George Nakayama - Pharma Delegatespharmadelegates.jp/wp-content/uploads/2016/09/20160921 PharmaDelegates Daiichi Sankyo...Source: Internal analysis based on Symphony Health Solutions,

George Nakayama President and CEO Daiichi Sankyo Co., Ltd.

Pharma Delegates Luncheon Meeting, Tokyo September 21, 2016

Forward-Looking Statements Management strategies and plans, financial forecasts, future projections and policies, and R&D information that Daiichi

Sankyo discloses in this material are all classified as Daiichi Sankyo’s future prospects. These forward looking statements

were determined by Daiichi Sankyo based on information obtained as of today with certain assumptions, premises and future

forecasts, and thus, there are various inherent risks as well as uncertainties involved. As such, please note that actual results

of Daiichi Sankyo may diverge materially from Daiichi Sankyo’s outlook or the content of this material. Furthermore, there is

no assurance that any forward-looking statements in this material will be realized. Regardless of the actual results or facts,

Daiichi Sankyo is not obliged and does not have in its policy the duty to update the content of this material from the date of this

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Daiichi Sankyo takes reasonable care to ensure the accuracy of the content of this material, but shall not be obliged to

guarantee the absolute accuracy, appropriateness, completeness and feasibility, etc. of the information described in this

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This material disclosed here is for reference purposes only. Final investment decisions should be made at your own discretion.

Daiichi Sankyo assumes no responsibility for any damages resulting from the use of this material or its content, including

without limitation damages related to the use of erroneous information.

1

Brief History of Daiichi Sankyo Current Status 2025 Vision 5-Year Business Plan and Beyond Growth beyond FY2017 LOE Edoxaban Japan Business Pain Franchise

Establish Foundation of Oncology Beyond Horizon: Cell Therapy

Conclusion

Agenda

2



Conclusion

Agenda

3

Daiichi Sankyo, an Innovative Pharmaceutical Company Since Its Founding

Daiichi Sankyo

Edoxaban

Olmesartan Pravastatin

Levofloxacin

Sankyo Daiichi

Pharmaceutical

Dr. Jokichi Takamine Dr. Katsuzaemon Keimatsu

2007

1899 1915

4



Conclusion

Agenda

5

Daiichi Sankyo Global Sales FY2015 Revenue: JPY 986 Billion

28%

58% 8%

Japan

Europe

North America

Other areas

Geographies

9%

10%

41%

9%

Cardiovascular-metabolic

Gastro-intestinal

Blood

Musculoskeletal

Therapeutic Areas*

6%

5% 4%

21%

Systemic Anti-infectives Central Nervous System

Oncology & Immunomodulators

*Source: EvaluatePharma® 2015 Sales

1%

Other RX/OTC products

6

6 42 88

128 147

173 33

39 40

45 16

10

121

167

209

268

FY2012 FY2013 FY2014 FY2015

(USD Million) Currency rate : JPY/USD=120

anti-hypertension

Olmesartan (Benicar® : US Olmetec® : JP, EU)

antiplatelet

Prasugrel (Effient® : US Efient® : JP, EU)

anticoagulant

Edoxaban (Savaysa® : US Lixiana® : JP, EU)

Not disclose

Not disclose

Major Global Products

793 813 789 768

790 936 888 930

401 547 544 491 173 206 225 180 2,157

2,502 2,446 2,368

FY2012 FY2013 FY2014 FY2015

OthersEUUSJapan

30

108

6

3 13

3 3

36

124

FY2012 FY2013 FY2014 FY2015FY2012 FY2013 FY2014 FY2015

Others EU US Japan

124

7

Lixiana®

(anti-coagulant)

Ranmark®

(bone metastasis)

Effient®

(antiplatelet)

Canaglu®

(anti-diabetic)

Memary®

(anti-Alzheimer)

Nexium®

(anti-ulcer)

Tenelia®

(anti-diabetic)

