Overview of Financial Results for FY ending September 2016

マスタータイトルの書式設定

© Copyright CMIC

CMIC HOLDINGS Co., Ltd.November 11, 2016

Overview of Financial Results for FY ending September 2016


CFOWataru Mochizuki

Overview of Financial Results for FY ending September 2016

(Oct. 1, 2015 – Sept. 30, 2016)


3© Copyright CMIC

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

Segment Products and services CMIC Group companies (as of end of Sept. 2016)

CRO business Services provided to pharma companies related to contract research and analytical chemistry

CMIC HOLDINGS Co., Ltd.CMIC Co., LtdCMIC-PMS Co., Ltd.CMIC ShiftZero K.K.CMIC Pharma Science Co., Ltd.CMIC, Inc.CMIC Korea Co., Ltd.CMIC ASIA-PACIFIC, PTE, Ltd.CMIC ASIA-PACIFIC (Malaysia) SDN. BHD.CMIC (Beijing) Pharmaceutical Services Co., Ltd.CMIC (Beijing) Co., Ltd.

CMO business Services provided to pharma companies related to prescription drugs and over-the-counter contract manufacturing

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

CSO business Services provided to pharma companies related to sales & marketing support, and BPO and personnel for the healthcare and pharmaceutical industries

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

Health care 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.Healthclick Co., Ltd.CMIC VIETNAM COMPANY LIMITED

IPD business Services related to development and marketing of diagnostics and orphan drugs

CMIC Holdings Co., Ltd.OrphanPacific, Inc.

● Institute of Applied Medicine, Inc. merged with JCL Bioassay Corporation and changed its business name to CMIC Pharma Science on October 1, 2015.● CMIC ShiftZero K.K. was founded on January 13, 2016, becoming a subsidiary of this company.● CMIC Pharma Science merged with CMIC Bioresearch Center, and CMIC CMO merged with CMIC CMO Ashikaga in April 1, 2016.● CMIC‐BS Co., Ltd. changed its trading name to CMIC Career Co., Ltd. and changed its segment to CRO business on October 1, 2016.● Changed segments, renamed CMO business to CDMO business, and IPD business to IPM business, on October 1, 2016.


4© Copyright CMIC

Summary of FY ending September 2016

Project Phoenix – to achieve profit‐driven growth ‐

▸ Achieved a surplus in CMO and SMO businesses

▸ Built a comprehensive support system for oncology, from new drug development to marketing

▸ Built a system that can be provided as a total solution in non‐clinical fields

▸ Strengthened our contract research system in the fields of regenerative and cellular medicine

▸ Restructured domestic CMO business and undertook strategic capital investment for CDMO

▸ Began commercial solutions such as a CSO “syndicated sales force”

▸ Developed in‐vitro diagnostic “L‐FABP” high‐sensitivity kit and new drugs for POC* simple test kits

▸ Expanded sales to achieve a surplus in orphan drug business*Point of care


5© Copyright CMIC

2015/9 2016/9

Amount Composition ratio Amount Composition

ratio Change

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

Sales 55,904 100.0 62,039 100.0 6,134Operating income 1,411 2.5 3,363 5.4 1,951

Ordinary profit 970 1.7 2,989 4.8 2,018Net profit

belonging to parent company

shareholders(542) (1.0) 878 1.4 1,421

Current profit per share (¥29.57) ¥47.00

Consolidated income statement (overview)


6© Copyright CMIC

Sales & operating income by segment2015/9

Amount (¥ millions)2016/9

Amount (¥ millions)Change(¥ millions)

Percent change (%)

CRO businessSales 27,471 29,330 1,858 6.8

Operating income 5,092 4,689 (402) (7.9)

CMO businessSales 13,810 14,167 356 2.6

Operating income (325) 305 630 －

CSO businessSales 8,875 9,712 836 9.4

Operating income 716 905 188 26.3

Healthcare business

Sales 5,640 6,895 1,255 22.3

Operating income (1,188) 172 1,360 －

IPD businessSales 762 2,643 1,881 246.8

Operating income (356) (177) 178 －

AdjustmentsSales (656) (710) (53) －

Operating income (2,526) (2,531) (5) －

ConsolidatedSales 55,904 62,039 6,134 11.0

Operating income 1,411 3,363 1,951 138.2


7© Copyright CMIC

2015/9 2016/9

Ordersreceived Backlog Orders

receivedPercent change Backlog Percent

change

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

CRO business 31,587 42,430 31,764 0.6 44,996 6.0

CMO business 13,350 3,240 14,179 6.2 3,289 1.5

CSO business 10,174 7,247 7,969 (21.7) 5,930 (18.2)

