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Financial Results PresentationQ3 FY2010

(Fiscal Year Ending March 31, 2011)

February 15, 2011Atsumasa MakiseSenior Managing DirectorOtsuka Holdings Co., Ltd.

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Topics

Q3 YTD Consolidated Financial Results

Q3 YTD Sales by Business Segment

Q3 YTD Business Segment Analysis

Q3 YTD Pharmaceutical Segment Analysis

Abilify Sales Evolution

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1

5

4

3

6

8

7

9

10

Overview of Abilify Contract Extension

Q3 YTD Nutraceutical Segment Analysis

Q3 YTD Net Income: Change from PY

Consolidated Balance Sheet

FY2010 Forecast

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1. Q3 YTD Consolidated Financial Results(100 million yen)

FY2009 Actual FY2010 Actual Change %

Net Sales 8,175 8,381 207 2.5%

Cost of Sales 2,676 2,820 144 5.4%

SG&A Expenses 4,589 4,591 1 0.0%

Operating Income 909 971 61 6.7%

Ordinary Income 991 1,031 40 4.1%

Income Before Tax 958 1,047 89 9.3%

Net Income 655 694 39 6.0%

R&D Expenses 1,048 1,220 172 16.4%

Earnings Per Share (Yen) 140.07 144.04 - -

Effect of appreciation of the Yen: Net Sales -300, Operating Income -35, Net Income -60

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2. Q3 YTD Sales by Business Segment

【FY2009】Net Sales 8,175

【FY2010】Net Sales 8,381

Pharmaceuticals5,453

（65.1%）

Nutraceuticals2,003

（23.9%）

ConsumerProducts

373（4.4%）

Others552

（6.6%）

Pharmaceuticals5,341

（65.3%）

Nutraceuticals1,907

（23.3%）

ConsumerProducts

415（5.1%）

Others511

（6.3%）

*Parentheses represent component ratio

(100 million yen)

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3. Q3 YTD Business Segment Analysis

Net Sales Segment (operating) income

+112（+2.1%）

+99（+5.1%）

-43（-10.2%）

+40（+5.1%）

+207（+2.5%）

-99（-8.7%）

+115（+217.6%）

+59（-%）

+17（+62.0%）

-31（-%）

+61（+6.7%）

FY2009 FY2010 Change

Pharma 5,341 5,453 112

NC 1,921 2,020 99

Consumer 421 378 (43)

Others 780 820 40

Eliminations (289) (290) (1)

Consolidation 8,175 8,381 207

Operating incomeratio (%)

FY2009 FY2010 Change

Pharma 1,141 1,042 (99)

NC 53 168 115

Consumer (70) (11) 59

Others 27 44 17

Eliminations (241) (273) (31)

Consolidation 909 971 61

FY2009 FY2010

21.4 19.1

2.8 8.3

(16.6) (2.8)

3.5 5.4

― ―

11.1 11.6

FY2010 8,381 FY2010 971*Parentheses represent % increase

FY2009 8,175 FY2009 909

Pharmaceuticals

Consumer Products

Others

Nutraceuticals

Eliminations -1（-%）

(100 million yen) (100 million yen)

(100 million yen)

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4. Q3 YTD Pharmaceutical Segment Analysis

Abilify

Oncology

FY2009 5,341

FY2010 5,453

+59（+10.7%）

Net Sales

+77（+2.9%）

+112（+2.1%）

Clinical Nutrition

Mucosta

Pletal

Others

+10（+1.3%）

+9（+2.3%）

+15（+2.2%）

-59（-19.9%）

Sales

R&D ExpensesSales Promotion Expenses

Cost of Sales

FY2009 1,141+112

+106

-126

+161

-99（-8.7%）

Segment (operating) income

FY2010 1,042

Other Expenses +70

Japan

Others

North America

FY2009 5,341

FY2010 5,453

-24（-1.0%）

+55（+2.3%）

Net Sales by Market

+82（+16.5%）

+112（+2.1%）

(100 million yen)

