Slide 1: Aiming to Achieve Mid-term Business Plan IBI 18
Aiming to Achieve Mid-term Business Plan “IBI 18” - 2017 Results and 2018 Outlook - CHUGAI PHARMACEUTICAL CO., LTD. President, COO Tatsuro Kosaka February 1/2, 2018
Slide 2: Forward-Looking Statements
- 2017 Results and 2018 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: 2017 Results
- 2017 Results and 2018 Outlook - 2017 Results Achieved record-high revenues and operating profit in the 15th anniversary year of the Strategic Alliance with Roche Revenues Operating profit (billion JPY) (billion JPY) 600.0 300.0 Revenues 534.2 Operating profit 500.0 250.0 400.0 200.0 300.0 150.0 10
Slide 4: 2017 Financial Performance
- 2017 Results and 2018 Outlook - 2017 Financial Performance Strong growth in revenues and operating profit mainly due to increase in exports/ROOI driven by global expansion of Alecensa and Actemra 2016 2017 2017 achiev. billion JPY Jan -Dec Jan - Dec Growth Jan - Dec (%) actual actual forecast Reve
Slide 5: Achievements in 2017
- 2017 Results and 2018 Outlook - Achievements in 2017 emicizumab: US approval/launch for HA with inhibitors to FVIII Alecensa: EU launch, 1st line NSCLC approval in EU and US Regulatory filing for five projects • emicizumab (US/EU/Japan simultaneous filing for HA with inhibitors) • Alecensa (
Slide 6: Emicizumab: Clinical Data to Support Global Rollout
- 2017 Results and 2018 Outlook - Emicizumab: Clinical Data to Support Global Rollout - 2015 2016 2017 2018 - Phase 1: Healthy adults and patients → Phase 1/2 (extension study): Patients QW: dosing every week Non-interventional study: Patients Q2W: dosing every 2 weeks (Main purpose: real-world trea
Slide 7: Priority Agenda of IBI 18
- 2017 Results and 2018 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 • • Growth driver
Slide 8: Progress of IBI 18
- 2017 Results and 2018 Outlook - Progress of IBI 18 • Cutting-edge immunology research in • Emicizumab trilateral regulatory filing (US, comprehensive collaboration with IFReC EU and Japan) and US approval • Initiated clinical trials for two in-house • Progress of atezolizumab development in engine
Slide 9: 2018 Outlook
- 2017 Results and 2018 Outlook - 2018 Outlook Final year of “IBI 18” Deliver expanded achievements as a culmination of three years Core EPS CAGR* (2015-18) forecast: 9.5% 2017 2018 billion JPY Jan - Dec Jan - Dec Growth actual forecast Revenues 534.2 541.5 +7.3 +1.4% Sales 499.3 498.5 -0.8 -0.2% ex
Slide 10: Priority Agenda for 2018
- 2017 Results and 2018 Outlook - Priority Agenda for 2018 Continuous creation of innovative engineered antibody projects and establishing the drug creation technology of middle molecule Initiated clinical trials for two antibody projects: 2018-2019 Further progress in middle molecule drug disco
Slide 11: Tecentriq Launch and Immuno-Oncology Projects
- 2017 Results and 2018 Outlook - Tecentriq Launch and Immuno-Oncology Projects • Approved for NSCLC (2nd line) in Jan. 2018 Immune checkpoint inhibitor • Extension of overall survival was confirmed across patient groups regardless of PD-L1 progression in 2nd and 3rd line NSCLC (OAK study) • Seven t
Slide 12: Governmental Activities in Genomic Medicine and the FMI Collaboration
- 2017 Results and 2018 Outlook - Governmental Activities in Genomic Medicine and the FMI Collaboration Government Genomic medicine promotion council Chugai Taskforce to promote medical and other use of genomic information 2015 The 3rd Phase 2016 Basic Plan to Promote Cancer Control Programs 2017 St
