塩野義製薬（4507） – FY2021 Financial results material

FY2021 Financial Results(April 2021-March 2022)May 11, 2022Shionogi & Co., Ltd.Isao Teshirogi, President and CEOAgenda1. Overview of FY2021 Financial Results (P.4-14)2. Actions and Financial Forecasts in FY2022 (P.16-29)3. Shareholder Return (P.31)21. Overview of FY2021 Financial Results Financial Results (Consolidated)(Unit: B yen)Forecasts**(revised on Nov. 1)FY2021ResultsAchievement(%)FY2020ResultsY on YChange(%)Change294.090.090.0115.0100.0335.1110.3110.6126.3114.2114.0 122.6 122.9 109.8 114.2 297.2117.494.0143.0111.912.8 (6.1)17.7 38.0 (7.1)16.6 (11.7)(16.8)2.1 2.3 RevenueOperating profitCore operating profit*Profit before taxProfit attributable toowners of parent• Revenue and profit items reached achieved forecast levels– Revenue, core operating profit and profit attributable to owners of parent increased year-on-year• Profit items all over 100 B yenExchange Rate（average）USD ($) – JPY (¥)GBP (£) – JPY (¥)EUR (€) – JPY (¥)FY2021forecasts(revised on Nov. 1)FY2021results110150130112.40153.53130.56* Operating profit adjusted for one-time factors (impairment losses, gain on sale of property, plant and equipment, etc.)** The consolidated earnings forecasts announced on Nov. 1, 2021 were written here, and the revisions to the forecasts were announced on Apr. 25, 20224Statement of Profit or Loss (Consolidated)FY2021ResultsForecasts**(revised on Nov. 1)294.019.457.0237.030.318.989.055.5(2.5)30.630.639.190.090.025.0115.0100.0335.116.555.4279.728.495.221.873.0(1.2)32.9110.333.0110.616.037.7126.3114.2FY2020Y on Y(Unit: B yen)Achievement (%)ResultsChangeChange(%)Main Variation Factors ( Forecast Comparison***)114.0 97.2 118.0 107.0 131.5 46.7 122.6 122.9 63.8 109.8 114.2 297.217.752.5244.732.095.118.354.239.5117.431.694.025.648.1143.0111.9••12.8 38.0 5.5 14.3 2.9 35.1 0.1 0.1 34.6 18.7 (6.1)(7.1)17.7 (37.6)16.6 (9.6)(11.7)(16.8)2.1 2.3 22.1 (105.3)(23.3)• R&D• Revenue- Increase: Royalty income (HIV franchise)- Decrease: Prescription drugsSelling, general & administrative expenses- Increase: Launch and sales activity costs to support strong sales of Fetroja®and Fetcroja®, launch preparation costsdfor S-217622- Increase: Intensive investment in R&D activities related to COVID-19 Finance income & costs- Decrease in income :Shift to FY2022 in receiving dividend from ViiV in the 4th quarter of FY2021RevenueCost of salesGross profitSelling, general &administrative expensesR&D expensesOther income & expensesOperating profitCore operating profit*Finance income & costsProfit before taxProfit attributable to owners of parent* Operating profit adjusted for one-time factors (impairment losses, gain on sale of property, plant and equipment, etc.)** The consolidated earnings forecasts announced on Nov. 1, 2021 were written here, and the revisions to the forecasts were *** Appendix p.35: Year-on-Year Comparisonannounced on Apr. 25, 20225Revenue by SegmentFY2021FY2020Y on Y(Unit: B yen)Forecasts**(revised on Nov. 1)ResultsAchievement (%)ResultsChange(%)ChangePrescription drugsOverseas subsidiaries/exportShionogi Inc.Fetroja®Ping An-Shionogi* /C&OSBV(Europe)Contract manufacturingOTC and quasi-drugRoyalty incomeHIV franchiseCrestor®OthersOthersTotal89.134.413.86.210.294.4 98.3 108.5 -82.6 94.435.012.7-12.35.094.724.67.51.710.1(5.9)(5.6)39.5 84.5 268.7 1.1 9.7 6.3 4.6 0.1 3.0 5.099.8 2.0153.7 17.817.497.9 19.7(11.7)(2.3)13.411.2132.0 181.3125.2 174.01.26.11.8294.0 335.1-6.71.483.0 137.4 138.9 -91.5 124.4 114.0 11.7144.6123.416.64.71.8297.2(4.8)(0.6)25.3 36.6 41.0 50.6 (93.1) (15.4)1.4 0.0 12.8 38.0 30.8 1.7 Main Variation Factors ( Forecast Comparison***)• Prescription drugs- Decrease: Sales of Influenza franchise• Overseas subsidiaries/export- US/EU: Increase: Sales of cefiderocol（Fetroja®）- China: Decrease: Sales on online medical platform lower than projections• OTC and quasi-drug- Decrease: sales of ISODINE®• Royalty income- HIV franchise: Increase: Royalty income from the conclusion of dolutegravir patent license agreement (transient factor)HIV royalties excluding the one-time payment increased year-on-year* OTC and quasi-drugs also include in revenue of joint venture** The consolidated earnings forecasts announced on Nov. 1, 2021 were written here, and the revisions to the forecasts were*** Appendix p.36: Year-on-Year Comparisonannounced on Apr. 25, 20226Revenue from Prescription Drugs in JapanFY2021FY2020Y on Y(Unit: B yen)Forecasts*(revised on Nov. 1)ResultsResultsChangeChange(%)Cymbalta®Intuniv®Vyvanse®Infectious disease drugsInfluenza franchiseOxyContin® franchiseSymproic® Actair®Mulpleta®Pirespa®OthersCrestor®Irbetan®franchisePrescription drugs17.116.61.016.67.95.03.10.40.13.530.85.73.194.415.916.40.811.83.14.82.70.50.13.832.45.93.289.126.513.10.39.80.35.32.30.30.15.132.06.73.394.7(39.9)25.4 190.7 20.8 -(10.0)17.9 45.1 8.9 (25.3)1.2 (11.0)(5.0)(5.9)(10.6)3.3 0.5 2.0 2.8 (0.5)0.4 0.2 0.0 (1.3)0.4 (0.7)(0.2)(5.6)＜Products included in infectious disease