FY2012 2Q Consolidated Financial Overview
CHUGAI PHARMACEUTICAL CO LTDCHUGAI PHARMACEUTICAL CO., LTD.Executive Vice President CFO Yoshio Itaya
July 26/27, 2012
FY2012 2Q Consolidated Financial Overview
Forward Looking StatementsForward-Looking Statements
This presentation may include forward-looking statements pertaining to the business and prospects of Chugai Pharmaceutical Co., Ltd. (the “Company”). These statements
fl t th C ’ t l i f i ti i f tireflect the Company’s current analysis of existing information and trends. Actual results may differ from expectations based
i k d t i ti th t ff t th C ’on risks and uncertainties that may affect the Company’s businesses.
2
FY2012 2Q Consolidated Financial Overview
SummarySummary
Revenues 185 3 billion JPY (+1 9%) Revenues 185.3 billion JPY (+1.9%)• Tamiflu: approx. 1.8 times higher, reflecting a large flu season• Domestic sales excl. Tamiflu: flat YoY growth as new product sales
ff t b d li f E i /HCV d t l d th i t f NHIoffset by decline of Epogin/HCV product sales and the impact of NHI price revision
• Overseas sales: double-digit growth led by Actemra export • Other operating revenues: approx. 30% decline due to a YoY decrease
in one-time income
O ti I 34 3 billi JPY ( 2 6%) Operating Income 34.3 billion JPY (-2.6%): • Drop in gross profit associated with an unfavorable product mix
outweighed cost containment
Net Income 20.9 billion JPY (+22.2%)• Extraordinary loss of 6.5 billion JPY recorded last year due to the
earthquake
3
q
FY2012 2Q Consolidated Financial Overview
Financial Overview Jan JunYear on Year
Financial Overview Jan - Jun(Billion JPY)
Sales excl. TamifluDomestic -0.5Overseas +2.2
Sales of Tamiflu* +3 5
2011 2012Jan-Jun As % of
RevenuesJan-Jun As % of
Revenues %
181 9 185 3 +3 4 +1 9
Growth
Revenues
(Billion JPY)
Sales of Tamiflu +3.5
Other Operating Revenues -1.9Decline in one-time income
181.9 185.3 +3.4 +1.9
Sales 174.8 180.0 +5.2 +3.0
excl. Tamiflu 170.2 171.9 +1.7 +1.0
Tamiflu 4.6 8.1 +3.5 +76.1
Revenues
Operating Income -0.9
Non-operating Inc./Exp. -1.0
Other Operating Revenues 7.2 5.3 -1.9 -26.4
35.2 19.4 34.3 18.5 -0.9 -2.6
Non-operating Income 1.3 1.0 -0.3 -23.1
Operating Income
Extraordinary Gain/Loss +7.6Decline in Extraordinary Loss
Loss on disaster -6.5
Non-operating Expenses 0.4 1.0 +0.6 +150.0
36.2 19.9 34.3 18.5 -1.9 -5.2
Extraordinary Gain - 0.0 +0.0 -
Ordinary Income
Average exchange rate (JPY)2011 Jan Jun 2012 Jan Jun
* Tamiflu2011 Jan Jun 2012 Jan Jun Growth
Asset retirement obligations -1.0Extraordinary Loss 7.6 0.0 -7.6 -100.0
17.1 9.4 20.9 11.3 +3.8 +22.2Net Income
4
2011 Jan-Jun 2012 Jan-JunCHF 90.38 85.82 EUR 114.86 103.39
2011 Jan-Jun 2012 Jan-Jun GrowthOrdinary 4.1 7.8 +3.7Govt. Stockpile etc. 0.5 0.4 -0.1
FY2012 2Q Consolidated Financial Overview
