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1Q FY2012 _Fiscal Year Ending March 31_ 2013_ Financial Results

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1Q FY2012 _Fiscal Year Ending March 31_ 2013_ Financial Results Powered By Docstoc
					            1Q FY2012
   (Fiscal Year Ending March 31, 2013)
Financial Results Presentation

              Eisai Co., Ltd.


               August 1, 2012
Safe Harbor Statement

    •   Materials and information provided during this presentation may contain so-called “forward-
        looking statements.” These statements are based on current expectations, forecasts and
        assumptions that are subject to risks and uncertainties which could cause actual outcomes and
        results to differ materially from these statements.
    •   Risks and uncertainties include general industry and market conditions, and general domestic
        and international economic conditions such as interest rate and currency exchange fluctuations.
        Risks and uncertainties particularly apply with respect to product-related forward-looking
        statements. Product risks and uncertainties include, but are not limited to, technological
        advances and patents attained by competitors; challenges inherent in new product
        development, including completion of clinical trials; claims and concerns about product safety
        and efficacy; regulatory agency’s examination period, obtaining regulatory approvals; domestic
        and foreign healthcare reforms; trends toward managed care and healthcare cost containment;
        and governmental laws and regulations affecting domestic and foreign operations.
    •   For any forward-looking statements the Company cannot guarantee the actual outcomes and
        results.
    •   Also, for products that are approved, there are manufacturing and marketing risks and
        uncertainties, which include, but are not limited to, inability to build production capacity to meet
        demand, unavailability of raw materials, and failure to gain market acceptance.
    •   The Company disclaims any intention or obligation to update or revise any forward-looking
        statements whether as a result of new information, future events or otherwise.
    •   This English presentation was translated from the original Japanese version. In the event of
        any inconsistency between the statements in the two versions, the statements in the Japanese
        version shall prevail.


1
                   Highlights for FY2012

           Most challenging year in the Plan “HAYABUSA”
     Full impact of Aricept LOE in Japan and Europe
     Impact of drug price revision in Japan


                     Progress of transformation
     Transformation of growth drivers
       From Aricept and Pariet/AcipHex to Halaven, Fycompa, and BELVIQ
     Transformation of P/L structure
       Maintaining R&D expenses to 20% of sales, securing profitability through
       restructuring and efficiency in SG&A expenses

                              FY2012 forecast
     Seeking recovery toward the year-end to secure the same level of
      profitability as previous year
       Sales           610 billion yen (94% YOY)               ROE       14.1%
       Op. profit      87 billion yen (91% YOY)                EPS       207.0 yen
       Net income      59 billion yen (101% YOY)
       Cash income     107.5 billion yen (100% YOY)
2
1Q FY2012 Consolidated Financial Results
                Steady progress toward 1H forecast
                                                                                                            (Billion Yen, %)
                                       April – June 2011                            April – June 2012

                                      Results             %          Results           %           YOY        1H Progress

      Net Sales                           167.3          100.0         146.9        100.0              88            49.5
       Cost of Sales                        43.0           25.7          43.2         29.4           100            -
      Gross Profit                        124.3            74.3        103.7          70.6             83           -
       R&D Expenses                         33.7           20.2          28.4         19.3             84           -
       SG&A Expenses                        68.4           40.9          56.2         38.3             82           -
      Operating
      Income
                                            22.2           13.3          19.1         13.0             86            54.7

      Ordinary Income                       21.2           12.6          17.9         12.2             85            55.2
      Net Income                            13.5             8.1         11.9           8.1            88            50.5
      Cash Income                              25.9                          24.3                      94            50.5
    Cash income is the total amount of cash available for investments for growth, business development, dividend payment, and
    repayment of borrowings, etc.
    Cash income = Net income + Depreciation of PP&E and Amortization of intangible assets + In-process R&D + Amortization
    of goodwill + Loss on impairment (including loss on devaluation of investment securities)
3   1Q FY2012 average exchange rates: U.S.$ = 80.20 yen (YOY -1.9%), Euro = 102.90 yen (YOY -12.4%), GBP = 126.85 yen
    (YOY -4.8%)
       Sales of Oncology Franchise Products
Sales ratio of oncology franchise steadily increased to 17%
                                                                                                                       (Billion Yen, %)

