Sumitomo Pharma : Oct. 31, 2023 Conference on Q2 FY2023 Financial Results

Conference on Q2 FY2023

(April 1 to September 30, 2023)

Financial Results

Hiroshi Nomura, President and CEO Sumitomo Pharma Co., Ltd.

October 31, 2023

Disclaimer Regarding Forward-looking Statements

This material contains forecasts, projections, goals, plans, and other forward-looking statements regarding the Group's financial results and other data. Such forward-looking statements are based on the Company's assumptions, estimates, outlook, and other judgments made in light of information available at the time of disclosure of such statements and involve both known and unknown risks and uncertainties.

Accordingly, forecasts, plans, goals, and other statements may not be realized as described, and actual financial results, success/failure or progress of development, and other projections may differ materially from those presented herein.

Information concerning pharmaceuticals and medical devices (including those under development) contained herein is not intended as advertising or as medical advice.

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

1

Financial Results for Q2 FY2023

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

2

Financial Results for Q2 FY2023

Financial Results for Q2 FY2023 (Core Basis)

The forecasts are not revised

Billions of yen

	Q2YTD	Q2YTD		Change
	FY2022	FY2023
	Value	FX impact	%
	Results	Results
Revenue	319.3	152.6	(166.6)	3.8	(52.2)
Cost of sales	92.8	60.3	(32.5)	(7.6)	(35.0)
Gross profit	226.4	92.3	(134.1)	11.4	(59.2)
SG&A expenses	152.3	118.8	(33.5)	4.2	(22.0)
R&D expenses	49.4	45.3	(4.1)	1.5	(8.3)
Other operating income/expenses	0.0	5.9	5.9	－	－
Core operating profit	24.8	(65.8)	(90.7)	5.7	－
Non-recurring items	(53.8)	(20.6)	33.1
(negative number indicates net loss)
Operating profit	(28.9)	(86.5)	(57.6)		－
Finance income/costs	49.9	30.4	(19.6)
Profit before taxes	21.0	(56.1)	(77.2)		－
Income tax expenses	36.3	11.6	(24.7)
Net profit	(15.2)	(67.7)	(52.5)		－
Net profit attributable to owners	(7.3)	(67.7)	(60.5)		－
of the parent
Average rates:			Period end rates:

FY2023

May 15	%
forecasts

362.0 42.2

1. 45.7

1. 40.1

1. 54.0

1. 53.9

12.0 48.9

(62.0) 106.2

(16.0)

(78.0)	110.9
(3.0)
(81.0)
(1.0)
(80.0)	84.7
(80.0)	84.7

• Revenue decreased significantly due
  to LATUDA®'s loss of exclusivity in the U.S.
• Share transfer of Sumitomo Pharma Animal Health Co., Ltd. included in Other operating income/ expenses
• Business structure improvement expenses in North America recognized as Non- recurring items

Q2 FY2022 Results : 1US$ = ¥134.05, 1RMB = ¥19.89	As of the end of March 2023
Q2 FY2023 Results : 1US$ = ¥141.07, 1RMB = ¥19.75	As of the end of September 2023
FY2023 forecasts : 1US$ = ¥130.00, 1RMB = ¥19.50

• 1US$ = ¥133.54, 1RMB = ¥19.42
• 1US$ = ¥149.58, 1RMB = ¥20.50

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

3

Financial Results for Q2 FY2023

Financial Results for Q2 FY2023 (Core Basis) - vs. Q2 YTD FY2023 Plans

Billions of yen

	Q2YTD	Q2YTD		Change
	FY2023	FY2023
	Value	%	FX impact	%
	Plans	Results	(w/o FX)
Revenue	166.2	152.6	(13.6)	91.8	6.3	88.0
Cost of sales	60.6	60.3	(0.2)	99.6	2.2	96.0
Gross profit	105.7	92.3	(13.3)	87.4	4.1	83.5
SG&A expenses	116.1	118.8	2.6	102.3	6.8	96.4
R&D expenses	44.3	45.3	1.0	102.3	2.3	97.0
Other operating income/expenses	7.0	5.9	(1.1)	84.4	－	84.4
Core operating profit	(47.8)	(65.8)	(18.1)	－	(5.0)	－

Average rates:

Q2 FY2023 Results : 1US$ = ¥141.07, 1RMB = ¥19.75

FY2023 forecasts : 1US$ = ¥130.00, 1RMB = ¥19.50

© Sumitomo Pharma Co., Ltd. All Rights Reserved.