Healthcare business 6,229 8,908 7,415 19.0 9,490 6.5

IPD business 905 327 2,517 177.9 254 (22.3)

Total 62,247 62,153 63,846 2.6 63,961 2.9

Orders received / Backlog

・There has been a lag in new CSO business orders received, but this is recovering.・Orders received for the CRO business in 2015/9 includes a backlog of ¥1.959 billion at the end of Mar. 2015 for consolidated subsidiaries JCL Bioassay (now CMIC Pharma Science) and CMIC, Inc. in 205/H1.・IPD business orders received for 2016/9 includes orders for orphan drugs approved for sales and marketing inherited from Astellas Pharma.・Accounts for only the backlog of firm CMO 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.

ＶＶ


8© Copyright CMIC

Trend in consolidated sales & operating income

25,043 27,471 29,330

13,613 13,810

14,167

7,162 8,875

9,712 7,433 5,640

6,895 498

762

2,643

52,836 55,904

62,039

0

20,000

40,000

60,000

2014/9 2015/9 2016/9

CRO business CMO business CSO business

Healthcare business IPD business

2,766

1,411

3,363

5.2%

2.5%

5.4%

0%

5%

10%

15%

0

1,000

2,000

3,000

4,000

2014/9 2015/9 2016/9

Operating income Operating margin

(656)(915)

(710)

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


9© Copyright CMIC

Contract research organization (CRO) business

Expanded global development projects and in‐country clinical caretaker business. New orders and existing business inmonitoring and post‐marketing survey services are steadily progressing, while sales have exceeded the previous year onadded JCL Bioassay sales. Operating income has come in lower than the previous year due to delays in non‐clinicalbusiness orders and goodwill amortization, including the U.S..

13,899 14,412 14,786

7,446 8,131 8,368

1,441 1,604 1,780 2,542 3,664 4,379 25,043 27,471

29,330

0

10,000

20,000

30,000

2014/9 2015/9 2016/9

Monitoring Data managementPharma consulting/overseas Non‐clinical

*Adjustment

4,830 5,092

4,689

19.3% 18.5%

16.0%

0%

10%

20%

30%

0

2,000

4,000

6,000

2014/9 2015/9 2016/9


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

(340)(286)

+18


10© Copyright CMIC

Contract manufacturing organization (CMO) business

Through efforts at structural reforms, we have improved our price competitiveness and business development capabilities, with order inquiries such as clinical drug contract manufacturing steadily increasing. Sales have exceeded last year’s as contract manufacturing for new orders has steadily increased. Profit has improvedsignificantly and we have recorded an operating surplus as a result of ongoing efforts at cost structure reform.

379

(325)

305

2.8%2.2%

‐20%

‐10%

0%

10%

△ 500

0

500

2014/9 2016/9


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

11,728 11,623 11,909

1,541 1,679 1,774 343 507 483 13,613 13,810 14,167

0

5,000

10,000

15,000

2014/9 2015/9 2016/9

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

2015/9


11© Copyright CMIC

Contract sales organization (CSO) business

CMIC Ashfield worked to strengthen capabilities and to expand existing services. They worked hard to expand service models such as the “syndicated sales force,” Japan’s first commission service. Sales and operating income exceeded last year’s on a steady increase in MR dispatches and existing BPO services.

5,722 6,921 7,397

2,166

1,959 2,314 7,162

8,875 9,712

0

5,000

10,000

2014/9 2015/9 2016/9

CMAS BS

645716

905

9.0%8.1%

9.3%

0%

10%

20%

0

500

1,000

2014/9 2015/9 2016/9



(726)

(5)

*Adjustment


12© Copyright CMIC

Healthcare business

In order to recover from a recent downturn, we continued to move forward with measures to cut costs and bolster project management. Through improvements in business development activities and new orders from the expansion of services to new institutional networks, orders are recovering smoothly. Sales have significantly exceeded last year’s on a steady improvement in new orders and existing business. Profit has improved significantly and we have recorded an operating surplus with development of our management streamlining policy.

