IR Meeting - 科研製薬株式会社...Licensed overseas “KP-470” –a new compound for...

IR MeetingFiscal 2018

(Year Ended March 31, 2019)

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Comments:

The assumptions made in this document are based on available

data current at May 2019 and on the rationale of Kaken

Pharmaceuticals.

Preceding the launch of any new drug, much time and money is

spent on development. Drug development is based on numerous

trials which test for effectiveness and safety. The development of

some drugs is abandoned during this process.

The “Development Status” is based on the development plans

available in May 2019. Accordingly, the status may change in

accordance with progress in the development plans.

These financial highlights may not be in accordance with normal

U.S. and international accounting standards.

～ Topics ～

・Launched “HERNICORE”, Indicated for Treatment of Lumber Disc Herniation.

・“CLENAFIN” – a topical formulation for Onychomycosis

1. Our licensing partner Tai Tian Pharmaceuticals Co., Ltd. started sales of this product in

Taiwan

2. Licensed development and sales rights in China to AIM in China

3. Licensed sales rights in Hong Kong and Macao to Main Life Corp., Ltd. in Hong Kong

・Licensed in “Lenabasum,” for systemic sclerosis and dermatomyositis, from Corbus

Pharmaceuticals Holdings, Inc. in the United States

・Licensed in “Ivermectin Lotion 0.5%” for head lice

2※TIPR-HUYA Advancing Innovative Medicines

Main Points for Fiscal 2018 (ended March 31, 2019)

・ Increase in sales of Clenafin

・ Annual dividends 150.00 yen per share, undertook share buybacks totaling

0.60million shares.

・ Decrease in revenue by 4.3% due to the impact of the NHI drug price

revision, generic products and competing products

Decrease profit due to increased R&D expenses, etc.

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Consolidated Performance in FY2018 (ended March 31, 2019)

FY2017 FY2018 ChangeChange

(%)

FY2018

(Est.)※Achieved

（％）

Net sales 98,430 94,165 -4,264 95.7 94,800 99.3

Cost of sales 42,403 40,363 -2,040 95.2 40,900 98.7

Selling, general and

administrative expenses28,530 29,209 679 102.4 31,400 93.0

R&D expenses 8,152 10,261 2,109 125.8 11,700 87.7

Operating profit 27,496 24,592 -2,903 89.4 22,500 109.3

Ordinary profit 27,854 24,972 -2,882 89.7 22,800 109.5

Profit before income

taxes27,686 24,922 -2,763 90.0 22,700 109.8

Profit 19,043 17,775 -1,267 93.3 16,400 108.4

※ FY2018 (Est) : 9th May 2019

(Millions of yen, rounded down)

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Breakdown of Consolidated Net Sales

FY2017 FY2018 Change Change (%)

Pharmaceuticals and medical

devices (sales to medical institutions)82,560 75,973 -6,586 92.0

Agrochemicals 5,639 5,640 1 100.0

Real estate rental 2,407 2,360 -46 98.1

Other 7,823 10,190 2,366 130.3

Total 98,430 94,165 -4,264 95.7


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Artz ： Growing sales volume, but decrease revenue due to effect of NHI drug price revision.

Clenafin: Growth owing to an increase in prescriptions to new patients.

Seprafilm: Decrease revenue due to effect of competing products.

Sales Breakdown of Pharmaceuticals and Medical Devices

FY2017 FY2018 Change (%)

Artz 28,351 24,333 85.8

Clenafin 22,185 22,584 101.8

Seprafilm 10,162 9,825 96.7

Fiblast Spray 3,616 3,126 86.5

Lipidil 4,208 2,400 57.0

Generic products (total) 11,793 10,279 87.2


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Consolidated Balance Sheets / Consolidated Cash Flows

Consolidated Balance Sheets (Millions of yen, rounded down)

FY2017 FY2018 Change

Current assets 103,859 103,731 -128

Non-current assets 48,557 52,254 3,696

Total assets 152,417 155,985 3,567

Current liabilities 31,401 27,580 -3,821

Non-current liabilities 7,141 7,274 132

Total liabilities 38,543 34,854 -3,688

Total net assets 113,874 121,131 7,256

Consolidated Cash Flows

FY2017 FY2018 Change

Net cash provided by (used

in) operating activities21,703 21,129 -573


in) investing activities-3,245 -5,744 -2,498


in) financing activities-9,530 -9,524 5

Cash and cash

equivalents at end of

period52,694 58,555 5,860

Major Changes

◆ Assets:

