協和キリン（4151） – Annual Report 2021

Annual Report 2021For the year ended December 31, 2021Life-changingKyowa Kirin Co., Ltd.Contents02 Message from the President06 History of Value Creation08 Our Philosophy and Core Value09 Our Vision toward 203010 Value Creation Story11 Materiality12 Overview of Medium Term Business Plan13 Financial Strategy15 AT A GLANCE15 Headline News16 Financial Highlights17 ESG Highlights18 Pipeline02 INTRODUCTION20 VALUE CREATION STRATEGIES20 Providing pharmaceuticals for unmet 60 FINANCIAL INFORMATION61 Eleven-Year Selected Financial Data62 Management’s Discussion & Analysis (MD&A)67 Risk Factorsmedical needs• Three Global Strategic Products• Striving to create life-changing “Only-one value” that brings smiles to patients (R&D)• Next-Generation Strategic Products27 Address patient-centric healthcare needs(Patient Advocacy)32 Retain the trust of society• Providing high-quality pharmaceuticals to patients around the world• Ensure a thriving global environment for future generationsHuman ResourcesGovernanceDiscussion with Outside Directors424652585955 ManagementComplianceRisk Management38 VALUE CREATION FOUNDATIONDigital Transformation Strategy4070 CORPORATE INFORMATION70 Corporate Data71 Investor InformationiHgh Importance toStakehodersl Annual Report (PDF version)https://ir.kyowakirin.com/en/library/annual.htmlReported in the bookCorporate websitehttps://www.kyowakirin.com/index.htmlInvestors (IR)https://ir.kyowakirin.com/en/index.htmlReported through the websiteImportance to Management High• Financial Resultshttps://ir.kyowakirin.com/en/library/earnings.htm• Corporate Governance Report https://ir.kyowakirin.com/en/management/governance.htmlSustainability (CSR)https://www.kyowakirin.com/sustainability/index.html• ESG Datahttps://www.kyowakirin.com/sustainability/esg_data/index.html• GRI Standard Indexhttps://www.kyowakirin.com/sustainability/gri/index.htmlScope of This ReportKyowa Kirin Co., Ltd. and its consolidated subsidiaries* Indication is provided in cases where the scope of reporting differs.Reporting PeriodJanuary to December 2021* The latest information at the time of publication is also included where possible.DisclaimerStatements concerning future plans and forecasts are based on information currently available to the Company and certain assumptions that the Company believes to be reasonable. Actual results and performance may differ due to various risks and uncertainties. Statements concerning ethical pharmaceuticals and products under development are not intended as advertising, promotions, or medical advice.For inquiries about the Annual Report:IR Group, Corporate Communications Department, Kyowa Kirin Co., Ltd.+81-3-5205-7206/https://faq.kirin.co.jp/form/kkc_04.html01Motohiko KawaguchiManaging Executive OfficerDirector, Finance Department(In charge of Corporate Communications and Procurement Departments)About the publication of the Integrated ReportKyowa Kirin’s Integrated Report is published for our shareholders, investors, and a wide range of stake-holders. It introduces our business—both in its financial and non-financial aspects—as we aim to contribute to the health and wellbeing of people around the world by creating new value. In producing this report, we referred to the International Integrated Reporting Framework proposed by the Value Reporting Foundation (VRF) and the Guidance for Collaborative Value Creation Guidance issued by Japan’s Ministry of Economy, Trade and industry (METI).Production of this report was led by the IR Group of the Corporate Communications Department, in collab-oration with the Corporate Planning Department and other departments across the organization. As head of the Corporate Communications Department, I have confirmed that the content of this report is accurate.We hope that this report may be of use as a tool for communication with our stakeholders, leading to the creation of new shared value.KYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION Message from the President02Bringing smiles to patients is what motivates usFY2021 ReviewR&D, quality assurance and other functions. OKK is designed to support We achieved our targets for FY2021, with revenue and profits both the Group’s future growth and is already delivering major benefits. This increasing year on year. It was also a solid start to our new five-year year, we started adding a product organization (product franchises) to Medium Term Business Plan, which launched in 2021. Moreover, we the OKK structure. Our goal is to create and provide unique value to made good progress with our R&D pipeline, underscoring how we are patients, rather than simply reinforcing the Group’s regions and func-working to maximize the Group’s corporate value for the longer term.tions. To do that, we realized we needed to add a franchise-based Since 2019, we have been putting in place our One Kyowa Kirin perspective to OKK. We currently only have three global strategic (OKK) matrix management structure, which combines a regional orga-products, but we plan to incorporate next-generation strategic prod-nization based on four regions and a functional organization based on ucts in the future.Masashi Miyamoto, Ph.D.Representative Director President and Chief Executive OfficerFY2020 vs FY2021 –Revenue–(Billions of yen)FY2020 vs FY2021 –Core Operating Profit–(Billions of yen)+33.9 billion yen (+11%)+7.9+7.9+7.7+7.7+2.5+2.5+18.9+18.9360340320300–3.1–3.1318.4318.4+5.7 billion yen (+10%)+26.5+26.5–19.0–19.0–5.4–5.4+3.6+3.6352.2352.260.060.065.765.72020JapanNAEMEAAPACOther20212020SG&AR&DGrossProfitEquityMethod2021100806040200KYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION03Progress with Medium Term Business Plan and Future InitiativesProvide pharmaceuticals for unmet medical needsand a portfolio focused on inflammatory diseases and skin disorders. maintenance dialysis. One of our tasks going forward will be to prepare While many companies are active in this treatment field, Amgen has an NDA for the drug in Japan.strong development, manufacturing and sales capabilities, making it the While we continue to make progress with these next- generation One of our main missions for FY2022 is to build our own commercial ideal global partner to maximize the value of KHK4083. Amgen also has strategic products, we recognize the need to strengthen our preclinical organization for Crysvita in North America – the product’s biggest the expertise to help us identify other indications for KHK4083 outside pipeline and output from early stage research and discovery activities. market. We plan to transfer the commercial activities of Crysvita from atopic dermatitis.All product candidates do not necessarily progress to the clinical stage, Ultragenyx Pharmaceutical Inc. to Kyowa Kirin in April 2023. With that Meanwhile, we continue to make steady progress with the develop-so we have to expand the volume of preclinical compounds. We plan to timeframe in mind, we are working closely with Ultragenyx to smoothly ment of investigational cancer treatment ME-401 with partner MEI direct more of our energy into this area, as it will also have a major transfer sales know-how, including marketing approaches, to our propri-Pharma, Inc. Further investment is needed, but we believe it has signifi-impact on Kyowa Kirin’s trajectory ten years from now. The key will be etary commercial organization. Crysvita is still unavailable in some cant potential to become a major product in the