100%                                                                                   April-June               April-June
                                                                                         2011                     2012

         25%                  26%                21%
                                                                                         Results          Results           YOY

                                                  6%               Halaven                          2.6        5.5*               212
         4%                   5%
                                                 12%              Symbenda/
                                                                  Treakisym                         0.8         0.9               112
         23%                  22%
                                                                     Aloxi                          9.7         9.5         99 [100]
50%                                              22%
                                                                  Dacogen                           4.9         4.4           90 [92]
         14%                  17%
                                                  9%               Fragmin                          3.5         2.9           81 [83]
         2%
                              3%
                                                                    Others                          2.5         2.0           79 [82]

         32%                                                      Oncology-
                              28%                29%               related                         24.0       25.2        105 [108]
                                                                    Total
                                                                                                              [ ] based on local currency
 0%                                                          * Halaven sales in the U.S. is $39M
       1Q FY2011            1Q FY2012      Plan "HAYABUSA"
                                               (FY2015)

       Neuroscience            Epilepsy                       Sales ratio of oncology-related products increased to
       Oncology                GI/Liver                        17.2% through 108% growth based on local currency
       Immunology/Allergy      Other branded products
   4
                    Sales of Aricept and Pariet/AcipHex

                               Aricept                        (Billion Yen, %)                       Pariet/AcipHex                                     (Billion Yen, %)

                         April-June                                                                             April-June
                                                 April – June 2012                                                                            April – June 2012
                           2011                                                                                   2011

                           Results              Results            YOY                                            Results                 Results             YOY

      East Asia*1                 30.0               23.3               78            East Asia                          15.5                   13.8                89
       [Japan]                   [28.5]             [21.7]             [76]            [Japan]                          [14.8]                 [13.1]              [88]

      Americas*2                    4.7                 2.4             51            Americas                            15.8                   13.2               83
      [$ million]                  [57]                [30]            [52]           [$ million]                        [194]                  [164]              [85]

       EMEA*3                       6.8                 1.2              17             EMEA                                1.4                   1.2               81

     Indo-Pacific*4                 0.5                 0.4              82       Indo-Pacific                              0.4                   0.4               95

           Total                   42.0               27.3        65 [66]                Total                            33.2                   28.5         86 [87]
*1 Japan, China, Korea, Taiwan, and Hong Kong     [ ] based on local currency                                                                 [ ] based on local currency
*2 North and South America
*3 EMEA: Europe, Middle East, and Africa
*4 Indo-Pacific: South Asian, ASEAN, and Oceania countries




 Sales of Aricept in Japan performed 76% YOY                                     Pariet in Japan secured 88% YOY sales in spite of
  due to the impact of the drug price revision and                                 impact from the drug price revision (volume*5 105%
  the intensified competition (volume*5 94% YOY)                                   YOY)

       5                                                                         *5   YOY sales excluding the impact of drug price revision
                                              Sales by Segment

                                                                                                                             (Billion Yen, %)
100%
                  6%                4%                 3%                                   April – June            April – June
                       1%              1%                    3%
                                    5%                 7%                                      2011                    2012
                  7%
                                                                                            Sales      %       Sales          %          YOY

                                   26%                24%              East Asia*             98.8     59.1      93.4         63.6            95
                 27%
                                                                          [Japan]            [91.8]   [54.9]    [85.4]       [58.2]          [93]

                                                                                                                                             86
                                                                      Americas*                44.8    26.8      38.6          26.3
                                                                                                                                            [88]
50%
                                                                                                                                             56
                                                                      EMEA*                    12.4      7.4       6.9           4.7
                                                                                                                                            [63]
                                                                                                                                             96
                                   64%                63%             Indo-Pacific*             1.7      1.0       1.6           1.1
                 59%                                                                                                                       [102]
                                                                      Reporting
                                                                                             157.7     94.3     140.6          95.7           89
                                                                      Segment Total

                                                                      Others                    9.6      5.7       6.3           4.3          66

 0%                                                                   Consolidated                                                            88
               1Q FY2011          1Q FY2012     Plan "HAYABUSA"                              167.3    100.0     146.9        100.0
                                                    (FY2015)
                                                                      Sales                                                                  [89]
                                                                                                                       [ ] based on local currency
           East Asia   Americas     EMEA      Indo-Pacific   Others
                                                                      *Pharmaceuticals Businesses of East Asia, Americas, EMEA,
       6                                                              and Indo-Pacific
                                        Profit by Segment

