News Releases

Overview of the Mochida Pharmaceutical Group's "06-08 Medium Term Management Plan"

April 3, 2006

Dear All,

Every year, the Mochida Pharmaceutical Group (Mochida Pharmaceutical Co., Ltd., TSE: 4534, 1st Section) establishes its rolling three-year plan. We are pleased to present an overview of the mid-term management plan for the fiscal years 2006 through 2008.

In the period of solifying the business foundation ending the previous fiscal year, the Group successfully completed its business restructuring plan including spinning off several divisions into subsidiaries. The coming three years from FY 2006 will thus be for maximizing market value of the Group toward a unique and distinct comprehensive healthcare company. Continuing with the fundamental policy to focus on profit and ongoing investment for the future, the Group will continue to boost productivity by strengthening cooperation and bonds among group departments. Furthermore, our core pharmaceutical business is set to establish the business development headquarters of the Group, Business Development Division - consisting of Strategic Planning & Coordination, Intellectual Property, and Licensing departments - in order to integrate strategic planning with a global corporate perspective. The Division will aggressively promote licensing activities with emphasis on partnerships, and life cycle management supported by intellectual property strategies.

Taking full advantage of the agility and responsiveness of a mid-sized firm, the Group will continue to strive toward the following three key points, which remain unchanged under the new mid-term management plan:

  1. Establishing businesses and specialized fields where Mochida has a competitive advantage
  2. Placing a high priority on partnerships
  3. Thorough streamlining of resources


Management Target Values for 2008 (Consolidated):

Sales 79 billion yen
Operating income 8 billion yen
Research and development expenditures 10 billion yen
Productivity per employee More than 44 million yen

For further details on the promotion of restructuring and on the key items of our business strategy, please see the attached supplemental information.


[Supplemental Information]

  1. Promotion of Restructuring

    Mochida Pharmaceutical Group promotes structual improvement of the entire group from any aspect, and enhances lean management that enables us to respond to the environmental changes.

    a) Innovations toward indipendent and collaborative business units
    In order to clarify each division's responsibility and to enable each to expedite its activities suitalbe to their individual business environments, Mochida Pharmaceutical Group has split off several divisions into separate companies. The former Medical Electronics and Equipment Division was split off and became Mochida Medical Systems Co., Ltd. in October 2003, then was reorganized as Mochida Siemens Medical Systems Co., Ltd. in September 2004. Similarly, the former Healthcare Products Division became Mochida Healthcare Co., Ltd. in April 2004, and the Pharmaceutical Manufacturing Division became Mochida Pharmaceutical Plant Co., Ltd.

    Business units such as medical devices, healthcare products, pharmaceuticals, and the Pharmaceutical Research Center, are managed under the self-support accounting system with an awareness of the business environment of each unit and operational efficiency. In addition, the Group enhances the lianson among the unites. Headquarters will also seek to strengthen its functions as a business unit and continue to improve its market value, speed of decision-making, and overall business efficiency.

    b) Innovations toward boosting productivity
    The Group will review its personnel strategy, allocation, and utilization, from the viewpoint of optimization of human resources, in accordance with the restructuring of the Group's management system. The Group will seek expertise outside the Group if required, and flexibly diversify the employment system, including nonpermanent employment.

    Toward the lean management, the Group will also promote better awareness among employees and enhance interdepartmental cooperation in order to meet our target of increasing productivity by 10%.

  2. Business Strategies

    1) Pharmaceuticals

    The Group will seek:

    • To focus its resources on four major fields, in order to become a "speciality pharma":
      • cardiovascular
      • obstetrics and gynecology
      • dermatology
      • emergency medicine
    • To build-up our life cycle management to extend current product life and maximize product value
    • To introduce multiple products in which we specialize and create efficiency in sales activities

    a) Development
    The Group will seek:

    • To optimaize organizational structuring and to allocate resource for accelerating drug development and improving accuracy, in close cooperation with our partners.
    • o To ensure the marketing approval of both imiquimod (a treatment for external genital warts) and dienogest (for endometriosis) within FY 2007 and FY 2008, respectively
    • To shorten the development period of escitalopram (an antidepressant) as much as possible and ensure marketing approval of the drug
    • To promote strategic development plan of drugs under development in light of long-term life cycle management, such as extension of drug indications after release
    • To conduct unique formulation research by ascertaining a wide range of medical needs, including not only our products but also those of other companies

    b) Marketing
    The Group will seek:

    • To foster and maintain 700 medical representatives (MRs) who can capably cover all the four targeted major fields
    • To maximize sales of the EPA preparation, Epadel, through optimal application of results of JELIS (the world's first large-scale clinical trial of a highly-purified EPA drug, presented at the Late-Breaking Clinical Trial Session of the American Heart Association last November) beyond its already established position as an effective anti-atherosclerosis drug with a variety of pharmacological properties
    • To focus more resources on the Ca-channel antagonist, Atelec, to establish its position as a prominent antihypertensive drug

    c) Pharmaceutical Research Center
    Our laboratory for drug discovery, which has been independent since 2003 and underwent reorganization in January 2005 for better organizational concentration, will focus resources on diabetes and obesity as core fields, and chronic pain as a sub-core field, aiming to license out three new drugs (overseas markets included) by the end of fiscal year 2008.

    2) Mochida Pharmaceutical Plant Co., Ltd.

    Mochida Pharmaceutical Plant in Otawara was split off as an independent company from headquarters in April 2005, and completed the intensification of manufacturing to Otawara. We will promote contract manufacturing business of medical products with high reliability and efficiency, using both state-of-the-art manufacturing facilities and highly advanced technologies that meet global standards.

    3) Mochida Siemens Medical Systems Co., Ltd.

    Mochida Siemens Medical Systems commenced operations with the transfer of the ultrasonic business from Siemens Asahi Meditech Co., Ltd. in September 2004. It introduced high-end models manufactured by Siemens into the ultrasound diagnostic devices market field, and established a call center to improve customer service. We aim to further strengthen our position in the field of obstetrics and gynecology, where we continue to hold the largest market share, and increase presence in the cardiovascular and abdominal devices markets.

    4) Mochida Healthcare Co., Ltd.

    Since 1970, our healthcare products sector has successfully promoted itself as an expert in gentle basic skin care products, such as baby products. Skina Babe is a bath additive product that has been enjoying the top market share since then, and also Mochida was the first to develop collagen-containing cosmetics. This section was split off from headquarters in April 2004 to form Mochida Healthcare, and merged the healthcare product manufacturing sector's Saitama Factory in October 2004. By integrating the manufacturing and sales functions, we realized a flexible product development system. Building upon its high rate of support and popularity among dermatologists, obstetricians and gynecologists, Mochida Healthcare will continue to open up the market through strengthened marketing, expanding the Collage Furfur line-up, releasing more new products, and further establishing its brand image.