Pralia®

(osteoporosis)

Sales Pipeline Success

(anti-cancer) (antiplatelet)

Japan (anti-coagulant)

Global MovantikTM

(opioid induced constipation)

: acquired or in-licensed products 8

http://www.zelboraf.com/patient/?cid=gne_WE_00000083

as of March 2016

16,000 Worldwide Employees

- Germany - UK - Ireland - France - Spain - Portugal - Italy - Netherlands - Belgium - Austria - Switzerland - Turkey

- China - South Korea - Taiwan - Hong Kong - Thailand - India - Brazil

- Venezuela

EU 2000

Asia 1900

Latin America 500

US 2300

Japan 8600

Our Global Prominence

9

FY2017 LOE

(USD Million) *Currency rate: JPY/USD=110

anti-hypertension

Olmesartan (Benicar: US Olmetec: JP, EU)

Olmesartan LOE US in October 2016 EU/Japan early 2017

719 693 671 618

857 700 661 382

376 309 281

218

224 245 196

172

2,176 1,947 1,809

1,390

FY2013 FY2014 FY2015 FY2016

OthersEUUSJapan

(estimate)

10



Agenda

11

Management Policy Transformation

• CVM area • PCP focus • Global products • In-house • Sales volume

Until 2015

12



Until 2015

2025 Vision

• Oncology area • Specialty area • Regional value • Alliance • Sustainable profit

growth

13



Until 2015

2025 Vision

2016-2020 5-Year Business

Plan

Transformation toward 2025 Vision

• Oncology area • Specialty area • Regional value • Alliance • Sustainable profit

growth

14



Agenda

15

Growth beyond FY2017 LOE Edoxaban Japan Business Pain Franchise

16

Growth beyond FY2017 LOE Edoxaban (Lixiana®, Savaysa®) Japan Business Pain Franchise

17

Edoxaban: Japan

Latest market share reached: 13.5% (Apr. 2016 ~ Jun. 2016)

0

10

20

30

40

50

FY2014Q2 FY2014Q3 FY2014Q4 FY2015Q1 FY2015Q2 FY2015Q3 FY2015Q4 FY2016Q1

LixianaProduct AProduct BProduct C

Market Share: 13.5%

（%）

©2016 IMS Health Calculated based on JPM 2014. Oct.-2016. Jun. Reprinted with permission 18

101

214

431

749

0

200

400

600

800

1,000

1,200

2011 2012 2013 2014 2015

Growth of Global DOAC* Market

120 JPY/USD

1,100 2% 5% 11% 18%

0%

20%

40%

60%

80%

100%

2011 2012 2013 2014 2015

25%

DOAC VKA (vitamin K antagonists)

VKAs vs. DOACs - Volume (DOT) (Bn JPY)

*DOAC : Direct Oral Anticoagulant , same meaning as NOAC (novel oral anticoagulant) ©2016 IMSHealth Calculated based on IMS MIDAS Sales Data 2011-2015 Reprinted with permission

DOAC market trend

19

Expand as Growth Driver for Mid- to Long Term

Execute launch strategy Appeal product profile continuously Generate new evidence to strengthen product

• Ensure-AF, Hokusai-VTE Cancer etc. • ENTA Registries

14.7

69.0

Global strategies Over 120 Bn JPY (1 Bn USD) in FY2020

Regional strategies Japan

Utilize product profile and fine-tuned sales capabilities with high quality

Nurture into Japan’s No. 1 DOAC

US* Acquire prescriptions through specifically targeted promotions Improve market access

Europe Conduct promotion across Europe through

collaboration with MSD*

ASCA and other regions Realize early approval and launch in all countries of operation Conduct promotion through collaboration with best partners

*MSD: Merck Sharp and Dohme Europe Subsidiary of Merck & Co., Inc.