                                                                                                                                       (Billion Yen, %)

                                         April – June 2011                                          April – June 2012

                                                               % on                                         % on                       Change from
                                Results            %                         Results            %                         YOY          previous year
                                                               Sales                                        Sales

    East Asia*                       42.2          72.5          42.6              38.1         76.4           40.8              90              (4.0)
    [Japan]                         [40.3]        [69.4]        [43.9]            [36.7]       [73.5]         [42.9]            [91]           [(3.6)]
Americas*                             10.2                                           8.1                                         79             (2.1)
                                                    17.6          22.9                          16.3            21.0
 [$ million]                         [125]                                         [101]                                        [81]           [(24)]

EMEA*                                   1.1            1.8         8.5                0.4         0.9             6.2            40             (0.6)

Indo-Pacific*                           0.4            0.7        22.5                0.4         0.7           21.6             92             (0.0)

    Reporting Segment
    Total                             53.8          92.6          34.1              47.0        94.3            33.5             87             (6.8)

    Others                              4.3            7.4        44.9                2.9         5.7           45.3             67             (1.4)
    R&D expenses & Non-
    allocated SG&A                  (35.9)                                        (30.8)                                         86               5.2
    expenses

    Consolidated
    Operating Profit                  22.2                        13.3              19.1                        13.0             86             (3.1)

       *Segment profit from Americas pharmaceuticals business in local currency was calculated based on average exchange rate
7      *Pharmaceuticals Businesses of East Asia, Americas, EMEA, and Indo-Pacific
               Transformation of P/L Structure

                                       Sales: 143.2 B yen            Sales: 146.9 B yen

100%
                                            9.5%                            13.0%                             14.7%
              16.3%
          Operating margin
80%
                                            37.9%
                                                                            38.3%         Pursuing further    35.6%
              39.5%                                                                          efficiency
60%
               SG&A
              expenses
                                                                                        Continue proactive
40%                                         21.8%                           19.3%                             21.1%
                                                                                          investment in
              18.6%                                                                      priority projects
           R&D expenses
20%
              25.6%                         30.8%                           29.4%         Maintaining the     28.7%
                                                                                           same level
               COGS
 0%
          第3四半期累計
          1Q - 3Q total                  第4四半期
                                           4Q                            第1四半期
                                                                           1Q                               第2~4四半期
                                                                                                             2Q - 4Q
                              FY2011
                             2011年度                                                         FY2012
                                                                                            2012年度
                                   Aricept sales declined in      Efficient SG&A expenses           Launches and growth of
         November 2011:                                             through the reform of the
                                    Japan                                                              new products (Fycompa,
       Aricept LOE in Japan        Declined demand before          pension plan, etc.                 BELVIQ, etc.)
                                    drug price revision            Impacts of the drug price         Initiation of the sole
                                                                    revision, etc.                     promotion of Aricept in
                                   Aricept LOE in Europe
                                                                                                       Japan (4Q)
  8
Forecast for FY2012 Consolidated Financial Results
     Maintaining the KPIs for value creation at the same level as
                  previous year for stable dividends
                                                                                                                                                                     (Billion yen, %)
                                                              FY2011                                                      FY2012
                                                   Results                      %                 Forecast                       %                   YOY
     Sales                                               648.0                  100.0                     610.0                  100.0                       94
         Cost of Sales                                   173.4                    26.8                    176.0                    28.9                    101
     Gross Profit                                        474.6                    73.2                    434.0                    71.1                      91
        R&D Expenses                                     125.1                    19.3                    126.0                    20.7                    101
        SG&A Expenses                                    253.7                    39.1                    221.0                    36.2                      87
     Operating Income                                       95.7                  14.8                       87.0                  14.3                      91
     Ordinary Income                                        90.0                  13.9                       82.0                  13.4                      91
     Net Income                                             58.5                     9.0                     59.0                     9.7                  101
     EPS (yen)                                                  205.3                                           207.0
     ROE (%)                                                     14.3                                            14.1
     DOE (%)                                                     10.4                                            10.2
     Cash Income                                                107.7                                           107.5
     Dividends (yen)                                             150                                              150
    Cash income is the total amount of cash available for investments for growth, business development, dividend payment, and repayment of borrowings, etc.
    Cash income = Net income + Depreciation of PP&E and Amortization of intangible assets + In-process R&D + Amortization of goodwill + Loss on impairment (including loss
    on devaluation of investment securities)
9   FY2011 average exchange rates: U.S. $ = 79.08 yen, Euro = 108.97 yen, GBP = 126.22 yen
    FY2012 estimated exchange rates: U.S. $ = 80 yen, Euro = 105 yen, GBP = 120 yen
         Toward
Product Value Maximization