4

Financial Results for Q2 FY2023

Revenue of Major Products in North America

			Q2YTD	Q2YTD			Q2YTD	Q2YTD		Change			FY2023
			FY2022	FY2023	Change		FY2022	FY2023
				FX				Yen-basis
			Results	Results			Results	Results	Value	%	May 15 forecasts
					%
										impact
	North America											Billions
		Million $				Billions of yen			Million $
							of yen
	ORGOVYX®	79	138	58		10.6	19.4	8.8	1.0	82.4	396	51.5	37.7
	MYFEMBREE®	10	29	19		1.4	4.2	2.8	0.2	198.5	192	24.9	16.7
	GEMTESA®	71	112	42		9.5	15.8	6.4	0.8	67.2	362	47.0	33.6
	APTIOM®		129	114	(15)		17.4	16.1	(1.2)	0.8	(7.0)	273	35.5	45.5
	RETHYMIC®	19	22	3		2.6	3.1	0.5	0.2	20.3	54	7.0	44.0
	LATUDA®	952	29	(923)		127.6	4.0	(123.6)	0.2	(96.8)	161	20.9	19.3
	Others		60	9	(51)		8.0	1.2	(6.8)	0.1	(84.9)	167	22.0	48.4
	Export products/	137	67	(70)		18.3	9.4	(8.9)	0.5	(48.4)
	Lump-sum revenue, etc.*
		Total	1,457	519	(938)		195.3	73.3	(122.1)	3.6	(62.5)	1,605	208.8	35.1
	* Major items included in Export products/Lump-sum revenue, etc.
	Q2YTD	Deferred revenue from the collaboration with Pfizer of $80M		Q2YTD
							Deferred revenue from the collaboration with Pfizer of $59M
	FY2022 Revenue from the license agreement for ORGOVYX® in EU of $50M	FY2023

(Ref.) Achievement rate against Q2 YTD plans for three key products

		Million $
Plans	Results	%
155	138	88.7
60	29	49.3
156	112	72.0

• Of the "Export products/Lump- sum revenue, etc." in Q2 FY2022, the lump-sum revenue under the license agreement for ORGOVYX® in EU was $50M. (See the breakdown below the table)

Average rates:

Q2 FY2022 Results : 1US$ = ¥134.05

Q2 FY2023 Results : 1US$ = ¥141.07

FY2023 forecasts : 1US$ = ¥130.00

© Sumitomo Pharma Co., Ltd. All Rights Reserved. 5

Financial Results for Q2 FY2023

Marketing Status of ORGOVYX®

Plan for Q2	Actual for Q2	Achievement rate against	Volume and price of influence against
YTD FY2023	YTD FY2023	plan for Q2 YTD FY2023	actual for Q2 YTD FY2023, $138M
$155M	$138M	89%	Volume	Unfavorable. approx. ($23M)
Price	Favorable. approx. $6M

• ORGOVYX® continues to show strong growth - H1 FY2023 revenue increased approx. 75% compared to H1 FY2022 and provides important treatment advantages, as the first oral GnRH antagonist in the U.S., for advanced prostate cancer
• Forecasted volume was not achieved due to slower than anticipated market share while price was favorable vs. forecast due to lower prior quarter adjustments tied to coverage gap liability in Medicare Part D

	FY2023 Strategies and Outlook
	 Urology in-office-dispensing clinics (approx. 19% of ADT Market*1): Utilizing analysis of Advanced Analytics team*2 to
	inform appropriate promotional messaging and improve timing of sales reps visit a prescribing physician in June
Volume	 Academic/Integrated Delivery Network (approx. 50% of ADT Market): Introduced Strategic Account Manager team in
	July focused on supporting adoption of ORGOVYX® in hospital setting
	 Changes in Medicare Part D benefit design will improve ORGOVYX® affordability for patients as of Jan. 2024 by
	eliminating out of pocket following catastrophic phase and increasing the low income subsidy threshold
Price	 Gross to net expected to be consistent with current trends

*1	Androgen Deprivation Therapy market where ORGOVYX® is prescribed	© Sumitomo Pharma Co., Ltd. All Rights Reserved.	6
*2	SMPA's Advanced Analytics Computational Technology & Research (AACTR), which leverages SMPA's digital infrastructure, including DrugOME and Digital Innovation

Financial Results for Q2 FY2023

Marketing Status of MYFEMBREE®

Plan for Q2	Actual for Q2	Achievement rate against	Volume and price of influence against
YTD FY2023	YTD FY2023	plan for Q2 YTD FY2023	actual for Q2 YTD FY2023, $29M
$60M	$29M	49%	Volume	Unfavorable. approx. ($24M)
Price	Unfavorable. approx. ($7M)