future.open innovation. To further accelerate open innovation, we revamped regions. We will therefore continue to negotiate promptly and resolutely In July 2021 we submitted a new drug application (NDA) in Japan the structure of the R&D Division in April 2021, creating a research with the regulatory authorities in each country to ensure that more for nephrology development product RTA 402 for the treatment of organization that draws on even greater input from external expertise. patients gain access to the drug.Alport Syndrome. We are also conducting Phase 3 trials for the treat-Also, we plan to launch a corporate venture capital (CVC) fund to give In next-generation global strategic products, atopic dermatitis treat-ment of diabetic kidney disease. We plan to submit an application after us greater access to early-stage technologies and development candi-ment KHK4083 looks increasingly promising as a major product. We have obtaining solid clinical evidence that includes long-term safety data. dates. In this way, we plan to combine in-house research capabilities signed an agreement to jointly develop and commercialize KHK4083 Additionally, we have built up sufficient clinical data for KHK7791, a with the skills and resources of external partners to create a stronger with US biopharmaceutical company Amgen Inc., which has experience treatment being studied for hyperphosphatemia in patients on pipeline that supports the Group’s sustained growth.We will expand our pipeline to support sustained growthNext-generation Strategic ProductsCountry/region*1Indication*2Approval year*3KHK4083KW-6356ME-401NA/EU/JPNA/EU/JPNA/EU/JPRTA 402JP/AsiaAtopic dermatitisParkinson’s diseaseFollicular lymphomaMarginal zone lymphomaAlport syndromeDiabetic kidney diseaseAutosomal dominant polycystic kidney disease (ADPKD)Hyperphosphatemia under maintenance dialysisTBD202420252023Total addressable market*4No. of patients*52025/20262026TBD★★★★★★★★★16,000K3,500K–800K★★★2,500K–KHK7791JP★☆☆250K*1 Products may not be approved/launched in all countries or regions shown in the table*2 Indications may ultimately differ to expectations due to status of approvals from regulatory authorities*3 Expected year of first approval*4 Expected total addressable market based on the indications and countries/regions shown in the table, not projected sales or targets of the Company; • = less than ¥50bn, •• = ¥50–100bn, ••• = Over ¥100bn*5 Total number of estimated patients in all countries/regions shown in the table.Note: The size of the total addressable market and patient numbers are based on our estimatesKYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION04Address patient-centric healthcare needsRetain the trust of societyOur goal is to bring smiles to the faces of people battling disease, and We aim to establish a robust production system that can reliably Reinforce human resources and structures that support the creation of life-changing valuethe people around them. To do that, we need to know what really trou-supply high-quality pharmaceuticals to patients who need them We have been reforming Kyowa Kirin’s corporate culture since 2019, under bles them and provide tailored treatments and support. This in essence worldwide. As part of that, we are reinforcing quality assurance sys-the slogan KABEGOE (activities that spur cooperation across different is our approach to patient advocacy.tems and supply-chain management. This will take time, but we will organizations within the Group). We want to create an organization that is For example, Crysvita is approved as a novel therapeutic antibody keep making our efforts for this area.always learning, based on a culture of constant change and evolution.treatment for X-linked hypophosphatemia (XLH), and only Kyowa Kirin As a company, we also have to respond to global climate change. I often get asked by employees about the final objectives and goals and our partners can provide its value to patients. However, treatment Helping to establish a sustainable society will be a key part of our efforts. of KABEGOE activities, but there is no natural end to them. Once we has to start with the patients themselves – they or their friends or family Under the Kirin Group Environmental Vision 2050, the Kirin Group, of reach the summit of a mountain, the next summit comes into view. In may notice something is not quite right, prompting the individual to which Kyowa Kirin is a member, is targeting net zero greenhouse gas other words, reforming our corporate culture is an enduring mission that undergo a medical examination that leads to a diagnosis of XLH. That’s emissions across its entire value chain. We are also collaborating with this helps us constantly evolve and learn. Embedding KABEGOE activities when we can begin providing value. In many cases, people do not know effort to achieve this goal by reducing greenhouse gas emissions in our across the Group will accentuate Kyowa Kirin’s uniqueness as a company, they have XLH, preventing them from receiving appropriate treatment. operations. In addition, we well also continue to implement a range of giving us the strength to take on the world’s pharmaceutical majors.Raising awareness of the condition is therefore very important. We are initiatives, such as conserving energy, introducing and expanding the We also want these reforms to encourage our employees world-playing our part through patient awareness and patient support activi-use of renewable energy, and switching from fossil fuels to electricity. We wide – regardless of region, division, or position – to truthfully explore ties. We are also taking a similar approach with other conditions such as will continue to work with Kirin Holdings to ensure we pass on a healthy their own visions for work and their future. Ideally, these visions will be cutaneous T-cell leukemia, Parkinson’s disease and kidney disease.planet to future generations.endorsed by their superiors and incorporated organically within the vision for their organizations, and ultimately for the Group as a whole.To improve patient quality of life (QOL), we need to consider whether developing and providing new pharmaceuticals by itself achieves that goal. In other words, as a pharmaceutical company we have to take an even broader view as we work hard to provide value to patients that goes beyond pharmaceutical products. In that respect, Kyowa Kirin still has much to do, and I believe activities in these areas can also lift the value of our pharmaceutical products, while also strengthening Kyowa Kirin’s presence in the market.We can do much more to bring smiles to patientsKYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION05DX strategyLooking to the futurefrustrated or give up on their vision when faced with problems. That’s The main focus of our digital transformation (DX) strategy is to ensure as As shown by the current pandemic, it is very difficult to predict changes when they need to ask themselves whether the vision in their mind’s eye efficient global operations as possible for a company of our size. We are in society. More than ever, given the uncertain outlook, we have to really does have value. That makes it harder for them to give up. These therefore prioritizing the construction of systems that optimize opera-create a flexible organization that can adapt to any change to ensure we individual visions also drive the whole company. I believe that linking tions across the entire Kyowa Kirin