drugs＞•••Xofluza®Rapiacta®Brightpoc®Flu・Neo•••FINIBAX®Flumarin®Flomox®•••Shiomarin®VancomycinBaktar®••Flagyl®ISODINE®Influenza franchise* The consolidated earnings forecasts announced on Nov. 1, 2021 were written here, and the revisions to the forecasts were announced on Apr. 25, 20227Summary of FY2021 Results• Domestic businesssteadily progressing• Overseas businessDomestic prescription drugs sales did not reach the forecast due to a very small epidemic of influenza–– OTC and quasi-drugs did not achieve the forecast due to lower-than-expected sales of ISODINE® while new products are •••–Sales of cefiderocol in the United States and Europe are steadily progressingSelling, general & administrative expenses–Launch and sales activity supporting strong sales of Fetroja® and Fetcroja®R&D expenses–Due to intensive investment in R&D activities related to COVID-19, 73 billion yen (up 18.7-billion-yen year-on-year comparison) which is the largest amount everSettlement of dolutegravir patent infringement litigation with Gilead –Recognized royalty on upfront and on an agreed projection of future royalty payments as revenue following the conclusion of the patent license agreement Achieved Initial and revised forecasts8Actions for the Early Termination of COVID-19Epidemic forecastingPreventionDiagnosisTreatmentExacerbation suppressionLaunch of sewage epidemiology surveillance survey serviceDevelopment of S-268019Th2 chemokine TARC* kit, antigen-test kitDevelopment of S-217622Development of AsapiprantEstablished AdvanSentinelEarly detection of BA.2(Refer to next page)Verification of non-inferiority to COMIRNATY intramuscular injection (Pfizer) in additional immunological testsJoint sale of antigen-test kit using saliva specimensCompletion of domestic approval application based on the result of Phase 2a/2bPh2 trial startedAlthough S-217622 and S-268019 were not launched before the end of FY2021, our COVID-19 efforts progressed at a speed that breaks established records* TARC (thymus and activation-regulated chemokine): One of the chemokines driving migration of Th2 cells, a type of lymphocyte, to the site of inflammation** SARS-CoV-2 antigen test kit that be able to use saliva as an adaptive specimen jointly sold with TAUNS 9Establishment of AdvanSentinelHospitalizationsCases reported（diagnostic tests that get reported)Cases tested(diagnostic PCR and RAT testing)(symptomatic and asymptomatic)すべての感染者Infected persons shedding virus （症状あり・なし含into catchment areas viaむ）wastewater sewers or environmental waters((pre/post)symptomatic and asymptomatic)All infected persons ((pre/post)symptomatic and asymptomatic)※ WHO：Environmental surveillance for SARS-COV-2 to complement public health surveillance – Interim Guidance*1• Early public health implementation of wastewater monitoring– Partnering with SHIMADZU– Wastewater monitoring is an indispensable method to more accuratelyofassess the infection status of society as a whole, withselection bias seen with PCR or RAT testslessrisk– US and Europe were progressing this implementation during the COVID-19 pandemic> US: CDC has been leading wastewater monitoring in 46 states and publishedthe results on a dashboard together with clinical tests*2> Europe: All EU Member States have agreed with the European Commissionrecommendation and around 1370 wastewater treatment plants are underregular surveillance and the data are shared amongst countries*3• Actions for FY2022– Dissemination of wastewater epidemiological surveys and evidence building activities through supplementary budget and Ministry of Land, Infrastructure, Transport and Tourism projects– Launch of new method and kit with very high sensitivity and which can be automatedBy launching a new method with very high sensitivity and automation,we will contribute to the accurate understanding of infection epidemiology worldwide*1 Environmental surveillance for SARS-COV-2 to complement public health surveillance – Interim Guidance (who.int)*2 National Wastewater Surveillance System (NWSS) – a new public health tool to understand COVID-19 spread in a community | CDC*3 Coronavirus response: monitoring of wastewater contributes to tracking coronavirus and variants across all EU countries (europa.eu)10Progress Summary of S-217622, S-268019FY2021FY2022As of May 11, 2022789101112123456789101112123■ S-217622Conditional approval application (2/25)Phase 2a*1Result report (4/23)Phase 2b*2Phase 3 (mild/moderate)*2Result report (2/7)Phase 2b/3 ( asymptomatic/mild symptoms)*2Phase 2/3 trial is supported by the Ministry of Health, Labor and Welfare’s support project for the practical application ofCOVID-19 treatment drug.Global Phase 3 (SCORPIO-HR)■ S-268019Phase 1/2*3Interim report (12/6)Phase 2/3*4 (safety / immunogenicity evaluation)Interim report (4/22)Phase 2/3*5 (booster trial)Interim report (3/4)Global Phase 3*6 (placebo control, onset prevention)Phase 1/2 trial was supported by Japan Agency for Medical Research and Development (AMED) (Trial number: JP21nf0101626″)Phase 