10
 Seeking 90B Yen Level Sales of Aricept in Japan




               FY2012: 200,000
                people (target)


                                                               (Target)
                                                         Average of 6 months
                                                            administration
                                                           to be extended
                                                             by 2 weeks




                                   10mg tablet: volume
                                  increased 145% YOY




11
       Continued Growth of New Products in Japan

                                                                                          (Billion Yen, %)

                                                  April - June   April - June              Change from
(Billion Yen)                Next-generation
                                                                                YOY          previous
                              growth driver          2011           2012                       year

12.0

                                Halaven                      -         1.33           -          1.33
10.0

                               Treakisym                 0.81          0.90      111             0.09
 8.0

                                 Humira                  4.63          5.75      124             1.12
 6.0

                                  Lyrica
                                                         2.11          3.10      147             0.99
 4.0                         (alliance revenue)


                             Lunesta, Onbrez,
 2.0                          Lipacreon, and                 -         0.85           -          0.85
                                  Fostoin

 0.0
             1Q       1Q          Total                  7.55         11.93      158             4.38
           FY2011   FY2012
  12
                              Halaven® (eribulin mesylate)
                              Continues Global Growth
(Billion Yen)

6.0


5.0
                              Launch in                         Status and events in major countries
                               Japan
                                                                     U.S.: scientific presentations at ASCO*
4.0
                      Launch in                        5.5           Japan: data presentation at the Annual
                       Europe                                         Meeting of the Japan Breast Cancer
3.0                                             5.1                   Society

                                          4.6
2.0    Launch in
        the U.S.                  3.6                           Expansion and acceleration of approvals to
                                                                 contribute to more patients globally
                          2.5
1.0                                                                  Approved in 37 countries worldwide
                   1.8                                               Submitted in 13 countries
           0.4
                                                                     Europe: progress in reimbursement in
0.0
          3Q     4Q      1Q     2Q      3Q      4Q    1Q              major countries
         FY2010                   FY2011              FY2012
                                                                  * ASCO: American Society of Clinical Oncology
  13
     FDA Approved Anti-obesity Agent BELVIQ®
     First prescription weight-loss treatment approved in the U.S. in 13 years



                                              Provide a new treatment option for weight management
and                                           contribute to the medical management of obesity

 Approved by the FDA on June 27, 2012
 Mechanism: first-in-class selective serotonin                                                                           Product Potential
  (5-HT2C) receptor agonist                                                                      Market Launch: to be launched following a
 Indication: an adjunct to a reduced-calorie diet                                                review by the U.S. Drug Enforcement
  and increased physical activity for chronic weight                                              Administration to determine final scheduling
  management in adult patients with an initial body                                               designation; expected to be on the market in
  mass index (BMI) of ≥ 30 kg/m2 (obese), or ≥ 27                                                 early 2013
  kg/m2 (overweight) in the presence of at least
  one weight related comorbid condition (e.g.,                                                   Commercial Rights: Eisai owns exclusive
  hypertension, dyslipidemia, type 2 diabetes)                                                    marketing rights in 21 countries throughout the
                                                                                                  Americas, including the U.S., Canada, Mexico,
Limitations of Use:                                                                               and Brazil
       • The safety and efficacy of coadministration with
          other products for weight loss have not been                                           35.7% of U.S. adults aged 20 and over (approx.
          established                                                                             110 million) are obese (BMI ≥ 30) *1
       • The effect of BELVIQ on cardiovascular morbidity                                        Obesity costs the U.S. approximately $150
          and mortality has not been established                                                  billion*2 (approx. 12 trillion yen) a year (almost
If patient has not achieved a 5% weight loss by week 12,                                          10% of the national medical budget)
label recommends discontinuation of therapy
     *1   Prevalence of Obesity in the United States, 2009 – 2010, Centers for Disease Control and Prevention
14   *2   Eric A. Finkelstein, Justin G. Trogdon, Joel W. Cohen and William Dietz, Annual Medical Spending Attributable To Obesity: Payer-And Service-Specific Estimates,
          Health Affairs, 28, no.5 (2009):w822-w831 (published online July 27, 2009; 10.1377/hlthaff.28.5.w822)
     For more information about BELVIQ: http://us.eisai.com/package_inserts/BelviqPI.pdf
Start of a New Market Creation with BELVIQ®