Slide 13: Contribute to Oncology through the FMI Collaboration
- 2017 Results and 2018 Outlook - Contribute to Oncology through the FMI Collaboration Committed to advance PHC with innovative medical products and services as the No.1 company in Oncology Improve patient access to appropriate treatment Accelerate drug development based Ultimate consulting promotio
Slide 14: FY2017 Consolidated Financial Overview (IFRS based)
FY2017 Consolidated Financial Overview (IFRS based) CHUGAI PHARMACEUTICAL CO., LTD. Executive Vice President, CFO Yoshio Itaya February 1/2, 2018
Slide 15: Full Year Results Summary
FY2017 Consolidated Financial Overview Full Year Results Summary Revenues: 534.2 billion yen (+42.4, +8.6% YoY) • Domestic sales excl. Tamiflu: increase as growth of mainstay products exceeded impact of HIP revision (+8.7, +2.3%) • Overseas sales: growth of Alecensa export to Roche, etc. (+14.5, +
Slide 16: IFRS and Core Results Jan - Dec
FY2017 Consolidated Financial Overview IFRS and Core Results Jan - Dec (Billions of JPY) Non-Core items Intangible assets: Amortization of intangible assets +1.3 Impairment +4.0 Others Legal income and expenses -1.0 Core net income attributable to Chugai shareholders 75.9 (Millions of shares) Weight
Slide 17: Financial Overview Jan - Dec
FY2017 Consolidated Financial Overview Year on Year (Core) Financial Overview Jan - Dec 2016 2017 (Billions of JPY) Jan - Dec Jan - Dec Growth (Billions of JPY) vs. Revenues vs. Revenues Royalties and other operating income +15.8 Revenues 491.8 534.2 +42.4 +8.6% Increase in milestone income Sales 47
Slide 18: Sales (excl. Tamiflu) Jan - Dec
FY2017 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 (Billions of JPY) +23.2, +5.1% 482.4 459.2 -1.0, -8.7% Tarceva Alecensa +10.2, +275.7% (10.5) (overseas) (13.9) Overseas +14.5,
Slide 19: Tamiflu Sales Trends
FY2017 Consolidated Financial Overview Tamiflu Sales Trends 18
Slide 20: Operating Profit Jan - Dec
FY2017 Consolidated Financial Overview Year on Year (Core) Operating Profit Jan - Dec (Billion of JPY) M&D -3.0 R&D (Billions of JPY) 2016 2017 Growth Royalties and Jan - Dec Jan - Dec other operating -6.3 Revenues 491.8 534.2 +42.4 income +15.8 G&A Cost of sales -246.7 -252.9 -6.2 -4.2 Gross profit
Slide 21: Financial Overview Oct - Dec
FY2017 Consolidated Financial Overview Year on Year (Core) Financial Overview Oct - Dec Increase in gross profit from sales +5.8 Increase in sales due to growth of mainstay products etc. and improvement of cost of sales ratio to sales Increase in royalties and other operating income +6.9 Increase in
Slide 22: Financial Overview Jan - Dec vs. Forecast
FY2017 Consolidated Financial Overview vs. Forecast (Core) Financial Overview Jan - Dec Cost of sales ratio vs. Sales 2017 2017 Jan – Dec Jan – Dec Forecast Actual 51.4% 50.7% Exchange rate (JPY) 2017 2017 Jan – Dec Jan – Dec Assumption Actual * 1CHF 106.00 113.90 1EUR 122.00 126.39 1USD 115.00 112.
Slide 23: Sales Progress (excl. Tamiflu) Jan - Dec
FY2017 Consolidated Financial Overview vs. Forecast (Core) Sales Progress (excl. Tamiflu) Jan - Dec (Billions of JPY) Sales by Disease Area, Actual vs. Forecast Sales by Products, 482.2 +0.2, +0.0% 482.4 Actual vs. Forecast HER2 Overseas -2.3, -4.0% Franchise *) Alecensa (overseas) (13.9) +4.4, +46.
