Chugai Pharmaceutical : CONSOLIDATED FINANCIAL STATEMENTS (IFRS) (Non-Audited)(for the second quarter of the fiscal year 2022)

NOTICE: For the convenience of capital market participants, Chugai makes efforts to provide English translations of the information disclosed in Japanese, provided that the Japanese original prevails over its English translation in the case of any discrepancy found between documentation.

CONSOLIDATED FINANCIAL STATEMENTS (IFRS) (Non-Audited)

(for the second quarter of the fiscal year 2022)

Name of Company:	Chugai Pharmaceutical Co., Ltd.	July 21, 2022
Stock Listing:	Tokyo Stock Exchange
Security Code No.:	4519 (URL https://www.chugai-pharm.co.jp/english)
Representative:	Osamu Okuda, President & CEO
Contact:	Toshiya Sasai, Head of Corporate Communications Department
Phone:	[phone]

Date of Submission of Quarterly Marketable Securities Filings: July 22, 2022

Date on which Dividend Payments to Commence: August 30, 2022

Supplementary Materials Prepared for the Quarterly Financial Statements: Yes

Presentation Held to Explain the Quarterly Financial Statements: Yes (for institutional investors, securities analysts and the media) (Note: Amounts of less than one million yen are rounded.)

1. Consolidated results for the second quarter of FY 2022 (January 1, 2022-June 30, 2022)

(1) Consolidated operating results

	Revenues	% change	Operating profit	% change	Net income	% change
First six months of FY 2022	¥596,166 million	52.8	¥286,947 million	78.6	¥204,153 million	72.8
First six months of FY 2021	¥390,229 million	6.0	¥160,679 million	14.3	¥118,137 million	15.5
	Net income		Total
	attributable to
	% change	comprehensive	% change
	Chugai
		income
	shareholders
First six months of FY 2022	¥204,153 million	72.8	¥194,538 million	60.8
First six months of FY 2021	¥118,137 million	15.5	¥120,997 million	18.8
	Earnings per share	Earnings per share
	(Basic)		(Diluted)
First six months of FY 2022	¥124.14		¥124.08
First six months of FY 2021	¥71.86		¥71.81

Note: Percentages represent changes compared with the same period of the previous fiscal year.

(2) Consolidated results (balance sheet)

			Equity attributable		Ratio of equity
	Total assets	Total equity	to Chugai		attributable to
			shareholders		Chugai shareholders
As of Jun. 30, 2022	¥1,625,604 million	¥1,307,340 million	¥1,307,340 million	80.4%
As of Dec. 31, 2021	¥1,538,694 million	¥1,188,017 million	¥1,188,017 million	77.2%

2. Dividends

			Annual dividends per share
	End of first	End of second		End of third	End of fiscal year	Total
	quarter	quarter		quarter
FY ended Dec. 2021	－	¥30.00		－	¥46.00	¥76.00
FY ending Dec. 2022	－	¥38.00
FY ending Dec. 2022				－	¥38.00	¥76.00
(Forecast)
Note: Whether the most recent dividend forecast has been revised: No

3. Consolidated forecasts on Core basis for FY 2022 (January 1, 2022-December 31, 2022)

		Core revenues	% change	Core operating		% change	Core net income	% change
		profit
First six months of FY	¥504,251 million	+43.8	¥201,427 million	+45.8	¥144,744 million	+46.3
2022 (Results)
FY ending Dec. 2022		¥1,150,000 million	+15.0	¥440,000 million	+1.4	¥312,500 million	+0.3
(Forecast)
		Core earnings	Core dividend
		per share		payout ratio %
First six months of FY	¥87.97	+46.3	－
2022 (Results)
FY ending Dec. 2022		¥190.00	+0.3	40.0
(Forecast)

Notes: 1. Except for Core dividend payout ratio, percentages represent changes compared with the same period of the previous

fiscal year for the forecasts, and the percentage of forecast levels that have been achieved to date for the results.

1. Whether the most recent forecasts for consolidated figures have been revised: No
2. The figures for the consolidated forecasts and actuals are calculated based on Core basis indicators established by Chugai and used on a consistent basis. Core EPS is diluted earnings per share attributable to Chugai shareholders on a Core basis.

4. Others

1. Changes in the state of material subsidiaries during the period (Changes in the state of specific subsidiaries with change in scope of consolidation): None
2. Changes in accounting policies and changes in accounting estimates
3. 1. Changes in accounting policies required by IFRS: None
   2. Changes in accounting policies other than those in (a) above: None

1. 1. Changes in accounting estimates: None
2. Number of shares issued (common stock):
3. 1. Number of shares issued at the end of the period (including treasury stock)
   2. Number of treasury stock at the end of the period
   3. Average number of shares issued during the period (six months)

As of June 30, 2022	1,679,057,667	As of Dec. 31, 2021	1,679,057,667
As of June 30, 2022	34,068,838	As of Dec. 31, 2021	34,739,943
First six months of FY	1,644,590,421	First six months of FY	1,644,048,643
2022	2021

Notes:

The quarterly financial statements are not subject to quarterly reviews.

