KYORIN Pharmaceutical : Supplementary Information (May 11, 2024)

Consolidated Financial Results

for the Fiscal Year Ended March 31, 2024

1.	Overview of Consolidated Financial Results	P.2
2.	Highlights of Business Performance	P.3
3. Consolidated Financial Results	P.4
4.	Main Product Sales Update	P.5
5.	R&D Expenses, Capital Expenditure & Depreciation Expense	P.6
6.	Development pipeline	P.7-9
7. Consolidated Financial Results and full year Forecast	P.10
【Reference】
8. P&L Summary	P.12-13
9. BS Summary	P.14
10.	Financial summary	P.15
11. Kyorin Pharmaceutical result	P.16-19

May 10, 2024

KYORIN Pharmaceutical Co., Ltd.

■Disclaimer

This material contains performance forecasts, goals and plans, and other forward-looking

statements related to the Group.

These statements are based on the judgment of the Group′s assumptions and outlooks based on the information and forecasts available at the time of preparation of this material, and contain known or unknown risks and uncertainties. Therefore, due to various factors that may occur, the actual performance, progress / success / failure of the development and other insights may differ significantly from the description. It also contains information about medicines (including those under development), but the description is not for the purpose of advertising or medical advice.

Notice: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

1

Overview of Consolidated Financial Results for FY2023

（JPY millions）	FY2020	FY2021	FY2022	FY2023	Change	FY2024	Change
（％）	(Forecast）	（％）

Net sales	102,904	105,534	113,270	119,532	＋5.5	123,400	＋3.2
Operating profit	5,786	5,007	5,123	6,013	＋17.4	6,500	＋8.1
Ordinary profit	6,447	5,569	5,827	6,602	＋13.3		6,900	＋4.5
Profit attributable to	6,130	3,932	4,723	5,322	＋12.7		5,000	－6.1
owner of parent
Net income per share (¥)	106.99	68.62	82.44	92.74	＋12.5		87.03	－6.2
Total assets	167,126	171,924	176,045	177,679	＋0.9		-	-
Total equity	124,661	124,507	125,461	130,783	＋4.2		-	-

Consolidated Financial Results for FY2023

[Net sales] Sales of new drugs etc. (Japan) increased from year on year by the effort to spread of the product, while the impact of the NHI drug price revision. Sales of generic drugs decreased. As a result, net sales were 119,532 mil. (an increase of 6,262 mil. year on year)

[Profit] Gross profit was 51,408 mil.(an increase of 1,240 mil. year on year) due to increase in sales. On the other hand, SG&A expenses increased 350 mil. (R&D expenses decreased 2,884 mil.). As a result, operating profit was 6,013 mil. (increased 890 mil., year on year). Extraordinary income of 1,404 mil. and extraordinary loss of 987 mil. caused to profit attributable to owner of parent of 5,322 mil.(increased 598 mil., year on year).

Consolidated Financial Results for FY2024 (Forecast)

Net sales of new drugs (Japan) are expected to increase in FY2024 by sales increase in "Beova", "Lasvic" and "Lyfnua" etc., though affect by NHI drug price revisions, and sales increase in generic drugs. Operating profit are expected to increase, since gross profit are expected to increase by an increase in net sales and SG&A are expected to remain flat. From the above, in terms of consolidated results for FY2024, net sales are forecast to be 123.4 billion yen (+3.2% year on year), operating profit to be 6.5 billion (+8.1% year on year), and profit attributable to owners of parent to be 5.0 billion (-6.1% year on year).

2

Highlights of Business Performance

（JPY billions）

120.0

100.0		Cost of
		Sales
	63.1
80.0		Cost of
		Sales Ratio
60.0		Net Sales 55.7%
	113.3
		R&D
40.0	10.9
	SG&A
		（excluding R&D）
20.0		34.1

0.0

SG&A

45.0

Operating

Income

5.1

Cost of

Sales

68.1

Cost of

Sales Ratio

Net Sales 57.0%

119.5

8.0R&D

SG&A

（excluding R&D）

37.4

6.0

SG&A

45.4

Operating

Income

6.0

（JPY billions）

Net sales increased (+ 6.2 )

• Increase in sales of new drugs
• • New drugs grew (Beova, Lasvic etc.)
  • Increase in sales of long-listed products (Kipres, Mucodyne)

Cost of sales ratio increased (＋1.3 %point)

• Increase in sales of new drugs (Beova, Lasvic etc)
• • Increase in the ratio of new drugs

• Impact of NHI drug price revisions (Kyorin Pharmaceutical: 7% range)
• Loss on disposal of generic drugs
• Effect of exchange rate

Gross profit increased (+ 1.2)

SG&A cost increased (+ 0.4)

• R&D expenses decreased (- 2.9)
• Reactionary drop of milestone payment
• Decline of expenses regarding of ActivX
• SG&A (excluding R&D) increased (+ 3.3)
• Increase in selling expenses, personnel expenses, depreciation expenses and license fees etc.

