Eisai : CONSOLIDATED FINANCIAL REPORT for the Three-Month Period Ended June 30,2022

CONSOLIDATED FINANCIAL REPORT [IFRS] for the Three-Month Period Ended June 30, 2022

August 5, 2022

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, Corporate Communications

Telephone: [phone]

Expected date of quarterly report submission: August 5, 2022

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, 2022

(1) Consolidated Operating Results

(Percentage figures show year on year change)

															Profit for the	Comprehensive
	Revenue	Operating profit			Profit before	Profit for the	period attributable
			income for the
			income taxes	period	to owners of the
									period
															parent
	(¥ million)		(%)	(¥ million)	(%)		(¥ million)	(%)	(¥ million)		(%)		(¥ million)		(%)	(¥ million)		(%)
Three-month
period ended	184,262		-7.4	7,434	-86.6		9,722	-82.6	27,970		-33.8		26,897		-36.1	79,702		88.1
June 30,
2022
Three-month
period ended	198,894		20.1	55,339	72.5		55,715	71.9	42,253		70.9		42,110		72.6	42,365		78.9
June 30,
2021
		Earnings per share attributable		Earnings per share attributable
			to owners of the parent (basic)		to owners of the parent (diluted)
Three-month period					(¥)					(¥)
				93.81					93.81
ended June 30, 2022
Three-month period					146.89					146.86
ended June 30, 2021

(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, 2022	1,272,871	828,349	804,545	63.2	2,806.07
As of March 31, 2022	1,239,315	771,534	748,821	60.4	2,611.82

2. Dividends

			Annual dividend per share
		End of Q1	End of Q2	End of Q3		End of FY	Total
	(¥)	(¥)	(¥)		(¥)	(¥)
FY 2021		-	80.00	-		80.00	160.00
FY 2022		-
FY 2022 (Forecast)			80.00	-		80.00	160.00

(Note) Revisions to the latest dividend forecast: No

3. Consolidated Financial Forecast for Fiscal 2022 (April 1, 2022 - March 31, 2023)

(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	700,000		-7.4	55,000	2.3		56,500	3.7	58,000		26.9	57,000		18.9	197.80
Year
(Note) Revisions to the latest financial forecast: No

* 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 (including treasury shares)
2. Number of treasury shares
3. Weighted average number of shares outstanding

As of June 30, 2022	296,566,949	As of March 31, 2022	296,566,949
As of June 30, 2022	9,736,635	As of March 31, 2022	9,801,133
For the three-month		For the three-month
period ended June 30,	286,707,490	period ended June 30,	286,671,064
2022		2021

The Company's shares held through a trust (113,830 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 the page 9 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 Friday, August 5, 2022. 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	･･･････････	5
(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	･･･････････	10
(2)	Condensed Interim Consolidated Statement of Comprehensive Income	･･･････････	11
(3)	Condensed Interim Consolidated Statement of Financial Position	･･･････････	12
(4)	Condensed Interim Consolidated Statement of Changes in Equity	･･･････････	14
(5)	Condensed Interim Consolidated Statement of Cash Flows	･･･････････	16
(6)	Notes to Condensed Interim Consolidated Financial Statements
	(Going Concern)	･･･････････	17
	(Changes in Accounting Policies)	･･･････････	17
	(Segment Information)	･･･････････	18
	(Consolidated Statement of Income)	･･･････････	19
	(Consolidated Statement of Cash Flows)	･･･････････	20
	(Significant Subsequent Events)	･･･････････	21

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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, 2022.

			(¥billion)
	Three-month period	Three-month period	Year on year
	ended June 30, 2021	ended June 30, 2022	change (%)
Revenue	198.9	184.3	92.6
Cost of sales	39.2	47.4	120.8
Gross profit	159.6	136.9	85.7
Selling, general and	74.8	92.3	123.4
administrative expenses
Research and development	41.8	38.5	92.1
expenses
Operating profit	55.3	7.4	13.4
Profit before income taxes	55.7	9.7	17.4
Income taxes	13.5	(18.2)	－
Profit for the period	42.3	28.0	66.2
Profit for the period attributable	42.1	26.9	63.9
to owners of the parent

• While revenue of pharmaceutical business came to ¥181.3 billion (123.2% year on year) increasing significantly due to the continuous growth of global brands such as anticancer agent Lenvima, the Group's revenue decreased due to the impact caused by the recording of an upfront payment (¥49.6 billion) from Bristol Myers Squibb (the U.S.) in the same period of the previous fiscal year.
• Regarding revenue from global brands, revenue for Lenvima, anticancer agent Halaven, antiepileptic agent Fycompa and insomnia treatment Dayvigo was ¥66.3 billion (150.0% year on year), ¥11.1 billion (109.7% year on year), ¥9.9 billion (133.1% year on year) and ¥6.5 billion (247.1% year on year), respectively.
• Selling, general and administrative expenses increased significantly mainly due to the depreciation of the Japanese yen, in addition to increase in shared profit paid to Merck & Co., Inc., Rahway, NJ, USA following Lenvima's revenue growth, despite decrease in expenses related to Alzheimer's disease (AD) treatment ADUHELM (aducanumab).
• Research and development expenses decreased mainly due to controlling of expenses through the partnership model including the recording of regulatory milestone payments for Lenvima from Merck & Co., Inc., Rahway, NJ, USA as reimbursement, despite aggressive resource investment in anti-amyloid beta protofibril antibody lecanemab, jointly developed with Biogen Inc. (the U.S., hereinafter "Biogen").

2

• As a result of the above, although operating profit decreased, segment profit of pharmaceutical business increased significantly achieving ¥90.6 billion (133.1% year on year).
• Profit for the period increased compared to profit before income taxes following recording of a credit of income taxes due to the Company's recognition of losses on transferring of investments in subsidiaries for tax purposes following a repayment of paid-in capital from a consolidated U.S. subsidiary to the Company in order to collect capital from the consolidated U.S. subsidiary as part of the Company's capital policy to optimize the global allocation of cash in the Group.

[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, India, ASEAN, Central and South America), and OTC and others (Japan). Effective from this fiscal year, Hong Kong has been changed from the "Asia and Latin America" segment to the "China" segment. Also, as the co-development and co-promotion agreements with Biogen regarding ADUHELM were amended in March 2022, expenses related to ADUHELM (selling, general and administrative expenses) which the Company should share have been included in the "Group headquarters' management costs and other expenses". In addition, gains and losses on sale of non-current assets have been included in the "Group headquarters' management costs and other expenses". The year on year changes in the segment performance for this report are based on this new segmentation.

• Total revenue came to ¥57.5 billion (115.8 % year on year), with a segment profit of ¥21.6 billion (138.9% year on year).
• Regarding revenue by products, from neurology products, revenue for Dayvigo came to ¥5.3 billion (285.2% year on year), achieving significant growth. Revenue for Fycompa came to ¥1.6 billion (126.0% year on year) achieving growth. Among oncology products, revenue for Lenvima came to ¥3.6 billion (144.3% year on year) achieving significant growth due to impact of additional indications. Revenue for Halaven came to ¥2.2 billion (113.6% year on year). Fully human anti-TNF-α monoclonal antibody Humira earned revenue of ¥12.6 billion (110.1% year on year). Revenue for chronic constipation treatment Goofice came to ¥1.7 billion (115.3% year on year).

• Total revenue came to ¥53.1 billion (138.5% year on year), with a segment profit of ¥31.3 billion (144.0% year on year).

3