Group, rather than individual systems continue to meet the needs of society well into the future. Most import-their visions with our Group Vision will translate into sustainable growth for each function. In other words, instead of piecemeal DX, we need a ant, we need a corporate culture that readily embraces new values and a for the Group.comprehensive blueprint for a DX strategy that covers the whole Group. highly adaptable management strategy. We will of course design our Over the last decade we have steadily increased Kyowa Kirin’s corpo-We are currently discussing the Group’s DX priorities and have already product pipeline with a medium-term horizon and continue to commu-rate value, supported by our shareholders and investors. However, I think started investing in priority areas that have been finalized.nicate our scenario for sustained growth, but first and foremost, we have Kyowa Kirin has much more to give. As a Japan-based Global Specialty Of course, we won’t be able to fully leverage DX if we only to be prepared mentally to respond to any major unforeseeable changes Pharmaceutical Company, we are only just spreading our wings and strengthen our systems and infrastructure. We also urgently need to that could lie ahead.taking flight. I hope we can count on your continued support in the cultivate human resources who are skilled in business strategy as well as Also, we want to add more people to our workforce with a bold journey ahead.IT and digital infrastructure. That could also mean using external consul-outlook – employees who are not afraid of change or making mistakes. tants and experts to drive forward our DX strategy from the perspective As I always tell our executives and employees, we should never discount of both infrastructure and human resources and processes.individual visions that set out clear goals. Sometimes, people get Kyowa Kirin’s market capitalization(Billions of yen)1,8001,5001,200900600300668.1668.1654.9654.9543.0543.0489.4489.41,692.91,692.91,389.41,389.41,519.61,519.61,256.21,256.21,197.41,197.41,104.01,104.0931.6931.6020112012201320142015201620172018201920202021We are building a flexible organization that can adapt to any changeKYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTIONHistory of Value CreationKirin 1885Establishment of the Japan Brewery Company, the forerunner of Kirin Brewery Co., Ltd.Kirin 1907Establishment of Kirin Brewery Co., Ltd.Kirin 1984Establishment of Kirin-AmgenKirin-Amgen, Inc. (currently Amgen K-A, Inc.), a joint venture with U.S. company Amgen, was established for the research and development of erythropoietin. Kirin-Amgen later grew into a company that holds rights to major products with annual sales exceeding ¥1 trillion. This brought global recognition of Kirin’s pharmaceutical business.Kirin 1982Kirin Brewery decided to enter the pharmaceutical businessBy 1982, calls within the company to diversify business had become louder. A new R&D Depart-ment was established at the head office and a full-fledged pharmaceutical business was launched. The Research Institute for Production Development foundation began full-scale research towards the commercialization of erythropoietin.Kyowa Hakko 1949Establishment of Kyowa Hakko Kogyo Co., Ltd. as a secondary company of Kyowa Sangyo Co., Ltd, in accor-dance with the Enterprise Reorganization ActKyowa Hakko 1956Succeeded in isolating and commer-cializing the anti-tumor agent Mitomycin CKirin 1988Promoting open innovationIn 1988, targeting future expansion into immunology research, the Company supported the establishment of the La Jolla Immunology Institute, one of the world’s leading immunology laboratories. The partnership, which continues to the present day, went on to contribute to the discovery of KHK4083. It has provided learning opportunities for many of our researchers to experience cutting-edge research.06KirinEstablishment of technology for producing fully human antibodiesHuman antibodies can be used in the treatment of infectious diseases, cancer, and other diseases. The develop-ment of technology to enable their mass production had been long awaited. Our researchers became the first in the world to devise Human Artificial Chromosome (HAC) technology. They succeeded in developing mice that produce fully human antibodies. This further expanded the pharmaceutical potential of antibodies.2008Launch of Kyowa Hakko Kirin Co., Ltd.In October 2008, Kyowa Hakko Kirin was formed through the merger of Kyowa Hakko Kogyo and Kirin Pharma. This began the challenge of becoming a Japan-based Global Specialty Pharmaceutical Company (GSP)—with the aim of becoming a world-class biotechnology R&D-driven life science company.Kyowa Hakko 1951Kyowa Hakko entered the pharmaceutical businessAt a time when tuberculosis was considered a terminal disease, Kyowa Hakko had been conducting research into streptomycin, an anti- tubercular drug. But we had not been able to achieve the level of mass production that would make it commercially viable. After introducing manufacturing technology from the U.S. company Merck, we succeeded in mass-producing streptomycin for the first time in Japan. In doing so, we contributed to the eradication of tuberculosis in Japan.Kyowa Hakko 2003Establishment of POTELLIGENT and BioWaHaving established POTELLIGENT, a breakthrough antibody production technology that dramatically increases the activity of antibodies, Kyowa Hakko established BioWa, Inc. in the US in 2003 to start a licensing business for this technology, out of a determination to help more people. Through their strong desire to make use of this technology, the researchers overcome repeated challenges. This culminated in the creation of world’s first antibody drug utilizing POTELLIGENT, Poteligeo.KYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION07When asked to describe Crysvita, one patient thought for a moment and replied, “Life Changing.”2011Acquired UK company ProStrakan as a subsidiary2010Completed construction of one of Japan’s leading production facilities for drug substances for antibodies at the Bio Process Research and Development Laboratories2018Launch of Crysvita in Europe and the USX chromosome-linked hypophosphatemic rickets (XLH) is a rare disease that affects 1 in 20,000 people. Previously, patients had suffered from growth failure and pain that kept them awake at night, with treatment limited to symptomatic therapy. Patients with this genetic disease have suffered across generations, with both parents and children affected. Crysvita became the first essential treatment for XLH, for which there had been no adequate therapy.2013Launch of Nouriast in JapanWith dopaminergic drugs dominating the mainstream, the research and development into this non-dopaminergic drug had presented a series of challenges. The project was encouraged by a corporate culture of embracing challenges. In 2013, the effort finally bore fruit.2012Launch of Poteligeo in JapanAt the time, Adult T-cell Leukemia-Lymphoma (ATL) was an incurable disease for which there was no effective treatment. All those involved in the research and development of this drug a steadfast determination to carry their efforts through to completion, with the creation of a drug. In 2012, Poteligeo was launched as the world’s first antibody drug utilizing POTELLIGENT technology.2012Establishment of Fujifilm Kyowa Kirin Biologics Co. Ltd., a joint venture with Fujifilm Corporation2014Acquired UK company Archimedes as a