* Conservative assumption that insurance reimbursement status in United States will remain unchanged

FY2015 FY2017 FY2020

(Bn JPY)

Others Japan/ Europe

20

FY2017 LOE

Olmesartan Benicar, Olmetec etc

Prasugrel Effient, Efient

Levofloxacin

Pravastatin

FY2007 FY2012 FY2016 FY2020

Edoxaban Lixiana, Savaysa

Oncology etc.

21

22


Japan: 4 Businesses

Innovative about 440Bn JPY

Daiichi Sankyo

OTC about 53Bn JPY

Daiichi Sankyo Healthcare

Vaccine about 36Bn JPY

Kitasato Daiichi Sankyo Vaccine

Japan Vaccine

Generic about 18Bn JPY

Daiichi Sankyo Espha

23

Japan: Major Products

73 92

112 118

2013 2014 2015 2016

29 66

113 145

2013 2014 2015 2016

302 334 385 463

2013 2014 2015 2016

For No.1 market share company in Japan

(USD Million) *Currency rate: JPY/USD=110

anti-ulcer (PPI) Nexium

treatment for alzheimer’s disease Memary (Namenda)

treatment for osteoporosis Pralia (Prolia)

treatment for bone metastases Ranmark (Xgeva)

(estimate) (estimate)

492 630

749 727

2013 2014 2015 2016

(estimate) 2013 2014 2015 2016

(estimate) 2013 2014 2015 2016

(estimate) 2013 2014 2015 2016

24

Grow Major Products in Japan

170

243 Product strategies

Nexium (anti-ulcer; Proton Pump Inhibitor) Maintain No. 1 share by establishing position as “first choice” drug for GERD* treatment

Memary (treatment for Alzheimer’s Disease) Standardize combination therapy with ChE** inhibitor for the treatment of moderate-to-severe AD*** by provision of clinical evidence

Pralia (treatment for osteoporosis) Expand market penetration by promoting high evaluation received by guideline Further growth by additional indication of rheumatoid arthritis

Ranmark (treatment for bone metastasis ) Maintain position as standard of care for treating bone metastasis of cancer Further growth by additional indication of breast cancer

Effient (antiplatelet) Maintain dominating No. 1 share in heart area by promoting dosage ideal for Japanese Lead next generation of antiplatelet treatment in Japan by additional indication of brain area

Teneria (treatment for type 2 diabetes) Appeal efficacy and ease of use for elderly people and patients with renal impairment to aim for first-line treatment for diabetes and expand market share

Maintain growth by existing products and additional indications

Red：additional indication (Planned)

226

*GERD: Gastroesophageal Reflux Disease **ChE: Cholinesterase ***AD: Alzheimer‘s disease

FY2015 FY2017 FY2020

(Bn JPY)

Total of 6 products in right column (excl. Lixiana), Including the impact of mandated price revisions 25

New Products and Additional Indications

New product - Lacosamide (Epilepsy) - VN-100 (Seasonal flu vaccine)

New product - Hydromorphone (Cancer pain) - Etanercept BS (Rheumatoid arthritis) - VN-0107/MEDI3250 (Seasonal flu

vaccine as a nasal spray) Additional indication - Prasugrel (Ischemic stroke) - Denosumab (Rheumatoid arthritis)

New product - Mirogabalin (DPNP, PHN)*

New product - CS-3150 (Hypertension) - Quizartinib (Acute myeloid leukemia) - VN-0105 (DPT-IPV/Hib vaccine)

New product - VN-0102 (Measles-Mumps-Rubella

vaccine) Additional indication - Denosumab (Breast cancer adjuvant)

Seamless launch of new products and additional indications

FY2016 FY2017 FY2018 FY2019 FY2020

*DPNP: Diabetic peripheral neuropathic pain PHN : Postherpetic neuralgia

New product - Nine Bio-Similar Products (from Amgen)