6,793

5,014 6,109

510

526

707

179

133

3

7,433

5,640

6,895

0

4,000

8,000

2014/9 2015/9 2016/9

SSI Healthclick Other

(521)

(1,188)

172 2.5%

‐35%

‐30%

‐25%

‐20%

‐15%

‐10%

‐5%

0%

5%

(1,500)

(1,000)

(500)

02016/9



2014/9(50) 2015/9

(34)

+74

*Adjustment


13© Copyright CMIC

Intellectual property development (IPD) business

Diagnostic development began sales and marketing of high‐sensitivity external diagnostics. After the simple test (dip‐test) kit was covered for insurance, we worked to expand the market. Sales and marketing of orphan drugs approved for manufacture and sale by pharmaceutical companies improved sales. Sales significantly exceeded the previous year’s with increased sales of diagnostics and orphan drugs, shrinking the operating loss.

(546)

(356)

(177)

‐20%

‐15%

‐10%

‐5%

0%

5%

(750)

(500)

(250)

0

250

Operating P&L

176 234 301 194

312

1,944

132 217

362

498 762

2,643

0

1,000

2,000

3,000

2014/9 2015/9 2016/9

L‐FABP OP IPD, etc

*Adjustment

2014/9 2015/9


△2

△4

+35

2016/9


14© Copyright CMIC

Balance sheet (assets)(¥ millions)

25,61729,578

34,305

3,9374,251

3,7154,604

5,4395,285

9,154

10,78710,731

5,922

5,804 5,069

49,237

55,861 59,104

0

20,000

40,000

60,000

2014/9 2015/9 2016/9

Cash equivalentsTrade receivablesInventoryOther current assetsFixed assets

Total assets +3,243

■ Cash equivalents

(735)

■ Trade receivables

(56)

■ Inventory (154)■ Other current

assets(536)

■ Fixed assets +4,727


15© Copyright CMIC

Balance sheet (liabilities and net assets)

(¥ millions)

20,309 20,667 21,397

13,40918,070 16,085

4,911

6,414 8,84410,016

9,48211,825

589

1,226 953

49,237

55,861 59,104

0

20,000

40,000

60,000

2014/9 2015/9 2016/9

Accounts payableOther current liabilitiesOther fixed liabilitiesInterest‐bearing debtNet assets

■ Accounts payable

(273)

■ Other current liabilities

+2,342

■ Other fixed liabilities

+2,429

■ Interest-bearing debt

(1,985)

■ Net assets +730


16© Copyright CMIC

2015/9 2016/9 Change

Cash flow from operating activities 889 6,493 5,604

Cash flow from investing activities (3,461) (4,639) (1,178)

Cash flow from financing activities 1,904 (2,391) (4,295)

Translation difference of cash and cash equivalents 21 (153) (174)

Change in cash and cash equivalents (646) (692) (46)

Cash and cash equivalents at beginning of period

5,751 5,638 (113)

Increase in cash andcash equivalents from share exchange

533 － (533)

Cash and cash equivalents at end of period

5,638 4,946 (692)

Cash flow

[Major components]

(Cash flow from operating activities)・Increase in current term net income before tax・Decrease from payment of corporate tax

(Cash flow from investing activities)

・Expenses from acquisition of tangible and

intangible fixed assets

・Expenses from long‐term loans(Cash flow from financing activities)

・Expenses from repayment of short‐term debt from financial institutions and reimbursement of commercial paper

(¥ millions)

マスタータイトルの書式設定Forecast for FY ending Sept. 2017

CMIC‐BS Co., Ltd. (currently CMIC Career Co., Ltd.), which provides BPO and personnel services for the pharmaceutical industry as of October 1, 2016 in line with changes inits organizational system, has changed its reported segment from CSO to CRO, and aportion of the IPD services provided by CMIC Holdings Co., Ltd., to CRO. Therefore, for results for FY ending Sept. 2016, we have published information on calculation methods subsequent to said change as reference data.