subsidiary2016Completed construction of a new biopharma-ceutical API manufacturing building at the Takasaki Plant, increasing production capacity.2018Launch of Poteligeo in the US2019Launch of Crysvita in Japan2019Launch of Nourianz in the US2018Launch of Fasenra in Europe, US, and JapanFasenra is an antibody drug discovered by Kyowa Hakko and licensed to AstraZeneca’s for development and marketing. It has grown to become one of AstraZeneca’s blockbuster products.2019Launch of the One Kyowa Kirin structureIn response to the growth of global strategic products, Kyowa Kirin launched a matrix management structure combining the regional organizations of Japan, EMEA, North America, and APAC with functional organizations that transcend regions. The close collabora-tion and checks and balances between the two types of organiza-tions have made it possible to improve operational efficiency and strengthen governance.2021Concluded an agreement with Amgen for joint development and marketing of KHK4083/AMG 4512020Launch of Poteligeo in Europe2021Evolution of the One Kyowa Kirin structureTo strengthen activities with a greater focus on patients, a product organization was added to the regional and functional organizations. We aim to further maximize the value of our global strategic products.2019Kyowa Hakko Bio Co., Ltd. is transferred to Kirin Holdings Company, Limited.2020Construction begins on a new quality building at the Takasaki Plant.To the FutureOur challenge continues into the futureKYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTIONINTRODUCTION08Our Philosophy and Core Value OUR PHILOSOPHYThe Kyowa Kirin Group companies strive to contribute to the health and wellbeing of people around the world by creating new value through the pursuit of advances in life sciences and technologies.Transform lives with passion and excitement.Challenge the status quo in all of our work.CORE VALUESWork for the most precious presence on this planet.Create value for patients, caregivers, healthcare professionals, and customer.Do the right things. Be sincere and ethical consistently.Make a better world through good business practices.One for all, all for one.Work in diverse teams and respect each other.Go beyond boundaries and collaborate with stakeholders.KYOWA KIRIN Annual Report 2021AT A GLANCECORPORATE INFORMATIONFINANCIAL INFORMATIONVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONOur Vision toward 203009Kyowa Kirin will realize the successful creation and delivery of life-changing value* that ultimately makes people smile, as a Japan-based Global Specialty Pharmaceutical company built on the diverse team of experts with shared passion for innovation.Provide pharmaceuticals for unmet medical needsWe are focused on developing medicines for diseases where there is a clear patient need for new options. We make full use of multiple therapeutic modalities, including biotechnology such as antibody technology, and beyond, building on our Kyowa Kirin established strengths.Address patient-centric healthcare needsWe will meet the needs of patients and society by providing value across the entire patient care pathway, delivering cutting-edge science and technology, grounded in our in-depth pharmaceutical knowledge and expertise.Retain the trust of societyWe pursue world-class product quality and operational excellence to grow our business in ways which build long-term trust with our stakeholders.* Make patients smile through dramatic improvements in quality of life by identifying the unmet medical needs of people battling with medical conditions and by creating and supplying new drugs or services that help them overcome those challenges.KYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTIONValue Creation Story· · ·Future generationsLocal communityValue creation process (business process)Strategies for achieving the Medium Term Business PlanInvestorsStakeholdersCustomersShareholdersHealth care providersOutput10InputHuman capitalCreate a unified team brimming with diversity Number of employees (global): Percentage of management positions held by women (Japan): Percentage of leaders who are women (global): 5,75212.4%29%Intellectual capitalPursuing life-changing value creation with a focus on “Only-one” R&D expenses: R&D expense ratio: ¥57.7 billion16.4%Manufactured capitalEnsuring a stable supply of pharmaceuti-cals of reliable quality Manufacturing sites (global): 3 sitesSocial and relationship capitalEvolution of “One Kyowa Kirin” and earning the trust of stakeholders Number of countries with operations: 42Natural capitalHelping protect the environment1,004,699 GJ Energy consumption: Water consumption (water withdrawal): 1,672 thousand m3 Financial capitalGrowth investments for sustainable growth and maximization of corporate value Total assets: Total capital: ¥921.9 billion¥737.2 billionProvide pharmaceutical products for unmet medical needsAddress patient-centric healthcare needsRetain the trust of societyStrengthen our talent and infrastruc-ture to realize life-changing valueCompany employeesPatientsCSV Management (Co-creation of Value)Value creation in the process of delivering medicines to patientsManagement Philosophy Core ValuesAddressing materialityCycle of augmenting corporate valueValue creation in products, quality, and distributionValue creation to meet UMN through R&DOutcomeAchieving our vision for 2030Social valueContinuously create and provide life-changing valueEconomic valueFY2021 Actual Revenue ¥352.2 billion Core operating profit ¥65.7 billion Core operating profit ratio 18.6% ROE 7.3%KYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTIONMateriality— Identifying material issues to address during the Medium Term Business Plan from 2021 —By identifying priority issues that the Group needs to address from both a social and business perspective, we aim to help build a sustainable society Main initiatives (KPI)Related SDGs11while also growing our business.STEP 1List issuesSTEP 2Assess impact on social sustainability and businessSTEP 3Identify materiality (material issues)STEP 4Confirm validity and finalize List issues to be discussed (competi-tor, sector and expert review, data analysis) Prioritize listed issues from a social perspective (media surveys, trend surveys) Prioritize listed issues from a business perspective (analysis of internal documents, hearings with manage-ment, internal workshops) Formulate a materiality matrix Conduct dialogue with stakeholders Discuss and confirm materiality in internal meetings attended by management Embed materiality in the Medium Term Business Plan Finalize at Board of Directors meetingMateriality Matrix— Make as many people as Growth opportunitiespossible smile —○ Continuous innovation○ Patient advocacy○ Access to medicineGrowth foundations— Foster even greater trust in Kyowa Kirin —○ Corporate governance○ Quality assurance and a stable supply of productsEnsuring patient safety and appropriate use of medicinesSupply chain managementLegal compliance and ethical business practicesAnti-counterfeitingReinforce risk managementRespecting human rightsTransparency and disclosure; engagement Providing pharmaceuticals for UMN P20 Initiatives for Patients P28 Number of countries where the product is marketed Corporate governance P46 Providing high-quality pharmaceuticals to patients around the world P33Organiza-tional culture and talent— Create a unified team brimming with diversity —○ Diversity, equity and inclusion