Explanation of the appropriate use of performance forecasts and other related items

1. Portions of this report that refer to performance forecasts or any other future events are believed to be reasonable under information available at the time of the forecasts. Actual results may differ from these forecasts due to potential risks and uncertainties.
2. The forecast which is published for shareholders and investors is based on the internal management indicator Core basis under International Financial Reporting Standards ("IFRS"). The difference between IFRS results and Core results will be explained at each event and presentation.
3. For the specifics of the forecasts, please refer to "Consolidated Forecasts and Other forward-looking Statements" on page 6 of the attachment.
4. Chugai is scheduled to hold a presentation of the financial statements as noted below. The presentation materials, the verbal recording, the Q&A, and other related documents will be posted on the Chugai's website following the conclusion of the presentation.
   Presentation for institutional investors, securities analysts and the media (An online conference will be held simultaneously) (Japanese only): July 21, 2022, Thursday (Japan time).
   The English translation of the presentation materials will be posted on the website on the next business day.

Index of the Attachment
1. Qualitative Information .................................................................................................................................................	2
(1)	Consolidated operating results ...................................................................................................................................	2
(2)	Consolidated financial position ..................................................................................................................................	6
(3)	Consolidated forecasts and other forward-looking statements ................................................................................	7
2. Interim Condensed Consolidated Financial Statements and Major Notes ..............................................................	8
(1)	Interim condensed consolidated income statement and interim condensed consolidated statement of
	comprehensive income ................................................................................................................................................	8
(2)	Interim condensed consolidated balance sheet ...........................................................................................................	10
(3)	Interim condensed consolidated statement of cash flows ...........................................................................................	11
(4)	Interim condensed consolidated statement of changes in equity ................................................................................	12
(5)	Notes regarding the going concern assumption ..........................................................................................................	13
(6)	Notes regarding the interim condensed consolidated financial statements ................................................................	13

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Chugai Pharmaceutical Co., Ltd. (4519) CONSOLIDATED FINANCIAL STATEMENTS (2nd quarter of FY 2022)

1. Qualitative Information

(1) Consolidated operating results in billions of yen

	First six months of		First six months of		% change
	FY 2022.12	FY 2021.12
	(Jan. 1, 2022-Jun. 30, 2022)	(Jan. 1, 2021-Jun. 30, 2021)
Core results
Revenues	504.3		390.2		+29.2
Sales	452.8		304.1		+48.9
Royalties and other operating	51.4		86.1		(40.3)
income
Cost of sales	(193.7)		(121.9)		+58.9
Gross profit	310.6		268.4		+15.7
Marketing and distribution	(35.1)		(34.0)		+3.2
Research and development	(65.8)		(59.9)		+9.8
General and administration	(8.3)		(8.7)		(4.6)
Operating profit	201.4		165.8		+21.5
Net income	144.7		121.7		+18.9
IFRS results
Revenues	596.2		390.2		+52.8
Operating profit	286.9		160.7		+78.5
Net income	204.2		118.1		+72.9

Consolidated financial highlights (IFRS results)

Revenues for the six months under review were ¥596.2 billion (an increase of 52.8% year on year), operating profit for the six months under review was ¥286.9 billion (an increase of 78.5% year on year), and net income for the six months under review was ¥204.2 billion (an increase of 72.9% year on year). These results include non- Core items, such as amortization of intangible assets of ¥0.6 billion, impairment loss of intangible assets of ¥0.2 billion, and restructuring expenses etc. of ¥4.5 billion, as well as the income and other related items which totaled ¥90.7 billion associated with the settlement agreement between Chugai and Alexion Pharmaceuticals, Inc., which are excluded from the Core results that Chugai adopts to manage recurring business activities.

Consolidated financial highlights (Core results)

Revenues for the six months under review were ¥504.3 billion (an increase of 29.2% year on year), due to a significant increase in sales, despite a decrease in royalties and other operating income.

Of revenues, sales were ¥452.8 billion (an increase of 48.9% year on year). Within domestic sales the sales grew significantly over the previous fiscal year primarily due to the steady market penetration of the new products Evyrsdi, Polivy and Enspryng, the favorable sales of the mainstay product Hemlibra, and the supply of Ronapreve to the government, while sales were affected by the NHI drug price revisions of April 2021 and 2022 and market penetration of generic drugs. Overseas sales increased significantly compared to the previous fiscal year due to the major increase in the exports of Hemlibra and Actemra, despite a decrease in the export of Alecensa to Roche. Royalties and other operating income amounted to ¥51.4 billion (a decrease of 40.3% year on year), due to a significant decrease in royalty income from initial shipments of Hemlibra. Furthermore, cost to sales ratio was 42.8%, a 2.7 percentage point rise year on year, reflecting a change in the product mix and other factors. As a result, gross profit amounted to ¥310.6 billion (an increase of 15.7% year on year).

Operating expenses were ¥109.2 billion (an increase of 6.5% year on year). Marketing and distribution expenses were ¥35.1 billion (an increase of 3.2% year on year) due to the effects of foreign exchange and other factors. Research and development expenses amounted to ¥65.8 billion (an increase of 9.8% year on year) due to an increase in expenses associated with the progress of projects and the effects of foreign exchange, etc. General and administration expenses amounted to ¥8.3 billion (a decrease of 4.6% year on year) due to increases in the enterprise tax (pro forma standard taxation) and various expenses, while recognizing gain on sales of property, plant and equipment. As a result, operating profit was ¥201.4 billion (an increase of 21.5% year on year) and net income was ¥144.7 billion (an increase of 18.9%year on year).

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