• MYFEMBREE® continues to grow - H1 FY2023 revenue has increased approx. 190% increase compared to H1 FY2022.
• TRx and NBRx share* in uterine fibroids (UF) and endometriosis (EM) of GnRH antagonists market are 37% and 46% in Sep. 2023 (30% and 40% in March 2023)
• Volume of forecast was not achieved due to slower than anticipated market share especially in endometriosis and price of forecast was not achieved due to higher proportion of Medicaid volume and Co-pay cards assistance

FY2023 Strategies and Outlook

• Position MYFEMBREE® as the standard of care for women with UF or EM:
• • UF: Establish MYFEMBREE® as GnRH therapy use earlier in the treatment journey by positioning GnRH antagonists as treatment of choice after first oral contraceptive failure

Volume

 EM: Establish MYFEMBREE® as GnRH of choice by differentiating MYFEMBREE® on effectively treating pain

• Continuous field force targeting optimization in collaboration with the Advanced Analytics team and Pfizer Inc.
• Leveraging Advanced Analytics team to improve DTC effectiveness/efficiency and partnering with Pfizer Inc. to launch new DTC

Price  Monitoring usage and reinforcing proper use of Co-pay cards

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*Source: Symphony METYS - Data through September 2023, IDV®

Financial Results for Q2 FY2023

Marketing Status of GEMTESA®

Plan for Q2	Actual for Q2	Achievement rate against	Volume and price of influence against
YTD FY2023	YTD FY2023	plan for Q2 YTD FY2023	actual for Q2 YTD FY2023, $112M
$156M	$112M	72%	Volume	Unfavorable. approx. ($14M)
Price	Unfavorable. approx. ($30M)

• GEMTESA® continues to grow - H1 FY2023 revenue has increased approx. 58% increase compared to H1 FY2022
• TRx and NBRx Share* in Beta3 are 21% and 32% in Sep. 2023 (16% and 28% in March 2023)
• Volume of forecast was not achieved due to lower than assumed Beta3 market share and price of forecast was not achieved due to higher proportion of Medicare Part D volume and lower proportion of non-contracted volume

	FY2023 Strategies and Outlook
	 Focus on increasing awareness (currently approx. 30%) and prescription uptake in primary care and long-term care,
Volume	which account for approx. 45% of total prescriptions for over active bladder
 Plan to conduct a satellite media tour during Bladder Health Awareness Month in Nov. to raise awareness, in
	addition to the digital advertising currently being conducted on the web and in clinic waiting rooms
Price	 Price is expected to be improved in Q4 FY2023 because pharmaceutical companies' burden of the Coverage Gap
in Medicare Part D will be lower in Q4 FY2023 than in other quarters

* Source IQVIA NPA

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8

Financial Results for Q2 FY2023

Revenue of Major Products in Japan & Asia

Billions of yen

	Q2YTD	Q2YTD	Change	FY2023
	FY2022	FY2023
	Value	％	May 15		%
	Results	Results	forecasts
Japan
Equa®/EquMet®	17.3	15.8	(1.5)	(8.7)	32.4		48.7
TRERIEF®	8.6	8.5	(0.0)	(0.5)	15.0		57.0
LATUDA®	4.6	5.7	1.1	23.3	12.5		45.8
METGLUCO®	4.0	3.7	(0.2)	(5.8)	7.5		49.6
TWYMEEG®	0.5	2.6	2.1	420.7	4.2		62.9
LONASEN® Tape	1.4	1.8	0.4	31.7	3.3		55.5
AG products	4.6	4.6	(0.0)	(0.7)	8.6		53.5
Trulicity® *	16.7	－	(16.7)	－	－		－
Others	8.7	10.9	2.1	24.5
Export products/	9.6	3.5	(6.1)	(63.6)	30.6		51.3
Lump-sum revenue, etc.
Non-pharmaceutical operations	22.1	1.3	(20.8)	(94.1)
Total	98.1	58.5	(39.5)	(40.3)	114.1		51.3
Asia
MEROPEN® （China)	18.7	10.2	(8.5)	(45.3)	18.7		54.8
Others	7.1	10.6	3.4	48.4	20.4		51.8
Total	25.9	20.8	(5.0)	(19.5)	39.1		53.2

Japan

• Progress is fundamentally on track in total
• Sales of TWYMEEG®, LATUDA®, and LONASEN® Tape continue to grow
• Of the "Export products/Lump- sum revenue, etc." in Q2 FY2022, the lump- sum revenue under the license agreement for DSP-0187 was ¥6.1B
• NHI drug price revision effect (¥2.0B) in total

Asia

• MEROPEN® (China) revenue decreased due to Volume-Based Procurement application

Note: Sales of each product are shown by invoice price (* Trulicity® is shown by NHI drug price)

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