18© Copyright CMIC

2016/9results

(¥ millions)

2017/9forecast

(¥ millions)

Change(%)

Sales 62,039 66,500 7.2

Operating income 3,363 3,700 10.0

Ordinary income 2,989 3,420 14.4

Net profit belonging to

parent company

shareholders

878 1,200 36.5

Forecast for FY ending Sept. 2017(¥ millions)

1,411

3,363 3,700

2.5%

5.4%5.6%

0%

5%

10%

0

1,000

2,000

3,000

4,000

5,000

2015/9 2016/9 2017/9EOperating incomeOperating margin


19© Copyright CMIC

2016/9 results(¥ millions)

2017/9 forecast(¥ millions)

Change(%)

CRO businessSales 31,971 35,200 10.1


CDMO businessSales 14,167 14,600 3.0

Operating income 305 350 14.8

CSO businessSales 7,398 7,900 6.8


Healthcare businessSales 6,895 7,200 4.4


IPM businessSales 2,317 2,400 3.6

Operating income (239) (250) －

AdjustmentsSales (710) (800) －

Operating income (2,531) (2,910) －

ConsolidatedSales 62,039 66,500 7.2


Forecast for FY ending Sept. 2017 (by segment)


20© Copyright CMIC

6.15 5.4 6.65 8.35

17 1719.5 17.5 17.5

5

11144.65 5.4

6.658.35

9.513.25

15.5 17.5 17.5

17.5 5

5

10.8 10.8 13.3

16.7

26.5

30.25

35.0 35.0 35.0

22.5

16.0 19.0

16.3% 13.7%

26.5%

27.7%26.1%

30.0%

28.4% 36.3%

54.2%

34.0%

30.0%

0%

10%

20%

30%

40%

50%

60%

0

10

20

30

40

50

2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012/9 2013/9 2014/9 2015/9 2016/9E 2017/9E

Dividends (mid‐term)

Dividend (end of term)

Payout ratio

(Reference) Trend in dividends and payout ratio per share

(¥)

マスタータイトルの書式設定CMIC Group

Business StrategyChairman and CEOKazuo Nakamura


22© Copyright CMIC

Introducing HTA (health technology assessment) Utilizing real world data (RWD) Utilizing big data and AI Facilitate precision medicine

A changing environment for pharmaceutical companies

Promote controls on medical and pharmaceutical expenses, and maintain and improve new drug

development capacity

The pharmaceutical industry is facing major structural changes

マスタータイトルの書式設定Overview ofCMIC


24© Copyright CMIC

CMICʼs unique business model (PVC)

CRO business(Contract Research Organization)

CSO business(Contract Sales Organization)

CDMO business(Contract Development Manufacturing Organization)

Healthcare business(Healthcare)

IPM business(Innovative Pharma Model)

Pharmaceutical Value Creator


25© Copyright CMIC CONFIDENTIAL

CMIC Group area development

Overseas bases:11(Plants: 2)

(Labs: 1)

Labs

Plants

Offices/satellites

In-country bases:

34(Plants: 3)

(Labs: 6)

In-country bases:

34(Plants: 3)

(Labs: 6)

Labs

Plants

Offices/satellites

In-country bases:

34(Plants: 3)

(Labs: 6)

CMIC Korea (Seoul)CMIC CMO Korea (Bucheon)

CMIC CMO USA(New Jersey)

CMIC (Beijing) Pharmaceutical Services

CMIC Asia‐Pacific (Taiwan)

CMIC Asia‐Pacific (Malaysia)

CMIC Asia‐Pacific (Singapore)

CMIC (Beijing) CMIC, Inc.(Illinois)

PlantsLabs

Offices

CMIC VIETNAM

CMIC Asia‐Pacific (Hong Kong)


26© Copyright CMIC

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 13 14 15 16 17E

Sales

Operatingincome

Trend in sales & operating incomeSales

(¥ millions)

Operating income

(¥ millions)


27© Copyright CMIC

Project Phoenix

Initiated Project Phoenixfrom October 2014

To achieve profit-driven growth

Eliminate unprofitable business, reform cost structure Establish corporate culture (CMIC’S creed)

Organizational reform and personnel education for agile management

Offer solutions which utilize PVC feature Offer innovative pharma model platform

Evolve business model for further growth

Phoenix 3.0 (Apr. 2018 – Mar. 2020)

Phoenix 1.0 (Oct. 2014 ‐Mar. 2016)

Phoenix 2.0 (Apr. 2016 – Mar. 2018)

マスタータイトルの書式設定Progress and FutureProspects of Project

Phoenix

マスタータイトルの書式設定CRO businessContract Research

Organization


30© Copyright CMIC

Sales & operating income forecast[CRO business]

22,256

24,969 26,559

29,431

31,971

35,20037,600

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2012 2013 2014 2015 2016 2017E2018E

(¥ millions)