New market creation for unmet medical needs
      First prescription weight-loss treatment approved in the U.S. in 13 years
      Disease state awareness and appropriate product use are critical for this underserved market


Patient education and appropriate product use are essential for patient contribution
      Promotional activities based on full product information
      Utilizing experiences and know-hows learned from Aricept marketing to cultivate a new market
      Realize patient contribution through market launch with thorough preparations




         Success story by Aricept in commitment to set
          foundation for a new market to be replicated
15
            Strong Recovery in FY2012

                                                     313 B yen
                          Trajectory of Sales

     297 B yen

      1Q Progress                                                            52 B yen
         49.5%
                               Trajectory of
                              Operating Profit

                        35 B yen

                          1Q Progress
                             54.7%

                       Efforts for regrowth of Aricept in Japan
                       Initiation of sole promotion of Aricept in Japan
                       Launch and expansion of new products
                       Further efficiency in SG&A expenses


                    1H FY2012                                    2H FY2012
                     Forecast                                     Forecast
16
     Progress of Innovation




17
       Fycompa®                     (perampanel) Approved in Europe
       Fight neuronal hyperexcitation by providing a new treatment option

   First-in-class, highly selective non-competitive
    postsynaptic AMPA-type receptor antagonist that
    reduces hyperexcitation, one potential cause of
    epileptic seizures
   Europe: Received approval by European Commission
    as an adjunctive treatment of partial-onset seizures
    with or without secondarily generalised seizures in
    patients with epilepsy aged 12 years and older on July
    23, 2012

                       Launch plans:
      To be launched first in the U.K., Germany, Austria,
        and Denmark followed by other EU countries

   U.S.: PDUFA action date on October 22; if approved,
    expected to be launched in 1Q FY2013
   Phase III study for partial-onset seizures is ongoing in
    Japan and Asia
   Global phase III study for adjunct therapy for primary
    generalized tonic-clonic seizures is ongoing in the U.S.,
    Europe, Japan, and Asia

            Establishing a franchise with
             four antiepileptic products
       Fycompa, ZEBINIX, Zonegran, and Inovelon
                                       Toward Maximizing
                                  The Product Value of Halaven®
     Preliminary results of phase III study (study 301) of Halaven versus capecitabine in locally-
     advanced/metastatic breast cancer patients:
         Number of patients: 1,102 (905 events)
         Primary endpoints: the study did not meet the pre-specified criteria (p-value) for OS*1 and PFS*1 with
          statistical significance; however, it showed a trend toward improved OS for group of patients who received
          Halaven compared with capecitabine
         The safety profile was consistent with that reported in previous clinical studies
         Working closely with authorities to evaluate prospects for potential regulatory filing
         Detailed data will be presented at an academic conference by the end of year

Results of phase I/II studies (study 203) of Halaven in combination with capecitabine for
advanced/metastatic breast cancer:
         Confirmed acceptable tolerability for combination therapy; presented at ASCO (June 2012)*2
         Patient enrollment for phase II study was completed (42 cases)

Non-small-cell lung cancer: Clinical trials in the U.S., Europe, Japan, and Asia (phase III study) are steadily ongoing
Soft-tissue sarcoma:
Clinical trials in the U.S., Europe, and Asia (phase III study) are ongoing;
Clinical trial in Japan (phase II study) is ongoing
Liposomal formulation: Phase I clinical study to be initiated in Europe

*1   OS: overall survival; PFS: progression-free survival   *2   Dr. Plummer and Dr. Twelves et al.
        Steady Progress in Clinical Studies for Lenvatinib
                         Exploring inhibitory effect against multiple kinases,
                          including VEGFR2 tyrosine kinase and RET kinase