Sales (excl Tamiflu) Jan JunYear on Year
Sales (excl. Tamiflu) Jan - JunSales (excl. Tamiflu) 1 1 9 ( 1 1 0%)
(Billion JPY)
170.2
171.9 (+1.7, +1.0%)(Billion JPY)
MiE i
9 816.8 15.0
19.3 21.5 -8.9
-1.4 Others
-1.8, -10.7%
Overseas+2.2, +11.4% +7.5
+4.3
Mircera(7.5)
Actemra(overseas)
Epogin(7.7)
Neutrogin(overseas)
24.3 22.9 11.5 9.8
-1.0
DomesticD tiRenal diseases
Transplant, Immunologyand Infectious diseases
-1.7, -14.8% +3.2
( )(13.4)
Avastin(29.6)
( )(6.7)
Alfarol(4.4)
30.4 30.3 -1.0
-1.0
DomesticSales150.4
-0.5, -0.3%
DomesticSales
150.9 Bone and Joint-0.1, -0.3%
-1.4, -5.8%+1.9
+1.3
Edirol(2.5)
Rituxan(11 7)
Pegasys(3.4)
Sigmart(4 7)
67.9 72.4 Oncology+4.5, +6.6%
Left : Sales by Disease Field
(11.7)(4.7)
5
Jan-Jun2011
Jan-Jun2012
Right : Sales by Product, Variance Year on Year( ): FY2012 Actual
FY2012 2Q Consolidated Financial Overview
Tamiflu Sales PerformanceTamiflu Sales PerformanceFY2007.12 FY2008.12 FY2009.12 FY2010.12 FY2011.12 SeasonalFY2012.12 Cases per
Fiscal Term Sales
FY2005.12 FY2006.12(Billion JPY)
Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec Jan-Jun Jul-Dec
2004-05 23.2 24.6 1.47
2005-06 11.9 9.9 21.8 0.92
2006-07 3.7 5.0 8.7 1.01
2007 08 5 2 1 4 6 6 0 66
Salessentinel *(m i l l ions)
2007-08 5.2 1.4 6.6 0.66
2008-09 5.7 11.0 16.7 1.27
2009-10 25.2 1.4 26.6 2.02
2010-11 0.2 4.1 4.3 1.26
2011-12 1.3 7.8 9.1 1.63
Ordinary
2012-13 1.5 - -
Ordinary 35.1 (+26.5) 13.6 (-21.5) 10.2 (-3.4) 7.1 (-3.1) 36.2 (+29.1) 1.6 (-34.6) 5.4 (+3.8) 9.3 (+3.9)
2005-06 0.2 6.5 6.7
2006-07 17.9 18.9 36.8
2007-08 9.6 0.2 9.8
2008-09 1.1 14.4 15.5
2009-10 25.6 10.6 36.2
2010-11 5.9 0.5 6.4
Govt. Stockpile
etc.
2011-12 2.8 0.4 3.2
2012-13 0.0
Govt. Stockp i le e tc. 0.2 (+0.2) 24.4 (+24.2) 28.5 (+4.1) 1.3 (-27.2) (+38.7) 16.6 (-23.4) 3.3 (-13.3) 0.4 (-2.9)
23.2 12.0 16.3 21.6 23.8 14.8 1.6 6.8 25.4 50.8 12.0 6.1 4.6 4.1 8.1 1.535 2 ( ) 38 0 ( ) 38 7 ( ) 8 4 ( ) 76 2 ( ) 18 2 ( ) 8 7 ( ) 9 7 ( )
40.0
Total
6*Total patients number of the controlled samples in the infectious Diseases Weekly Report, period between late October and mid-April (between early July 2009 and mid-March 2010 for 2009/2010), published by Japan’s National Institute of Infectious Diseases.
Company forecast() Year on year
35.2 (+26.6) 38.0 (+2.8) 38.7 (+0.7) 8.4 (-30.3) 76.2 (+67.8) 18.2 (-58.0) 8.7 (-9.5) 9.7 (+1.0)
FY2012 2Q Consolidated Financial Overview
Operating Income Jan JunYear on Year
Operating Income Jan - Jun(Billion JPY) 2011 2012 G h(Billi JPY)(Billion JPY) 2011 2012
Jan-Jun Jan-Jun (%)
Revenues 181.9 185.3 +3.4 +1.9
Cost of Sales 74.5 81.7 +7.2 +9.7
Growth(Billion JPY)
Decrease in SG&A (excl. R&D) exp.
Other operating
Gross profit from Sales
Decrease in R&D exp1 9
Gross Profit 107.4 103.5 -3.9 -3.6
Sales 100.2 98.3 -1.9 -1.9 Other Operating Revenues 7.2 5.3 -1.9 -26.4p g
revenuesR&D exp.