4,151

5,021 5,175 5,497

5,203

5,650

6,300

0

1,000

2,000

3,000

4,000

5,000

6,000

2012 2013 2014 2015 2016 2017E 2018E

(¥ millions)[Sales] [Operating income]

0


31© Copyright CMIC

Drive globalization

More advanced solutions business

Improve contract medical affairs project implementation systems such as Phase IIIb, IV, PMS, and clinical research

Design a cost-effective operations model

“To be #1 in Asia”

CRO business (clinical)


32© Copyright CMIC

• Singapore (HQ)• Taiwan• Malaysia• Hong Kong

Locations in Asia

CMIC HD / CMIC: Japan

TokyoSeoul

CMIC Korea: Korea

BeijingCMIC Beijing: China

Taipei

Malaysia

CMIC Asia-Pacific

Singapore

Hong Kong

Vietnam

CMIC Vietnam

Indonesia

Field-based locations• Philippines• Indonesia

PhilippinesThailand

マスタータイトルの書式設定Non-clinical CRObusiness


34© Copyright CMIC

Non-clinical CRO business analysis facilities

Seamless coordination between labs in the U.S. and Japan

Seamless coordination between labs in the U.S. and Japan

U.S.(CMIC, Inc.)

IshikariQA business

NishiwakiBioanalysisbusiness


35© Copyright CMIC

New animal testing facility

We conduct safety testing related to regenerative medicine such as tumorigenicity testing*

New “bioresearch center” in Kobuchizawa.Validation to be finalized in Jan. 2017

*Test which confirms whether xenogeneic cells transplanted in the body have become cancerous

We consider animal protection and welfareAAALAC (Association for Assessment and Accreditation of Laboratory Animal Care)Fully accredited: Feb. 2007

(Accreditation renewed Mar. 2013)


36© Copyright CMIC

Specialized for pharmaceutical companies Bridge non‐clinical to clinical and CDMO

Compliant with GMP, can conduct materials acceptance tests and product acceptance tests

(Product acceptance tests of macromolecular products are especially advantageous)

Bolster analytical labs in the U.S. U.S.‐Japan coordination (simultaneous tests) Exclusively commission measuring work in North America for major Japanese

pharmaceutical companies Plan to deploy in Europe and China as well in the future

Non-clinical CRO initiatives

Apply

Approve

CPhSAnalysis and measuring work

CMICclinical testing

CDMOcommercial production

CDMOdrug development

CDMOinvestigational new drug manufacturing

CPhSAnalysis and measuring work

CPhSnon‐clinical testing

CMIC PMSPMS

<Comprehensive support based on the development stage of customer products>


CDMO business

Contract Development and Manufacturing

Organization


38© Copyright CMIC

Sales & operating income forecast[CDMO business]

14,908

13,717 13,613

13,810 14,168

14,600 16,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2012 2013 2014 2015 2016 2017E2018E

[¥ millions)1,270

932

379

‐325

305 350

450

△400

△200

0

200

400

600

800

1,000

1,200

2012 2013 2014 2015 2016 2017E 2018E

[¥ millions)[Sales] [Operating income]

0

Target for FY ending Sept. 2021: ¥20 billion in sales and¥1.5-2 billion in operating income


© Copyright CMICSource: Global Pharmaceutical Contract Manufacturing Organization (CMO) Market Emerging Business Models Drive Transformation (Frost & Sullivan, Aug 2016)

Size of global CDMO business market

CMO global market2015 ¥7.27 trillion2020 ¥10.87 trillionCAGR 8.4%

CMO global market2015 ¥7.27 trillion2020 ¥10.87 trillionCAGR 8.4%

US CMO market2015 ¥2.9 trillion2020 ¥4.3 trillion

CAGR 7.8%

US CMO market2015 ¥2.9 trillion2020 ¥4.3 trillion

CAGR 7.8%

EU CMOmarket2015 ¥2.0 trillion2020 ¥2.6 trillion

CAGR 5.6%

EU CMOmarket2015 ¥2.0 trillion2020 ¥2.6 trillion

CAGR 5.6%

APAC CMO market2015 ¥2.0 trillion2020 ¥3.6 trillionCAGR 12.2%

APAC CMO market2015 ¥2.0 trillion2020 ¥3.6 trillionCAGR 12.2%

Japan CMO market2015 ¥0.5 trillion2020 ¥0.7 trillion

CAGR 5.7%

Japan CMO market2015 ¥0.5 trillion2020 ¥0.7 trillion

CAGR 5.7%


© Copyright CMIC

New drug manufacturers

GEmanufacturers

Academia/bioventures

Type of company

▸ Deteriorating profit and deepening loss due to difficulty developing new drugs, NHI price revision, and lower sales of long‐term listed products

