Kyowa Kirin Co., Ltd. · TSE:4151

Kyowa Kirin — Kyowa Hakko Kirin — Q3 2017 Earnings Presentation

31 slides from Kyowa Kirin's earnings presentation, 2017

1. Slide 1: Result Presentation Fiscal 2017 3rd Quarter

   Result Presentation rd Fiscal 2017 3 Quarter Kyowa Hakko Kirin Co., Ltd. © Kyowa Hakko Kirin Co., Ltd.

2. Slide 2: Agenda

   Agenda FY2017Q3 Highlights Financial Review Voluntary Adoption of IFRS Kazuyoshi Tachibana Director, Managing Executive Officer R&D Review Mitsuo Satoh, Ph.D. Executive Officer, Head of R&D Q&A © Kyowa Hakko Kirin Co., Ltd. 2

3. Slide 3: Forward-looking Statement

   Forward‐looking Statement 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 pre

4. Slide 4: Q3 Consolidated Results

   Q3 Consolidated Results 2016Q3 2017Q3 Change Results Results (↑) & (↓) indicate positive or negative impact in net profit, respectively. • Benralizumab‐related licensing revenue (↑) Net Sales 257.7 258.4 ＋0.6 ( +0%) • Drug price revision and generics penetration (↓) Operating • Benralizumab‐related

5. Slide 5: Financial Review

   Financial Review © Kyowa Hakko Kirin Co., Ltd. 5

6. Slide 6: Consolidated: YoY Analysis - Net Profit

   Consolidated：YoY Analysis ‐Net Profit‐ Net Profit (Jan‐Sep) +3.2 billion yen Pharmaceuticals +2.4 Loss of equity method +1.7 (¥Bn) Bio‐Chemicals ‐0.3 Gain on sales of fixed assets ‐2.2 Gain on forgiveness of debts ‐1.3 Pharmaceuticals +4.5 Bio‐Chemicals +0.6 © Kyowa Hakko Kirin Co., Ltd. 6

7. Slide 7: Q3 Results by Segment

   Q3 Results by Segment  Pharmaceuticals’ profit increased mainly due to the rise in tech‐licensing revenue, despite a drop in domestic sales caused by the drug price revision and penetration of generics  Bio‐Chemicals’ profit slightly increased despite a decrease in net sales 2016Q3 2017Q3 Change R

8. Slide 8: Pharmaceuticals: YoY Analysis - Sales

   Pharmaceuticals: YoY Analysis ‐Sales‐  Domestic Drug Sales (KHK*) ‐4.1 +2.5 billion yen • Our key product NESP decreased due to the drug price revision. (incl. forex effect ‐2.2) • Long‐listed products such as ALLELOCK and Coniel also decreased due to the market penetration of (¥Bn) generic drugs.

9. Slide 9: Pharmaceuticals: YoY Analysis - Operating Income

   Pharmaceuticals: YoY Analysis ‐Operating Income‐ +7.0 billion yen (incl. forex effect +0.5)  Gross Profit +4.5 (incl. forex effect ‐1.6) • Mainly due to the increase in technology licensing revenue. (¥Bn) 30 Cost reducing effect by ¥1.9B due to strong yen  Increase by ¥1.9B in real term  SG&A ‐0.

10. Slide 10: Pharmaceuticals: KHK's Sales by Product

    Pharmaceuticals: KHK’s Sales by Product  Domestic drug sales business decreased due to a drop in the key product NESP and the long‐listed products  Technology out‐licensing revenue came mainly from benralizumab Product 2016Q3 2017Q3 Change Reason 2017Q4 Progress* Results Results Forecast NESP 41.6

11. Slide 11: Bio-Chemicals: YoY Analysis - Sales

    Bio‐Chemicals: YoY Analysis ‐Sales‐ ‐1.8 billion yen (incl. forex effect +0.1)  Overseas Sales ‐1.0 (incl. forex effect +0.1) (¥Bn) • Americas ‐0.4 (incl. forex effect +0.0): Decreased in health‐food materials and amino acids for cell culture mediums. 63 • Europe +0.0 (incl. forex effect +0.0) • As

12. Slide 12: Bio-Chemicals: YoY Analysis - Operating Income

    Bio‐Chemicals: YoY Analysis ‐Operating Income‐ +0.2 billion yen (incl. forex effect +0.0) (¥Bn)  Gross Profit +0.6 (incl. forex effect +0.1) • Increased in real terms excluding the forex effect, 5 reflecting steady growth in the domestic business. • No big impact arising from the fall in Kyowa Engi

13. Slide 13: Voluntary Adoption of IFRS

    Voluntary Adoption of IFRS © Kyowa Hakko Kirin Co., Ltd. 13

14. Slide 14: Impact of IFRS Adoption and IFRS-based Forecast

    Impact of IFRS Adoption and IFRS‐based Forecast J‐GAAP (28‐Jul‐2017) IFRS ‐Approximation‐ Sales ¥347B Sales ¥348B COGS COGS Impact on Sales +1 Gross Margin 216 Gross Margin • Deferment of Upfront Revenue +3 SG&A (excl. Goodwill Amortization) SG&A • Netting of Liquor Taxes ‐2 Gain/Loss on Equity Meth

15. Slide 15: R&D Review

    R&D Review © Kyowa Hakko Kirin Co., Ltd. 15

16. Slide 16: Key development events in 2017: Domestic

    Key development events in 2017 Domestic:  Announcement of top‐line results of phase 3 clinical study of evocalcet (KHK7580) for the treatment of secondary hyperparathyroidism (January) and application for approval (April)  Application for approval of benralizumab (KHK4563) for the treatment of ast