Operating profit increased (+ 0.9)

FY2022FY2023

3

Consolidated Financial Results

（JPY billions）			（Year on Year）	（vs Forecast）
	■Net sales	119.5		(+6.2）			（＋3.3）
	●New drugs (Japan)	82.6		(+7.8）			（＋3.5）
		FY2022		FY2023

（JPY billions）

FY2022

Net sales	113.3
New drugs, etc	74.8
(Japan)
New drugs	0.3
(Overseas)
Generic drugs	38.2

FY2023 Change

1. ＋6.2
2. ＋7.8

0.4 ＋0.1

36.6 －1.6

・Beova	12.9	⇒	18.1	（ ＋5.2）	（ －0.8）
・Lasvic	2.5	⇒	4.9	（ ＋2.4）	（ ＋1.7）
・Lyfnua	0.2	⇒	0.8	( ＋0.6）	（ －0.5）
・Desalex	8.5	⇒	8.9	（ ＋0.4）	（	0）
・Flutiform	12.0	⇒	12.9	（ ＋0.9）	（ ＋1.5）
・Pentasa	12.8	⇒	12.3	（ －0.5）	（ ＋0.5）
・Kipres	6.6	⇒	7.0	（ ＋0.4）	（ ＋1.7）
・Mucodyne	3.5	⇒	4.2	（ ＋0.7）	（ ＋1.2）
・Nasonex	2.5	⇒	2.0	（ －0.5）	（ ＋0.8）
・Uritos	0.7	⇒	0.5	（ －0.2）	（ ＋0.3）
●New drugs (Overseas)		0.4	(+0.1 ）		（0）
●Generic drugs		36.6	（－1.6）		（0）
Decrease sales in AG products
Decrease sales in supplies to other companies
Items launched in FY2023 contribute to sales
■Operating profit		6.0	（+0.9）			（0）

●Cost of sales ratio : 57.0％（FY2022: 55.7％）

[Factors of decrease] Increase in sales of new drugs (Beova, Lasvic etc.) - Increase in the ratio of new drugs

[Factors of increase] NHI drug price revisions, Loss on disposal of generic drugs effect of exchange rate

Operating profit	5.1
Ordinary profit	5.8

6.0 ＋0.9

6.6 ＋0.8

●R&D : 8.0（FY2022: 10.9 ）

Reactionary drop of milestone payment, decline of expenses regarding of ActivX, etc.

●SG&A (excluding R&D expenses) : 37.4 (FY2022: 34.1）

Increase in selling expenses, personnel expenses, depreciation expenses and license fees etc.

■ Profit attributable to owner of parent 5.3 （+0.6）

（＋0.4）

Profit attributable	4.7
to owner of parent

5.3 ＋0.6

Extraordinary profit 1,404 mil.: gain on sale of investment securities of 993 mil. etc.

Extraordinary loss 987 mil.: expenses regarding voluntary retirement program of 869 mil. etc.

4

Main Product Sales Update

（JPY billions）	FY2019	FY2020	FY2021	FY2022	FY2023	Change	Change
（％）

FY2024

（Forecast）

New drugs, (Japan)

Beova (Kyorin)

(β3 adrenergic receptor agonist overactive bladder therapeutics )

Lasvic

(New quinolone synthetic antibacterial agent)

Lyfnua

(selective P2X3 receptor antagonist for the treatment of chronic cough)

Desalex

(Antiallergic Agent)

Flutiform

(Combination drug for asthma treatment)

Pentasa

(Ulcerative colitis and Crohn's disease treatment)

Kipres

(Leukotriene Receptor Antagonist)

Mucodyne

(Mucoregulant)

Uritos (Kyorin)

(Therapeutic agent for overactive bladder)

Milton

(Disinfectant)

Rubysta

(Disinfectant)

4.3	7.3	8.6	12.9	18.1	＋5.2	＋40.3
1.1	0.9	1.8	2.5	4.9	＋2.4	＋99.5
－	－	－	0.2	0.8	＋0.6	＋323.9
2.6	5.7	7.1	8.5	8.9	＋0.4	＋3.7
14.6	13.3	12.6	12.0	12.9	＋0.9	＋7.1
13.3	12.8	14.0	12.8	12.3	－0.5	－4.0
11.8	8.3	8.4	6.6	7.0	＋0.4	＋5.9
5.8	3.3	3.5	3.5	4.2	＋0.7	＋20.6
5.8	2.3	1.3	0.7	0.5	－0.2	－26.4
2.4	2.1	2.1	2.0	1.9	－0.1	－6.7
1.5	2.0	2.1	2.1	1.5	－0.6	－25.8