Occupational health and safety Employee development and provide opportuni-ties for employees to grow One team of diverse people working to realize life-changing value P42 Percentage of management positions held by women (Japan) Percentage of leaders who are women (global) Percentage of paid leave taken (Japan) Walking campaign participation rate (Japan)Impact on social sustanabiilityKyowa Kirin Group materialitySocial foundations— Ensure a thriving global environ-ment for future generations —○ Climate change mitigation and adaptation Biodiversity Reducing environmental impact Water resources management Philanthropic activities (advancement of medical science)Impact on the Group’s business○: Material issues during this fiscal year Ensuring a thriving global environment for future generations P35 Reduction of CO2 emissions (compared to 2019)KYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTIONOverview of Medium Term Business Plan12In February 2021, the Kyowa Kirin Group announced a Medium Term Business Plan for the period 2021 to 2025.The plan sets out the strategies for the next five years to achieve our qualitative and quantitative goals in 2025 and our longer-term vision for the Group.We also adjusted the Group’s material issues (materiality), aiming to generate growth while also satisfying the demands and expectations of society.▶ Maximize the value of global products▶ Establish framework to ensure stable ▶ Build a drug pipeline to drive growth global suppliesbeyond 2025▶ Launch services that go beyond pharmaceuticals▶ Foster a corporate culture suited to global business developmentPhilosophyVisionTo be in 2025▶ ROE▶ Revenue growth rate▶ R&D expense ratio▶ Core operating profit ratio▶ Dividend payout ratio10% or higher CAGR 10% or higherTargeting 18–20% to support active investment25% or higher by FY2025Sustained dividend hikes with 40% (based on core EPS)▶ Address patient-centric healthcare needs▶ Provide pharmaceuticals for unmet medical needs▶ Retain the trust of society▶ Reinforce human resources and structures that support the creation of Life-changing valueKyowa Kirin’s MaterialityMake as many people as possible smileFoster even greater trust in Kyowa KirinCreate a unified team brimming with diversityEnsure a thriving global environment for future generationsCSV* managementContribute to the SDGs* In our management philosophy, we are committed to creating new value by capitalizing on the Kyowa Kirin Group’s strengths in life sciences and technologies with the aim of contributing to the health and well-being of people around the world. What we mean by “new value” is value that can be shared with society, or in other words, “Creating Shared Value (CSV).” We practice CSV management aimed at realizing improved corporate value through the creation of both social and economic value.StrategyKYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTIONFinancial Strategy13Aiming to establish a stable earnings structure and generate sustained growth as a Global Specialty Pharmaceutical Company (GSP)Medium Term Business Plan Progress ReviewIn the FY2021–2025 Medium Term Business Plan, we are targeting sustainable growth beyond FY2025 and increased corporate value over the medium- to long-term. To measure progress, we are using return on equity (ROE) as a key performance indicator (KPI). Our aim is to rapidly achieve ROE of 10% or higher so that ROE consistently exceeds the expected cost of capital. We also aim to increase ROE over the longer term.To achieve our ROE objectives, we need to continuously increase the Group’s growth potential, capability to innovate and profitability. We have selected three KPIs to measure our progress in those areas: revenue growth rate, R&D expenses ratio and core operating profit ratio.First, let’s look at the revenue growth rate (growth potential benchmark). During the five years of the Medium Term Business Plan, we are targeting average annual top-line growth of 10% or higher. We aim to do that by imple-menting further steps to increase sales and maximize the value of existing global strategic products, and by steadily rolling out the next generation of strategic products. Second, the R&D expenses ratio (capability to innovate benchmark). Our goal is to expand the drug pipeline to accelerate and drive the Group’s growth beyond FY2025 by consistently and actively investing in research and development, aiming for an R&D expenses ratio target of 18–20%. At the same time, we will work to improve profitability by reducing the selling, general and administrative expenses ratio through tighter cost control to achieve our third KPI, a core operating profit ratio (profitability benchmark) of 25% or higher by FY2025, the final year of the plan.By implementing measures to achieve the three KPIs, we aim to deliver profit growth that outpaces revenue growth in order to improve ROE over the medium- to long-term, supporting sustained increases in the dividend. Ultimately, our objective is to establish a stable earnings structure and gener-ate continued growth as a Global Specialty Pharmaceutical Company (GSP).In FY2021, revenue and profits both rose year on year. Revenue increased ¥33.9 billion (+11%) to ¥352.2 billion, driven by top-line growth for Crysvita and other global strategic products, core operating profit rose ¥5.7 billion (+10%) to ¥65.7 billion (core operating profit margin of 18.6%), and profit attributable to owners of parent increased ¥5.3 billion (+11%) to ¥52.3 billion. Despite the pandemic, we achieved our first-year targets for revenue, core operating profit and profit attributable to owners of parent in the Medium Term Business Plan. ROE also improved from 6.8% last year to 7.3%.In FY2022, the second year of the plan, Japan’s drug price standards are to be lowered, but we forecast revenue will increase ¥27.8 billion year on year to ¥380.0 billion (average annual growth of 9.3% vs. FY2020 base year), sup-ported by further growth for global strategic products, mainly in North America and EMEA, and by higher licensing revenue. We forecast selling, Financial KPIs (Numerical guidance)ROE10% or higher (achieve target early / maintain or increase over the medium- to long-term)Revenue growth rateCAGR*1 10% or higherR&D expenses ratioTargeting 18–20% to support active investmentCore operating profit ratio*225% or higher by 2025Dividend payout ratioTargeting sustained dividend hikes with 40% (based on core EPS*3)*1 Average growth rate over a five-year period, with FY2020 as the base year.*2 Core operating profit: “Gross profit” – “Selling, general and administrative expenses” – “Research and development expenses” + “Share of profit (loss) of investments accounted for using equity method.”