17. Slide 17: Key development events in 2017: Overseas

    Key development events in 2017 Overseas:  Approval received for darbepoetin alfa (KRN321) for the treatment of anemia with myelodysplastic syndrome (February in Singapore and May in Malaysia)  Application for approval of brodalumab (KHK4827) for the treatment of psoriasis (February in Taiwan and J

18. Slide 18: Key development events in 2017: Overseas (cont.)

    Key development events in 2017 Overseas (cont.):  Announcement of positive results of phase 3 clinical study of burosumab (KRN23) for the treatment of adult X‐linked hypophosphatemia (April in the U.S., Europe, Canada, Japan, and Korea)  Initiation of phase 3 clinical study of brodalumab (KHK4827)

19. Slide 19: Key development events in 2017: Overseas (cont.)

    Key development events in 2017 Overseas (cont.):  Announcement of positive results of phase 2 clinical studies of burosumab (KRN23) for the treatment of pediatric X‐linked hypophosphatemia and adult tumor‐induced osteomalacia (September at ASBMR)  Application for approval of brodalumab (KHK4827) f

20. Slide 20: Key global development updates (1) mogamulizumab

    Key global development updates (1) mogamulizumab/KW‐0761 (hematological cancer) 1 Development stage Country/ (Scheduled trial completion date) Estimated Indication region enrollment Phase 2 Phase 3 Application Relapsed/ 3 ATL U.S., Europe, others (2017/12) 71 refractory Relapsed/ 4 CTCL U.S., Europe

21. Slide 21: Key global development updates (2) mogamulizumab solid tumor

    Key global development updates (2) mogamulizumab/KW‐0761 (solid tumor) Development stage Country/ Concomitant (Scheduled trial completion date) Estimated Indication Partner region Drug enrollment Phase 1 durvalumab 1 U.S. (2018/5) AstraZeneca 81 or tremelimumab 2 U.S. PF‐05082566 (2017/9) Pfizer 70

22. Slide 22: Key global development updates (3) burosumab

    Key global development updates (3) burosumab/KRN23 Development stage (Scheduled trial completion date) Estimated Indication Country/region Partner enrollment Phase 2 Phase 3 2 U.S., Europe (2018/12) 50 3 Pediatric U.S. (2017/12) 13 N.A., Europe, Japan, Ultragenyx 4 (2018/9) 60 Korea, Australia Pharm

23. Slide 23: Key global development updates (4) burosumab

    Key global development updates (4) burosumab/KRN23 Development stage (Scheduled trial completion date) Estimated Indication Country/region Partner enrollment Phase 2 Phase 3 U.S. (2019/5) Ultragenyx 17 3 Pharmaceutical TIO/ENS (North America, 4 Japan / Korea (2017/7) Europe) 6 Estimated no. of patie

24. Slide 24: Q&A

    Q&A © Kyowa Hakko Kirin Co., Ltd. 24

25. Slide 25: Appendix

    Appendix © Kyowa Hakko Kirin Co., Ltd. 25

26. Slide 26: KMX's Share Transfer Agreement with Hitachi Chemical

    KMX’s Share Transfer Agreement with Hitachi Chemical Kyowa Hakko Hitachi Kirin Chemical Kyowa Hakko Kyowa Medex Bio (KMX) Maximize the shareholder value by Foster the Life Science Business focusing on Kyowa Kirin and Kyowa Bio Maximize the corporate value of KMX Kyowa Hakko Kirin will transfer 66.6%

27. Slide 27: Development schedule of major late-stage pipeline

    Development schedule of major late‐stage pipeline * ：NDA holder is AstraZeneca + ：Estimated time of regulatory decisions Generic name Country/ Indication 2017 2018 2019~ Code region bardoxolone methyl diabetic kidney Japan Phase 2 Phase 3 RTA 402 disease U.S. +* asthma Europe +* benralizumab Japan f

28. Slide 28: Biosimilar products development

    Biosimilar products development Development Reference bio medical product Development stage Country/region code Generic name Brand name Phase 2 Phase 3 Application FKB327 adalimumab HUMIRA U.S., others 1 FKB238 bevacizumab Avastin U.S., Europe, others Not Not Not Not disclosed disclosed disclosed di

29. Slide 29: List of acronyms

    List of acronyms ATL Adult T‐cell Leukemia/Lymphoma COPD Chronic Obstructive Pulmonary Disease CTCL Cutaneous T‐Cell Lymphoma ENS Epidermal Nevus Syndrome HTLV‐1 Human T‐cell Leukemia Virus Type 1 ITP Idiopathic (immune) Thrombocytopenic Purpura TIO Tumor Induced Osteomalacia XLH X‐linked Hypophosph

30. Slide 30: FOREX Information

    FOREX Information Average FOREX Rate [¥] 2017Q4 2016Q3 2017Q3 Currency Change Revised Result Result Forecast USD/JPY 111 112 +1 112 EUR/JPY 123 124 +1 121 GBP/JPY 156 142 ‐14 140 Q1‐Q3 FOREX Effect (YoY) [ ¥Bn ] Segment Currency Sales Operating Income USD +0.05 ‐0.02 Pharmaceuticals EUR +0.00 +0.00

31. Slide 31: Inquiries

    The Kyowa Hakko Kirin Group companies strive to contribute to the health and well- being of people around the world by creating new value through the pursuit of advances in life sciences and technologies. If you have any inquiries regarding this presentation, please call: Corporate Communications De

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