▸ Decline in availability at our own plants

⇒ Streamline R&D and production department⇒ Actively commission long‐term listed products to CDMOs

▸ Favorable conditions for promoting use of GE drugs▸ Commit to expanding lineup

⇒ Insufficient production facilities and personnel

▸ Formulate academic seeds, manufacture investigational new drugs, commercial production

⇒Need comprehensive support for development, manufacturing, sales, and marketing

Current status

CDMO business environment paradigm shift


© Copyright CMIC

Sales from commissioned generic drug projects(As of Oct. 2016)

(¥ millions)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021

⽇本⽶国

1,4821,616

1,485

2,503

1,938

3,316

4,228JapanU.S.


42© Copyright CMIC

20132014

2015

2016

2017

2018

2019

2020

Solid agents Semi-solid agents Injections

New injection buildingScheduled Dec. 2018

Highly pharmacological

production building

Increase filling/ packaging line

facilities

Highly pharmacological production line

Reconfigure product line (technology transfer)

High‐alcohol formulation

manufacturing building

Strategic capital investmentShizuoka Toyama Ashikaga


43© Copyright CMIC

PIC/S and trilateral GMP compliant*1: International framework to promote shared manufacturing, the formulation of quality control standards, and

inspection in the drug field*2: Standards on drug manufacturing and quality control stipulated in the U.S., Japan, and Europe

[Background] Advanced production technology and global standards (PIC/S*1 and trilateral

GMP*2 compliant) Accommodates high pharmacological activity and organism-derived

preparations Expand market of anti-cancer agents

Overview of new injection building

Scheduled to be built and operating in Ashikaga Plant in Dec. 2018

© Copyright CMIC

マスタータイトルの書式設定CSO business

Contract Sales Organization


45© Copyright CMIC

Sales & operating income forecast [CSO business]

3,916 3,896

5,722

6,9167,398

7,900

9,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2012 2013 2014 2015 2016 2017E2018E

{¥ millions]

‐16

155

264 312

453 450

600

△100

0

100

200

300

400

500

600

700

800

900

1,000

2012 2013 2014 2015 2016 2017E 2018E

{¥ millions]

[Sales] [Operating income]

0


46© Copyright CMIC

Initiated Japan’s first “syndicated sales force”MR oversees products of multiple companies (non‐competitive segments)92.8%* of doctors at visited sites evaluated this as useful according to the results of a

satisfaction survey

Contact center businessProvide drug information to medical practitioners through remote channels such as

websites.

Medical affairs businessIn addition to dispatching MSLs (medical science liaisons), provide comprehensive support to

the medical affairs departments of pharmaceutical companies.

CMAS initiatives

Aim to improve quality and offer services based on diverse needsAim to improve quality and offer services based on diverse needs

* 194 valid responses in an outsourced questionnaire survey


47© Copyright CMIC

5%

9%10% 9%

10%

13%

16%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2009 2010 2011 2012 2013 2014 2015

No. of CMRs industry‐wide

CMAS industry share (based on no. of MRs)

Expanding share of contract MRs

No. of CMRs industry-wide: Japan CSO Association

(No. of people)

The number of CMRs decreased industry‐wide in 2015,expanding our share of CMAS (No. 2 in industry)

The number of CMRs decreased industry‐wide in 2015,expanding our share of CMAS (No. 2 in industry)


Healthcare businessSite management

organization (SMO)


49© Copyright CMIC

Sales & operating income forecast [SSI]

7,138

7,645

6,793

5,015

6,109

6,420 6,500

3,000

4,000

5,000

6,000

7,000

8,000

2012 2013 2014 2015 2016 2017E2018E

{¥ millions]

773

615

‐525

‐1188

81

300460

△1,400

△1,000

△600

△200

200

600

1,000

2012 2013 2014 2015 2016 2017E 2018E

{¥ millions][Sales] [Operating income]

0

≈


50© Copyright CMIC

Trend in orders accepted [SSI]

(¥ millions)

8,920

7,965

2,751

5,549

6,658 7,150

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2012 2013 2014 2015 2016 2017E