Slide 24: Impact from Foreign Exchange
FY2017 Consolidated Financial Overview vs. Forecast (Core) Impact from Foreign Exchange FX impact Jan – Dec 2017 [Reference] (Billions of JPY) Historical exchange rate to the JPY (FX impact vs. Assumption) Forecast rate +3.2 Revenues Sales +1.7 1EUR: 122JPY Royalties and other +1.5 operating income
Slide 25: Balance Sheet Items
FY2017 Consolidated Financial Overview vs. 2016 Year End Balance Sheet Items < Assets, Liabilities, and Net Assets > Decrease in net working capital -7.8 Increase in trade accounts receivable +7.8 Increase in sales Decrease in inventories -16.3 Impact from front-loaded purchases in the *1 previous y
Slide 26: Net Cash
FY2017 Consolidated Financial Overview vs. 2016 Year End Net Cash Main investment for P.P.E Yokohama site：Purchase of Total investment (Billions of JPY) Total increase in net land for business working capital, etc. Ustunomiya： High-mix low- volume production capability +14.5 for pre-filled syringe f
Slide 27: Summary of Earnings Prospects for 2018
FY2017 Consolidated Financial Overview Summary of Earnings Prospects for 2018 Revenues: • Domestic sales excl. Tamiflu: despite continuous growth on a quantity basis, decrease due to impact of HIP revision • Overseas sales: overall growth mainly due to Actemra and Alecensa export to Roche • Royalt
Slide 28: Forecast 2018 Jan - Dec
FY2017 Consolidated Financial Overview 2018 Forecast (Core) Forecast 2018 Jan - Dec Actual Forecast Growth (Billions of JPY) 2017 Jan - Dec 2018 Jan - Dec vs. Revenues vs. Revenues Revenues 534.2 541.5 +7.3 +1.4% Sales 499.3 498.5 -0.8 -0.2% excl. Tamiflu 482.4 492.9 +10.5 +2.2% Domestic 388.4 374.8
Slide 29: Movement of Operating Profit 2016 - 2018
FY2017 Consolidated Financial Overview 2018 Forecast (Core) Movement of Operating Profit 2016 - 2018 (Billions of JPY) Royalties, Operating National Health Increase etc. expenses Royalties in sales Insurance and other volume, Operating drug price operating etc. Royalties, expenses revision income et
Slide 30: Sales (excl. Tamiflu) Forecast vs. 2017 Actual
FY2017 Consolidated Financial Overview 2018 Forecast (Core) Sales (excl. Tamiflu) Forecast vs. 2017 Actual Sales by Disease Area, Sales by Products, (Billions of JPY) Year on Year Comparisons Year on Year Changes 482.4 +10.5, +2.2% 492.9 Rituxan Alecensa Overseas -10.0, -29.9% (23.4) (overseas) (26.
