Overview of Financial Results (Core Basis)

Revenue totaled ¥397.0 billion, which was an increase of ¥22.5 billion (6.0%) from the corresponding period of the previous fiscal year (year on year).

• Sales of Domestic Products

Sales of Opdivo Intravenous Infusion for malignant tumors decreased by ¥6.8 billion (7.1%) year on year to ¥89.2 billion, mainly due to the intensified competitive environment. Sales of Forxiga Tablets for diabetes, chronic heart failure and chronic kidney disease increased by ¥3.9 billion (5.7%) year on year to ¥72.7 billion, mainly due to its expanded use, particularly in treatment for chronic kidney disease and chronic heart failure, despite the entry of generic products in December.
With respect to other main products, sales of Orencia Subcutaneous Injection for rheumatoid arthritis were ¥21.0 billion (1.0% increase year on year). Sales of Glactiv Tablets for type-2 diabetes were ¥10.4 billion (28.9% decrease year on year). Sales of Velexbru Tablets for malignant tumors were ¥9.2 billion (12.3% increase year on year). Sales of Ongentys Tablets for Parkinson’s disease were ¥6.9 billion (16.6% increase year on year). Sales of Parsabiv Intravenous Injection for Dialysis for secondary hyperparathyroidism on hemodialysis were ¥6.9 billion (5.1% increase year on year). Sales of Kyprolis for Intravenous Infusion for multiple myeloma were ¥6.0 billion (12.9% decrease year on year).

• Sales of Overseas Products

Sales of QINLOCK^® (ripretinib) for gastrointestinal stromal tumor, marketed by Deciphera Pharmaceuticals, LLC, the operating company of Deciphera Pharmaceuticals, Inc., increased by ¥11.3 billion (65.1%) year on year (the previous period included only six months of sales from July to December) to ¥28.6 billion. Additionally, sales of ROMVIMZA^® (vimseltinib), also marketed by Deciphera, for tenosynovial giant cell tumor (TGCT) treatment were ¥5.4 billion.

• Royalty and Others

Royalty and others increased by ¥11.5 billion (9.7%) year on year to ¥129.2 billion, mainly due to an increase in royalty revenue from Bristol-Myers Squibb Company.

Core operating profit was ¥116.3 billion, an increase of ¥18.6 billion (19.1%) year on year.

• Cost of sales was ¥83.2 billion, roughly unchanged from the corresponding period of the previous fiscal year.
• Research and development costs increased by ¥1.2 billion (1.1%) year on year to ¥104.6 billion mainly due to the inclusion of research and development expenses from Deciphera Pharmaceuticals, LLC(the previous period accounted for only six months of Deciphera’s expenses (July to December), and the current period includes nine months (April to December)), despite a decrease in research costs.
• Selling, general, and administrative expenses (except for research and development costs) increased by ¥2.6 billion (2.9%) year on year to ¥92.8 billion mainly due to the inclusion of business operating costs from Deciphera Pharmaceuticals, LLC (the previous period accounted for only six months of Deciphera’s expenses (July to December), and the current period includes nine months (April to December), despite the promotion of cost efficiency.

Core profit attributable to owners of the Company increased by ¥13.5 billion (17.6%) year on year to ¥90.0 billion in association with the increase of the profit before tax.

Overview of Financial Results (IFRS (Full) basis)

Revenue (IFRS (full) basis) is the same as on a core basis.

The main adjustments are as follows.

• Cost of Sales: Amortization expenses, mainly related to intangible assets from the acquisition of Deciphera, were adjusted, ¥9.1 billion in the previous fiscal year and ¥19.0 billion in the current fiscal year, etc. Additionally, the cost portion of inventory assets evaluated at fair value was adjusted, ¥10.5 billion in the previous fiscal year and ¥6.4 billion in the current fiscal year, etc.
• Research and Development Expenses: An impairment loss of ¥3.5 billion related to intangible assets was adjusted in the previous fiscal year, etc.
• Selling, General and Administrative Expenses (excluding R&D): Acquisition-related expenses of ¥3.0 billion for Deciphera were adjusted in the previous fiscal year, etc.
• Other Expenses: Loss on retirement benefit plan amendments of ¥1.7 billion was adjusted, arising from the transition of a portion of the defined benefit pension plan to defined contribution pension plan in the current fiscal year, etc.

Therefore, Operating profit increased by ¥17.5 billion (24.8%) year on year to ¥88.3 billion.

Profit attributable to owners of the Company increased by ¥12.4 billion (21.8%) year on year to ¥68.9 billion in association with the increase of the profit before tax.