(100 million yen)

FY2009 FY2010 ChangeAbilify 2,681 2,758 77Oncology 554 613 59Clinical Nutrition 721 731 10Pletal 403 412 9Mucosta 295 236 -59Others 688 703 15Total 5,341 5,453 112

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【YTD】 (100 million yen)

Product 2008 2009 Change 2Q 2009 2Q 2010 Change 3Q 2009 3Q 2010 Change

Anti-psychotic agentAbilify 2,971 3,745 26.1% 1,879 1,902 1.2% 2,681 2,758 2.9%

North America 2,372 3,056 28.8% 1,518 1,524 0.4% 2,180 2,140 -1.8%(Million USD) (2,606) (3,303) 26.8% (1,574) (1,723) 9.4% (2,405) (2,553) 6.1%

Japan 132 187 41.7% 88 110 25.5% 142 173 22.5%Others 467 502 7.5% 272 267 -1.8% 359 444 23.8%

5. Abilify Sales Evolution

2010 North America Abilify Sales by Quarter

$Mil

2010 U.S. atypical anti-psychotics prescription market

(growth versus previous year)

Total market

Abilify

Other products total

2009 Net sales2010 Net salesGrowth rate

Source: Wolter Kluwer, pharmacy data, 2010 Dec

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As a result of the extension of the Co-promotion agreement with BMS, Otsuka’s Abilify profit structure in the US has improved from 2010

6. Overview of Abilify Contract Extension with BMS

2009 2010Otsuka Net Sales 100％ 100％BMS profit share 65％ 58％Otsuka profit margin 35％ 42％

Abilify Sales and Profit Share Year US Net Sales Otsuka Group BMS2009 35.0% 65.0%2010 42.0% 58.0%2011 46.5% 53.5%2012 48.5% 51.5%

$0-$2.7 billion 50% 50%80% 20%93% 7%98% 2%99% 1%

2013 -2015/4

80% 20%

In addition to the above, Otsuka will be responsible for 30% of the U.S. expenses related to the commercialization of Abilify from 2010 to 2012 and 50% for 2013 and beyond. $4.0-$4.2 billion

In excess of $4.2 billion

$3.7-$4.0 billion

$2.7-$3.2 billion

$3.2-$3.7 billion

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7. Q3 YTD Nutraceutical Segment Analysis

Functional Beverages(3 core products)

Others

FY2009 1,921

FY2010 2,020

Net Sales

(+12.1%)

+99 (+5.1%)

(-1.5%)

Sales

Advertising expSales promotion exp

COGS

FY2009 53

+99+40

-39

+115 (217.6%)

Segment (operating) income

FY2010 168

-12

Other exp -6

FY2009 1,921

FY2010 2,020

+1 (+0.2%)

Net Sales by Market

-11 (-2.5%)

+109 (+9.4%)Japan

Others

North America

【Japan】 3 core functional beverages all showed positive

growth. Pocari Sweat showed particularly solid growth due partly to the hot summer.

SOYJOY and Calorie Mate recorded decreased sales.

【Overseas】 Functional foods, which consist of Nature Made,

N&S products and others, showed positive sales growth in local currency terms. However, yen-based sales showed negative growth as a result of the foreign exchange impact.

+99 (+5.1%)

(100 million yen)

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8. Q3 YTD Net Income: Change from Previous Year

Operating Income

Equity in earnings

Gain on change in equity interest

Others

Loss on transfer of business

Net Income655

Net Income694

+61 （+6.7%）

+39

【Factors】

Co-promotion extensionCurrent period portion of payment received for the extension of the US portion of the Abilify co-promotion agreement

Foreign exchange lossForeign exchange loss as a result of the appreciation of the yen

Gain on change in equity interest

Increase in equity interest as a result of the IPO of the equity method affiliate, Microport Scientific