Cash and cash equivalents: 58,555million yen

（+5,860 million yen ）◆ Liabilities:

Interest-bearing debt: 3,875 million yen

◆ Net assets:

Retained earnings: 109,057 million yen

（+11,772 million yen）Treasury stock: -26,782 million yen

（-3,523 million yen ）

Major Changes

◆ Net cash provided by (used in) operating activities:

Income before income taxes: 24,922 million yen

◆ Net cash provided by (used in) investing activities:

Payment of long-term prepaid expenses:

3,661 million yen

Purchase of property, plant and equipment:

1,908 million yen

◆ Net cash provided by (used in) financing activities:

Cash dividends paid: 6,001 million yen

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Consolidated Performance

93,889

109,730101,479 98,430

94,165 92,900

20,631

35,146

30,707

24,496 24,592 22,300

12,122

21,143 22,017

19,04317,775 16,100

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 (Est.)

Net sales

Operating income

Net income

2015/3 2016/3 2017/3 2018/3 2019/3 2020/3

Annual Dividends* 118 yen 146 yen 150 yen 150 yen 150 yen

150 yen（Forecast）

ROE 16.7% 25.3% 22.9% 17.6% 15.1% －

* Common shares were consolidated in the ratio of 1 share for every 2 shares as of October 1, 2015.

Annual dividends per share is shown on a post-share consolidation basis.

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Code Indication Stage Remarks

BBI-4000Primary axillary

hyperhidrosisPIII Licensed from Brickell Biotech, Inc.

KMW-1Removal of eschar

with thermal burnsPIII

Licensed from MediWound Ltd.;

Overseas product name : NexoBrid

KP-607 Onychomycosis PIIn-house drug discovery

Post Clenafin/Jublia

KAR

（Ivermectin）Head Lice

infestation

Preparing for

clinical trialLicensed from Arbor Pharmaceuticals, LLC.

【 Clinical trial being conducted by partner 】

Lenabasum Systemic Sclerosis PIIILicensed from Corbus Pharmaceuticals Holdings, Inc. ;

Corbus is conducting the global clinical trial.

Lenabasum Dermatomyositis PIII

Licensed from Corbus Pharmaceuticals Holdings, Inc. ;

Corbus is planning as a global clinical trial.

( Just started in the United States )

KP-470 Psoriasis PI

In-house drug discovery

Licensing partner, Bausch Health Companies Inc.

is conducting the clinical trial.

Development Status

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Consolidated Performance Forecast for FY2018(ending March 2019)

FY2018 FY2019 (Est.) Change Change (%)

Net sales 94,165 92,900 -1,265 98.7

Operating profit 24,592 22,300 -2,292 90.7

Ordinary profit 24,972 22,700 -2,272 90.9

Profit before income taxes 24,922 22,600 -2,322 90.7

Profit 17,775 16,100 -1,675 90.6

Selling, general and administrative expenses

29,209 29,500 291 101.0

R&D expenses 10,261 10,600 339 103.3


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Sales Forecast for Pharmaceuticals and Medical Devices

FY2018 FY2019(Est.) Change (%)

Artz 24,333 24,400 100.3

Clenafin 22,584 23,200 102.7

Seprafilm 9,825 9,900 100.8

Fiblast Spray 3,126 3,200 102.4

Lipidil 2,400 1,900 79.2

Generic products (total) 10,279 10,400 101.2


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Domestic pharmaceuticals and medical devices

Topical onychomycosis treatment

ClenafinSales

（Millions of yen）

(Forecast)

Forecasts for FY2019： 102.7%, year on year

Strengthen activities to provide

information focused on dermatologists

(Hold Web seminars and enhance product

sites)

Disease awareness activities for patients (put up posters in medical institutions, etc.)

