Eisai : CONSOLIDATED FINANCIAL REPORT for the Three-Month Period Ended June 30, 2021

CONSOLIDATED FINANCIAL REPORT [IFRS] for the Three-Month Period Ended June 30, 2021

August 4, 2021

Eisai Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange (TSE)

TSE Code: 4523

URL:https://www.eisai.com

Representative: Haruo Naito, Representative Corporate Officer & CEO

Contact: Sayoko Sasaki, Vice President, Chief IR Officer & Stakeholder Communications

Telephone: [phone]

Expected date of quarterly report submission: August 6, 2021

Expected date of dividend payment commencement: -

Preparation of quarterly supplementary explanatory material: Yes

Quarterly results briefing held: Yes

(Figures are rounded to the nearest million yen)

1. Consolidated Financial Results for the Three-Month Period Ended June 30, 2021

(1) Consolidated Operating Results

(Percentage figures show year on year change)

															Profit for the	Comprehensive
									Profit before	Profit for the	period attributable
	Revenue	Operating profit			income for the
			income taxes	period	to owners of the
									period
															parent
	(¥ million)		(%)	(¥ million)	(%)		(¥ million)	(%)	(¥ million)		(%)		(¥ million)		(%)	(¥ million)		(%)
Three-month
period ended	198,894		20.1	55,407	72.5		55,783	71.9	42,305		70.9		42,161		72.6	42,417		78.9
June 30,
2021
Three-month
period ended	165,583		7.5	32,120	24.4		32,448	20.3	24,753		12.0		24,425		12.7	23,710		672.0
June 30,
2020
		Earnings per share attributable		Earnings per share attributable
			to owners of the parent (basic)		to owners of the parent (diluted)
						(¥)					(¥)
Three-month period					147.07					147.04
ended June 30, 2021
Three-month period					85.23					85.20
ended June 30, 2020

(2) Consolidated Financial Position

			Equity attributable to	Ratio of equity	Equity per share
	Total assets	Total equity	attributable to	attributable to
	owners of the parent
			owners of the parent	owners of the parent
	(¥ million)	(¥ million)	(¥ million)	(%)	(¥)
As of June 30, 2021	1,129,341	747,354	722,552	64.0	2,520.42
As of March 31, 2021	1,090,009	727,942	703,183	64.5	2,452.97

2. Dividends

			Annual dividend per share
		End of Q1	End of Q2	End of Q3		End of FY	Total
	(¥)	(¥)	(¥)		(¥)	(¥)
FY 2020		-	80.00	-		80.00	160.00
FY 2021		-
FY 2021 (Forecast)			80.00	-		80.00	160.00

(Note) Revisions to the latest dividend forecast: No

3. Consolidated Financial Forecast for Fiscal 2021 (April 1, 2021 - March 31, 2022)

(Percentage figures show year on year change)

												Profit for the year	Earnings per share
	Revenue		Operating profit		Profit before	Profit for the	attributable to	attributable to
			income taxes	year		owners of the	owners of the
												parent		parent (basic)
	(¥ million)		(%)	(¥ million)	(%)		(¥ million)	(%)	(¥ million)		(%)	(¥ million)		(%)	(¥)
Fiscal	701,000		8.5	76,000	46.8		76,500	45.6	59,000		38.9	58,500		38.9	208.00
Year
(Note) Revisions to the latest financial forecast: Yes

* Explanatory Notes

1. Changes in number of significant subsidiaries during the period (changes in specified subsidiaries resulting in a change in scope of consolidation): No
2. Changes in accounting policies and accounting estimates:
3. 1. Changes in accounting policies required by IFRS: Yes
   2. Changes in accounting policies other than 1): No
   3. Changes in accounting estimates: No
4. Number of shares issued (common shares):

1)	Number of shares issued	As of June 30, 2021	296,566,949	As of March 31, 2021	296,566,949
	(including treasury shares)
2)	Number of treasury shares	As of June 30, 2021	9,826,160	As of March 31, 2021	9,839,021
3) Weighted average number
For the three-month		For the three-month
	of shares outstanding	period ended June 30,	286,671,064	period ended June 30,	286,583,220
		2021		2020

The Company's shares held through a trust (61,510 shares) are not included in the number of treasury shares as of the end of the period, but are included in the average number of shares outstanding as treasury shares that are deducted from the calculation of earnings per share.

• This financial report is not subject to the quarterly review procedures by independent auditors.
• Explanation concerning the appropriate use of results forecast and other special instructions:

(Caution concerning forward-looking statements)

Materials and information provided in this financial disclosure may contain "forward-looking statements" based on expectations, business goals, estimates, forecasts and assumptions that are subject to risks and uncertainties as of the publication date of these materials. Accordingly, actual outcomes and results may differ materially from these statements depending on a number of important factors. Please refer to pages 9-10 for details with regard to the assumptions and other related matters concerning the consolidated financial forecast.

(Methods for obtaining supplementary materials and content of financial results disclosure meeting)

Supplementary materials are attached to this financial report. The Company plans to hold a financial results disclosure meeting for institutional investors and securities analysts on Wednesday, August 4, 2021. The handouts from the disclosure meeting will be made available on the Company's website after the event.

