Conference on FY2023

(April 1, 2023 to March 31, 2024)

Financial Results

Hiroshi Nomura, President and CEO Sumitomo Pharma Co., Ltd.

May 14, 2024

Disclaimer Regarding Forward-looking Statements

This material contains forecasts, projections, goals, plans, and other forward-looking statements regarding the Group's financial results and other data. Such forward-looking statements are based on the Company's assumptions, estimates, outlook, and other judgments made in light of information available at the time of disclosure of such statements and involve both known and unknown risks and uncertainties.

Accordingly, forecasts, plans, goals, and other statements may not be realized as described, and actual financial results, success/failure or progress of development, and other projections may differ materially from those presented herein.

Information concerning pharmaceuticals and medical devices (including those under development) contained herein is not intended as advertising or as medical advice.

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

1

Financial Results for FY2023

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

2

Financial Results for FY2023

Financial Results for FY2023 (Core Basis)

Billions of yen

FY2022

FY2023

Change

FY2023

Jan. 31

Results

Results

Value

FX impact

%

forecasts

Revenue

555.5

314.6

(241.0)

11.1

(43.4)

317.0

Cost of sales

176.7

126.6

(50.1)

(12.3)

(28.4)

125.0

Gross profit

378.8

188.0

(190.9)

23.4

(50.4)

192.0

SG&A expenses

305.6

236.4

(69.2)

11.3

(22.6)

240.0

R&D expenses

106.1

90.9

(15.2)

3.4

(14.3)

92.0

Other operating income/expenses

49.2

6.4

(42.8)

－

6.0

Core operating profit

16.4

(133.0)

(149.3)

8.3

－

(134.0)

Non-recurring items

(93.3)

(221.9)

(128.5)

(22.0)

(negative number indicates net loss)

Operating profit

(77.0)

(354.9)

(277.9)

－

(156.0)

Finance income/costs

29.1

31.7

2.7

18.0

Profit before taxes

(47.9)

(323.1)

(275.2)

－

(138.0)

Income tax expenses

48.8

(8.2)

(57.0)

3.0

Net profit

(96.7)

(314.9)

(218.2)

－

(141.0)

Net profit attributable to owners

(74.5)

(315.0)

(240.5)

－

(141.0)

of the parent

Average rates:

Period end rates:

FY2022 Results : 1US$ = ¥135.51, 1RMB = ¥19.75

As of the end of March 2023 : 1US$ = ¥133.54, 1RMB = ¥19.42

FY2023 Results : 1US$ = ¥144.59, 1RMB = ¥20.14

As of the end of March 2024 : 1US$ = ¥151.33, 1RMB = ¥20.84

FY2023 forecasts : 1US$ = ¥145.00, 1RMB = ¥20.00

  • Revenue decreased significantly due to LATUDA®'s loss of exclusivity in the U.S.
  • Other operating income/expenses:
    • FY2023: Share transfer of Sumitomo Pharma Animal Health Co., Ltd.
    • FY2022: Share transfer of Sumitomo Pharma Food & Chemical Co., Ltd.; Certain product transfers and Priority Review Voucher sale in the U.S.
  • Non-recurringitems:
    • FY2023: Impairment loss on intangible assets and goodwill; Business structure improvement expenses in North America
    • FY2022: Impairment loss on intangible assets; Business structure improvement expenses in North America

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

3

Financial Results for FY2023

Revenue of Major Products in North America

FY2022

FY2023

FY2022

FY2023

Change

Change

Results

Results

Results

Results

Value

FX

%

impact

North America

Million $

Billions of yen

ORGOVYX®

182

292

110

24.7

42.2

17.5

2.7

70.8

MYFEMBREE®

33

64

30

4.5

9.2

4.7

0.6

104.7

GEMTESA®

182

255

73

24.7

36.8

12.1

2.3

49.2

APTIOM®

249

235

(14)

33.7

34.0

0.3

2.1

0.7

RETHYMIC®

33

44

11

4.4

6.3

1.9

0.4

42.3

LATUDA®

1,465

47

(1,418)

198.5

6.7

(191.8)

0.4

(96.6)

Others

76

15

(61)

10.3

2.1

(8.1)

0.1

(79.2)

Export products/

204

150

(54)

27.7

21.7

(6.0)

1.4

(21.7)

One-time revenue, etc. *

Total

2,424

1,100

(1,324)

328.5

159.0

(169.4)

10.0

(51.6)

  • Revenue decreased significantly due to LATUDA®'s loss of exclusivity in the U.S. despite the growth of three key products and
    RETHYMIC®
  • Decrease in Others was due to the transfer of some products in FY2022
  • Export products/One- time revenue, etc. in FY2022 included $50M for the licensing agreement for ORGOVYX® in the EU (See the breakdown below the table)

* Major items included in Export products/One-time revenue, etc.

Deferred revenue from the collaboration with Pfizer of $138M

Deferred revenue from the collaboration with Pfizer of $117M

FY2022

FY2023

Revenue from the license agreement for ORGOVYX® in EU of $50M

Milestone revenue from the approval of MYFEMBREE® for

endometriosis in EU of $9M

Average rates:

FY2022 Results : 1US$ = ¥135.51

FY2023 Results : 1US$ = ¥144.59

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

4

Financial Results for FY2023

Revenue of Major Products in Japan & Asia Billions of yen

FY2022

FY2023

Change

Japan

Results

Results

Value

％

Revenue decreased due to the termination of

the sales collaboration for Trulicity® and the

Japan

transfer of all shares of two domestic

Equa®/EquMet®

33.6

30.6

(2.9)

(8.7)

consolidated subsidiaries

TRERIEF®

16.7

15.5

(1.2)

(7.0)

Sales of LATUDA®, TWYMEEG®, and

LATUDA®

9.6

11.7

2.2

22.5

LONASEN® Tape continue to grow

METGLUCO®

7.7

7.3

(0.4)

(5.3)

TWYMEEG®

2.2

4.6

2.3

105.6

Export products/One-time revenue, etc. in

LONASEN® Tape

2.9

3.8

0.9

29.9

FY2022 includes one-time revenue ¥6.1B under

AG products

9.2

9.7

0.5

5.8

the license agreement for DSP-0187

Trulicity® *

24.8

－

(24.8)

－

Total impact of NHI drug price revision (¥4.2B)

Others

19.4

22.1

2.8

14.3

Export products/

12.8

8.0

(4.8)

(37.7)

One-time revenue, etc.