Anti-osteoarthritis product

ArtzSales


(Forecast)

28,978 28,351 24,333 24,400

2016 2017 2018 2019

Forecasts for FY2019： 100.3%, year on year

Promote growth in the hyaluronic market and

expansion of market share by utilizing

evidence information accumulated since

release

21,624 22,185 22,584 23,200

2016 2017 2018 2019

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Forecasts for FY2019： 102.4% year on year

Work to expand further by appealing the

revised wound/burn guidelines effectively

Forecasts for FY2019： 100.8% year on year

Expand use through proposals for techniques

and dosage forms in line with the needs of

physicians focused on surgeries for which

Seprafilm not used so much

Domestic pharmaceuticals and medical devices

Anti-adhesive absorbent barrier

Seprafilm Sales


11,036

10,162 9,825 9,900

2016 2017 2018 2019(Forecast)

Wound-healing product

Fiblast Spray Sales


(Forecast)

3,700 3,616 3,126 3,200

2016 2017 2018 2019

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Medium-term business plan 2021

● Licensed in “Lenabasum,” a therapeutic agent for systemic sclerosis and dermatomyositis, from Corbus Pharmaceuticals Holdings, Inc. in the United States

● Licensed in “Ivermectin Lotion 0.5%,” a therapeutic agent for head lice infestations, from Arbor Pharmaceuticals, LLC. in the United States

● Started clinical trials of “KP-607” – an topical agent for onychomycosis (in-house developed product)

● Licensed overseas “KP-470” – a new compound for psoriasis (in-house developed product)

⇒ Bausch Health Companies Inc. is conducting exploratory clinical trials in Canada

● Started research collaboration with Numab Therapeutics in Switzerland for discovery of new antibody drugs

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Target for FY2018

Initial Target(Announced May 2016)

Net sales 110 billion yen

Revised Target(Announced May 2018)

FY2018 Result

94.8 billion yen 94.1 billion yen

■ For enhancement of the R&D pipeline

Summary of the Medium-term Business Plan 2018

Establishment of growth foundations for the future

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■ Maximize the Value of Clenafin and New Products

■ Strengthening of Sales Base

Introduction of new sales support system and reorganization of sales force

➡ Improvement in quality and efficiency in provision of product information

Summary of the Medium-term Business Plan 2018

～ Clenafin / Jublia ～《 Japan 》

● Steady growth despite being affected by competing products and NHI drug price revision

〔Results for FY2018： 22,584 millions of yen ( 113.7%, March, 2017 compared)〕

《 Overseas 》

● Korea: Licensing partner, Dong-A ST Co., Ltd. launched Jublia in June, 2017 in Korea, and

showing strong performance.

● Taiwan: Licensing partner Tai Tien Pharmaceuticals Co., Ltd., which is a consolidated

subsidiary of Mitsubishi Tanabe, launched Jublia

● Hong Kong/ Macau: Licensed to Main Life Corp., Ltd. in Hong Kong.

● China： Licensed to AIM

～ New products ～● Launched “REGROTH,” Medicinal product for periodontal regeneration.

● Launched “HERNICORE”, Indicated for Treatment of Lumber Disc Herniation.

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Establish a base for sustainable growth

1. Enhance the R&D pipeline

2. Maximize the value of Clenafin (overseas expansion) and new

products (overseas expansion and additional indication)

3. Strengthen and optimize the sales base to achieve consolidated

net sales of 94.5 billion yen

4. Develop human resources and reform business process to improve productivity

■ Basic Policy

Medium-term Business Plan 2021

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■ FY2021 Management Numerical Targets

ItemNumerical Target

(Consolidated)

Net sales 94.5 billion yen

Operating profit 25 billion yen

ROE 12% or more

Management Numerical Targets

Medium-term Business Plan 2021:

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■ Expand and Integrate the Drug Discovery Platform

Infectious

DiseasesDeep mycosis etc.

Immune SystemInflammatory skin

diseases, Allergy and

RA etc.

Nervous System

Neuropathic pain etc.

Expand technology platform

Focusing on three areas

Enhance the R&D PipelineMedium-term Business Plan 2021:

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Licensing of Development Products

Seprafilm

BBI-4000 (PIII) KMW-1 (PIII)

Orthopedics

Dermatology and

Plastic Surgery

Other Fields

KP-607 (PI) and Ivermectin (PI preparation)

KP-470 (Exploratory clinical trials, Bausch Health

Companies Inc.)