+2.3-1.9 +0.7
-1.9 SG&A (excl. R&D) exp. 45.3 43.0 -2.3 -5.1
R&D exp. 26.9 26.2 -0.7 -2.6
Operating Income 35.2 34.3 -0.9 -2.6
35.2 34.3 Decrease in Gross Profit from Sales -1.9
Decrease in Other Operating Revenues -1.9
Jan-Jun Jan-Jun
-0.9 (-2.6%)
p gDecrease in one-time income
Decrease in SG&A (excl. R&D) exp. +2.3Cost containment
7
Jan-Jun2011
Jan-Jun2012 Decrease in R&D exp. +0.7
Completion of late stage projects
FY2012 2Q Consolidated Financial Overview
Financial Overview Apr JunYear on Year
Financial Overview Apr - Jun(Billion JPY)
2011 2012 G th(Billi JPY) Sales excl. Tamiflu -1.1
Mircera +4.5Avastin +2.2
Apr-Jun As % ofRevenues
Apr-Jun As % ofRevenues %
96.2 95.0 -1.2 -1.2
Sales 94.4 93.2 -1.2 -1.3
Growth(Billion JPY)
Revenues
Edirol +1.3Rituxan +0.8Epogin -5.3N t i ( ) 1 3
excl. Tamiflu 94.0 92.9 -1.1 -1.2
Tamiflu 0.4 0.3 -0.1 -25.0
Other Operating Revenues 1.8 1.8 +0.0 +0.0
Cost of Sales 39.4 42.1 +2.7 +6.9 Neutrogin (overseas) -1.3Actemra (overseas) -1.1
Sales of Tamiflu* -0.1
Cost of Sales 39.4 42.1 2.7 6.9
56.8 59.0 52.9 55.7 -3.9 -6.9
SG&A (excl. R&D) exp. 23.2 22.0 -1.2 -5.2
R&D exp. 13.9 13.2 -0.7 -5.0
Gross Profit
Other Operating Revenues
+0.019.6 20.4 17.7 18.6 -1.9 -9.7
Non-operating Income 1.2 1.5 +0.3 +25.0
Non-operating Expenses 1.4 1.2 -0.2 -14.3
19 5 20 3 18 0 18 9 1 5 7 7
Operating Income
Ordinary IncomeOperating Income -1.9 19.5 20.3 18.0 18.9 -1.5 -7.7
Extraordinary Gain - 0.0 +0.0 -
Extraordinary Loss 0.5 0.0 -0.5 -100.0
12.1 12.6 11.5 12.1 -0.6 -5.0
Ordinary Income
Net Income
8
* Tamiflu 2011 2012 GrowthApr-Jun Apr-JunOrdinary 0.4 0.3 -0.1Govt. Stockpile etc. - - -
FY2012 2Q Consolidated Financial Overview
Financial Overview Jan Junvs. Forecast
Financial Overview Jan - JunActual
A hi
Forecast on Feb. 1
20122012(Billion JPY)
Actual Forecast on Feb. 1
Achiev.(%)
Sales excl. Tamiflu 171.9 181.2 94.9Oncology 72.4 74.4 97.3
Avastin 29 6 30 7 96 4
2012Jan-Jun
2012Jan-Jun
(Billion JPY)
2012 2012Achiev.