3*7 (active control, neutralizing antibody titer)Phase 3*8 (booster trial (additional trial in Japan))*1 jRCT2031210202, *2 jRCT2031210350, *3 jRCT2031210269, *4 jRCT2031210383,*5 jRCT2031210470, *6 NCT05212948, *7 jRCT2051210151, *8 jRCT203121061311Actions for COVID-19S-217622 (oral therapeutic drug)• Domestic manufacturing and marketing approval application– Application based on the results and analysis from Phase 2b part (February 25, 2022)••Phase 2b result report–Efficacy and safety results announced at 32ndECCMID*Continuation of Phase 2/3 trial–Phase 3 part (mild/moderate) and Phase 2b/3 part (asymptomatic/mild symptoms) are underway> Patient registration is proceeding smoothly including Vietnam and South Korea••Global Phase 3 trial started–Preparing to Initiate ACTIV-2d (SCORPIO-HR trial) in collaboration with ACTG**Supply– Completed production for 1 million people–Since April 2022, production is expanding to supply more than 10 million people annuallyStarted preparations for building a global supply system–Preparations are progressing steadily for domestic and global provision* European Congress of Clinical Microbiology and Infectious Diseases ** The AIDS Clinical Trial Group: The world‘s largest HIV research network expanding 12Presentation: https://www.shionogi.com/global/en/investors/ir-library/presentation-materials.htmlits activities to evaluate outpatient treatment of COVID-19 in recent years***Quality test completedActions for COVID-19S-268019 (recombinant protein vaccine)5 Pivotal clinical trials in progress• Phase 2/3 trial• Phase 2/3 booster trial ⁃⁃⁃trial⁃Safety/immunogenicity evaluation trial in 3,100 adults aged 20 and over and the elderly aged 65 and overTop-Line results: Disclosed at the Infectious Diseases Society (April 22, 2022)⁃ Non-inferiority verification trial with COMIRNATY (Pfizer) by booster immunization after 2 doses of COMIRNATY Achieved the primary endpoint in the interim analysis• Phase 3 booster trial (additional trial in Japan)⁃• Active control, neutralizing antibody titer Superiority verification trial over VAXZEVRIA (AstraZeneca) Top-Line results will be obtained in May (scheduled to be published in a paper)For adults aged 20 to 64 years who received SPIKEVAX (Moderna) twice and elderly people aged 65 years or older who received COMIRNATY or SPIKEVAX twiceTop-Line results will be obtained in May• Placebo control, onset prevention trialAdvance start in Vietnam from December 2021Subject registration is progressing smoothly⁃⁃⁃⁃Each trial is steadily progressing in support of both initial immunity and booster immunity indicationsSupported by AMED issue number JP21nf0101626 in investigational drug manufacturing in each clinical trial13Results for FY2021 and Issues RemainingResults for FY2021Issues RemainingAchieved forecastsEarly commercialization of COVID-19 therapeutic and vaccinesProgress of COVID-19 related projectsSophistication and speed of decision makingDevelopment of growth driversStrengthening domestic/overseas businessFocus on efforts for medium- to long-term growth in parallel with aiming to provide solutions for COVID-19 142. Actions and Financial Forecasts in FY2022What is Shionogi after FY2022FY2021From FY2022Lessons from the special situation of the COVID-19 pandemic•••Promote R&D and production at an unprecedented speed by drastically shifting resources and changing processesEfforts to build a sustainable infectious disease business modelRecommendations for policy changes through the pharmaceutical industryApply COVID-19 lessons to drive success and growth• World-class drug discovery capability with speed, advanced decision-making, and effective resource allocation honed during the COVID-19 situationBuilding the sustainable infectious disease business modelFurther development of vaccine business and of new modalities••Taking the special situation of FY2021 as “the new normal”, promote pandemic experience-based transformation without changing gears16Direction for FY2022As a result of investments to dateRealization of returns from COVID-19 related projectsDeveloping growth drivers other than COVID-19 related productsReinvest the profits from COVID-19 related projects and focus on efforts for medium- to long-term growth17New Investments to Build Infectious Disease Business ModelInvesting to address the challenges exposed by the COVID-19 situationEnhancement of vaccine R&DStrengthening the supply chain (forming of API/ formulation networks)Strengthening bargaining power with governments/ external support organizations (securing specialized human resources)Building a sustainable infectious disease business foundationthat enables us to globally launch and supply infectious disease drugs on our own18Early Commercialization and Value Maximization of COVID-19 Related ProductsS-217622 (oral therapeutic drug)S-268019 (recombinant protein vaccine)••••Provision in Japan– Domestic manufacturing and marketing approval–Formally conclude a purchase contract with the Japanese