51© Copyright CMIC

Initiatives in SMO business

Evolution & Future Innovation

PM improvement:Start testing early

1 2 3 4

FastSlow

Month

Quality improvement:Decrease in deviations

1 2 3 4 Month

Improve SR* sales capacity:Increase in key HPs

・Basic partnerships up・Specialize in TA

(therapeutic area)

*Site RelationCompliance

マスタータイトルの書式設定IPM businessInnovative Pharma Model


53© Copyright CMIC

Domestic pharmaceutical companies

Marketing Approval Holder (MAH)Acquire manufacturing and distribution license (prescription drugs, generic drugs, quasi‐drugs, in‐vitro

diagnostics, cosmetic medical devices)

Utilize all CMIC’s tools, including development, manufacturing, and distribution

Ministry of Health, Labour and Welfare

Medical institutions/ patients

IPM (Innovative Pharma Model) business: existingproducts

Domestic manufacturingand distribution rights

Products that stray from pharma companies’ strategy,especially long‐term listed products and orphan drugs

Approvalnotification Provision


54© Copyright CMIC

Marketing Approval Holder (MAH)Acquire manufacturing and distribution license (prescription drugs, generic drugs, quasi‐drugs, in‐vitro

diagnostics, cosmetic medical devices)

Utilize all CMIC’s tools, including development, manufacturing, and distribution

Overseas pharma companies without offices in Japan, academia, bioventures

Ministry of Health, Labour and Welfare

Medical institutions/ patients

IPM (Innovative Pharma Model) business: newproducts

Domestic manufacturingand distribution rights

Approval notification/acquisition

Provision

New business strategy options

Candidate drugs

マスタータイトルの書式設定IPM businessInnovative Pharma Model

Status of L‐FABP


56© Copyright CMIC

Assess the validity of biomarkers capable of early detection of progress and deterioration of kidney

disease domestically and overseas

In‐vitro diagnostics

Drug screening

Application to clinical testing

Application to digital health

L-FABP business strategy


57© Copyright CMIC

Human L‐type fatty acid binding protein (L‐FABP) POC* kit

Released on October 21, 2016D001 License fee for quantitative assay of special material in urine: 210 pointsD026 1 urine/feces screening and diagnosis fee: 34 points

*Point of care


58© Copyright CMIC

Domestic and international medical exam programs

“KEN-NYOU” (urinalysis) programOut-patients and community-based screening

JICA‐backed disease control METI/AMED‐backed CKD prevention program in Bangladesh program in Vietnam

Private health insurance data health; kidney high-risk medical exam program


59© Copyright CMIC

Vietnamese Ministry of Industry and Trade medical‐engineering collaboration program activities

Demonstrating L‐FABP POC kits in ICU of Bach Mai Hospital, Hanoi’s largest hospital (Nov. 2016)

Urinalysis event at private elementary school in Hanoi: “KEN‐NYOU urinalysis” project (Nov. 2016)


60© Copyright CMIC

Healthcare app for precise prediction of kidney disease risk(in development as a 2016 AMED program)

NameBirthdate (age)HeightWeightBlood test resultsUrinalysis results

Health score (HS)Disease risk score (DRS)Treatment cost dataHS improvement tipsDRS reduction tipsRecommendations

Daily stepsDistance traveled

Database

Insurance

CMIC/CLS*

User

Datacollection

The app can visualize individuals’ health risks by collecting, analyzing, and indexing data from medical checkups and daily activities. This can help prevent

disease and improve health.

Analysis

Healthcare data analysis tool

健康指標TodayDashboardDaily stepsHealth scoreProspective costLiked tips

CMIC Health app

Send to dr.& patients

* CytoLine Solutions K.K.

Health index

マスタータイトルの書式設定Topics


62© Copyright CMIC

90 950 10,000

25,000

170 950

5,500

13,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2012 2020 2030 2050

周辺産業

製品・加⼯品

1,000 10,000

120,000

380,000

2,400 10,000

52,000

150,000

0

100,000

200,000

300,000

400,000

500,000

600,000

2012 2020 2030 2050

周辺産業

製品・加⼯品

Scale of the regenerative medicine market

(¥100 millions)

(¥100 millions)

[Domestic][Global]

Source: Conference on the practical applications of regenerative medicine and the industry. “Paper on the practical applications of regenerative medicine and the industry ‐ final report” (February, 2013)

