Kyowa Kirin : Results Presentation Fiscal 2024 First Quarter (0B)

Results Presentation Fiscal 2024 First Quarter

Agenda

Financial Review

Managing Executive Officer, Chief Financial Officer (CFO) Motohiko Kawaguchi

Commercial Update

Managing Executive Officer, Chief Strategy Officer (CSO) Yasuo Fujii

R&D Update

Senior Managing Executive officer, Chief Medical Officer (CMO) Takeyoshi Yamashita, Ph.D.

News Flow in 2024

Managing Executive Officer, Chief Strategy Officer (CSO) Yasuo Fujii

Q&A

Senior Managing Executive officer, Chief Medical Officer (CMO) Takeyoshi Yamashita, Ph.D. Managing Executive Officer, Chief Financial Officer (CFO) Motohiko Kawaguchi

Managing Executive Officer, Chief Strategy Officer (CSO) Yasuo Fujii

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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 reasonable assumptions made by the company in making its forecasts, but the actual results in practice may differ substantially due to uncertain factors.

These uncertain factors include, but are not limited to, potential risks of the business activities in the pharmaceutical industry in Japan and overseas, intellectual property risks, risk of side effects, regulatory risks, product defect risks, risks of changes to the prices for raw materials, risks of changes to market prices, as well as risks of changes to foreign exchange rates and financial markets.

This document is used only for the purpose of providing the information to investors. Though it may contain the information concerning pharmaceutical products (including products under development), it is not for the purpose of promotion, advertising, or medical advice.

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Financial Review

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Summary of Q1 Results

					( Billion Yen / Rounded )
	2023Q1	2024Q1	Changes	FY2024	Progresses
	Results	Results	Plans
Revenue	93.5	105.6	+12.0 (+13%)	473.0	22%
[Overseas Ratio]	[63%]	[68%]	[70%]
Gross Profit	74.6	80.0	+5.4 (+7%)	348.0	23%
[Gross Profit Margin]	[80%]	[76%]	[74%]
SG&A	41.8	40.2	-1.6(-4%)	166.0	24%
[SG&A Ratio]	[45%]	[38%]	[35%]
R&D	16.6	23.3	+6.7 (+40%)	100.0	23%
[R&D Ratio]	[18%]	[22%]	[21%]
Gain/Loss on	0.8	0.9	+0.1 (+13%)	3.0	30%
Equity Method
Core Operating Profit	17.0	17.4	+0.4 (+2%)	85.0	20%
[Core OP Margin]	[18%]	[16%]	[18%]
Profit	12.8	14.6	1.9 (+15%)	63.0	23%

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YoY Analysis -Revenue-

+12.0 billion yen

(incl. forex effect +7.3)

• Japan -2.4

Although Duvroq, Phozevel, and Crysvita increased, revenue in Japan region decreased by 7% due mainly to negative impact by annual NHI price-cut and shrink in G-Lasta affected by competitive products.

• North America +6.6 (incl. forex effect +3.4)

Revenue in North America region increased by 26% with the growth of Crysvita(+21%) and Poteligeo(+44%).

• EMEA +1.3 (incl. forex effect +2.0)

Revenue in EMEA region increased by 8% with the growth of Crysvita(+49%) and Poteligeo(+29%) although the shift from product sales to sales royalties/license fees for 13 established medicines portfolio, such as Abstral, by entered into the Joint Venture Collaboration with Grünenthal on Aug 1, 2023

• APAC +1.9 (incl. forex effect +0.7)

APAC revenue increased by 26% with the growth of Crysvita, and Nesp.

• Other +4.6 (incl. forex effect +1.2)

42% growth in the other revenue was due to the royalties of growing Fasenra (Benralizumab), upfront revenue from Boehringer Ingelheim, and new consolidation of Orchard.

