Overview of Financial Results for the 1st Quarter FY2018 · CSO Business Provision of comprehensive commercial solution that combines various services Healthcare Business Launched

マスタータイトルの書式設定

© Copyright CMIC Group

CMIC HOLDINGS Co., Ltd.

February 1, 2018

Overview of Financial Results for the 1st Quarter FY2018


2 © Copyright CMIC Group

Business segments and group companies Blue indicates overseas. *indicates affiliated company

Segment Products and services CMIC Group companies (as of end of Dec. 2017)

CRO

Business

Services related to pharmaceutical development support, analytical chemistry services, and healthcare for pharmaceutical companies, and BPO and personnel services for the pharmaceutical industry

CMIC HOLDINGS Co., Ltd. CMIC Co., Ltd. CMIC-PMS Co., Ltd. CMIC ShiftZero K.K. CMIC Korea Co., Ltd. CMIC ASIA-PACIFIC, PTE. LTD. CMIC ASIA PACIFIC (MALAYSIA) SDN. BHD. CMIC Asia-Pacific (Hong Kong) Limited CMIC ASIA-PACIFIC (PHILIPPINES), INC. CMIC (Beijing) Pharmaceutical Services Co., Ltd. CMIC (Beijing) Co., Ltd. CMIC Pharma Science Co., Ltd. CMIC, INC. CMIC (Suzhou) Pharmaceutical Technology Co., Ltd. CMIC Career Co., Ltd.

CDMO

Business

Services related to drug formulation development and manufacturing support, from formulation design to investigational new drug manufacturing to commercial production of ethical drugs and nonprescription drugs for pharmaceutical companies

CMIC CMO Co., Ltd. CMIC CMO Korea Co., Ltd. CMIC CMO USA Corporation CMIC JSR Biologics Co., Ltd.*

CSO

Business

Services provided to pharma companies related to sales & marketing support

CMIC Ashfield Co., Ltd. MDS-CMG, Inc.*

Healthcare Business

Support services primarily for medical institutions and treating, maintaining, and promoting the health of patients and general consumers, such as SMO services and healthcare information services

Site Support Institute Co., Ltd. CMIC Healthcare Co., Ltd. CMIC VIETNAM COMPANY LIMITED

IPM

Business

Provision of new business solution to pharmaceutical companies that combines the system to support all value chains and manufacturing authorization and other licenses (intellectual properties) held by CMIC Group

CMIC HOLDINGS Co., Ltd. CMIC CMO Co., Ltd. OrphanPacific, Inc.



Main initiatives of the current term

Execution of Project Phoenix Expansion of solution business through PVC model Promoted the activities of cross organizational team “Hayabusa (Falcon)” towards agile management Work style reforms: Company-wide introduction of “Telework program” to promote various ways of

working

CRO Business Participated in the Technology Consortium aiming at the clinical application of platelet preparations

derived from human iPS cells Enhanced analytical services for Nucleic acid drugs, expected as candidates for next-generation drugs Started services to support generic drug application for approval in China

CDMO Business Built a new injection building outfitted with state-of-the-art equipment at the Ashikaga plant to increase

orders to manufacture anti-cancer drugs

CSO Business Provision of comprehensive commercial solution that combines various services

Healthcare Business Launched services to support spinal muscular atrophy (SMA) patients together with Biogen and Welby Expanded new service models such as Medical Concierge Services

IPM Business Transferred domestic manufacturing and marketing license from Novartis for hypertension drug “Rasilez

Tablets ® (Aliskiren Fumarate) 150mg”



2017/1Q 2018/1Q

Amount Composition

ratio Amount Composition

ratio

YoY change

Percent change

(¥ millions) (%) (¥ millions) (%) (¥ millions) (%)

Sales 15,389 100.0 16,637 100.0 1,248 8.1

Operating income 501 3.3 1,013 6.1 512 102.0

Ordinary income 619 4.0 1,035 6.2 415 67.1

Profit attributable to owners of

parent 200 1.3 544 3.3 343 170.9

Earnings per share ¥10.74 ¥29.09

Consolidated income statement (overview)



Breakdown of Non-operating income and expenses /Extraordinary losses

(¥ millions)