26

Growth of Japan

Business

Fine-tuned sales

capabilities

Acquire valuable new

products

Sales growth of acquired

products

Process for Sustainable Growth

Realize sustainable growth by leveraging No.1 sales capabilities of leading company in Japan

Top class sales capabilities in quantity and

quality

No.1 market share

No.1 evaluation

Continuous launch & sales growth of own

products

27


28

25%

18%

23%

5%

5%

12%

3% 5%

2%

* Immediate-Release Opioid, ** Extended-Release Opioid † Pain management use only

Source: Internal analysis based on Symphony Health Solutions, PHAST Integrated Monthly, 2007-2015 and Encuity 2007-2015

Large, Growing Market with Diverse Segments

U.S. Pain Market Gross Sales (US$ Billion)

2015: $28 Billion ‘07-’15 CAGR 6.6%

330~ Million TRx

Anesthetics 1%

ERO**

Non-narcotic analgesics

Anti-epileptics†

Pregabalin Anti-migraine

TCAs† SNRIs† 1%

IRO* >30 days

Mirogabalin

CL-108

Movantik

Acute IRO*

(<15 days)

Other Non-Acute IRO* (>15 days & <30 days)

U.S. Pain Market Holds Great Opportunity

9 10 11 11 12 11 11 13 13

17 19 19 20 21 22 23

26 28

2007 2008 2009 2010 2011 2012 2013 2014 2015

OthersOpioids

29

Movantik

First once-daily oral product FDA approved for the treatment

of opioid-induced constipation (OIC) for adults with chronic

non-cancer pain

Co-promotion with AstraZeneca from FY15 and 1.3 billion

yen revenue up to December 2015

While the reported occurrence of OIC varies, it affects

roughly 40% of patients in clinical trials who were taking

opioids for chronic pain

30

Novel, opioid-containing formulation for the management of

pain severe enough to require an opioid analgesic while

preventing or reducing the associated opioid-induced

nausea and vomiting (OINV) when alternative treatments for

pain are inadequate

Reports in the literature suggest approximately 40% of

patients experience OINV, and the incidence may be higher

in clinical practice

Met primary endpoints in two pivotal Ph3 studies

CL-108

Hydrocodone 7.5 mg / Acetaminophen 325 mg +

Promethazine 12.5 mg (Rapid release)

31

Mirogabalin

If approved, mirogabalin may provide a new therapeutic

option for patients in the US with pain associated with

fibromyalgia

The α2δ-ligand Market as large as 64MM Prescriptions

in 2015

Ph3 control drug: pregabalin - U.S. Net sales reached

$2.7 Billion in 2015

Pain associated with fibromyalgia has a substantial

impact on the 5 to 7 million adults – the majority of

whom are women - in the US with the condition.

Top line results anticipated 1H CY2017 Sources: Sales reported by Pfizer in Q4-2015 earnings; EvaluatePharma® 32

Rapid Growth in Pain Franchise

FY2015 FY2017 FY2020 Mirogabalin

KSF & main tactics

Movantik Raise awareness of burden of OIC Inspire a conversation about OIC Deliver affordable access

CL-108: Targeted launch in FY 2017 Raise HCPs’ OINV awareness Engage the medical community

Mirogabalin: Targeted launch in FY 2019 Differentiate from pregabalin based on Ph3

results

Movantik, CL-108

>100 Bn JPY business in FY2020

33



Conclusion

34

Agenda

DS-3032

NME of clinical pipeline

Phase III

Phase II

Phase I

efatutazone (CS-7017)

tigatuzumab (CS-1008)

nimotuzumab (DE-766)

tivantinib (ARQ 197)

U3-1287




denosumab (AMG162)

NDA

3

6

• Maximizing internal assets

• Acquisition of external assets

FY2006 FY2008 FY2010 FY2012 FY2014

Launch

PLX3397

U3-1565

vemurafenib (PLX4032)


U3-1287




denosumab (AMG162)

DS-2248

PLX3397

DS-7423



U3-1287




denosumab (AMG162)