Slide 31: Dividend Policy
FY2017 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. 62 62 55.0% 58 5-year average 6 52 33 5-year ave
Slide 32: Current Status / Plan for Major Capital Investments
FY2017 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 33: Outline of Arrangements for Sales, Royalties, and Expenses of Three Products to Roche
FY2017 Consolidated Financial Overview Outline of Arrangements for Sales, Royalties, and Expenses of Three Products to Roche 32
Slide 34: 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, 2018
Slide 35: Projects under Development (1)
Overview of Development Pipeline Projects under Development (1) (as of Feb. 1, 2018) Phase I Phase II Phase III Filed CKI27 RG3502 / Kadcyla RG7446 / GA101 (RG7159) (Japan / overseas) - breast cancer atezolizumab / obinutuzumab - solid tumors (adjuvant) - NSCLC (adjuvant) - follicular lymphoma - SCL
Slide 36: Projects under Development (2)
Overview of Development Pipeline Projects under Development (2) (as of Feb. 1, 2018) Phase I Phase II Phase III Filed RG7845 MRA / Actemra - rheumatoid arthritis - systemic sclerosis Autoimmune SA237(RG6168) / satralizumab - neuromyelitis optica★ RG7916 RG1450 / gantenerumab - spinal muscular atroph
Slide 37: Development Status (1)
Overview of Development Pipeline Development Status (1) In- AF802 / Alecensa® house Advanced ALK-positive NSCLC [1st line] Approved in November 2017 (US) Approved in December 2017 (EU) In- RG7446 / atezolizumab licensed Unresectable advanced or recurrent NSCLC Approved in January 2018 NSCLC [1st lin
Slide 38: Development Status (2)
Overview of Development Pipeline Development Status (2) In- RG7440 / ipatasertib licensed Triple negative breast cancer Started global Phase 3 study in January 2018 In- RG7596 / polatuzumab vedotin licensed Diffuse large B-cell lymphoma Started global Phase 3 study in November 2017 In- RG7916 (SMN2
Slide 39: Development Status (3)
Overview of Development Pipeline Development Status (3) In- RG6206 (Anti-myostatin adnectin) licensed Duchenne muscular dystrophy Started global Phase 2/3 study in November 2017 In- RG7802 (Anti-CEA/CD3 bispecific antibody(CEA-TCB)) licensed Solid tumors Decided to start development In- RG1273 / Per
Slide 40: Other Progress
Overview of Development Pipeline Other Progress In- Alaglio® divided granules 1.5g (photodynamic diagnostic licensed agent) Diagnostic agent to visualize non-muscle invasive bladder cancer at the operation of its transurethral resection Launched in December 2017 In- CIM331 / nemolizumab house Atopic
Slide 41: Results of Clinical Trials / Conference (1)
Overview of Development Pipeline Results of Clinical Trials / Conference (1) In- licensed RG7446 / atezolizumab NSCLC 1st line: global Phase 3 study (IMpower150) • One of the primary endpoints, progression-free survival (PFS) was achieved in November 2017 Statistically significant improvement in P
Slide 42: Results of Clinical Trials / Conference (2)
Overview of Development Pipeline Results of Clinical Trials / Conference (2) In- ACE910 / emicizumab hemophilia A house Non-inhibitor: global Phase 3 study (HAVEN 3) • Primary endpoint was achieved in November 2017 A statistically significant reduction in the number of bleeds was confirmed in pati
Slide 43: Results of Clinical Trials / Conference (3)
Overview of Development Pipeline Results of Clinical Trials / Conference (3) In- house ED-71 / Edirol ® Osteoporosis: global Phase 3 study (China) • Primary endpoint was achieved in November 2017 Significantly increased the bone mineral density of osteoporosis patients compared with alfacalcidol 4
Slide 44: RG6206 (Anti-Myostatin Adnectin) and its MoA
Overview of Development Pipeline RG6206 (Anti-Myostatin Adnectin) and its MoA Duchenne Muscular Dystrophy (DMD) is a hereditary disorder with progressive muscle weakness and its major pathology is simultaneous degeneration, necrosis, regeneration of skeletal muscle cells due to the mutation of dys
Slide 45: RG7802 (CEA-TCB) and its MoA
Overview of Development Pipeline RG7802 (CEA-TCB) and its MoA CEA binding CEA-TCB and Target CEA-TCB is a novel T cell bispecific (TCB) antibody being investigated for the treatment of carcinoembryonic antigen (CEA)-expressing solid tumours. CEA-TCB has the potential to work in a broad range of soli
Slide 46: Projected Submissions (Post PoC NMEs and Products)
Overview of Development Pipeline Projected Submissions (Post PoC NMEs and Products) nemolizumab* (CIM331) Pruritus in Dialysis Patients NME line extension KADCYLA lebrikizumab (RG3502) in-house Breast Cancer (RG3637) IPF in-licensed (adjuvant) NSCLC: non-small cell lung cancer RCC: renal cell carcin
Slide 47: 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 48: 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