(%)
185 3 195 5 94 8
(Billion JPY)Jan-Jun Jan-Jun
Revenues
Avastin 29.6 30.7 96.4Herceptin 13.5 12.7 106.3Rituxan 11.7 11.3 103.5Xeloda 5.2 7.3 71.2Tarceva 4.5 3.6 125.0185.3 195.5 94.8
Sales 180.0 189.5 95.0
excl. Tamiflu 171.9 181.2 94.9
Revenues Tarceva 4.5 3.6 125.0Bone and Joint 30.3 31.4 96.5
Actemra 7.9 7.8 101.3Evista 7.6 8.0 95.0Svenyl 5.9 6.8 86.8
Tamiflu 8.1 8.3 97.6
Other Operating Revenues 5.3 6.0 88.3
34.3 36.5 94.0Operating Income
y 5 9 6 8 86 8Edirol 2.5 2.7 92.6
Renal 22.9 28.3 80.9Epogin 7.7 8.7 88.5Mircera 7.5 12.1 62.0
34.3 37.0 92.720.9 22.0 95.0
Ordinary IncomeNet Income
Transp., Immun., Infectious 9.8 11.9 82.4Pegasys 3.4 5.6 60.7Copegus 1.0 1.2 83.3
Others 15.0 14.8 101.4
9
Overseas 21.5 20.4 105.4Actemra 13.4 12.3 108.9Neutrogin 6.7 6.5 103.1
FY2012 2Q Consolidated Financial Overview
Impact from Foreign Exchangevs. Forecast
Impact from Foreign Exchange
FX impacts Jan-Jun FX rate to the JPY 1CHF 1EUR(Billion JPY)FX impacts Jan Jun
(vs. Forecast on Feb. 1)
-0.3
FX rate to the JPY 1CHF 1EUR
Assumption as of Feb 1(Jan – Dec) 85.00 109.00
Actual Jan – Jun avg. 85.82 103.39Revenues Neutrogin (Overseas) -0.3
Actemra (Export) +0.2Other Operating Revenues -0.2 [Reference]
Historical exchange rates to the JPY (Jan-Jun)
Cost of salesSG&A expenses
Cost of Roche products -0.1Overseas SG&A exp., etc. +0.1
115
120
125 JPY EUR 2012 CHF 2012 EUR 2011 CHF 2011
Operating Income -0.3
Non-operating I /E
Gain/loss on foreign exchanges and exchange forward contracts 100
105
110
115
Inc./Exp.g
-0.6
Ordinary Income -0.980
85
90
95
10
Jan Feb Mar Apr May Jun
FY2012 2Q Consolidated Financial Overview
Balance Sheet Items (Assets)Actual 2012
Balance Sheet Items (Assets)(Billion JPY)
Cash and depositsMarketable securities
Accounts receivable
Inventories
Cash and deposits +22.8 Marketable securities +10.0-11.4
securities Accounts receivable -11.4
Seasonal change-1.0 Others+32.8 Property,
l t d
-5.6
-6.0
Inventories -5.6plant and equipment
533.5542.2
Property, plant and equipment-1.0
Assets
Others -6.0Decrease in account receivables - other and deferred tax assets
+8.7 (+1.6%)
11
Dec2011
Jun2012
FY2012 2Q Consolidated Financial Overview
Balance Sheet Items (Liabilities)Actual 2012
Balance Sheet Items (Liabilities)Income (Billion JPY) Accounts payable +9 4
Accounts payable
taxes payable
Accounts payable +9.4
Income taxes payable -4.0P f i
Reserves for bonuses to employees and Other -4.0
Payment of income taxes
Reserves for bonuses to employees
reserves+9.4 -1.0-6.2
OthersLiabilities
-0.3 Other reserves -0.8
-1.6 (-2.2%)74.4 72.8
Others -6.2Decrease in accrued payables and accrued expensesp
Equity Ratio
Dec. 2011 Jun. 2012 Variance
12
Dec2011
Jun2012
85.6% 86.2% +0.6%pts
FY2012 2Q Consolidated Financial Overview
Cash Flow Statement Jan JunActual 2012
Cash Flow Statement Jan - Jun
In esting Cash flow from operating activities +50 3(Billion JPY)
Operating activities
Investing activities
Financing activities
Exchange rate-15.9
Cash flow from operating activities +50.3Income before taxes and minority interests +34.4Depreciation and amortization +7.1Decrease in working capital +26 4
+50.3
Exchange rate changes-11.3
-0.1Cash and h
Decrease in working capital +26.4Decrease in trade notes and accounts receivable +11.5Decrease in inventories +5.5Increase in trade notes and accounts payable +9.4
cash equivalents
Payments for loss on disaster -1.1Income taxes paid -13.9
C h fl f i ti ti iti 15 9