government and start domestic supplyGlobal provision–Started full-scale purchase negotiations with governments of each countryPreparation for access and supply for LMIC* s–Lifecycle management–Expansion of indications to pediatric, |prophylactic administration, etc.Partnering to support retail (post-governmental) stage of commercialization•••Provision use in Japan– Domestic manufacturing and marketing approval⇒ Construction of a greater than 60 millionshots/year production systemLifecycle management–Scheduled to start a trial in 12-19 year old subjects––Scheduled to start a trial in 5-11 year old subjectsScheduled to start a booster trial (4th vaccination) mainly for elderlyGlobal provision–Full-scale expansion to Southeast Asia* Low Middle-Income Country19Promotion of R&DPromote R&D focusing on COVID-19 related projects, nasal vaccine, 8 core projectsCore pipeline (Blue: 8 core projects*)ProjectIndicationS-217622COVID-19 treatmentS-268019COVID-19 vaccineInfectiousdiseaseS-875670COVID-19 nasal vaccineS-872600Influenza nasal vaccineS-540956Infectious disease, cancerProjectS-600918[sivopixant]S-812217[zuranolone]BPN14770[zatolmilast]S-531011IndicationRefractory chronic coughDepressionFragile X syndromeSolid tumorS-005151[redasemtide]①Epidermolysis bullosa②Acute ischemic stroke③Knee osteoarthritis ④Chronic liver disease ⑤CardiomyopathyPsycho-neurological diseasesNew growth areasAccelerate the R&D of growth drivers by leveraging the speed gained from the COVID-19 experience*Appendix p.3720To Build the Foundation of the Vaccine BusinessA drug discovery venture company originating at the University of TokyoCationized nanogel delivery system••Able to effectively induce immunity in respiratory mucosa, which is the area that becomes infected, as well as the entire bodySimple administration with no pain caused by conventional needles••Vaccines using BEVS* are widely used, with established efficacy and safetySpeedy, low cost, and suited to mass production••Specializes in immunization studiesEstablished a joint search department for human mucosal vaccines and opened in April 2022•••Utilizing our know-how in developing recombinant protein vaccines using BEVS* and adjuvants, we are considering expansion to other diseases (influenza, pneumococcal bacteria, RS virus, etc.) and development of combination vaccinesEstablished the rhabdovirus free ** insect cell culture technologyPlan to initiate clinical trials for Covid-19 nasal vaccine (S-875670) in FY2022 Strengthen and expand the vaccine business for medium- to long-term growth* BEVS：Baculovirus Expression Vector System** Manufacturing method that does not contain rhabdovirus derived from insect cells contained in the manufacturing process21Domestic and Overseas Business InitiativesDomestic businessOverseas business••Infectious diseases– Government stockpiling of xofluza and COVID-19 related products in preparation for future pandemicsExpansion of CNS projects–Insomnia treatment drug daridorexant> Concluded a memorandum of understanding with Mochida regarding a marketing rights license agreement (with certain conditions*) (March 31, 2022)> Development status: Phase 3（JP）（US, EU: Approval）・ADHD– Intuniv® – Vivanse®– SDT-001· Insomnia–Insomnia treatment app> Concluded a sales alliance agreement with SUSMED· Depression– S-812217Create synergies with sales products and development compounds••COVID-19 related products–Full-scale discussions with stakeholders in each country for commercialization• Western business– Maximize the value of Cefiderocol›››High economic value evaluation by the National Institute for Health and Care Excellence (NICE)Collecting and publishing real world data (RWD) evidence in clinical practiceEfforts to improve accessChina business–Strengthen sales and expand new sales channels after launching products on medical platformsProgression of activities for early launch of new drugs (cefiderocol, naldemedine)Expansion of research approaches utilizing AI technology––* Japanese Phase 3 trial results, etc.22Progress of HIV Franchise by ViiV HealthcareEstablishing the long-acting formulation category for both treatment and prevention− The treatment and prevention markets of long-acting formulations are each expected to grow to the £4-5 billion range by 2030*Dolutegravir portfolioExpanding market share of 2-drug regimen• Dovato– Acquired the top share in the US and EU switch market– Good progress towards achieving sales in excess of £ 1bn in 2022Cabotegravir portfolioWorld’s first long-acting formulationMedium- to long-term growth driversMeet a wide range of medical needs• CABENUVA (CAB / RPV** )––Treatment once every two months is now possible1 month oral lead-in is optional• Apretude (cabotegravir)– Approved for prophylactic indications once every 2 months• S-365598– Aiming to further reduce the burden on patients with an ultra-long-acting formulation that is administered once every 3 months or even less frequently• Self-injection regimen– Offering new options