 Thyroid cancer:                                                      Melanoma:
      Global phase III study for differentiated thyroid                      Phase II study to confirm POC is ongoing
      cancer is ongoing, application to be submitted                         (2 groups: wild-type BRAF and mutated BRAF)
      in FY2013
                                                                                 Phase Ib study in combination with
          Phase II study for medullary thyroid cancer*1                          temozolomide for advanced melanoma*2
                                                                                           Distribution of the tumor reduction rate
                 Distribution of the tumor reduction rate




          80% of patients had either stable disease or partial                     64% of patients had either stable disease or
          response                                                                 partial response

 Hepatocellular carcinoma:                                            Non-small-cell lung cancer
      Phase III study is in preparation based on POC                       (targets chromosomal translocation of cRET)
      confirmation in phase I/II study                                     Global phase II clinical study is in preparation
 Endometrial cancer and Glioma:
      Phase II studies to confirm POC are ongoing
                   *1   M. Schlumberger (Institut Gustave-Roussy, Villejuif, France) et al. (presented at ASCO 2012)
 20
                   *2   D. Hong (The University of Texas MD Anderson Cancer Center, TX, USA) et al. (presented at ASCO 2012)
    Progress of E2609: Next-Generation Investigational Compound
                       For Alzheimer’s Disease
      Next-generation oral Alzheimer’s disease investigational compound
developed in-house being explored for disease modification by BACE1* inhibition


Results from phase I clinical trials in healthy adult volunteers were presented
       at the Alzheimer’s Association International Conference 2012




          Single dose study showed a                              Demonstrated a reduction in cerebrospinal fluid (CSF)
          reduction in plasma Aβ level                                       Aβ level after 14-day dosing
     (maximum reduction was 92% at 800mg)                                 (74% reduction in the 100mg cohort)


 *BACE1:   Beta-secretase 1 (beta-site amyloid protein-cleaving enzyme)
                 Accelerated Product Creation
      Development of investigational antibody products in Morphotek

                                An investigational humanized                                     An investigational humanized
                                                                                                 monoclonal antibody that
  Farletuzumab                  monoclonal antibody targeting
                                folate receptor alpha (FRA)         MORAb-004                    targets tumor endothelial
                                developed by Morphotek                                           marker 1(TEM-1) /endosialin
Phase III study for platinum-sensitive recurrent                                                 developed by Morphotek
ovarian cancer                                                  Currently conducting 3 types of phase II studies, including
• Completed patient enrollment of 1100 in 30 countries          studies to identify biomarkers which could potentially be a
  worldwide                                                     candidate for companion diagnostics
• Aimed for simultaneous regulatory submissions in Japan,
  U.S., and Europe in 4Q FY2012                                 •   Melanoma: completed patient enrollment for
                                                                    phase IIa study
Diagnostic kit to detect FRA expression:                        •   Colorectal cancer: phase II
commercialized for research in collaboration with                   study is ongoing; expected to
                                                                                                                          Endosialin


Biocare Medical, LLC                                                complete the study by the end
Rate of FRA-positive is over 90% in ovarian cancer patients;        of FY2012
confirmed FRA expressions in non-small cell lung cancer and     •   Sarcoma: initiated phase II study
phase II study for FRA-expressed patients is ongoing                                           Fibroblast

   Diagnostic kit to detect
   FRA expression                               Acceleration of
                                               Product Creation                                             Cancer cell
                                                                                                                          Pericytes




Increasing development speed                           Pilot plant                  Construction to be completed
     and efficient antibody
                                                                                    in August 2012
    manufacturing through
manufacturing of antibody for in-                                                   Scheduled to initiate GMP
      house development                                                             manufacturing from FY2013
                          Accelerated Product Creation
            Enhancement of the platform for the development of
                     companion diagnostics (CDx)

                                                                                         Former BPM Core Function Unit
    Reorganization of Biomarker & Personalized                                           Experienced in biomarker research
        Medicine (BPM) Core Function Unit                                                  and equipped with knowledge,
                                                                                         technology, and know-how that are
                          BPM Core Function Unit                                            fundamental to develop CDx
                               President