22.0

6.4

1.5

9.6

12.5

11.6

5.3

4.3

0.3

1.9

1.5

	Montelukast tablets "KM"	11.5	10.8	12.2	13.3	12.3	－1.0	－7.7
	(Leukotriene Receptor Antagonist)
Generic	Mometasone Nasal 50μg "KYORIN"	2.8	3.8	3.6	4.7	4.5	－0.2	－2.7
drugs	(Spray type allergic rhinitis remedy)
	Imidafenacin tablets & OD "KYORIN"	－	0.7	0.8	0.7	0.6	－0.1	－14.0
	(Therapeutic agent for overactive bladder)

11.8

4.3

0.5

5

R&D Expenses, Capital expenditure & Depreciation expense

（JPY millions）	FY2019	FY2020	FY2021	FY2022	FY2023	Change		FY2024
（％）	（Forecast）
R&D expenses	10,987	9,703	8,897	10,903	8,019	－26.5	8,500
Capital expenditure	3,590	4,307	3,624	5,252	6,587	＋25.4	6,600
Depreciation	3,221	3,564	3,714	3,840	4,290	＋11.7	4,500
expense

（JPY Billions）	FY2022	FY2023		FY2024
	（Forecast）

Plant facilities	4.2	5.5	5.1
Equipment for	0.5	0.5	0.9
control, sales
activities
Equipment for	0.5	0.5	0.6
research

6

Development pipeline

Main R&D Activities -1 (as of May 10, 2024)

Ph 3 ～ Launch

Stage	Code	Proposed Indication	Origin		Features	Note
Japan	Overseas
Ph 3	Ph 3	KRP-R120	Interstitial lung disease:	aTyr		It is a fusion protein drug having the action to
(Sep 2022)	(aTyr pharma,		ILD	pharma		suppress, by binding to neuropilin-2 (NRP2)
	USA)		(pulmonary sarcoidosis)			receptor, the excessive activation of immune
							cells, and is a potential first-in-class therapy
							to treat inflammatory diseases such as
							pulmonary sarcoidosis
	POC Project（Ph1 ～ Ph2）
Stage
Japan	Overseas	Code	Proposed Indication	Origin		Features	Note
Ph 1		KRP-114VP	Overactive bladder	Merck	It selectively acts on β3 receptors in the	Additional
(Aug 2022)						bladder and increases bladder capacity by	Indication
						enhancing the bladder-relaxing effect of	for Beova
						noradrenaline during the urinary storage	in pediatric
						phase, resulting in the improvement of	patients
						incontinence symptoms of urinary urgency,
						frequent urination and urge urinary
						incontinence with OAB.
―	Ph 1	KRP-A218	Rhinovirus infection at	In-house	It is antiviral drug that suppresses viral
	(Apr 2021,		risk of potentially severe		growth by targeting host molecules
	England)

7

Development pipeline

Main R&D Activities -2 (as of May 10, 2024)

Licensing development (License-in)

Stage			Proposed
		Code	Origin	Features	Note
	Over
Japan	Indication
seas
Ph 2	―	AKP-009	Benign	ASKA	Novel androgen receptor	-ASKA Pharmaceutical granted
(Dec 2019)			Prostatic	Pharmaceuti	modulator mode of action with	KYORIN Pharmaceutical the joint
ASKA			Hyperplasia	cal	the potential to exhibit prostatic	development and
Pharmaceutical					shrinkage and to improve urinary	commercialization rights for AKP-
					function as a novel therapeutic	009 in Japan (Sep 2020)
					agent for Benign Prostatic	-Additional Ph1 study at a higher
					Hyperplasia	dose has been completed (ASKA)

• Ph1 trial is being conducted again (ASKA Pharmaceutical)
• Development of GMAC for Fabry disease is terminated

Licensing development (License-out)

Stage	Compound /	Licensee	Therapy	Origin	Features	Note
Code	area / Action
Ph 3	KRP-203	Priothera	―	In-house	Sphingosine-1-Phosphate	Transfer of intellectual
					Receptor Agonist	property(patents and data required
						for the development and sale) and
						APIs (Sep 2020)

8

Other (as of May 10, 2024)

Code	Proposed	Origin	Note
Indication
KRP-DT123	Tinnitus	SUSMED	Collaboration research and sales agreement for development of Digital
			Therapeutics (DTx) in otolaryngology Field (Nov 2022)
			Specified clinical trial is in progress (Sep 2023)

9