with self-managing injections• Maximizing the value of dolutegravir portfolio with two-drug regimens• Accelerating the market penetration of long-acting formulations with new Cabenuva labeling, Apretude launch and pursuit of additional regimens* From GSK Meet GSK Management Getting ahead of HIV** CAB / RPV: cabotegravir / rilpivirine23Medium- to Long-term Commitment as a Leading Company in Infectious DiseasesMaterial goal that Shionogi is committed to address: “Protect people worldwide from the threat of infectious diseases”Participate in industry activities and R&D fundsContinue drug discovery research by making use of our strengthsCollaborate to generate innovation and maximize product value• Provision of R&D investment and technical support through participation in AMR* Action Fund, GHIT Fund, etc.• Dialogue with national governments to develop sound markets• Lobbying for establishment of clinical trial networks and more responsive regulation on a global basis••Initiatives in serious infectious diseases incl. viral infectious diseases, the three major infectious diseases and AMRInitiatives in Neglected Tropical Diseases (NTDs) that are overlooked• Expansion into total care against • Collaboration with academia, ventures and other industries that strive to tackle infectious diseases• Collaborations in overseas development and marketing• Partnering for expansion of LMICs infectious diseasesaccessContinuous production, support and development of researchers and research institutions are essential to sustain innovation that can meet unmet needs related to infectious diseases and prepare against unknown threatsEstablish Shionogi’s own, new foundation that supports and encourages research in Japan* AMR: Antimicrobial Resistance24•••Establishment of SHIONOGI INFECTIOUS DISEASE RESEARCH PROMOTION FOUNDATIONBackground of the foundation–––Society & Economy: The importance of infectious disease research was reaffirmed due to the once-in-a-lifetime COVID-19 pandemicPharmaceutical companies: Efforts against infectious diseases have tended to be reduced or withdrawn from a business feasibility perspective, leading to loss of employment opportunities for researchersAcademia: Lack of funds and employment irrespective of the disease area and the avoidance of infectious disease area where the market size is small have posed a problem for the fostering of young researchers⇒ Considering a new academic research support schemeActivity details (Annual budget: Around 300 million yen is planned)– Granting subsidies for research on infectious diseases; awards for distinguished achievements– Hosting lectures and symposiums on infectious diseases ..and moreInterest bearing issuance of treasury shares with Sumitomo Mitsui Trust Bank as the trustee and the Foundation as the beneficiary (3 million shares)–To be submitted as a matter for special resolution at the 157th Annual General Meeting of Shareholders to be held on June 23, 2022Fulfill our corporate social responsibilitiesby supporting and encouraging research in the infectious disease area, thereby contributing to academic research progress and the welfare of mankind25Disposal, Acquisition and Cancellation of Treasury Stock Associated with the Establishment of the New FoundationDisposal of treasury stock (advantageous issuance)Cancellation of treasury shares• Total shares to be disposed ：3.00M• Disposal date: Scheduled to be Decided bythe Board of Directors after the general meeting of shareholders scheduled to be held on June 23, 2022(1,000 shares)Share buyback• Share buyback: 7.20M shares (upper limit)• Total amount of buyback: 50 B yen (upper limit)• Period: After the general meeting of shareholders scheduled to be held on June 23, 2022 ~ 2022/12/31Share buyback ofca. 7.20M sharesCancellation of4.20M shares（％）5.0• Total shares to be cancelled: 4.20M shares• Date for cancellation: Feb,10, 2023Disposal of 3.00M shares16,00014,00012,00010,0008,0006,0004,0002,00004.03.02.01.00.0Treasury stocksShare buybackCancellationPercentage oftreasury stocks26Beginning of FY2022After treasury stock disposalAfter share buyback After cancellation of treasury sharesFinancial Forecasts (Consolidated)FY2022 ForecastsFull year1HFY2021Results400.0120.0120.0168.0136.0180.057.057.086.071.5335.1110.3110.6126.3114.2(Unit: B yen)Y on YChange(%)Change(B yen)19.4 8.8 8.5 33.0 19.1 64.9 9.7 9.4 41.7 21.8 RevenueOperating profitCore operating profit*Profit before taxProfit attributable toowners of parentA year to receive the return from COVID-19 related efforts and reinvest into future growthExchange Rate(average)FY2022ForecastsFY2021ResultsUSD ($) – JPY (¥)GBP (£) – JPY (¥)EUR (€) – JPY (¥)125160135112.40153.53130.56* Operating profit adjusted for one-time factors (impairment losses, gain on sale of property, plant and equipment, etc.)27Statement of Profit or Loss Forecast (Consolidated)FY2022 ForecastsFull yearFY2021ResultsY on Y(Unit: B yen)Change(%)Change(B yen)RevenueCost of SalesGross