*3 “Core profit” (“Profit attributable to owners of parent” – “Other income and expenses” (excluding impact from applicable taxes)) / average number of shares during fiscal year.ROE10% or higherImprove over longer termRevenue growth rateCAGR 10% or higherROE6.8%RevenueRevenue¥318.4 ¥318.4 billionbillionROE7.3%RevenueRevenue¥352.2 ¥352.2 billionbillionROE7.1%RevenueRevenue¥380.0 ¥380.0 billionbillion16%19%202016%19%202118%18%Core operating Core operating profit ratioprofit ratio2022 forecastR&D expenses ratio18–20%25% or higher2025 planMotohiko KawaguchiManaging Executive OfficerDirector, Finance DepartmentKYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION14general and administrative expenses will increase ¥18.4 billion (+13%) year on year, reflecting continued active investment in digital IT platforms and human resources to maximize the value of global strategic products and rapidly establish a global business base. We also anticipate a one-time invest-ment of roughly ¥5.0 billion to prepare for the start of proprietary commer-cialization of Crysvita in North America from spring 2023. We plan to spend ¥70.0 billion on research & development (18.4% R&D expenses ratio), up ¥12.3 billion (+21%) year on year, mainly to push forward late-stage develop-ment of next-generation drugs such as KHK4083. Based on these assump-tions, we forecast core operating profit of ¥67.0 billion, up ¥1.3 billion (+2%) year on year, giving a core operating profit margin of 17.6%. By continuing to actively invest in our business in FY2022, we will build a robust GSP business base to support global growth over the medium and long term.Cash allocationIn our five-year cash allocation plans in the FY2021–2025 Medium Term Business Plan, we assume the source of funds will be new operating cash flow of ¥800 billion or higher (before deduction of R&D expenses) generated during the plan’s five years.Our top priority for cash allocation is R&D, strategic and capital invest-ments to sustain growth beyond FY2025 and to maximize corporate value.R&D investmentDuring the FY2021–2025 Medium Term Business Plan, we aim to continue investing heavily in R&D, based on an R&D expenses ratio of 18–20% (R&D investment as a percentage of revenue). In R&D activities, we will channel resources into the development of next-generation strategic products to maximize the value of our pipeline. We also plan to actively invest in areas that support innovation over the long term, such as multi-modality tech-nology platforms that drive the creation of groundbreaking new treat-ments, aiming to consistently create new products that bring life-changing value to patients.In FY2021, we invested ¥57.7 billion in R&D, equivalent to 16.4% of reve-nue. The main area of spending was late-stage development expenses for next-generation products such as ME-401, RTA402 and KHK7791. We also concluded an agreement with Amgen Inc. in June 2021 to jointly develop and commercialize KHK4083, aiming to accelerate and expand the scope of development activities.Strategic investmentWe will actively utilize external resources for strategic partnering ( in- licensing, tie-ups, etc.) and M&A to tap external innovation, such as drug discovery technologies created through open innovation and new compounds for our pipeline. We will also target faster, sustained growth by expanding our global pipeline over the medium and long term, generating synergies with existing global strategic products, and increasing opportunities to create unique value. The Strategic Investment Review Committee, which is led by CEO Masashi Miyamoto, meets roughly twice a month to actively discuss potential targets for strategic growth investments.In FY2021, strategic investments included a €20 million upfront payment for a licensing contract with AM-Pharma B.V. to secure exclusive rights to develop and commercialize Ilofotase Alfa in Japan. We also made an upfront Cash AllocationSourceCash to be newly generated during the FY2021–2025 MTBP (cumulative)Operating cash flow before deduction of R&D expenses:¥800 billion or higher(Operating CF + R&D expenses)Cash on hand Approximately ¥300 billion(at the end of 2020)+ Borrowing capacityAllocationGrowth investmentreturnsSharehoder lR&D investment:Approximately ¥400 billion (R&D expenses ratio of 18–20%)Strategic investment(Pipeline, drug discovery technology, etc.)CAPEX: Approximately ¥100 billion(Stable global production and supply-chain framework, IT/digital investment, etc.)Dividend(Core EPS-based payout ratio of 40%)Share repurchases(Flexible approach)Dividends per Share(yen)353527276050403020104242444446464848Prioritize growth investments that will sustain growth and maximize corporate value from 2025 onwardsTarget sustained increases in the dividend in line with profit growth over the medium- to long-term and consider buying back shares on a flexible basis0201720182019202020212022(Forecast)payment to Synaffix B.V. for a licensing contract to use the company’s anti-body-drug conjugates (ADCs) drug discovery technology. Additionally, we made multiple investments in venture capital funds as a way of increasing rapid access to the latest drug discovery technology and product information.Capital investment (capex)We will invest heavily to create a more competitive business structure to help us maximize the value of global strategic products. In particular, we will focus on establishing a robust quality assurance and production system that can reliably supply safe, high-quality pharmaceuticals to patients worldwide. As the Group’s operations become increasingly global, we also aim to rapidly establish a global business foundation that supports Kyowa Kirin’s sustained growth as a GSP. Specifically, investment will be needed to build a platform that allows us to strategically utilize IT and digital tools and to reinforce global governance and risk management systems.In FY2021, capital investment totaled ¥14.5 billion (including intangible assets and long-term advance payments). Capital investment was mainly used to build and reinforce production systems to ensure the stable supply of global strategic products, and for IT and digital infrastructure to support global ERP and quality assurance systems.When evaluating the profitability of potential investments or development projects, we mainly use two quantitative standards: net present value (NPV) and expected present value (EPV). Both standards are based on the hurdle rate (by region), which reflects the expected cost of capital (WACC) for inves-tors. In investment decisions, we focus on whether the investment will con-tribute to an increase in corporate value over the medium- to long-term by generating returns in excess of the cost of capital.Shareholder returnsIn the FY2021–2025 Medium Term Business Plan, we are targeting a consoli-dated dividend payout ratio of 40% based on core EPS, aiming to steadily increase returns for investors by raising the dividend in line with profit growth over the medium- to long-term. In line with that policy, we paid an FY2021 dividend of ¥46.00 per share (dividend payout ratio of 43.2%), an increase of ¥2.00 from FY2020. In addition, we plan to raise the FY2022 dividend to ¥48.00 (dividend payout ratio 47.9%), which will be the sixth consecutive increase. We will also flexibly consider buying back shares, taking into account the share price and other factors.To generate sustained growth and maximize corporate value as a Japan-based GSP, we will enhance the Group’s growth potential, capability to innovate, and profitability in order to improve ROE over the medium- to long-term and support sustained increases in the dividend.KYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTIONAT A GLANCEHeadline NewsJune 2021Concluded an agreement with Amgen, Inc. of the U.S. for the co development and commercialization of KHK4083, a therapeutic drug for atopic dermatitisSee P24 for details.15August 2021Signed a license agreement with Synaffix for ADC creation technologyOctober 2021Signed a three-way research collaboration agreement with xFOREST and Axcelead on drug discovery targeting RNA structureSee P22 for details.December 2021Expanded collaboration with InveniAI on AI-driven drug