Regroth

Lenabasum (PIII / Corbus Pharmaceuticals Holdings,

Inc.)

< R&D Pipeline >

Clenafin

Artz

Fiblast Spray

Hernicore

In-licensing activity


(e.g., collagen disease etc.)



Enhance the R&D Pipeline

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Current By FY2021 (Planned)

Lau

nch

or

Su

bm

issio

n

BBI-4000

KMW-1

Lenabasum

Clin

ical T

rial

Sta

ge

P III: BBI-4000

P III: KMW-1

P III: Lenabasum(Corbus Pharmaceuticals Holdings, Inc.)

P I: KP-607

P I preparation: Ivermectin

Exploratory clinical trials :

KP-470 (Canada, Bausch health

Companies, Inc.)

Ivermectin

KP-607

KP-470 (Japan, Kaken)

• Pipeline from in-house

drug discovery

• In-licensed development

product

■ Vision of the R&D Pipeline in Three Years


Enhancing R&D Pipeline

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Maximize the Value of Clenafin and New Products

Clenafin: Maximize the value by overseas expansion

• Korea (Dong-A ST Co., Ltd.): Launched

on the market in 2017

• Taiwan (Tai Tien Pharmaceuticals Co.,

Ltd.): Launched on the market in 2018

(Under drug price application)

Clenafin East Asia: Strengthen and promote collaborations with partners in each country

US & Canada: Sales by Bausch Health Companies Inc.

Regroth

• Hong Kong and Macau (Main Life Corp., Ltd.):

Submitted NDA

• China (AIM): Preparing for clinical trialTopical onychomycosis

treatment product

Medicinal product for

periodontal regeneration

Accumulate data in Japan and

analyze the overall market with the

aim of overseas expansion

Plans also underway to also consider maximization of the

value of products under development in Phase III

Lenabasum (systemic sclerosis and dermatomyositis): Expand to other incurable diseases

New Products: Maximize the value by overseas expansion and

additional indication

Other territories: Marketing rights returned from Bausch

Health Companies Inc. >>> Consider new partners


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Strengthen and Optimize the Sales Base

■ Grow Sales by Utilization of the Sales Base

Clenafin

Regroth

Cultivate New Product Groups

Hernicore

Disseminate through e-Detail and media

Establish safety and effectiveness in Available facilities

Enhance presence in dermatology and plastic surgery toward the release of BBI-4000 and KMW-1

Also proactively license in product sales rights that can utilize the sales base

Expand Main Product Groups

Artz Seprafilm

Aim to further improve presence in key fields by strengthening promotions of each product

Strengthen Sales Base Aim for personnel deployment and organization according to product characteristics

and fields in response to market changes and system changes

Disseminate evidence of main products and new products through scientific society and

research society activities


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Develop Human Resources and Reform Business to Improve Productivity

■ Human Resource Development and Education• Improve the productivity of all employees and develop employees with a

presence

• Extend the strengths of individuals and promote management to utilize

human resources

• Develop human resources who can deliver results globally

■ Business Process and Organizational Reform

• Promote the right people in the right place, rationalize the organization,

and optimize business (including IT investment)

• Develop an environment in which all employees can play an active role

by reforming work styles

• Decrease manufacturing costs through planned and efficient capital

investment

FY 2018 FY 2019 FY 2020 FY 2021

94.1 94.5

(Billions of yen)

Consolidated net sales for FY2021: 94.5 billion yen

Establish a growth base Sustainable growth

Maximize the value of Clenafin and new products

with overseas expansion

Strengthen and optimize the sales base

Develop human process resources and

reform business to improve productivity

Enhance the development pipeline


Performance Forecast (Consolidated)

Growth Factors

• Continuous launch of

new products

• Overseas expansion

• Acquisition of new in-

licensed products

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◆ Capital Policy

• Priority investment to enhance the development pipeline

• Aim for continuous and stable dividends

Continue to invest for sustainable growth

and work to improve corporate value

while providing stable shareholder returns

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IR Meeting - 科研製薬株式会社...Licensed overseas “KP-470” –a new compound for...

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