profitSelling, general& administrative expensesR&D expensesOther income & expensesOperating profit*Core operating profitFinance income & costsProfit before taxProfit attributable to owners of parent400.022.088.0312.0120.030.017.530.030.070.0(2.0)120.0120.048.0168.0136.01H17.532.817.831.731.7180.031.5148.559.032.0(0.5)57.057.029.086.071.542.047.816.528.421.832.933.037.7335.155.4279.795.273.0(1.2)110.3110.616.0126.3114.219.4 58.8 11.5 26.0 (4.1)71.58.8 8.5 200.8 33.0 19.1 64.9 32.6 32.3 24.8 (3.0)(0.8)9.7 9.4 32.0 41.7 21.8 * Operating profit adjusted for one-time factors (impairment losses, gain on sale of property, plant and equipment, etc.)28Revenue Forecast by SegmentPrescription drugsOverseas subsidiaries/exportShionogi Inc.Ping An-Shionogi*/C&OSBV(Europe)Contract manufacturingOTC and quasi-drugRoyalty incomeHIV franchiseCrestor®OthersCOVID-19 related products**OthersTotalFY2022 ForecastsFull year1HFY2021ResultsY on Y(Unit: B yen)Change(%)Change(B yen)(11.8)(10.5)78.641.613.014.88.414.813.4140.4133.9-6.5110.01.2400.035.518.16.06.33.46.36.368.267.0-1.245.00.6180.089.134.413.810.25.017.411.2181.3174.01.26.1-1.8335.121.2 (6.0)45.1 67.9 (15.3)20.0 (22.5)(23.0)5.9 –(65.3)19.4 7.3 (0.8)4.6 3.4 (2.7)2.2 (40.9)(40.1)(1.2)0.4 -(0.6)64.9 * OTC and quasi-drugs also include in revenue of joint venture** Revenue from S-217622 and S-268019293. Shareholder returnFlexible and Prompt Capital Strategy• Shareholder return policy through which shareholders can feel our growth Enhance capital efficiency through share buybacks, cancellation of treasury shares, and unwinding of cross-shareholdings Plan to increase dividend again for the 11th consecutive year in FY2022（yen）1501005042462022245282946272343844103108115（Planned)120（Planned）50535560（Planned)0FYBuybackCancelationDOE (%)stocksTreasury12–3.71430 B yen-3.713–3.59.21635 B yen2,2 M shares4.51729.4 B yen5 M shares4.6 1850 B yen1950 B yen7.35 M shares 5.2 M shares*4.620.94.015.52050 B yen-4.121–2250 B yen**4.2 M shares3.8 (planned) 3.6 (expected)ROE (%)17.59.413.616.319.413.912.513.8 (expected)* Resolution passed on March 30, 2020, and treasure shares cancelled on April 6, 2020** Total amount of buyback: 50 B yen (upper limit)Values calculated based on IFRS after 2019312815–4.1AppendixRevenue Forecasts for Prescription Drugs in JapanFY2022 ForecastsForecasts1HFY2021ResultsY on YChange(%)Change(B yen)(Unit: B yen)Intuniv®Vyvanse®Infectious disease drugsInfluenza franchiseCymbalta®OxyContin® franchiseSymproic® Actair®Mulpleta®Pirespa®OthersCrestor®Irbetan®franchisePrescription drugs19.51.113.45.16.14.53.30.60.12.427.63.32.678.69.00.54.30.33.12.31.50.30.11.213.31.71.235.516.40.811.83.115.94.82.70.50.13.832.45.93.289.119.1 38.9 13.6 66.5 (61.7)(6.5)24.1 16.4 2.4 (37.8)(14.6)(43.6)(18.8)(11.8)3.1 0.3 1.6 2.0 (9.8)(0.3)0.6 0.1 0.0 (1.4)(4.7)(2.6)(0.6)(10.5)＜Products included in infectious disease drugs＞•••Xofluza®Rapiacta®Brightpoc®Flu・Neo•••FINIBAX®Flumarin®Flomox®•••Shiomarin®VancomycinBaktar®••Flagyl®ISODINE®Influenza franchise33Revenue from Prescription Drugs in JapanForecasts*(revised on Nov. 1)FY2021ResultsAchievement(%)Change(%)ChangeFY2020ResultsY on Y(Unit: B yen)Cymbalta®Intuniv®Vyvanse®Infectious disease drugsInfluenza franchiseOxyContin® franchiseSymproic® Actair®Mulpleta®Pirespa®OthersCrestor®Irbetan®franchisePrescription drugs17.116.61.016.67.95.03.10.40.13.530.85.73.194.415.916.40.811.83.14.82.70.50.13.832.45.93.289.192.9 98.5 74.9 70.9 39.0 95.9 85.8 129.4 92.0 109.6 104.9 104.2 103.0 94.4 26.513.10.39.80.35.32.30.30.15.132.06.73.394.7(39.9)25.4 190.7 20.8 -(10.0)17.9 45.1 8.9 (25.3)1.2 (11.0)(5.0)(5.9)(10.6)3.3 0.5 2.0 2.8 (0.5)0.4 0.2 0.0 (1.3)0.4 (0.7)(0.2)(5.6)＜Products included in infectious disease drugs＞•••Xofluza®Rapiacta®Brightpoc®Flu・Neo•••FINIBAX®Flumarin®Flomox®•••Shiomarin®VancomycinBaktar®••Flagyl®ISODINE®Influenza franchise* The consolidated earnings forecasts announced on Nov. 1, 2021 were written here, and the revisions to the forecasts were announced on Apr. 25, 202234Statement of Profit or Loss (Consolidated)FY2021ResultsForecasts**(revised on Nov. 1)FY2020Y on Y(Unit: B yen)Achievement (%)ResultsChangeChange(%)• RevenueMain Variation Factors (Year-on-Year Comparison)RevenueCost of salesGross profitSelling, general &administrative expensesR&D expensesOther income & expensesOperating profitCore operating profit*Finance income & costsProfit before taxProfit attributable to owners of parent294.019.457.0237.030.318.989.055.5(2.5)30.630.639.190.090.025.0115.0100.0335.116.555.4279.728.495.221.873.0(1.2)32.9110.333.0110.616.037.7126.3114.2114.0 97.2 118.0 107.0 131.5 46.7 122.6 122.9 63.8 109.8 114.2 297.217.752.5244.732.095.118.354.222.139.5117.431.694.025.648.1143.0111.912.8 38.0 – Increase: Overseas subsidiaries/export: Royalty income (HIV franchise)- Decrease: Prescription drugs (Cymbalta®)5.5 14.3 •2.9 35.1 Cost of sales- Increase: Product mix due to growth in overseas subsidiaries/export, contract manufacturing0.1 0.1 • R&D expenses- Increase: Concentrated investment in R&D activities related to COVID-19 34.6 18.7 • Other income & expenses- Decrease in income: Recognized a gain on the (105.3)(23.3)exchange of the Shionogi Shibuya Building in 3Q of the previous year (22.9 B yen) (6.1)(7.1)17.7 (37.6)16.6 (9.6)(11.7)(16.8)2.1 2.3 ••Finance income & costs- Decrease in income: Shift to FY2022 of receipt from ViiV of the dividend for the 4th quarter of FY2021Profit attributable to owners of parent- Increase: Received a refund regarding a favorable Judgement on the complaint for the rescission of tax reassessment by Osaka Regional Taxation Bureau * Operating profit adjusted for one-time factors (impairment losses, gain on sale of property, plant and equipment, etc.)