Loss on transfer of business

Loss related to the transfer of the Agri-Techno business

Non-operating

Extra-ordinary

Income

taxes

Others

Income taxes

Minority interest

Co-promotion extension

-14 （-23.3%）

+55 （-%）

-4 （-11.5%）

+56 （-%）

+19 （-%）

+12 （+37.9%）

+45 （+15.2%）

+5 （+72.6%）

＜Change＞971

Foreign exchange loss +58（+551.6%）-69

46

55

29

56

-19

-20

340

13

＜FY2010＞(100 million yen)

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9. Consolidated Balance Sheet

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2008/03 2009/03

16,000

(100 million yen) March 31, 201014,584

December 31, 201015,692 (+1,108)

Factors:・Increase in Current Assets (+1,367) ・・・Cash and deposits +428, Marketable securities +732・Decrease in Current Liabilities（-757） ・・・Short-term borrowings -207, Income taxes payable -302・Increase in Net Assets (+2,093) ・・・IPO +1,623, Net Income +694

Fixed Assets43.4%(6,809)

CurrentAssets56.6%(8,882)

73.8%(11,578)

15.0%(2,361)

11.2%(1,753)

Current Liabilities -757

Fixed Liabilities-229

Total Net Assets +2,093

+1,367

-259Fixed Assets48.5%(7,068)

Current Assets51.5%(7,515)

65.0%(9,485)

21.4%(3,118)

13.6%(1,981)

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10. FY2010 Forecast

(100 million yen)

Change %

Net Sales 10,843 11,380 537 5.0%

Operating Income 985 1,200 215 21.9%

Ordinary Income 1,091 1,290 199 18.3%

Net Income 674 797 123 18.2%

Earnings Per Share (Yen) 143.50 159.28 - -Dividends Per Share (Yen) 12.50 28.00 - -

Year-On-YearFY2009Actual

FY2010Forecast

R&D Pipeline Update and Overview of New Pharmaceutical Products

February 15, 2011Katsuya Yamasaki, Ph.D.Managing Director (Board Member)Otsuka Holdings Co., Ltd.

Agenda

R&D Pipeline in Pharmaceuticals

Update on Development Pipeline

Topics on Development Projects

Overview of New Products Launched in FY2010

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1

2

3

4

Number of Development Projects （as of Jan. 31, 2011 ）

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Areas No. of Compounds P II P III NDA Filing Total

CNS 4 3 8 1 12

Oncology 12 10 6 1 17

Cardiovascular 1 0 2 1 3

Others 10 5 4 2 11

Diagnostics 3 0 0 3 3

Total 30 18 20 8 46

Note） Each development project is counted on the basis of the number of indication. The number of PI project in oncology is five.

Many development projects are ongoing in the top priority areas of central nervous system and oncology.

Agenda

R&D Pipeline in Pharmaceuticals

Update on Development Pipeline

Topics on Development Projects

Overview of New Products Launched in FY2010

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1

2

3

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Update on Development Pipeline Since September 2010

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Area P II P III NDA Filing ApprovalJapan OCV-101

Pancreatic Cancer

TSU-68Gastric

CancerColorectal

Cancer

E KeppraEpilepsy (Partial

Seizures in Children) Epilepsy

(Generalized Seizures)

Rebamipide Eye DropsDry EyeSubmitted on Oct. 20,

2010

AripiprazoleBipolar DisorderSubmitted on Jan. 24,

2011

E KeppraEpilepsy (Partial seizures in

adults)Launched on Sep. 17, 2010

AbraxaneBreast CancerLaunched on Sep. 24, 2010

SamscaCardiac Edema (Heart Failure)Approved on Oct. 27, 2010Launched on Dec. 14, 2010

US SativexCancer Pain

Asia TSU-68Hepatocellular

Carcinoma

The following chart shows the development status of primary projects. Three products have been launched in Japan.