2017/1Q 2018/1Q

Non-operating income 180 59

Foreign exchange gains 153 26

Interest income 8 1

Share of profit of entities

accounted for using equity method － 16

Other 18 14

Non-operating expenses 62 37

Interest expenses 30 28

Share of loss of entities accounted for using equity method

6 －

Other 24 9

2017/1Q 2018/1Q

Extraordinary losses 102 18

Loss on sales of non-

current assets 21 －

Loss on retirement of

non-current assets 9 13

Provision of allowance

for doubtful accounts 70 －

Loss on valuation of

investment securities － 4



Sales & Operating income by segment

2017/1Q Amount (¥ millions)

2018/1Q Amount (¥ millions)

Change (¥ millions)

Percent change (%)

CRO Business Sales 7,677 9,012 1,334 17.4

Operating income 1,157 1,812 655 56.7

CDMO Business

Sales 3,233 3,586 353 10.9

Operating income (192) (184) 7 -

CSO Business Sales 1,711 1,675 (35) (2.1)

Operating income 83 56 (27) (32.6)

Healthcare Business

Sales 2,056 1,739 (317) (15.4)

Operating income 194 149 (45) (23.4)

IPM Business Sales 764 746 (18) (2.4)

Operating income 1 (65) (66) -

Adjustments Sales (54) (122) (67) -

Operating income (742) (755) (12) -

Consolidated Sales 15,389 16,637 1,248 8.1

Operating income 501 1,013 512 102.0



Orders received / Backlog

・ Accounts for only the backlog of firm CDMO business orders. There is customer demand for scheduled orders but these are different from firm orders so we have not included these in the backlog. ・Order status is not included for IPM Business because its business conditions are different from those of contract business.

2017/1Q 2018/1Q

Orders received

Backlog Orders

received Percent change

Backlog Percent change

(¥ millions) (¥ millions) (¥ millions) (%) (¥ millions) (%)

CRO Business 13,789 51,719 10,479 (24.0) 56,440 9.1

CDMO Business 3,519 3,593 3,523 0.1 3,582 (0.3)

CSO Business 1,045 4,929 1,663 59.1 3,084 (37.4)

Healthcare Business 1,999 9,448 1,606 (19.7) 9,054 (4.2)

Total 20,354 69,690 17,272 (15.1) 72,161 3.5

7



Trend in consolidated Sales & Operating income

7,486 7,677 9,012

3,159 3,233

3,586 1,827 1,711

1,675 1,653 2,056

1,739 657

764

746

14,633 15,389

16,637

0

10,000

2016/1Q 2017/1Q 2018/1Q

CRO business CDMO business CSO business

Healthcare business IPM business

515 501

1,013

3.5% 3.3%

6.1%

0%

10%

0

500

1,000

2016/1Q 2017/1Q 2018/1Q

Operating income Operating margin

*(54)

*(151)

*(122)

[ Sales ] [ Operating income ] (¥ millions) (¥ millions)

*Adjustment



Contract Research Organization (CRO) Business

Secured human resources to meet robust demand in clinical services and studied the feasibility of post-marketing support business utilizing clinical research and database. For non-clinical services, Japan-US collaboration was enhanced to support Japanese companies entering the US market. Provided drug discovery support for next-generation drugs including nucleic acid drugs and regenerative medicine. Sales and operating income exceeded those from the same period of the previous year thanks to robust growth in new and existing contracts.

6,039 6,244 7,448

999 914

1,052 549 576

584

7,486 7,677

9,012

0

5,000

10,000

2016/1Q 2017/1Q 2018/1Q

Clinical Non-clinical Others

954

1,157

1,812

12.7%

15.1%

20.1%

0%

10%

20%

0

1,000

2,000

2016/1Q 2017/1Q 2018/1Q


*(58) *(102)

*(73)

[ Sales ] [ Operating income ] (¥ millions) (¥ millions)

*Adjustment

9



Contract Development Manufacturing Organization (CDMO) Business

Continued an effort to establish a low-cost production structure in the pursuit of productivity and efficiency through total service provision for drug manufacturing. Focused on the preparation towards the full-scale operation of the new injection building. Sales and operating income exceeded those from the previous consolidated fiscal year thanks to robust growth in new and existing contract manufacturing projects, but operating loss was unchanged from the previous corresponding period due to start-up expenses for the new injection building in Ashikaga, which incurred before the business is running.