** The consolidated earnings forecasts announced on Nov. 1, 2021 were written here, and the revisions to the forecasts were announced on Apr. 25, 202235Revenue by Segment(Unit: B yen)Main Variation Factors (Year-on-Year Comparison)FY2021FY2020Y on YResultsAchievement (%)ResultsChange(%)ChangeForecasts(revised on Nov. 1)Prescription drugsOverseas subsidiaries/exportShionogi Inc.Fetroja®Ping An-Shionogi* /C&OSBV(Europe)Contract manufacturingOTC and quasi-drugRoyalty incomeHIV franchiseCrestor®OthersOthersTotal94.435.012.7-12.35.089.134.413.86.210.25.013.4132.0125.2-6.71.4294.011.2181.3174.01.26.11.8335.194.4 98.3 108.5 -82.6 99.8 97.9 83.0 137.4 138.9 -91.5 124.4 114.0 94.724.67.51.710.1(5.9)(5.6)39.5 84.5 268.7 1.1 9.7 6.3 4.6 0.1 3.0 2.0153.7 11.7144.6123.416.64.71.8297.2(4.8)(0.6)25.3 36.6 41.0 50.6 (93.1) (15.4)1.4 0.0 12.8 38.0 30.8 1.7 17.817.419.7(11.7)(2.3)• Prescription drugs- Decrease: Sales of Cymbalta®• Overseas subsidiaries/export- US: Increase: Sales of Fetroja®: Received a one-time payment for the transfer of FORTAMET® sales rights- EU: Increase: Sales of Fetcroja®• Contract manufacturing- Increase: The acquisition of Nagase Medicals as a consolidated subsidiary- Decrease: Pharmaceutical ingredient export of Xofluza and dolutegravir• Royalty income- HIV franchise: Increase: Received a lump sum payment for resolving litigation relating to bictegravir and dolutegravir patent: Advance royalty income on bictegravir-containing product sales in the U.S. to be received by 2027- Crestor®: Decrease: Based on the contract- Others: Increase: Out-licensing agreement with ViiVfor S-365598 * OTC and quasi-drugs also include in revenue of joint venture** The consolidated earnings forecasts announced on Nov. 1, 2021 were written here, and the revisions to the forecasts were announced on Apr. 25, 202236Financial Position (Consolidated, IFRS)Total AssetsEquity attributable to owners of parent(Unit: B yen)1,150.6975.7999.0846.1Unit: B yenEnd of Mar. 2021End of Mar. 2022ChangeTotalAssetsNon-currentAssetsCurrent AssetsEquity attributable to owners of parentTotal LiabilitiesNon-current LiabilitiesCurrentLiabilities442.8556.2846.1491.448.6659.2103.0975.7129.634.332.9△1.3100.2124.424.237End of Mar. 2021End of Mar. 2022Ratio of equity attributable to owners of parent to total assetsEnd of Mar. 2021End of Mar. 202284.7%84.8%R&D Progress: 8 Core ProjectsPipelineIndicationStatusInfectiousdiseaseS-540956Infectious disease, cancerPreparing for Phase 1 trialS-600918[sivopixant]①Refractory chronic cough②Sleep apnea syndrome①Preparing for Phase 3 trial②Closed (sufficient effectiveness could not be confirmed)S-637880Neuropathic low back painClosed (Due to safety concerns)Psycho-neurological diseasesS-812217 [zuranolone]DepressionBPN14770[zatolmilast]①Alzheimer’s disease②Fragile X syndromePhase 3 trial in progress①Phase 2 trial Closed (Due to safety concerns in this disease)Continued development in Alzheimer’s disease②Phase 2b/3 trial in progressS-874713Psycho-neurological diseasesPreparing for Phase 1 trialS-531011Solid tumorPhase 1b/2 trial in progressNew growth areasS-005151[redasemtide]①Epidermolysis bullosa②Acute ischemic stroke③Knee osteoarthritis④Chronic liver disease⑤Cardiomyopathy①Preparing for additional clinical trial ②Preparing for Phase 3 trial③④Investigator initiated clinical trial (Phase 2 trial) in progress⑤Preparing for Investigator initiated clinical trial38Pipeline: Infectious DiseasePreclinicalPhase 1Phase 2Phase 3Submissionas of May. 11, 2022UpS-217622*COVID-19 treatment* Phase 2/3 UpcefiderocolVarious infectious diseasesXofluza®Influenza virus infection(Granules, < 20 kg)Xofluza® (US)Influenza virus infection(Pediatric, over 1 year old)S-217622COVID-19 treatmentS-268019COVID-19 Prophylactic vaccineS-268019COVID-19 Prophylactic vaccinecefiderocolAerobic Gram-negative bacterial infection (Pediatric)Xofluza®Influenza virus infection(Pediatric, < 1 year old)Xofluza®Influenza virus infection(Transmission)S-555739Treatment by suppressing aggravation of COVID-19S-872600Influenza nasal vaccineS-880008COVID-19 treatment (peptide)S-875670COVID-19 nasal vaccineUpS-540956Nucleic acid adjuvantS-554110Nontuberculous mycobacterial infectionUpS-337395RSV infectiousUp：Global developmentOut licenseS-365598HIV infectionStage