94.5
117.5 Cash flow from investing activities -15.9
Increase in marketable and investment securities-8.7
Purchases of noncurrent assets -7 2+23.0 Purchases of noncurrent assets 7.2
Cash flow from financing activities -11.3Cash dividends paid -10.9
13
Dec2011
Jun2012
Cash dividends paid 10.9 Cash dividends paid to minority interests
-0.4
Overview of Development PipelineOverview of Development Pipeline
CHUGAI PHARMACEUTICAL CO., LTD.Senior Vice PresidentHead of Project Lifecycle Management Unit Yutaka Tanaka
July 26/27, 2012
Overview of Development Pipeline
Projects under Development ( f 26 J l 2012)
Phase I Phase II Phase III Filed
Projects under Development (as of 26 Jul. 2012)
Oncology CIF/RG7167 ‐ solid tumorsCKI27/RG7304 ‐ solid tumorsPA799 ‐ solid tumors
AF802 ‐ NSCLC (PI/II) GC33/RG7686 ‐ liver cancerRG340/Xeloda ‐ aGC★
RG435/Avastin
RG435/Avastin‐ GC‐ aBC‐ glioblastoma
RG1273/pertuzumab‐ BC ★RG1415/Tarceva‐ NSCLC (1st line)★
WT4869‐myelodysplastic syndromes (PI/II)‐ solid tumorsRG3638/onartuzumab
/‐ glioblastoma (relapsed)
gRG1273/pertuzumab‐ aBCRG3502/trastuzumab emtansine‐ BC
( )
RG3638/onartuzumab‐ NSCLC
‐ BCGA101 (RG7159)/obinutuzumab ‐ NHL
Bone & Joint RG484/Bonviva(oral)‐ osteoporosis
NRD101/Suvenyl‐ enthesopathy
RG484/Bonviva (inj) ‐ osteoporosis★osteoporosis enthesopathy osteoporosis★
Autoimmune SA237 ‐ RARG7415/rontalizumab‐ SLE★
MRA/Actemra (overseas)‐ RA (sc)
MRA/Actemra (Japan)‐ RA (sc)
CNS RG1450 /gantenerumab‐ alzheimer's disease
RG7090 (mGluR5)‐major depressive disorder
RG1678/bitopertin(GlyT1)‐ schizophrenia
Others CIM331‐ atopic dermatitis★
CSG452/tofogliflozin‐ diabetes
RG3637/lebrikizumab‐ asthma
15Letters in orange in-house projects
★: Projects with advances in stages since 24 Apr., 2012
Overview of Development Pipeline
Development Status OncologyDevelopment Status - Oncology
RG1273/pertuzumab : HER2 positive breast cancer
In-licensed
Filed in May 2012
Tarceva :In- Tarceva : Non-small cell lung cancer (1st line) Filed in Jun 2012
licensed
Avastin : In-licensed
Filed in Jun. 2012
Adjuvant breast cancer Did not meet primary endpoint in global P3 study
16
Overview of Development Pipeline
Development Status OncologyDevelopment Status - Oncology
Xeloda : Adjuvant gastric cancer
In-licensed
j gStarted P2 in Jul. 2012Co-development with Yakult Honsha
AF802 (Overseas) :Non-small cell lung cancer
In-house
Actemra : Pancreatic cancerI
Non small cell lung cancerStarted P1/2 in May 2012
Actemra : Pancreatic cancerDevelopment suspendedDifficulty in clinical evaluation of efficacy and safety
In-house
17
Difficulty in clinical evaluation of efficacy and safety
Overview of Development Pipeline
Development Status- Bone & Joint, Autoimmune, Others
RG484 (injection) : Osteoporosis
In-licensed
pFiled in Jul. 2012Co-development with Taisho Pharma
RG7415/rontalizumab : Systemic lupus erythematosus
In-licensed
Systemic lupus erythematosus Started P1 in Jul. 2012
CIM331 : Atopic dermatitis
In-house
18
pStarted P1 in Sep. 2011
Overview of Development Pipeline
Projected Submissions (P t P C d t d NME )Projected Submissions (Post PoC products and NMEs )
Seamless filings every yearg y y
in-licensedin-house
NME line extension
TARCEVANSCLC (1st line)
AVASTINBC Adj
AVASTINGlioblastoma
ACTEMRARA (sc)
SUVENYL(NRD101)
BONVIVA*
NSCLC (1 line) BC Adj.
pertuzumab(RG1273)
BC
tofogliflozin(CSG452)
Type 2 DiabetesT‐DM1 GLYT1/bitopertin
Enthesopathy
GA101/obinutuzumab
pertuzumab(RG1273)BC Adj.
