Create innovative Drugs, Value, and Future

with all efforts

New Medium-term Management Plan

Co-Creation April, 2017 – March, 2022

Five-year plan aiming for a stable growth in the future

during drastic changes in the business environment.

Medium-term Management Plan: Co-Creation

1

Opportunity Issue/Task

External

factors

Diversifying medical needs

Emergence of Unmet Medical Needs

(UMN)

Support policy of new drug discovery

by AMED

Structural change in domestic and

global pharmaceutical markets

Depletion of new drug seeds

Increase in R&D risks

Internal

factors

Six new candidates after PIII

Establishment of our presence in

urology, renal and dialysis areas

Overcoming silodosin (UriefⓇ

)

substance patent expiration

Productivity improvement on drug

discovery research

*1: Including API and bulk export

*2: Supply to domestic sales partners + revenue from technical fees (contact fees from out-licensing of R&D themes, milestone income, and running royalties)

2

Consolidated net sales Over ¥ 73.0 billion

Non-consolidated net sales Over ¥ 61.0 billion

Pharmaceuticals*1 Over ¥ 50.5 billion

Therapeutic and care foods Over ¥ 4.5 billion

Others*２ Over ¥ 6.0 billion

Operating income Over ¥ 6.5 billion

R&D expenses Over ¥ 13.0 billion

Co-Creation Targets for FY2021 (the final year)

Basic policy for Co-Creation

I. Strengthening of drug discovery research

II. Expansion of product portfolios

III. Maximize domestic sales of medical drugs

Management Vision We aim to be an R&D-oriented pharmaceutical company that

contributes to the health of people around the world through

innovative medical pharmaceutical products.

3

IV. Construction of stable earnings base overseas

✓ Structural biology

✓ Protein science

✓ Computational chemistry (in silico)

✓ Throughput

✓ Precision

✓ Open innovation

✓ Deepening specialization

Drug design

Screening

Integration of state of the art

technology

Drug Discovery with

Highly original & Competitive

advantages

Urology, Renal & Dialysis

areas

Unmet Medical Needs

I. Strengthening of drug discovery research

4

Present

NDA in progress

NDA in preparation

PIII

PII

PI/PII

PI

II. Expansion of product portfolios

MR13A9 (pruritus in dialysis patients)

KDT-3594 (Parkinson's disease)

JR-131 (renal anemia)

KLH-2109 (endometriosis, uterine fibroids)

KPS-0373 (spinocerebellar degeneration)

AJM300 (ulcerative colitis)

GLUBES® OD Tab.

Target by FY2021/E (Final Year of the Mid-term plan)

Lau

nch

& A

pp

roval

Clin

ical Tri

al S

tag

e (

inclu

din

g N

DA

)

YS110

KRP-114V

JR-131

MR13A9

KLH-2109

KDT-3594

Aflibercept BS (age-related macular degeneration)

KPS-0373

AJG511

AJM300

GLUBES® OD Tab.

PRX 302 (benign prostatic hyperplasia)

New drug discovery candidate

group

Urology, renal & dialysis areas

UMN

◆ Strengthening of drug discovery R&D systems

◆ Promotion of R&D projects

◆ In-licensing according to therapeutic area strategies

YS110 (malignant mesothelioma)

KRP-114V (overactive bladder)

AJG511 (ulcerative colitis)

Intr

od

ucto

ry c

an

did

ate

gro

up

5

UMN

KPS-0373

Diabetes

Diabetes

treatment drug

GLUBES®

◆ Strategic allocation of sales resources

◆ Establishment of presence in priority areas

Renal & Dialysis

Market expansion by

demonstration of the synergized

effects of both drugs

P-TOL®

Hyperphosphatemia

treatment drug

Epoetin Alfa BS

Renal anemia

treatment drug

Urology

KRP-114V Establishment of a top brand for the

treatment of benign prostatic hyperplasia Urief®

Dysuria with BPH

Treatment drug Overactive bladder treatment drug

Spinocerebellar degeneration treatment drug

MR13A9

JR-131

Pruritus treatment drug for dialysis patients

Renal anemia treatment drug

AJG511 AJM300

Ulcerative colitis treatment drug

III. Maximize domestic sales of medical drugs

6

Diabetes

treatment drug

GLUFAST®

Candidates to be launched during the Medium-term plan Existing products

GnRH antagonist KLH-2109 Expected indications: Endometriosis, uterine fibroids

Out-licensing to ObsEva (Switzerland) (Global development code: OBE2109)

Clinical trials are ongoing in Europe and the United States.

· Late phase II clinical trial with endometriosis as an indication

· Phase III clinical trial with uterine fibroid as an indication

7

◆ Out-licensing of new drug candidates

◆ Construction of post-silodosin foundation

IV. Construction of stable earnings base abroad

0

5

10

15

20

0

20

40

60

80

FY2016Performance

FY2017 FY2018 FY2019 FY2020 FY2021

8

Existing products/businesses

Performance image of

sales

Performance image of

operating profits

New domestic product group

Patent expiration of

silodosin

Operating profits

(¥ billion)

Sales

（¥ billion）

Performance outlook (consolidated)

9

Shareholder return

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Dividend per share ¥36 ¥38 ¥40 ¥42 ¥44 ¥46 ¥48

(Forecast)

Acquisition of

treasury stocks (No. of shares acquired)

4.3billion (2.8million

shares)

7.9billion (2.54million

shares)

1.6billion (0.61million

shares)

Retirement of

treasury stocks (No. of retired shares)

5.4bilion (2.6million

shares)

New product launches, advancement through development stages, in- and out-licensing

FYI: Business performance of PROGRESS 3 in the previous Medium-term plan

10

Introduction of MR13A9

Application for approval of GLUBESⓇ OD Tab.

Launch of SaveneⓇ

Application for approval of AJG511 applied

FY2015 FY2016 FY2017

Launch of SalagenⓇ granule

Introduction of AJG511 & AJM300

Launch of P-TOLⓇ

Launch of UriefⓇ OD Tab.

Introduction of KRP-114V

Launch of GLUFASTⓇ OD tab.

Out licensing of KLH-2109

Start of PI trials for KDT-3594

Start of PIII trials for JR-131

Start of PIIb trials for KLH-2109

Start of additional PIII trials for KPS-0373

Start of PI/II trials for YS110

PROGRESS ３

Target

Performance in Final FY

(ended in March 2017)

Consolidated net sales ¥ 70.5billion ¥ 71.7billion

Non-consolidated net

sales ¥ 61.0billion ¥ 61.4billion

Pharmaceuticals*1 ¥ 47.3billion ¥ 51.0billion

Therapeutic and care

foods ¥ 4.3billion ¥ 3.8billion

Others*2 ¥ 9.4billion ¥ 6.5billion

Operating income ¥ 9.5billion ¥ 8.4billion

FYI: Financial performance of PROGRESS 3 in the previous Medium-term plan

11

*1: Including API and bulk export

*2: Supply to domestic sales partners + revenue from technical fees (contact fees from out-licensing of R&D themes, milestone income,

and running royalties)

The outlook described in this material is based on the analysis of existing

information and various trends as of May 2017 by Kissei Pharmaceutical

Co. Ltd. Actual results may differ from the forecasts owing to business

risks and uncertainties.