Peripheral industries

Manufactured and processed goods

Peripheral industries

Manufactured and processed goods


63© Copyright CMIC

Regenerative medicine program

[Program background]

Different from normal drug development, requires testing and data based on product specifications

Increase in projects that have advanced to clinical trial stage Domestic: mainly development by bioventures and academia Overseas: ambitiously pursue entering Japan, where we can expect to go to market early Communication with regulatory authorities is important

We need to be thoroughly familiar with the specifications of regenerative medicine products

and the Japanese medical affairs system


64© Copyright CMIC

CMIC Groupʼs approach to regenerative medicine business

2015, May Established “Regenerative Medicine Group” in the Medical Affairs Consulting Department2016, June Completed new test building adapted to regenerative medicine biological safety testing2016, July Business partnership with Medinet, which excels at cell production, with the aim of providing

seamless service in the regenerative medicine and cellular therapy fields2016, October Established the “Regenerative Medicine Clinical Development Department”Future Increase personnel and further improve expertise

Consulting servicesCommissioned for about 40 projects from 17 companies (including international companies)Type of products commissioned・Cultured cells (allogeneic, xenogeneic) ・Stem cells (allogeneic, xenogeneic)・iPS cell‐derived products ・Cancer vaccine ・Gene therapy drugs・Nucleic acid drugs, etc.

[Major initiatives]

マスタータイトルの書式設定Vietnam business


66© Copyright CMIC

CMIC VIETNAM

CMIC VIETNAM COMPANY LIMITED

Room S.31, 31F, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City, Vietnam


67© Copyright CMIC

What is Vistar?

Operate “Vistar Pharmacy,” a pharmacy chain in VietnamFounded: 2015Number of stores: 19 stores (4th in Vietnam)

Obtained GPP chain certification (2016/8; the 3rd pharmacy chain certified in Vietnam)- Good Storage Practices (GSP) in March 2016- Good Distribution Practices (GDP) in March 2016- Good Pharmacy Practices (GPP) for each drugstore


68© Copyright CMIC

Objectives of Vietnam business through Vistar

Establish business foundations in Vietnam, where the medical affairs system is undeveloped and the market has tremendous

prospects for future growth

Clinical trial business

Local authorities collect information

by creating a network related to the healthcare industry and

personnel market.

Healthcare solutions business

While there is a pronounced trend towards health consciousness in Vietnam, much of the health industry

is still undeveloped.

Drug licensing business

Utilize local bases to promote drug licensing business as soon as possible once the system is

ready.

Pharmacy business

With significant room for growth, high affinity when deploying CMIC

core business such as CRO in the

future.

マスタータイトルの書式設定Mid‐term accounting plans


70© Copyright CMIC

Sales ¥62.039 billionOperating income ¥3.363 billion

Achieved

55,904

63,200 67,100

71,700

1,412

2,300

3,700

4,800

0

1,000

2,000

3,000

4,000

5,000

6,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2015 2016E 2017E 2018E

CRO CMO CSO Healthcare IPD

Mid-term accounting plans (announced Nov. 2015)Sales

{¥ millions)Operating income

{¥ millions)Sales ¥66.5 billionOperating income ¥3.7 billion

Forecast

マスタータイトルの書式設定Establishing corporate culture

CMICʼS CREED


Since we are at turning point, our needs are increasingly sophisticated and diversified.

To respond to them, we need to transform ourselves. But, thereʼs one thing that should not change:

“CMICʼS CREED”.

72

With unchanging determination at heart, we change


「CMICʼS CREED」

Our CREEDWe are determined to bring innovation to healthcare so that

all people, regardless of age and gender, can live their precious lives according to their will. This is our aspiration as

the CMIC Group.

Whether in childhood, when brilliance has yet to blossom, or in late adulthood, when potential has bloomed, we respect every individualʼs drive to live fully in the moment. We shall sincerely address each and every life. We shall overlook no

one.

To achieve this, we shall continually challenge ourselves to strive for a better future. We shall transform ourselves, seek new vantage points, turn our unwavering passion into values,

and continue to contribute to individuals and society.

73With unchanging determination at heart, we change


74© Copyright CMIC

Creed workshop

May 2016 - CMIC, Inc.

May 2016 - CMIC CMO USA


75

W&3C CMIC culture: ”Wellbeing”

and the 3 Cs

Thank you for your attention.

With unchanging determination at heart, we change

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 many 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.

Overview of Financial Results for FY ending September 2016

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