discoveryI n n o v a t e w i t h I n t e l l i g e n c eRSee P22 for details.See P22 for details.December 2021Formulated the Global DE&I StatementSee P43 for details.November 2021Received Silver certification in the PRIDE Index 2021, which evalu-ates LGBTQ-related initiativesSee P43 for details.January 2022Introduced Aqua Premium at Fuji Research Park and CMC Research CenterSee P35 for details.November 2021Announced our endorsement of the Task Force on Climate-related Financial Disclosures (TCFD)See P37 for details.March 2022Graded as an enterprise with excellent health and productivity under the Certified Health for the first time, and Productivity Management Organiza-tion Recognition Program (White 500) for the sixth consecutive yearSee P45 for details.December 2021Participation in STEP, a rare disease information community established by the NPO ASridSee P29 for details.KYOWA KIRIN Annual Report 2021VALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION AT A GLANCEFinancial HighlightsPOINTRevenue(Billions of yen)Overseas Revenue/Overseas Revenue Ratio(%)(Billions of yen) R&D Expenses/R&D Expense Ratio(Billions of yen) RevenueRevenue in Japan declined year on year, reflecting cuts to NHI drug prices for two consecutive years in 2020 and 2021 and the end of co-promotion arrange-ments for several products in 2020. However, revenue increased overseas, driven by steady growth for global strategic products in EMEA and North America. Technology out-licensing revenue also grew. As a result, revenue increased ¥33.9 billion (+11%) year on year, and the overseas revenue ratio rose six percent-age points to 54%.Core Operating ProfitSelling, general and administrative expenses and research & development expenses both increased year on year, reflecting higher Crysvita profit-sharing expenses in North America, active investment in digital IT platforms and human resources to maximize the value of global strategic products and rapidly establish a global business base, and progress with late-stage development of ME-401, KHK7791 and other products. However, core operating profit increased ¥5.7 billion (+10%) year on year, supported by higher gross profit in line with the rise in revenue and by an increase in share of profit (loss) of invest-ments accounted for using the equity method.40020010080604020380.0380.0352.2352.2305.8305.8318.4318.4300271.5271.5225.5225.510010016.816.817.517.516.416.416.416.453.553.552.352.357.757.745.745.7190.3190.354.054.059.359.3151.7151.747.747.7119.6119.639.139.188.088.032.432.40201820192020202102018201920202021020182019202020212022(Forecast)2022(Forecast) Overseas Revenue (left scale) Overseas Revenue Ratio (right scale) R&D Expenses (left scale) R&D Expense Ratio (right scale)Core Operating Profit/ Core Operating Profit Ratio(Billions of yen) Profit Attributable to Owners of Parent/Return on Equity (ROE)(Billions of yen) Cash Dividends/Payout Ratio*(Yen) 65.765.767.067.059.459.460.060.050.350.318.518.519.419.418.818.818.618.617.617.667.167.110.110.154.454.48.68.652.352.353.053.047.047.035356.86.87.37.37.17.135.235.233.733.7484846464444424250.350.347.947.943.243.22502001501005080604020(%)403020100806040205040302010806040200(%)201510500201820192020202102018201920202021020182019202020212022(Forecast)2022(Forecast)2022(Forecast) Core Operating Profit (left scale) Core Operating Profit Ratio (right scale) Profit Attributable to Owners of Parent (left scale) ROE (right scale) Cash Dividends (left scale) Payout Ratio (right scale)* Dividend payout ratio for 2021 and 2022 are the ratio of dividends to core profit (Profit attributable to owners of parent – Other income and expenses (excluding tax effects)).18.418.470.070.02022(Forecast)16(%)201612840(%)100806040200KYOWA KIRIN Annual Report 2021VALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION AT A GLANCE17Please see ESG Data Collection for details.https://www.kyowakirin.com/sustainability/esg_data/index.htmlAccident Frequency Rate*3,4(%)All-industryAverage1.661.661.831.831.801.801.951.95ESG Highlights(t-CO2/hundred million yen)(Thousand m3/hundred million yen)Waste Generation*2(t) CO2 Emissions*1(t-CO2/hundred million yen) 100,00023.423.480,00060,00064,62064,62042,36820.320.317.017.055,00255,00251,93151,93112.912.940,00036,74034,68710.910.941,07441,07438,24938,24920,00022,25218,26217,24417,18516,3552030(Target)23,88921,89423,36923,3692,000Water Use*1(Thousand m3) 1.131.136,0004,0003,1143,1140.860.860.730.732,3252,3252,2292,2290.550.550.470.471,7461,7461,6721,6729006003001,3371,3370.42030(Target)01.21,5001,4271,4271,4081,4081,1581,1581,1601,1601,2771,2771,2000.7220.7220.8(%)1.00.80.60.40.20.0910.0910.1090.1090.0040.0040.0020.0020.360.36(2)(2)0.130.13(1)(1)0.190.19(1)(1)0.390.39(4)(4)0.000.00(0)(0)0201720182019202020210201720182019202020210201720182019202020210020172018201920202021 Scope 1 (left scale) CO2 emissions per unit of net sales (right scale) Scope 2 (right scale) Water Use (left scale) Water Use per unit of net sales (right scale) Waste Generation (left scale) Final Disposal Rate (right scale) Accident Frequency Rate The numbers in parentheses are the number of accidents that required time off from work.Number of Employees/ Ratio of Overseas Employees(Persons) Number of Female Managers/ Ratio of Female Managers*5(Persons) 10,0008,0004,0002,0007,5327,53280061239123.923.97,2427,24287167827.227.26,0004245,7295,26929.729.730.030.05,4235,4235,7525,75230.028.028.04597163005,2675,2675086583485347584353,7923,9094,0251231231011011031038.98.99.79.711.211.215010091917.87.850Ratio of Workers with Disabilities*6(%)Number of Directors(Persons)142142(%)18.018.018.03.012.412.412.02.02.002.002.452.452.332.332.592.592.452.452.432.432.302.30Statutory Requirement2.202.2088357725884477349954020172018201920202021002017201820192020202102017201820192020202120182019202020212022 Japan Ratio of Overseas Employees (right scale) North America EMEA Asia/Oceania Number of Female Managers (Non-consolidated) (left scale) Ratio of Female Managers (right scale) Kyowa Kirin Group (Japan) Number of Internal Directors Number of Independent Outside Directors6.01.02025(Target)02520151050(%)50.040.020.010.02.01.51.00.51086420*1 Covers plants and research laboratories worldwide.*2 Covers plants and research laboratories in Japan.*3 Covers plants/laboratories of Kyowa Kirin/Kyowa Medex/Kyowa Hakko Bio /Kyowa Pharma Chemical until 2018, all locations of Kyowa Kirin in 2018 and *4 The rates indicate the number of casualties from fatal lost-time accidents per million working hours.