Non-pharmaceutical operations

44.8

1.3

(43.5)

(97.1)

Asia

Total

183.6

114.7

(69.0)

(37.6)

MEROPEN® (China) revenue decreased due to

Asia

Volume-Based Procurement application

MEROPEN® （China)

28.5

21.3

(7.3)

(25.5)

Others

14.9

19.6

4.7

31.4

Total

43.5

40.9

(2.6)

(6.0)

Note:

Sales of each product in Japan are shown by invoice price (* Trulicity® is shown by NHI drug price)

© Sumitomo Pharma Co., Ltd. All Rights Reserved. 5

Financial Results for FY2023

Segment Information (Core Basis)

Billions of yen

Japan

North

Asia

Total

America

Revenue

114.7

159.0

40.9

314.6

FY2023 Results

 Cost of sales

54.2

62.0

10.4

126.6

Gross profit

60.5

97.0

30.5

188.0

Core segment profit

13.4

(80.2)

18.4

(48.5)

 SG&A expenses

47.1

177.2

12.1

236.4

 R&D expenses

90.9

Core operating profit

(133.0)

Revenue

183.6

328.5

43.5

555.5

 Cost of sales

104.9

62.4

9.4

176.7

Gross profit

78.7

266.0

34.1

378.8

FY2022 Results

Core segment profit

19.5

32.2

21.4

73.2

 SG&A expenses

59.2

233.8

12.6

305.6

 R&D expenses

106.1

Core operating profit

16.4

Change

Revenue

(69.0)

(169.4)

(2.6)

(241.0)

 SG&A expenses

(12.1)

(56.5)

(0.5)

(69.2)

Core segment profit

(6.2)

(112.5)

(3.0)

(121.7)

R&D expenses

(15.2)

Core operating profit

(149.3)

Japan

  • Despite a decrease in selling, general and administrative expenses, a decline in revenue resulted in gross profit and core segment profit decrease

North America

  • A decline in revenue resulted in significant gross profit and core segment profit decrease, despite a reduction in selling, general and administrative expenses

Asia

  • A decline in revenue resulted in a decrease in gross profit and core segment profit

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

6

Financial Forecasts for FY2024

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7

Financial Forecasts for FY2024

Structural Reform in Sumitomo Pharma America, Inc. (SMPA)

Established lean operational structure through rationalization of SMPA, resulting in approximately 1,200 employees

Before Integration

After Integration

After Rationalization

(As of Mar. 31, 2023)

(As of Dec. 31, 2023)

(As of Mar. 31, 2024)

SMPA headcount*

2,216

1,757

1,200**

R&D/Non R&D, （Unit: people）

805/1,411

451/1,306

172/1,028

Financial Results

Seven U.S. subsidiaries

Financial Results

Rationalization of

Financial Forecasts

North America Segment

for FY2022

were integrated as part

for FY2023

for FY2024

(Million $)

of efforts to achieve

(Million $)

SMPA due to

(Million $)

sustained growth after

underperformance of

the loss of exclusivity

revenue from the three

2,424

1,100

1,370

Revenue

for LATUDA® in the U.S.

key products

(July 2023)

(March 2024)

Cost of sales

461

429

526

Gross Profit

1,963

671

844

SG&A expenses

1,725

1,226

758

Core segment profit

238

(555)

86

Include amortization expenses of patent rights and cost allocation, etc.

Average rates: FY2022 Results:1US$ = ¥135.51, FY2023 Results: 1US$ = ¥144.59, FY2024 forecasts:1US$ = ¥145.00

8

* Include Sumitomo Pharma Switzerland GmbH, ** Headcount reflects employees with known termination dates throughout FY2024

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

Financial Forecasts for FY2024

Review of Development Pipeline and Organizational Restructuring

Implementing a well balanced investment allocation in each area and establishing a new global operating model

  • Focus on clinical development of two oncology compounds (TP-3654,DSP-5336) to accelerate value maximization
  • Promote clinical development of regenerative medicine/cell therapy programs including CT1-DAP001/DSP-1083 for Parkinson's disease
  • In the psychiatry & neurology area, revised the alliance with Otsuka Pharmaceutical and focus on identifying value inflection point of early stage pipelines
  • Transform into a lean R&D organization by global integration of Japan and the U.S., through workforce optimization

As of Jan. 31, 2024

As of May 14, 2024

Others

Psychiatry &

Others

Others

1

2

Neurology

1

2

Clinical

Infection

6

Psychiatry &

disease

Total*

10

Total*

Development

5

Small

4

17

Neurology

Small

22

Pipelines*

molecules

molecules

Oncology

4

Oncology

4

Regenerative medicine/

cell therapy

*. Number of development assets in clinical study/clinical research phase. Psychiatry & Neurology area includes ophthalmology

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Sumitomo Pharma Co. Ltd. published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2024 06:37:30 UTC.