XELODAGC Adj.
2014
BONVIVA*Osteoporosis
2012(Filed)
2013
T DM1(RG3502)
BC
GLYT1/bitopertin(RG1678)
Schizophrenia
2015‐
GA101/obinutuzumab(RG7159)
NHL
*Overseas brand name (Filed)
19
Overview of Development Pipeline
Rontalizumab SLE and the PathophysiologyRontalizumab - SLE and the Pathophysiology No. of patients: 53,000 Autoimmune diseases with male: female ratio of 1:9 Autoimmune diseases with male: female ratio of 1:9 Symptoms: Systemic symptoms, focal symptoms such as skin and joint symptoms, organ
disorders Standard treatment: Steroid, Immunosuppresants
Acquire self-responsiveness by
Symptoms of SLE
Systemic Symptomsf f
q p yenvironmental and genetic factors(Breakdown of self immune tolerance)Systemic
symptoms
General malaiseFatigabilityFever
Conversion
Hair loss from front to top of head
Butterfly rash
Oral and nasal ulcer
Auto-antibody productionDepression
Pericardial effusion
Renal disorder
SLE
Induce chronic inflammation with deposition of immune complex of auto-antibody to various organs
Focal symptoms
Reynaud's phenomena
Skin rash
Joint pain
Sited from http://www.collagen-disease.com/
y gsymptoms
Skin rash
EdemaPurpura
20
Overview of Development Pipeline
Rontalizumab SLE and IFN α Mode of ActionRontalizumab - SLE and IFN-α: Mode of Action IFN- drives processes important in pathogenesis of SLE
Ann Rheum Dis 2010;69:1603–1611. (modified); ( )
Maturation and activation of antigen presentation cells
IFN-a
Promotion of T cell differentiation
Promotion of Rontalizumab:
Humanized IgG1 mAbB cell maturation
cell
Promotion of auto-antibody production by plasma cell
Humanized IgG1 mAb Binds to all 12 human IFN-subtypes
Therapeutic Hypothesis: Bl ki IFN d l t th t t ib t t h i Blocking IFN- may down-regulate processes that contribute to chronic
inflammation, reduce signs/symptoms of SLE
21
Overview of Development Pipeline
Update on the Requests Made by Unapproved
Review Committee of development request for Unapproved Drugs/indication 7 t f 8 d t (9 t f 10 i di ti i l di dditi l d ) ffi i ll
Drug Committee
7 out of 8 products (9 out of 10 indications including additional dosages) officially requested by MHLW at the 1st round have been approved.
Products remaining from the1st round {(Avastin (OC) and Bactramin)} and products from the 2nd round {Avastin (GBM) and Herceptin (dosage)} are shown belowfrom the 2 round {Avastin (GBM) and Herceptin (dosage)} are shown below.
Product Indication Current Situation
Avastin Ovarian cancer Planning
1st round requests
Avastin Ovarian cancer Planning
PulmozymeImprovement of pulmonary function in patients with cystic fibrosis
Launched in June 2012
i & f iBactramin
Prevention & treatment of pneumocystispneumonia
Filed on 13 Feb. 2012
Avastin Recurrent glioblastoma Study on‐going2nd round requests Herceptin
Weekly dosage with chemo‐therapy for HER2 + adjuvant breast cancer
NDA based on evidence in the public domain: Under assessment
22Letters in red: Projects with change in status since Feb. 1, 2012
Contacts: Corporate Communications Dept. Corporate Communications GroupTel: +81 (0)3-3273-0881 Fax: +81 (0)3-3281-6607Tel: 81 (0)3 3273 0881 Fax: 81 (0)3 3281 6607e-mail: [email protected] Aikawa, Koichi Kawahara, Kae Miyata, Hiroshi Araki
Investor Relations GroupT l +81 (0)3 3273 0554 F +81 (0)3 3281 6607Tel: +81 (0)3-3273-0554 Fax: +81 (0)3-3281-6607e-mail: [email protected] Uchida, Yusuke Tokita, Chisato Kitamura, Yuka Minoshima, , ,