：Oncology：CNS：Others

Agenda

R&D Pipeline in Pharmaceuticals

Update on Development Pipeline

Topics on Development Projects

Overview of New Products Launched in FY2010

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1

2

3

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TSU-68 SativexIndication Hepatocellular Carcinoma (after TACE) Cancer PainName of Study SPRAYStage P II P II

Location of Study Japan GlobalConference /Journal

ASCO, Chicago, Jun. 4-8, 2010 The Japan Society ofHepatology ,Yokohama, Oct. 13-14, 2010

GW Pharmaceuticals, News Release, Mar. 23, 2010

URL http://www.asco.org/ASCOv2/Meetings/Abstracts?&vmview=abst_detail_view&confID=74&abstractID=43074

http://www.gwpharm.com/Phase%20IIb%20Cancer%20Pain%20Trial%20Data.aspx

Tolvaptan Rebamipide (Eye Drops)Indication Polycystic Kidney Disease Dry EyeName of Study TEMPOStage P II (Open-label) P IIbLocation of Study US JapanConference/Journal

ASN RW, Denver, Nov. 16-21, 2010 ARVO Fort Lauderdale, May. 2-6, 2010

URL http://www.asn-online.org/education_and_meetings/ http://abstracts.iovs.org/cgi/content/abstract/46/5/2037

Main Clinical Trial Results (FY2010)

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Agenda

R&D Pipeline in Pharmaceuticals

Update on Development Pipeline

Topics on Development Projects

Overview of New Products Launched in FY2010

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1

2

3

4

75.3

56.851.5

73.3

44.5 40.4

0

20

40

60

80

100

Acute （0～24hrs）

Delayed （24～120hrs）

Total（0～120hrs）

Aloxi group(n=555)Control group(n=559)

Com

plet

e R

espo

nse

Rat

e ***p<0.001

******

%

Aloxi：5-HT3 Receptor Antagonist

Palonosetron Hydrochloride Prevention of acute and delayed

nausea and vomiting induced by cancer chemotherapy

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Generic Name・Indication Example of Clinical Trial Results

Comments Date Approved : Jan. 20, 2010 (Japan) Date Launched : Apr. 22, 2010 (Japan) Cumulative Sales : Approx. 2.8B yen

(in Japan, as of Dec.31, 2010) Currently approved in more than 60 countries worldwide

5-HT3 Receptor Antagonist Persistent antiemetic effect with

a single administration before cancer chemotherapy (cisplatin, etc.)

Also effective in delayed nausea and vomiting （PROTECT Trial）

Recommended by NCCN and JSCO* guidelines (May, 2010)

*JSCO (Japan Society of Clinical Oncology)

Mechanisms of Action・Features

Effective in both acute and delayed nausea and vomiting. Aloxi has gained the largest market share in eight months since its launch.

Saito.M. et al : Lancet Oncol.,10 115 (2009)

Abraxane：Anticancer Agent (nanoparticle)

Nanoparticle Albumin-bound Paclitaxel

Breast Cancer

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Generic Name・Indication Example of Clinical Trial Results

Comments Date Approved : Jul. 23, 2010 (Japan) Date Launched : Sep. 24, 2010 (Japan) Cumulative Sales : Approx. 0.5B yen

(in Japan, as of Dec.31, 2010) NSCLC（PⅢ）, Gastric Cancer（PⅡ）: Ongoing Approved in 41 countries worldwide （as of July, 2010） All-Case surveillance has been completed on Feb. 14,

2011.

Polyoxyethylated castor oil (Cremophor)-free nanoparticlealbumin-bound paclitaxelformulation

Infusion time is 30 minutes

Mechanism of Action・Features

PR 21.0％

PR 10.7％

24.0％

11.1％

CR：0.4％

CR：3.0％

Gradishar, W.J. et al.: J Clin Oncol, 23（31）, 7794（2005）

Novel formulation makes higher-dose taxane therapy possible with greater safety.

Administration of Abraxane in patients with metastatic breast cancer showed high response rate, compared with other solvent-based paclitaxel.