                                                                                           Integrated R&D functions
   Biomarker Research                                Diagnostic Products                 Aiming to shift to the structure to
         Dept.                                       Development Dept.                      create in vitro diagnostic
                                                      Development/clinical research of
                                                                                             products consistently
                                                      CDx
                                  collaboration       Promoting collaborative research
                                                      with external institutions, etc.                EIDIA Co., Ltd.
Product Creation Units:
                                                                                          (a subsidiary to manufacture/distribute
                                                                                                   diagnostic products)
              Neuro                                                            H3
Oncology
             -science
                            KAN           Frontier   Morphotek    JAC*
                                                                           Biomedicine
                                                                                         Equipped with knowledge and experience
                                                                                                  in diagnostic products


                          Products + CDx
                            Maximization of patients benefit
               through enhancement of capability for personalized medicine
* JAC: Japan and Asia Clinical Research
                       Accelerated Product Creation
                  Utilization of open innovation at KAN Research Institute

           Keio University                                                                                     Kagoshima University
                                                                    Knowledge/ know-                             Kyoto University
     Central institution to conduct
                                                                    how at universities                        Providing medical treatment to the
     early and exploratory clinical                                                                            patients not adequately controlled
        studies for intractable                                                                                   by internal hepatic adjunctive
                                                                   Matching with unmet
           immune disorders                                                                                      therapy or liver transplantation
                                                                     medical needs
                      collaboration                                                                                          collaboration
        Initiated phase I study*1 for
                                                                        Accelerated                          Development of new medicines
     development of new medicines
                                                                      product creation                         for severe acute hepatitis
     for inflammatory bowel disease
                      collaboration                                                                                           collaboration
                                                                            KAN
                                                                       Research Institute                     Recombinant human
                  KANAb001(E6011)
                                                                                                           hepatocellular growth factor
      Investigational first-in-class humanized                                                       Exploring potential effect to prevent the
      monoclonal antibody targeting chemokine                                                        disease progression through hepatic
      originated by KAN                                                                              regeneration effect and anti-apoptotic effect
                                                                                    Rendering

            Promoting “Research for Integrative Cell Biology for Medicine” with the focus on
     neurodegenerative disorders, recurrent/metastatic cancers, and refractory immunological diseases

     Received official approval for special international strategic development project being implemented within Kansai
        International Strategic Innovation Zone; to be relocated to a new research facility within the Zone in 2014*2
24    *1   Clinical trials in healthy adult volunteers are conducted in other clinical trial sites    *2   KAN Research Institute, Inc.
       Value Maximization Through Launches of
           Robust New Products in FY2012

Halaven   Approved in 37 countries; marketed in the U.S., Europe, Japan, Switzerland, Singapore, etc.
Lunesta   Insomnia treatment that improves difficulty with falling asleep and staying asleep: marketed in
          Japan


Halaven          Global: submitted in 13 countries
Fycompa® (perampanel)
          Europe: Approved in July 2012
                  To be launched from 2Q FY2012 first in U.K., Germany, Austria,
                  and Denmark followed by other EU countries
          U.S.:   If approved, expected to be launched in 1Q FY2013
BELVIQ® (lorcaserin)
          U.S.:      Approved in June 2012; expected to be launched in 4Q FY2012

Careram              Novel disease modifying anti-rheumatic drug that inhibits production of
                     inflammatory cytokine and immunoglobulin:
                     expected for 2Q FY2012 in Japan
Clevudine            Chronic hepatitis B treatment with large market potential in China:
                     expected for 3Q FY2012 in China
Gliadel              World’s only implant in the brain, sustained release formulation for brain
                     tumor (malignant glioma): expected for 3Q FY2012 in Japan
25
     Reference




26
Performance of East Asia Pharmaceuticals Business


                                                                                       (Billion yen, %)

                                    April – June 2011                April – June 2012

                                   Results       %         Results          %              YOY

     Sales                             98.8       100.0         93.4       100.0               95 [95]

      Aricept                          30.0        30.3         23.3        25.0               78 [78]

      Pariet                           15.5        15.7         13.8        14.8               89 [89]

      Methycobal                        9.4          9.5         9.1         9.8               97 [97]


      HUMIRA                            5.5          5.5         6.8         7.3            125 [126]

      Stronger Neo-Minophagen C/
                                        1.9          1.9         1.9         2.1            100 [100]
      Glycyron Tablets