(68)

(192) (184)

-10%

0%

10%

(300)

(200)

(100)

0

100

Operating income

2,611 2,667 2,948

437 436

414 111 129

223 3,159 3,233

3,586

0

2,000

4,000

2016/1Q 2017/1Q 2018/1Q

CMO (Japan) CCU (U.S.) CCK (Korea)

[ Sales ] [Operating income ] (¥ millions) (¥ millions)

10

2016/1Q 2017/1Q 2018/1Q



Contract Sales Organization (CSO) Business

1,827 1,711 1,675

0

1,000

2,000

2016/1Q 2017/1Q 2018/1Q

CMAS

90 83

56 5.0% 4.9%

3.4%

0%

5%

10%

0

100

2016/1Q 2017/1Q 2018/1Q

Operating income Operting margin

[ Sales ] [Operating income ] (¥ millions) (¥ millions)

CMIC Ashfield Co., Ltd. has worked steadily to strengthen its capacity to take new orders and move through existing projects, they are also providing comprehensive commercial solution that combines various services to meet customer demands. Sales and operating income are below the prior year level due to outsourcing needs of MR dispatch business facing the adjustment phase, but order intake exceeded those from the previous consolidated fiscal year. 11



Healthcare Business

Site Support Institute Co., Ltd. has acquired new orders and provided new services such as Medical Concierge Services. Sales and operating income are below that of the same period last year due to losing some large-scale projects we had in the same period last year.

1,476

1,882 1,589

175

163

149 1 1,653

2,056

1,739

0

1,000

2,000

2016/1Q 2017/1Q 2018/1Q

SSI CHC Others

(8)

194

149

9.5% 8.6%

-5%

5%

15%

(100)

0

100

200

300

2017/1Q 2018/1Q


2016/1Q

[ Sales ] [Operating income ] (¥ millions) (¥ millions) *Adjustment

* 9

12



Innovative Pharma Model（ IPM ） Business

88

1

(65)

13.5%

0.2%

-10%

0%

10%

20%

(100)

0

100

200

2016/1Q 2017/1Q


593 695 711

63

27 28 42

6 657

764 746

0

500

1,000

2016/1Q 2017/1Q 2018/1Q

L-FABP OP Others

2018/1Q

[ Sales ] [Operating income ] (¥ millions) (¥ millions) *Adjustment

Strengthened IPM business foundation through provision of IPM platform such as selling orphan drugs including the products developed in-house and supporting foreign companies entering the Japanese market. Expanded the market and strengthen promotions of the kidney disease biomarker "human L-type fatty acid-binding protein (L-FABP) kit". Sales and operating income were lower than that of the same period last year due to sales promotion expenses for "Zanmira Nail" (toe nail repair solution). Continued to expand our business scale through provision of new solutions towards positive turnaround of sales.

13



Balance sheet (assets)

34,305 38,264 40,072

3,715 3,960

3,926 5,285 5,443

5,511 10,731

12,989 12,812 5,069

4,947 6,209

59,104

65,605 68,533

0

20,000

40,000

60,000

80,000

2016/9 2017/9 2017/12

Cash equivalents

Trade receivables

Inventory

Other current assets

Fixed assets

Total assets

+2,927

■ Cash equivalents

+1,261

■ Trade receivables

(177)

■ Inventory ＋68

■

Other current assets

(34)

■ Fixed assets +1,808

(¥ millions)



Balance sheet (liabilities and net assets)

21,397 23,608 23,838

16,086 18,899

21,977

8,843

9,193 9,171

11,824

12,870 12,681

953

1,034 865

59,104

65,605 68,533

0

20,000

40,000

60,000

80,000

2016/9 2017/9 2017/12

Accounts payable

Other current liabilities

Other fixed liabilities

Interest-bearing debt

Net assets

■ Accounts payable

(169)

■ Other current liabilities

(189)

■ Other fixed liabilities

(22)

■

Interest-bearing debt

+3,078

■ Net assets +230

(¥ millions)

マスタータイトルの書式設定 Cautionary statement: This material includes forward-looking statements based on assumptions and beliefs in light of the information currently available to management, and is subject to significant risks and uncertainties. Actual financial results may vary materially from the content of this material depending on a number of factors. While this material contains information on pharmaceuticals (including compounds under development), this information is not intended to make any representations or advertisements regarding the efficacy or effectiveness of their preparations, promote any kind of unapproved uses, nor provide medical advice of any kind.

Documents

Overview of Financial Results for the 1st Quarter FY2018 · CSO Business Provision of comprehensive commercial solution that combines various services Healthcare Business Launched