DS-2248

U3-1565

DS-3078

ARQ 092

U3-1287




denosumab (AMG162)

DS-7423

DS-3078

DS-6051

13

10

DS-8895

DS-5573

DS-3032

DS-8273

U3-1565

17

FY2016

PLX9486



patriumab (U3-1287)


denosumab (AMG162)

PLX51107

PLX8394

DS-6051

DS-8895

DS-5573

DS-8273

U3-1784

21

quizartinib (AC220)

pexidartinib (PLX3397)

DS-8201

Steady growth of Oncology Pipeline

PLX7486

DS-1123

DS-3201

PLX73086/AC708

PLX3397

PLX7486

PLX8394 35

quizartinib (AC220)

Multi-category of Cancer Targeted Therapy

Gene Gene Mutation

Immune cell

Gene Fusion ROS1 NTRK

BRAF FLT3 KIT

EZH1/2 IDH MET

CSF1R HER3 EGFR

MDM2 FGFR4 BRD4 TBD

Gene Amplification/ Overexpression

Cancer cell

Suppression

CSF1R B7-H3* EPHA2* FGFR2*

Activation

Activation

HER2-ADC TBD

New modality

Immune suppression

Preclinical and clinical projects

*ADCC

36

Oncology Business Expansion

Late-stage development TLR NDA

• quizartinib • tivantinib • pexidartinib • patritumab

2015 2017 2020 2025

approval

• DS-8201 • DS-3201 • DS-3032 • DS-6051

Late-stage development TLR NDA

Early-stage development

approval

Innovative

technology etc.

New in-license

Late-stage development

Late-stage development

approval

Pre-clinical

Early-stage development

• vemurafenib • denosumab

Approx. 300.0 Bn JPY

40.0 Bn JPY

Contribution to Revenue

(Image) 37

Glo

bal R

&D

Uni

t R&D Planning

Project Management

Development Other TAs Oncology

Biologics New modality Anti-body

Research Other TAs Oncology

Plexxikon

Venture Science Labs.(VSL)

Asubio

Accelerate Oncology R&D by New R&D Organization

<Global Structure - before April 2016>

38

Accelerate Oncology R&D by New R&D Organization

<Global Structure – as of April 2016> G

loba

l R&

D U

nit

R&D Planning & Management

Project Management

Oncology R&D Unit

Biologics & Immuno-Oncology Labs.

Oncology Labs.

Oncology Clinical Development

Development Function (excl.

Oncology)

Research Technology Function

Research Function (excl. Oncology)

Pain & Neuroscience Labs.

End-Organ Disease Labs.

Rare Diseases & LCM Labs.

Cell Therapy Labs VSL

Asubio

Plexxikon 39

Global Head, Oncology R&D, Antoine Yver

+ Yver A, Osimertinib (AZD9291)—a science-driven, collaborative approach to rapid drug design and development Annals Oncology April 2016 (on line)

• Former Pediatrician Oncologist, academic faculty Paris, France

• Former Head, Oncology Global Medicines Development at AstraZeneca (2009-2016)

• 26 years pharma experience in global R&D, including early & late phase development and licensing

• Global clinical leader for 12 marketing applications in oncology, 4 new drugs

• In addition, in 2015: olaparib (PARPi), osimertinib (3rd-G mut-EGFRi T790M)+

• Multinational line management experience for development functions, including Japan R&D and China R&D

40

Target Therapeutic Area

Pain

• Generate drugs for pain complementing MOA of current development pipeline

Continuously generate innovative medicine changing Standard of Care

Oncology（incl. Immuno-Oncology） Generate molecular target drugs with potential

to cure or prolong life significantly by mono therapy or combination

CNS* diseases • Generate drugs for

neurodegenerative disease through collaborative research with UCSF

Heart Kidney diseases • Utilize accumulated

knowledge

• Utilize collaborative research with Sanford Burnham

Rare diseases • Optimize modality,

such as nucleic acid, antibody and small molecule

Partnering, Open Innovation Translational Research

New horizon Area

Primary Focused Area

41



Conclusion

Agenda

42

Accelerate Cell Therapy Research by New R&D Organization

<Global Structure – as of April 2016> G

loba

l R&

D U

nit

R&D Planning & Management

Project Management

Oncology R&D Unit

Development Function

Research Technology Function

Research Function

Pain & Neuroscience Labs.

