News Releases

Mochida Pharmaceutical Group
Numerical Management Targets for Fiscal Year 2007

(Tokyo, April 18, 2005) Mochida Pharmaceutical Group (TSE: 4534, 1st section) announced last April its first mid-term management plan for the fiscal years 2004 through 2006. The group always maintains a three-year plan, modified every new fiscal year, based on business results from the previous fiscal years. Thus we would like to announce Mochida's numeric management targets for the 2007 fiscal year, succeeding last year's mid-term management plan.

As in the previous plan, the coming three years will be devoted to bolstering foundations in order to become a comprehensive health care company with a unique, attractive corporate image. Under the new plan for the fiscal years 2005 through 2007, the Mochida Pharmaceutical Group will remain committed to our basic strategy of emphasizing profits and continuing investment. In particular, the following three key points will take advantage of our agility and responsiveness as a mid-sized company:

(1) Establishing specialized fields and businesses where Mochida has a competitive advantage
We will intensify our strategy of becoming "The Only Company" by strengthening our activities in specialized fields, so that we become our customers first and only choice, and thus earn comments like "only Mochida can do it" from customers in each and every field of business.

(2) Placing high priority on partnerships
Mochida Pharmaceutical Group will continue to emphasize relationships with our partners, under our strategy of bolstering competitive fields and complement uncompetitive fields by optimizing internal and external resources.

(3) Thorough streamlining of resources
We will reexamine all resources and their allocation in each of our business units, in order to better coordinate our business activities, e.g. by splitting off some divisions into separate companies. We also aim to promote economically-minded "muscular" management to concentrate our resources into core areas of corporate competence.

*Management Target Values for Fiscal Year 2007

Sales (consolidated) 76 billion yen (Projected from 67 billion yen in fiscal year 2004)
Operating income 8 billion yen (Projected from 4.8 billion yen in fiscal year 2004)
R&D expenses 10 billion yen (Projected from 10.2 billion yen in fiscal year 2004)
Productivity per employee 40+ million yen (Projected from 38 million yen in fiscal year 2004)

[Reference]

Management Target Values for the 2006 fiscal year (Announced on April 28, 2004)

Sales (consolidated) 72 billion yen
Operating income 7 billion yen
R&D expenses 10 billion yen
Productivity per employee 40+ million yen


[Supporting documentation]

  1. Promotion of Restructuring

    The Mochida Pharmaceutical Group strives to promote the structural transformation of the entire group considering every possible aspect. The paradigm is that of a truly "muscular" management -- able to respond agilely and powerfully and efficiently to changes in the business environment.

    a) Innovation toward complete independence of business units
    In order to clarify each division's responsibility and to conduct activities suitable to the business environments of each division on an expedited basis, the Mochida Pharmaceutical Group has split off several divisions into separate companies.
    In October 2003, Mochida Medical Systems Co., Ltd. was founded after splitting from the former Medical Electronics and Equipment Division, which commenced operations in September 2004 as Mochida Siemens Medical Systems Co., Ltd. In April 2004, Mochida Healthcare Co., Ltd. was also founded to take over the former Healthcare Product Division, and the Drug Manufacturing Division has become the Mochida Pharmaceutical Plant Co., Ltd.

    These business units, such as Pharmaceutical Research Center, drug development, Pharmaceutical Laboratory, and marketing, will be streamlined and managed with an awareness of the business environment specific to each unit for efficient business activities. In addition to the innovation of business divisions, headquarters will also strengthen its functions and aim to improve the company value, to accelerate decision-making, and to enhance operational efficiency.

    b) Innovations for improving company-wide productivity
    The group will soon review the manpower strategy, personnel allocation, and personnel utilization from the viewpoint of optimization of human resources, in accordance with the reformation of the group management system. When in-house manpower is insufficient for a given task, we will seek human resources outside of the company, and flexibly modify its employment system to accommodate the utilization of temporary workers.

    The company-wide productivity improvement project, established cross-sectionally in 2002 under the direct control of the president, was revised into the secondary project in 2004. To maximize project results, our group will enhance collaboration between divisions, and aim to increase overall productivity by 10% by setting specific targets.

  2. Business Strategies

    1) Pharmaceutical Research Center

    The Pharmaceutical Research Center, which was restructured in January 2005, will focus its resources on diabetes and obesity as a core field, and chronic pain as a sub-core field, aiming at licensing out three new drugs (overseas market included) by the end of the 2005 fiscal year.

    2) Pharmaceuticals

    We will focus its resources on four major fields in order to be a "specialty pharma":

    • Circulatory
    • Obstetrics and gynecology
    • Dermatology
    • Emergency medicine

    a) Development
    Our group will seek:

    • Drug development with optimal organizational structuring and resource allocation for accelerating drug development and improving accuracy in close cooperation with our external partners
    • To ensure with certainty the approval and release of both dienogest (a treatment for endometriosis) and imiquimod (a treatment for condyloma acuminatum) to market within the fiscal year 2008
    • To shorten the development period of escitalopram (an antidepressant) and Epadel (a treatment for dementia) as much as possible and tangible release of the drug on the market
    • The promotion of the ongoing development of drugs with an enormous potential based on long-term life cycle management, such as the extension of drug indications after release

    b) Research
    We will conduct unique pharmaceutical research by ascertaining needs from a wide range of healthcare settings, including not only our products but also those of our competitors.

    c) Marketing
    Our group will:

    • Foster and maintain a roster of 700 medical representatives (MRs) who can capably cover all the four major fields alone
    • Introduce multiple products in which we specialize and create efficiency in sales activities
    • Reinforce our life cycle management towards the extension of our current product life and the maximization of product value
    • Position our anti-lipidemic agent Epadel at the front ranks of therapeutic drugs for arteriosclerosis by widely promoting its various pharmacological benefits and the results of its research and extensive clinical trials (JELIS), aiming at annual sales of 31 billion yen for the 2007 fiscal year.
    • Aim for annual sales of our Ca antagonist Atelec to reach 11 billion yen for the 2007 fiscal year

    3) Mochida Healthcare Co., Ltd.

    For 30 years, our Healthcare Product Division has successfully promoted itself as an expert in baby products such as Skina Babe (a bath additive product of the top market share for decades), or as an expert in non-irritating cosmetics, as demonstrated by its development of the first collagen-containing cosmetics. The division was split off from headquarters in April 2004 into Mochida Healthcare, which then absorbed healthcare manufacturing sector's Saitama Factory in October 2004. By integrating both our manufacturing and sales sections, we realized more flexible product development system. Building upon its high rate of approval and popularity among dermatologists, obstetricians and gynecologists, Mochida Healthcare will continue to open up the market through strengthened marketing, releasing more new products, and further establishing its brand image.

    4) Mochida Siemens Medical Systems Co., Ltd.

    Mochida Siemens Medical Systems Co., Ltd commenced operations with the transfer of our ultrasonic business from Siemens Asahi Meditech Co., Ltd. in September 2004.
    Mochida Siemens Medical Systems aims at strengthening its position in obstetrics and gynecology where it has continued to occupy the largest share by means of introducing high-end models manufactured by Siemens into ultrasound equipment market, as well as of increasing its presence in the market of circulatory and abdominal devices in order to achieve a 15% domestic share of the ultrasonic products market by the 2007 fiscal year.

    5) Mochida Pharmaceutical Plant Co., Ltd.

    Mochida Pharmaceutical Plant Co., Ltd. was split off as an independent company from headquarters in April 2005. The Plant will promote the commissioned manufacturing of medical products, produced with high reliability and efficiency using both state-of-the-art manufacturing facilities and highly advanced technologies that meet global standards.