Ophthalmology is our singular focus Akira Kurokawa President & CEO, Santen Pharmaceutical Co., Ltd. J.P. Morgan Healthcare Conference January 8, 2018 Disclosure Notice • Information given in presentation contains certain forward-looking statements concerning forecasts, projections and plans whose realization is subject to risk and uncertainty from a variety of sources. Actual results may differ significantly from forecasts. • Business performance and financial condition are subject to the effects of medical regulatory changes made by the governments of Japan and other nations concerning medical insurance, drug pricing and other systems, and to fluctuations in market variables such as interest rates and foreign exchange rates. • The process of drug research and development from discovery to final approval and sales is long, complex and uncertain. Individual compounds are subject to a multitude of uncertainties, including the termination of clinical development at various stages and the non-approval of products after a regulatory filing has been submitted. Forecasts and projections concerning new products take into account assumptions concerning the development pipelines of other companies and any co-promotion agreements, existing or planned. The success or failure of such agreements could affect business performance and financial condition significantly. • Business performance and financial conditions could be affected significantly by a substantial drop in sales of a major drug, either currently marketed or expected to be launched, due to termination of sales as a result of factors such as patent expiry and complications, product defects or unforeseen side effects. Santen Pharmaceutical also sells numerous products under sales and/or manufacturing license from other companies. Business performance could be affected significantly by changes in the terms and conditions of agreements and/or the non-renewal of agreements. • Santen Pharmaceutical is reliant on specific companies for supplies of certain raw materials used in production. Business performance could be affected significantly by the suspension or termination of supplies of such raw materials if such and event were to adversely affect supply capabilities for related final products. • This presentation includes discussions of certain Santen products marketed in certain markets and compounds in clinical trials, as well as competitors and their products and compounds in clinical trials which are given for illustrative purposes only. Such discussions may include views subject to data interpretation that may or may not be views shared by regulatory authorities in the various regions in which the Company operates. 2 Agenda Santen Overall High-Potential Ophthalmology Market Santen Business Growth In Summary 3 Santen Overall 4 Santen’s Core Values By focusing on ophthalmology, Santen develops unique scientific knowledge and organizational capabilities that contribute to the well-being of patients, their loved ones and consequently to society. 5 To Become a Specialized Pharmaceutical Company with a Global Presence ~2013 2014~2017 ~2020 Overseas sales: Become Global Top 3 Rank #5 globally 30％ of total sales Overseas sales: 40~50％ of total sales Overseas sales: • Grow business in Asia/EMEA and “T o Become a Specialized improve profitability 16% of total sales Pharmaceutical Company • Prepare for business expansion to the U.S. and other regions with a Global Presence ” OVERALL RESULTS Product Development Business Expansion Organization & Talent • Approval, Launch: Tapcom, Ikervis • Overseas sales: 29.6% (FY17 H1) • New HR appraisal system • Development: DE-109, 117, 122 • Growth in Asia: 27.1% (Sales CAGR) • Training for the next generation • Licensing, Acquisition: DE-126, 128 • Growth in EMEA: 30.7% (Sales CAGR) 6 Strategic Progress Over Last 12 Months • Strong, faster-than-market consolidated revenue growth: FY17 H1: +13%1 Business • Japan FY17 H1 YoY1 growth: pharma +7% (now #1 in all 5 major categories2); OTC +25% growth • Robust growth continues from overseas businesses in FY17 H1: Asia +24%, EMEA +22%3 • Established a corporate venture capital fund in U.S. to strengthen strategic investment activities • DE-089 (Diquas) approved for dry eye in China • DE-117 (omidenepag isopropyl) met primary endpoint and filed for treatment of glaucoma and ocular Regulatory hypertension in Japan news • Beyond EMEA, new Ikervis approvals received in Singapore, S. Korea, Hong Kong and Taiwan • Positive CHMP opinion received for Vekacia for severe vernal keratoconjunctivitis • DE-126 (sepetaprost) initiates P2b for glaucoma in U.S. and Japan Portfolio • DE-128 (InnFocus MicroShunt) for primary open angle glaucoma completes P2/3 study enrollment progress • DE-122 initiates P2a for wet AMD New • DE-127 (atropine sulfate) targeting myopia added to pipeline, now preparing phase 2 pipeline • DE-114A (epinastine HCI, high dose) for allergic conjunctivitis, phase 3 7 1Year-on-year growth for the six month period ended September 30, 2017 2Glaucoma, VEGF, dry eye, infection and allergy 3Local currency basis Santen is a Leading Pharmaceutical Company Specialized in Ophthalmology Ophthalmology Specialization Growing Global Market Presence • Broad product line-up focused on unmet Annual growth rate of global medical needs +6% ophthalmic market from 2013 to 2020 • Market leader in Japan and Asia  Strong market position Annual growth rate of Santen revenue Japan: 46%, #1 market share +10.5% from FY2013 to FY2017 China: 13%, #2 market share  Growing productivity and efficiency +29.6% Santen’s overseas sales in FY2017 H1 (JPY billions) CAGR ++1100..00%% 24 Asia, EMEA and US subsidiaries 42.5 45.0 42.8 49.0 EBITDA 33.5 >60 countries Global sales FY13 FY14 FY15 FY16 FY17 FCST Striving to further contribute to ophthalmic treatments and patients around the world 8 Santen’s Market Share: FY base ended March 2017 (Japan) and CY2016 base (China) Source: Copyright © 2017 QuintilesIMS, Calculated based on IMS-JPM 2016-2017 data and IMS-MIDAS 2016 data, reprinted with permission Santen’s Strength High Customer Satisfaction (CS) based on Specialized Expertise and Strong Business Base Specialized Expertise Strong commitment to ophthalmic treatments • Products and services covering total patient care Visualizing onset risk, implementing early diagnosis, providing differentiated products, and improving compliance • Addressing unmet needs through all steps in treatment Strong Business Base Japan ophthalmology market (FY16): 345.5b yen Increasing Market Total Santen share: 46%, market leader in #1 share in all categories presence in Climbing to Japan Anti-glaucoma 32.2% (#1) EMEA top market Anti-VEGF 72.4% (#1) * share in Asia Corneal / dry eye 62.7% (#1) -China: 13% #2 Anti-allergy 42.9% (#1) -Korea: 14% #2 Anti-infection 44.1% (#1) Santen’s Market Share: FY base ended March, 2017 (Japan) and CY2016 base (China, Korea), *Including co-promoted product of Bayer Yakuhin, Ltd. (MAH) 9 Source: Copyright © 2017 QuintilesIMS, Calculated based on IMS-JPM 2016-2017 data and IMS-MIDAS 2016 data, reprinted with permission Market Leader in Japan- Success in Eylea Sales* Tremendous Eylea success shows Santen’s strong market position 72.1% Share in Sep 2017 (JPY billions) 8 100% Eylea 7 Others EEyylleeaa share 6 75% 5 4 50% 3 2 25% 1 0 0% Oct.2012 Oct.2013 Oct.2014 Oct.2015 Oct.2016 *Eylea is co-promoted with Bayer Yakuhin, Ltd. (MAH) 10 Source: Copyright © 2017 QuintilesIMS. IMS-JPM 2012-17 Santen analysis based on IMS data Reprinted with permission