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Revenue of Major Items (Japan)					( Billion Yen / Rounded )
Item	2023Q1	2024Q1	Changes	Reasons	2024		Progresses
Results	Results		Plans
Crysvita	2.3	2.5	+0.2	(+7%)	Market penetration (Launched in Dec 2019)		12.9	19%
Poteligeo	0.4	0.4	+0.0	(+1%)			1.9	23%
Nesp + Nesp-AG1	4.2	3.5	-0.8(-18%)			14.4		24%
Nesp	0.8	0.7	-0.1(-9%)	NHI price-cut &		2.8		25%
Biosimilars' penetration
Nesp-AG	3.5	2.8	-0.7(-20%)			11.7		24%
Duvroq	1.8	2.5	+0.7 (+37%)	Market penetration (Launched in Aug 2020)		12.2	20%
Phozevel	-	0.6	+0.6 (- %)	Launched in Feb 2024		3.3	19%
Orkedia	2.2	2.2	-0.1	(-2%)			11.7	19%
G-Lasta	7.0	5.8	-1.3(-18%)	Biosimilars' penetration		20.5	28%
Rituximab BS	2.2	1.9	-0.3(-13%)	NHI price-cut		7.9	24%
Romiplate	2.7	3.0	+0.3 (+12%)	Market penetration		13.2	23%
(New indication in Jun 2019)
Nouriast	1.7	1.5	-0.2	(-9%)			7.1	21%
Haruropi	0.9	1.0	+0.0	(+4%)			5.2	19%

1 AG stands for Authorized Generic. Official product name is Darbepoetin Alfa [KKF]. Kyowa Kirin Frontier is a marketing authorization holder; Kyowa Kirin is a distributor.

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Revenue of Major Items (ex-Japan)

Item	2023Q1	2024Q1	Changes	Reasons
Results	Results
Crysvita	27.1	35.4	+8.2 (+30%)
North America	18.8	22.8	+4.0 (+21%)	[North America] Market penetration
				[EMEA] Geographical expansion
EMEA	8.0	11.9	+3.9 (+49%)	& Additional indication (Adult/TIO)
[APAC] Geographical expansion
APAC	0.3	0.6	+0.4 (+144%)
Poteligeo	5.8	8.2	+2.4 (+41%)
North America	4.3	6.3	+1.9 (+44%)	[North America] Market penetration
				[EMEA] Geographical expansion
EMEA	1.5	1.9	+0.4 (+29%)	& Market penetration
APAC	-	0.0	+0.0 ( - %)
Libmeldy / Lenmeldy	-	1.1	+1.1( - %)	New consolidation of Orchard
(FDA approval in Mar 2024)
Nourianz	1.7	1.6	-0.1(-7%)	Market penetration
Nesp	2.2	2.9	+0.7 (+32%)
Gran	1.4	1.8	+0.3 (+24%)
Tech-licensing	8.9	11.7	+2.8 (+31%)	Upfront revenue from Boehringer Ingelheim
Benralizumab Royalty1	5.7	6.4	+0.7 (+12%)	and growth of Fasenra

1 Sales royalties of Fasenra which has been marketed by AstraZeneca, including our own estimation.

( Billion Yen / Rounded )

2024 Progresses Plans

175.920%

32.525%

23.327%

8.822%

0.54%

4.525%

8.518%

10.727%

7.225%

45.026%

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FKB; Fujifilm Kyowa Kirin Biologics Co., Ltd.

YoY Analysis -Core OP-

+0.4 billion yen

(incl. forex effect +2.1)

• Gross Profit +5.4 (incl. forex effect +6.4)

Increased in conjunction with JPY12.0B rise in revenue. COGs have increased due to the North America Crysvita Sales royalty after Apr 27, 2023. Hence, gross profit % declined YoY. (80% →76%)

• SG&A +1.6 (incl. forex effect -2.5)

While HR expenses and FX impact increased, SG&A decreased due to the North America Crysvita-related scheme change after Apr 27, 2023.

[HR exp -3.0 / Sales promotion +7.0 (incl. Crysvita profit sharing expenses +7.6) ]

• R&D -6.7 (incl. forex effect -1.8)

Increased in clinical study costs of KHK4083 which is undergoing joint global Phase III clinical study and new consolidation of Orchard

• Gain/Loss on Equity Method +0.1

Despite the reversal of deferred tax assets, sales of Hulio (FKB327/Adalimumab biosimilar) continue to grow.

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YoY Analysis -Profit-

Profit (Jan-Mar) +1.9 billion yen

Core Operating

Profit

+0.4

Profit Before Tax
+2.5	⚫	Finance/Other +2.1

• Gain on disposal of fixed assets +2.4 (0 → 2.4)

• Impairment losses +0.9 (-1.1→ -0.2)

• Provision for loss on contracts +0.6 (-0.6→ - )

• Business restructuring expenses -1.8(-0.5→ -2.3)

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