change (Changes from Jan. 31, 2022)S-217622 (COVID-19 treatment) : Submission (Japan)cefiderocol (Various infectious diseases) : Submission (Japan)S-875670 (COVID-19 nasal vaccine)S-554110 (Nontuberculous mycobacterial infection)S-337395 (RSV infectious): Progress from Jan. 31, 2022 to May. 11, 202239Pipeline: Psycho-neurological DiseasePreclinicalPhase 1Phase 2Phase 3SubmissionS-874713Psycho-neurological diseasesS-109802Post-stroke spasticityS-600918 [sivopixant]Neuropathic painS-010887Neuropathic painS-120083Inflammatory painS-117957InsomniaS-600918 [sivopixant]Refractory chronic coughS-600918 [sivopixant]Refractory chronic coughBPN14770[zatolmilast]Alzheimer’s diseaseBPN14770[zatolmilast]Alzheimer’s diseaseRizmoic®*Opioid-induced constipation(pediatric)* Phase 1/2S-120083Inflammatory pain：Global developmentStage change (Changes from Jan. 31, 2022)BPN14770 (Fragile X Syndrome) : Phase 2b/3 startSDT-001 : Phase3 startS-637880 (Neuropathic low back pain) : Closedas of May. 11, 2022S-812217 [zuranolone] DepressionBPN14770**[zatolmilast]Fragile X SyndromeSDT-001Inattentive ADHD (pediatric)UpUp** Phase 2b/3Out licenseS-0373[rovatirelin]Spinocerebellar Degeneration: Progress from Jan. 31, 2022 to May. 11, 202240Pipeline: New Growth AreasPreclinicalPhase 1Phase 2Phase 3Submissionas of May. 11, 2022S-540956Nucleic acid adjuvantS-770108Idiopathic pulmonary fibrosisS-237648ObesityS-588410Bladder cancerADR-001*Decompensated liver cirrhosis* Phase 1/2S-723595NASHS-588210Solid tumorS-309309ObesityS-588410Esophageal cancerSR-0379Cutaneous ulcerS-005151[redasemtide]Acute ischemic strokeS-005151[redasemtide]Epidermolysis bullosaS-488210Head and neck squamous cell carcinomaS-588410Bladder cancerS-222611 [epertinib]Malignant tumorS-531011 **Solid tumor：Global development** Phase 1b/2: Progress from Jan. 31, 2022 to May. 11, 202241Other Major Progress* February––––• March–••April–––––––Shionogi has been Selected as one of the "Excellent Integrated Reports" by the GPIF's Domestic Equity Managers for the second consecutive yearShionogi has been recognized as one of the highest-ranking companies on the “Supplier Engagement Reporting Leaderboard (Climate Change)” by CDPConclusion of a business cooperation agreement regarding support for children’s bright future with the city of YokohamaAgreement for enter into a strategic development collaboration for the novel anti-RS virus drug candidate S-337395 with Ube Industries Shionogi received the Special Award in the category of Corporate Environmental Sustainability at the Ministry of the Environment’s 3rd ESG Finance Awards JapanStarted multicenter joint research with XNef, Inc. and Advanced Telecommunications Research Institute International (ATR) for the development of diagnosis and treatment methods in the field of psychiatric disordersFiled for approval to manufacture and sell Cefiderocol in JapanShionogi has been selected for the ESG Investment Index “FTSE Blossom Japan Sector Relative Index” adopted by GPIFShionogi expresses its support for the recommendations of Task Force on Climate-related Financial Disclosures (TCFD) and its participation in the TCFD ConsortiumAgreement to enter into a strategic research collaboration for a novel hepatitis B therapeutic vaccine with NECTowns Co., Ltd. starts selling the new coronavirus antigen rapid diagnostic kit (Immunoace® SARS-CoV-2 Saliva) **Started sales of Symproic® Tablets 0.2mg for the Treatment of Opioid-Induced Constipation in adult patients in Taiwan* Progress from Feb. 1. 2022 to May. 11. 2022** Joint sales based on the Agreement for Joint Sales with Towns Co., Ltd. concluded in November 202142Forward-Looking Statements• Forecast or target figures in this material are neither official forecasts of earnings and dividends nor guarantee of target, achievement and forecasts, but present the midterm strategies, goals and visions. Official earnings guidance should be referred to in the disclosure of the annual financial report (kessan tanshin) in accordance with the rules set by Tokyo Stock Exchange.• 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; trend toward managed care and healthcare cost containment; and governmental laws and regulations affecting domestic and foreign operations.• 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, lack of availability of raw materials, and failure to gain market acceptance.• Shionogi disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future • This material is presented to inform stakeholders of the views of Shionogi's management but should not be relied on solely in making investment events or otherwise.and other decisions.• You should rely on your own independent examination of us before investing in any securities issued by our company. Shionogi shall accept no responsibility or liability for damage or loss caused by any error, inaccuracy, misunderstanding or changes of target figures or any other use of this material.• 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.43