Supplemental Materials: Table of Contents
1. Qualitative Information regarding Financial Results for the Period		(Page)
(1)	Operating Results	･･･････････	2
(2)	Financial Position	･･･････････	4
(3)	Research & Development Pipeline, Alliances, and Other Events	･･･････････	5
(4)	Information on Outlook for the Future including Financial Forecast	･･･････････	9
2. Condensed Interim Consolidated Financial Statements and Major Notes
(1)	Condensed Interim Consolidated Statement of Income	･･･････････	11
(2)	Condensed Interim Consolidated Statement of Comprehensive Income	･･･････････	12
(3)	Condensed Interim Consolidated Statement of Financial Position	･･･････････	13
(4)	Condensed Interim Consolidated Statement of Changes in Equity	･･･････････	15
(5)	Condensed Interim Consolidated Statement of Cash Flows	･･･････････	17
(6)	Notes to Condensed Interim Consolidated Financial Statements
	(Going Concern)	･･･････････	18
	(Changes in Accounting Policies)	･･･････････	18
	(Segment Information)	･･･････････	21
	(Consolidated Statement of Income)	･･･････････	22
	(Consolidated Statement of Cash Flows)	･･･････････	23
	(Significant Subsequent Events)	･･･････････	23

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1．Qualitative Information regarding Financial Results for the Period

1. Operating Results [Revenue and Profit]
2. • Eisai Co., Ltd. ("the Company") and its affiliates (collectively referred to as "the Group") recorded the following consolidated financial results for the three-month period ended June 30, 2021.

			(¥billion)
	Three-month period	Three-month period	Year on year
	ended June 30, 2020	ended June 30, 2021	change (%)
Revenue	165.6	198.9	120.1
Cost of sales	38.3	39.2	102.5
Gross profit	127.3	159.6	125.4
Selling, general and	64.9	74.7	115.1
administrative expenses
Research and development	30.5	41.8	137.0
expenses
Other income	0.7	13.4	1892.7
Operating profit	32.1	55.4	172.5
Profit before income taxes	32.4	55.8	171.9
Profit for the period	24.8	42.3	170.9
Profit for the period
attributable to	24.4	42.2	172.6
owners of the parent

• The Group's revenue increased significantly primarily due to the continuous growth of global brands such as anticancer agent Lenvima and an upfront payment of ¥49.6 billion from Bristol Myers Squibb (the U.S.) under strategic collaboration for antibody drug conjugate MORAb-202.
• Regarding revenue from global brands, revenue for Lenvima, anticancer agent Halaven, antiepileptic agent Fycompa and insomnia treatment Dayvigo was ¥44.2 billion (127.4% year on year), ¥10.2 billion (108.5% year on year), ¥7.4 billion (116.0% year on year) and ¥2.6 billion (¥0.1 billion in the same period of the previous fiscal year), respectively.
• Selling, general and administrative expenses increased significantly mainly due to the increase in shared profit paid to Merck & Co., Inc., Kenilworth, N.J., U.S.A. following Lenvima's revenue growth and proactive investment for the launch of Alzheimer's disease treatment ADUHELM (aducanumab), jointly developed and commercialized with Biogen Inc. (the U.S., hereinafter "Biogen").
• Research and development expenses increased significantly mainly due to aggressive resource investment in Lenvima's combination therapy with anti-PD-1 antibody pembrolizumab of Merck & Co., Inc., Kenilworth, N.J., U.S.A., as well as ADUHELM and

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anti-amyloid beta protofibril antibody lecanemab, which is also jointly developed with Biogen.

• Other income increased significantly due to divestiture of rights for antiepileptic agent Zonegran in Europe, the Middle East, Russia and Australia to Advanz Pharma (U.K.).
• As a result of the above, operating profit increased significantly.

[Performance by Segment]

(Revenue for each segment indicates revenue from external customers)

The Group's business is comprised of pharmaceutical business and other business. The pharmaceutical business is organized into the following six reporting segments in this report: Japan, Americas (North America), China, EMEA (Europe, the Middle East, Africa, Russia and Oceania), Asia and Latin America (primarily South Korea, Taiwan, Hong Kong, India, ASEAN, Central and South America) and OTC and others (Japan).

• Total revenue came to ¥49.6 billion (83.1 % year on year), with a segment profit of ¥15.6 billion (61.9% year on year). Revenue and profit decreased mainly due to drug price revision, launch of generics for Lyrica, a pain treatment being co-promoted with Pfizer Japan Inc., and transfer of rights for anticancer agent Treakisym which took place in December 2020 due to expiration of the business alliance.
• Regarding revenue by products, from neurology products, revenue for insomnia treatment Lunesta and Dayvigo came to ¥2.9 billion (81.1% year on year) and ¥1.9 billion (¥0.1 billion in the same period of the previous fiscal year), respectively. Revenue for Aricept, a treatment for Alzheimer's disease dementia, totaled ¥1.8 billion (62.1% year on year). Co- promotion revenue for Lyrica totaled ¥1.6 billion (25.5% year on year). Revenue for Fycompa was ¥1.2 billion (100.6% year on year). Among oncology products, revenue for Lenvima and Halaven came to ¥2.5 billion (67.7% year on year) and ¥2.0 billion (88.5% year on year), respectively. Fully human anti-TNF-α monoclonal antibody Humira earned revenue of ¥11.4 billion (91.7% year on year).
• Anticancer agent Remitoro was launched in May 2021.

• Total revenue came to ¥38.3 billion (112.1% year on year), with a segment profit of ¥17.9 billion (104.2% year on year).
• Regarding revenue by products, from neurology products, revenue for Fycompa came to ¥3.4 billion (112.9% year on year) achieving growth. Revenue for antiepileptic agent Banzel was ¥2.8 billion (55.1% year on year). Among oncology products, Lenvima earned ¥24.4 billion (113.1% year on year) achieving growth. Revenue for Halaven came to ¥3.3 billion (102.5% year on year).

• Revenue totaled ¥26.9 billion (112.6% year on year), with a segment profit of ¥15.9 billion (114.9% year on year).

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