FY2023 Changes FY2024 Plans USD 130 140 +10 140 GBP 161 174 +13 180 EUR 137 151 +14 155 FY23 FOREX Impacts (vs FY22, billion yen) Revenue Core OP USD +11.0 +3.5 GBP +2.3 +0.7 EUR +3.7 +1.7 FY24 FOREX Sensitivities (vs FY24 Plan, billion yen) Changes
Slide 52: Crysvita - Collaboration with Ultragenyx
Crysvita ‐ Collaboration with Ultragenyx ‐ Economic Terms • Kyowa Kirin books sales • 50/50 profit share for 5 years from the U.S. launch US & Canada ⁃ Supply price: 35% of net sales through 2022, 30% thereafter (No impact on the sales royalties stated below) • After 5 years (April 27, 2023-), Kyowa
Slide 53: KHK4083/AMG 451 - Collaboration with Amgen
KHK4083/AMG 451 ‐ Collaboration with Amgen ‐ US Europe & Asia (ex. JP) JP • Amgen leads development • Amgen leads development Development • Kyowa Kirin leads development • Share development cost • Share development cost • Amgen commercializes and • Amgen commercializes and books sales books sales •
Slide 54: Estimated Patient Numbers
Estimated Patient Numbers Country/ Disease Incidence Prevalence* Reference Region PTCL JP 2,000 Ministry of Health, Labour and Welfare: 2017 Patient survey (illness classification) JP 2,000 Ministry of Health, Labour and Welfare: 2017 Patient survey (illness classification) CTCL US 1,500 / y SEER Da
Slide 55: List of Acronyms
List of Acronyms AD Atopic Dermatitis AG Authorized Generic APAC Asia-Pacific AML Acute myeloid leukemia BS Biosimilar DME Diabetic Macular Edema EMEA Europe, the Middle East and Africa JP Japan LCM Lifecycle Management MDS Myelodysplastic syndromes MLD Metachromatic Leukodystrophy MPS-IH Mucopolysa
Slide 56: Kyowa Kirin Co., Ltd. Corporate Communications Dept., IR Group
Kyowa Kirin Co., Ltd. Corporate Communications Dept., IR Group +81-3-5205-7206 / ir@kyowakirin.com