     Segment Profit                    42.2        42.6         38.1        40.8                     90

                                                                                [ ] based on local currency


27
Performance of East Asia Pharmaceuticals Business

<Japan>                                                                      (Billion yen, %)
                                April – June 2011            April – June 2012
                               Results        %        Results          %            YOY
 Sales                             91.8        100.0          85.4        100.0         93
 Prescriptions                     82.1         89.4          75.5         88.4         92
  Aricept                          28.5         31.1          21.7         25.4         76
  Pariet                           14.8         16.1          13.1         15.3         88
  Methycobal                         7.4         8.1           6.8          8.0         92
  HUMIRA                             4.6         5.0           5.8          6.7        124
  Actonel                            2.9         3.1           2.4          2.8         84
 OTC                                 5.0         5.5           4.1          4.8          82
 Generics                            3.2         3.5           4.4          5.2         139
 Diagnostics                         1.5         1.6           1.4          1.6          92
 Segment Profit                     40.3       43.9           36.7         42.9           91

<China>                                                                       (MM RMB, %)
                                April – June 2011            April – June 2012
                               Results        %        Results           %           YOY
Sales                                330       100.0           404        100.0        123
 Methycobal                          146        44.4           175         43.3        120
  Stronger Neo-Minophagen C/
                                      67        20.3            72         17.8         108
  Glycyron Tablets
  Aricept                             31         9.3            49         12.2         160
28Pariet                              20         6.1            26          6.5         131
     Performance of Americas Pharmaceuticals Business



                                                                                    (Billion yen, %)

                                         April – June 2011             April – June 2012
                                        Results        %           Results      %           YOY
     Sales                                  44.8        100.0           38.6   100.0             86
      Aricept                                4.7           10.5          2.4      6.2            51
      AcipHex                               15.8           35.4         13.2     34.1            83
             Halaven                         2.5             5.6         3.1      8.1          125
                Aloxi                        9.7           21.6          9.5     24.6            99
                Dacogen                      4.9           10.9          4.4     11.5            90
             Total MGI                      15.3           34.1         14.5     37.6            95

             Fragmin                         3.5             7.9         2.9      7.4            81

      Total oncology-related products       22.6           50.5         21.2     55.0            94

     Segment Profit                         10.2           22.9          8.1     21.0            79




29
     Performance of Americas Pharmaceuticals Business



<U.S.>                                                                                 ($ million, %)
                                            April – June 2011             April – June 2012
                                           Results        %           Results      %          YOY
     Sales                                      548        100.0           481    100.0           88
      Aricept                                    57           10.5          30*      6.2          52
      AcipHex                                   194           35.4         164      34.2          85
             Halaven                             31             5.6         39       8.1        127
                Aloxi                           118           21.6         119      24.7        100
                Dacogen                          60           10.9          55      11.5          92
             Total MGI                          187           34.1         181      37.6          97

             Fragmin                             43             7.9         36       7.5          83

     Total oncology-related products            276           50.5         265      55.1          96

*including $19M from Aricept 23 mg sales




30
Performance of EMEA and Indo-Pacific Pharmaceuticals
Business

     <EMEA>                                                                       (Billion yen, %)
                       April – June 2011                   April – June 2012
                      Results        %           Results             %                 YOY
     Sales                 12.4       100.0                6.9      100.0                   56 [63]
      Aricept               6.8         55.1               1.2        16.7                  17 [19]
      Pariet                1.4         11.7               1.2        17.0                  81 [91]
      Zonegran              1.2            9.5             1.1        15.8                 93 [105]

      Halaven               0.1            0.8             1.0        15.1          1058 [1187]

     Segment Profit         1.1            8.5             0.4           6.2                40 [77]
                                                                          [ ] based on local currency

     <Indo-Pacific>                                                               (Billion yen, %)
                       April – June 2011                   April – June 2012
                      Results       %            Results             %                 YOY
     Sales                 1.7       100.0                 1.6      100.0                  96 [102]
      Aricept              0.5        29.3                 0.4        25.1                  82 [88]
      Pariet               0.4        24.7                 0.4        24.5                 95 [103]
     Segment Profit        0.4        22.5                 0.4        21.6                  92 [99]
31                                                           [ ] based on local currency

				
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