*5 Covers Kyowa Kirin *6 As of June each year.2019, all locations in Japan and overseas plants/laboratories of the Kyowa Kirin group in 2021.KYOWA KIRIN Annual Report 2021VALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION AT A GLANCEPipeline (As of December 31, 2021) antibody protein small molecule New Molecular Entity Progress with approvals in Jan–Dec 2021Code Name & Generic Name Mechanism of ActionIndicationKHK7580 Evocalcet CalcimimeticSecondary Hyperparathyroidism RTA 402 Bardoxolone Methyl Antioxidant Inflammation ModulatorAlport SyndromeDiabetic Kidney DiseaseAutosomal Dominant Polycystic Kidney DiseaseKW-3357 Antithrombin Gamma Recombinant Human AntithrombinPreeclampsiaKHK7791 Tenapanor NHE3 InhibitorHyperphosphatemia in Patients on DialysisNephrology OncologyKW-0761 Mogamulizumab Anti-CCR4 Humanized AntibodyMycosis Fungoides and Sézary SyndromeKRN125 Pegfilgrastim Long-Acting Granulocyte Colony-Stimulating FactorMobilization of Hematopoietic Stem Cells into Peripheral Blood for Autologous Blood Stem Cell Transplantation KHK2455 IDO1 Inhibitor ME-401 Zandelisib PI3Kδ InhibitorMobilization of Hematopoietic Stem Cells into Peripheral Blood for Allogeneic Blood Stem Cell TransplantationAutomated Injection Device for Decreasing the Incidence of Febrile Neutropenia in Patients Receiving Cancer ChemotherapySolid TumorUrothelial carcinomaFollicular Lymphoma and Marginal Zone LymphomaFollicular LymphomaMarginal Zone LymphomaIndolent B-cell Non-Hodgkin’s LymphomaB-cell malignanciesAreaCN/AsiaCH/SA/AUCN/CA/KWJPJPJPJPJPKRJPJPJPNANAJPJPEuropeJP/NA/Europe/Asia/Oceania/OthersNA/Europe/Asia/OceaniaPh IPh IIFiledApprovedStagePh IIIAs of December 31, 2021In-House or LicensedMitsubishi Tanabe Pharma18ReataIn-HouseArdelyxIn-HouseAmgen-KAIn-HouseMEI PharmaGlossaryStudies in small numbers of healthy people (patients in some cases) to verify safety issues including side effects.Phase I Clinical TrialPhase II Clinical TrialStudies in small numbers of patients to verify effective and safe dosage and regimen.Phase III Clinical Trial Studies in large numbers of patients to confirm efficacy and safety in comparison with standard drugs or placebo.* All trials are conducted under supervision of clinical doctors and with the consent of participants.KYOWA KIRIN Annual Report 2021VALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION AT A GLANCEImmunology/Allergy Code Name & Generic Name Mechanism of ActionIndicationPh IPh IIFiledApprovedStagePh IIIAs of December 31, 2021In-House or LicensedKHK4827 Brodalumab Anti-IL-17 Receptor A Fully Human AntibodyAnkylosing Spondylitis, non-radiographic axial spondyloarthritisAnkylosing SpondylitisSystemic SclerosisPalmoplantar Pustulosis KHK4083/AMG 451 Rocatinlimab Anti-OX40 Fully Human AntibodyAtopic DermatitisJP/NA/EuropeCentral Nervous SystemKW-6002 Istradefylline Adenosine A2A Receptor AntagonistParkinson’s Disease KW-6356 KHK6640 Adenosine A2A Receptor Antagonist/Inverse AgonistAnti-Amyloid Beta Peptide AntibodyParkinson’s DiseaseAlzheimer’s DiseaseOtherKRN23 Burosumab Anti-FGF23 Fully Human AntibodyTumor Induced Osteomalacia (TIO)X-linked Hypophosphatemia (XLH)CN/BH/SA/SG/AUAMG531 Romiplostim Thrombopoietin Receptor AgonistKW-3357 Antithrombin Gamma Recombinant Human AntithrombinKHK4951Wet Age-Related Macular DegenerationTreatment of Aplastic anemia (AA) which is refractory to immunosup-pressive therapy or immunosuppressive therapy being not suitableTreatment of adult aplastic anemia refractory to conventional therapiesMY/SGTreatment of adult patients with chronic immune thrombocytopenia (ITP) who are refractory to other treatments and Treatment of adult patients with aplastic anemia who are refractory to conventional therapyImmune Thrombocytopenia (ITP)Aplastic Anemia Who Were Previously Untreated with Immunosuppressive TherapyAplastic Anemia Who Were Previously Untreated with Immunosuppressive TherapyDisseminated Intravascular Coagulation, Congenital Antithrombin DeficiencyAreaTW/MYTLJPJPEuropeJPJP/EuropeTL/MYIS/CACNEuropeKRTLCNJP/AsiaEuropeJP19Amgen-KAIn-HouseIn-HouseIn-HouseImmunas PharmaIn-HouseAmgen-KAIn-HouseIn-HousePh II/Ph IIIKYOWA KIRIN Annual Report 2021VALUE CREATION STRATEGIESVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION AT A GLANCEVALUE CREATION STRATEGIES20Providing pharmaceuticals for unmet medical needsThe environment around pharmaceutical research is changing at a breathtaking pace. To ensure we continue to create new value that patients really need, Kyowa Kirin employees have to constantly change as well. We are contributing to Kyowa Kirin’s research activities – and the smiles of patients – by building systems that respond to changes in the environment and by providing proactive support to help employees transform themselves.Yumi OtaTokyo Research Park, Kyowa Kirin Co., Ltd.Value Creation StrategiesOur mission is to develop new medicines for patients with autoimmune and inflammatory diseases. I work diligently with everyone in the Kyowa Kirin US Research team and through collaboration with the Kyowa Kirin US Open Innovation Group to identify and evaluate novel therapeutic targets for our drug discovery pipeline. Importantly, we also incorporate innovative technologies into our drug discovery efforts to continuously demonstrate the competitive edge of the new therapeutics that we are developing.Ava Song, Ph.D.Associate Director, Research Kyowa Kirin, Inc.Amid constant change in the pharmaceutical sector, our job is to find ways of translating the latest life sciences research into life-changing value – or as we like to say, smiles for patients. We are combining Kyowa Kirin’s strengths in drug discovery technology and disease research with recent advances in AI and digital tools, while also constantly exploring, innovating and seeking out new challenges to create groundbreaking new drugs.Hayato YabuuchiSenior Scientist, Research Core Function Laboratories, Research Unit, Kyowa Kirin Co., Ltd.KYOWA KIRIN Annual Report 2021AT A GLANCEVALUE CREATION FOUNDATIONFINANCIAL INFORMATIONCORPORATE INFORMATIONINTRODUCTION VALUE CREATION STRATEGIESVALUE CREATION STRATEGIES21Value Creation StrategiesThree Global Strategic ProductsKyowa Kirin sells three pharmaceutical products – Crysvita, Poteligeo and Nouriast/Nourianz – that are helping to bring smiles to people battling disease worldwide. Based on our Group Policy for Access to Medicines, we are working to increase access to pharmaceutical products across the value chain in order to deliver our life-changing value to as many patients as possible, while also supporting Kyowa Kirin’s growth as a Global Specialty Pharmaceutical Company.Crysvita(Burosumab – anti-FGF23 fully human monoclonal antibody)X-linked hypophosphatemia (XLH) and tumor- induced osteomalacia (TIO)Crysvita is a therapeutic antibody developed by Kyowa Kirin for the treatment of X-linked hypophosphatemia (XLH) and tumor-induced osteomalacia (TIO). XLH is a rare genetic condition that causes abnormalities in phos-phate homeostasis. People with XLH have a genetic defect on the X-chromosome, which causes excessive loss of phosphate through the urine and poor absorption from the gut due to over-production of a hormone known as fibroblast growth factor-23 (FGF23), resulting in low levels of phosphate in the blood. The condition is estimated to occur in one in 20,000 people. In children with XLH, chronic hypophosphatemia causes bone deformity and stunted growth, while adults with XLH suffer from walking difficulties due to lower limb deformity, as well as bone and joint pain, muscle weakness and dental issues, leading to a material decline in patient QOL. Unlike XLH, TIO is not a genetic disorder. TIO arises from causal tumors that produce excess levels of FGF23. The symptoms rapidly resolve if the causal tumors can be resected, but there are cases in which the tumors are not detected or resection is not feasible.production of vitamin D, which improves intestinal absorption of phosphate and reabsorption of phos-phate in the kidneys, helping to boost serum levels of phosphorus.Clinical development of Crysvita, which started in the US in 2006, initially faced the problem of low numbers of people with the condition. However, development rapidly accelerated from 2013 when we teamed up with Ultragenyx Pharmaceutical Inc., giving us access to the company’s extensive experience and networks in the field of rare diseases. After further work