End-Organ Disease Labs.

Rare Diseases & LCM Labs.

Cell Therapy Labs. VSL

Asubio Regenerative Research

Plexxikon 43

Realize Clinical Application of Innovative Technology: Cell Therapy

Explore seeds utilizing alliances and move them forward to commercialization quickly

• Launch open innovation research to develop the new capillary stem cells (“CapSCs”) discovered by Jun-ichi Kawabe, a professor of Asahikawa Medical University, into a cell source for regenerative medicine and cell therapy

• License agreement with UK-based Cell Therapy Ltd. (currently Celixir) for an exclusive license in Japan to develop and market Heartcel™, a immune-modulatory progenitor (iMP) cell, therapeutic agent for ischemic heart failure

44


Establish Foundation of Oncology Beyond Horizon : Cell Therapy

Conclusion

Agenda

45

Investment for future growth

Investment Policy for Future Growth

Highest priority investment: Oncology

R&D expenses Approx. 900 Bn JPY

Business development investments

Approx. 500 Bn JPY

Japan Business

Pain Franchise 46

Recent Partnerships and Acquisitions

47

WHO WHEN AREA HIGHLIGHTS

2011 Global Oncology Therapeutic research areas include oncology, CNS and autoimmune disorders, and neuroinflammatory and cardiorenal diseases

2014 Global Oncology

Now fully integrated into Daiich Sankyo, "Ambit was focused on the discovery and development of medicines to treat unmet medical needs in oncology by inhibiting enzymes that are important drivers for those diseases. The lead drug candidate, quizartinib, is currently in phase 3 clinical trials among patients with a specific type of acute myeloid leukemia (AML).

2016 Japan Market Oncology

Commercialize nine biosimilars in Japan, including biosimilars of adalimumab, bevacizumab and trastuzumab.

2014 Japan Market Co-commerciallization agreement in Japan for Lacosamide(brand name “Vimpat®” for epilepsy.

2014 Pain Franchise

Co-development and co-promotion of CL-108, an investigational potential treatment for moderate to severe acute pain, while reducing the occurrence of OINV, the nausea and vomiting that can often accompany the use of opioids

2015 Pain Franchise

A co-commercialization agreement for a medication indicated for the treatment of opioid-induced constipation (OIC) in adult patients with chronic non-cancer pain

FY2020 Financial Targets

FY2015 (Forecast)

FY2017 (Target)

FY2020 (Target)

Revenue (Bn JPY) 980 940 1,100

Operating Profit (Bn JPY) 130 100 165

Assumption Exchange Rate: 1USD=120JPY, 1EUR=130JPY

ROE: 8% or more (FY2020)

Total return ratio: 100% or more (during 5YBP)

Annual ordinary dividends: more than 70 JPY (during 5YBP)

48


Until 2015

2025 Vision

Global Pharma Innovator with Competitive Advantage in Oncology

To have Specialty area business centered on Oncology business as the core business

To have enriched regional value products aligned with regional market

To have innovative products and pipeline changing Standard of Care

To realize shareholders’ value through highly efficient management

2016-2020 5-Year Business

Plan

Transformation toward 2025 Vision

49

Thank you for your attention

Documents

George Nakayama - Pharma Delegatespharmadelegates.jp/wp-content/uploads/2016/09/20160921 PharmaDelegates Daiichi Sankyo...Source: Internal analysis based on Symphony Health Solutions,