■Response Rate

Abraxane Group (n=229)

Other Solvent-based Paclitaxel Group (n=225)

Abraxane Particle

Serum Albumin

Paclitaxel

Approx. 130nm

E Keppra：Antiepileptic Agent

Levetiracetam An add-on therapy in the treatment of

partial seizures, with or without secondary generalization, in adult patients with epilepsy, who have not shown sufficient response to other antiepileptic drugs.

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Generic Name・Indication Overseas Post-Marketing Surveillance

Comments Date Approved ：Jul. 23, 2010 (Japan) Date Launched : Sep. 17, 2010 (Japan) Approved in more than 95 countries worldwide Epilepsy (Partial Seizures in Children) (PIII),

(Generalized Seizures) (PIII) : Ongoing in Japan

Levetiracetam and related analogs showed a rank order of affinity for SV2A which correlated with the potency of their antiseizure activity

No drug-drug interaction Possible to start from efficacious

dose with no need for TDM Low dropout rate due to fewer side

effects Excellent safety profile

The KEEPER Trial Results in Epilepsy Patients with Partial Seizures

High response rate and low withdrawal rate have been highly evaluated both in and outside Japan.

Mechanism of Action・Features

Perc

ent o

f Pat

ient

s(%

)

Disappearance of partial seizures (12 weeks)

More than 50% reduction in the frequency of partial seizures

Samsca：Aquaretic Agent

Tolvaptan Volume overload in heart failure when

adequate response is not obtained with other diuretics (e.g., loop diuretics)

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Generic Name・Indication

Comments Date Approved : Oct. 27, 2010 (Japan) Date Launched : Dec.14, 2010 Approved and Launched in 10 countries worldwide Total World Sales：2.9B yen（FY2010 US・EU・JPN）

Nonpeptide vasopressin V2 -receptor antagonist

By inhibiting vasopressin’s effects at the V2 -receptor, Samsca increases the excretion of free water without an accompanying increase in electrolyte excretion No significant decrease in serum

electrolytes No clinically significant impact on

renal function

World's First Aquaretic Agent for the Treatment of Volume Overload in Patients with Heart Failure

Mechanism of Action・Features

Example of Clinical Trial Results

Mea

n ur

ine

volu

me

Time since start of administration

1 2 3 4 5 6 7Baseline

（mL）

1,000

1,500

2,000

2,500

3,000

3,500

4,000

day

Mean±S.D.

LOCF*

Conventional diuretics＋PlaceboConventional diuretics＋Samsca15mg

12

（day）

2,000

1,500

1,000

500

0

-500

1 2 3 4 5 6 7 1 2 3 4 5 6 7

Conventional diuretics＋Samsca15mg （n=53）

Conventional diuretics＋Placebo （n=57）

Mean±S.D.

（mL）

（day）

Urine Volume Fluid Intake

Amou

nt o

f cha

nge

Masatake Fukunami (Osaka University):Company Data, A Double-Blind, Placebo-Controlled Study, 2008

Change in daily urine volume and fluid intake in CHF patients (Japan: PIII )

Subjects: Congestive heart failure (CHF) Patients* with extracellular volume expansiondespite the use of conventional diuretics.

*Patients between the ages of 20 and 85.N=110 （Samsca Group n=53, Placebo group n=57）

Mean±S.D.

Time since start of administration

-1.5

-1

-0.5

0

0.5

-2

-2.5Baseline 1 2 3 4 5 6 7 LOCF# （day）

（kg）

Conventional diuretics＋PlaceboConventional diuretics＋Samsca 15mg

Primary EndpointP＜0.0001（t -test）

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Body weight change in CHF patients (Japan: PIII )Adding Samsca to conventional diuretics (at a daily dosage equivalent to 40 mg or more of furosemide, or more than two diuretic agents) showed clinically-significant body weight loss when compared with placebo group.

Bod

y W

eigh

t Los

s (A

mou

nt o

f cha

nge)

Masatake Fukunami (Osaka University):Company Data, A Double-Blind, Placebo-Controlled Study, 2008