Interim Financial Results FAQ For Security Analyst

Q1. There were talks about strategic investment. What kind of direction are you considering? Are you also considering expansion of the sales base for CS-747 in Europe?

A1. We are considering directions on expansion of infrastructure and products acquisition. With regard to CS-747, in Europe, this is commercialized jointly with Lilly.

Q2. When a mid-term management plan is strategically formed, will the results of whether continuation of co-promotion with Forest Laboratories concerning Benicar be reflected?

A2. We will consider a mid-term management plan upon consideration of policies going forward on Benicar (US bland name, generic name: Olmesartan).

Q3. When will CS-011 enter phase 3?

A3.The FDA has its thinking concerning clinical trials, and the results of the carcinogenicity trials will be learned in the coming spring, so we will review the development plan upon consideration to those results.

Q4.What is the reason for the downward revision in the second fiscal half for Benicar?

A4. You may find we are slightly conservative.

Q5. It appears that new prescriptions of Benicar have plateaued. Will you take some action, given the application for CS-8663 is coming up soon?

A5.Demand for new prescription is slow, however, the ARB market is growing, and there is no change to the fact that we are still looking to become No 2 in ARB. However, the position in terms of sales on CS-8663, there are some slight differences when compared to Benicar.

Q6. With regard to ending the development of DJ-927, this was evaluated as one of the top priority at the RD meeting held 7 months ago. It is unclear what changed and why it was ended. We wish to hear the background.

A6.We discussed phase 2a data with the FDA, and as a result of the validation of safety and efficacy by trials on terminal treatment, it was determined that a clear superiority to existing products was not indicated, and the development was ended.

Q7. If CS-011 does not perform well, can there be a withdrawal from the diabetes field?

A7.That will not happen. In the discussions with the person charged with research and development, we are deciding to set up a disease level that we should place more focus on than on the field. Diabetes is also covered in the discussions.

Q8. Given the full integration on April 1, 2007, will the shipment of existing products be increased at end of March to avert risks?

A8. We are considering how to transition smoothly and how to minimize such impact. However, given the integration of the logistics center of Sankyo with the logistics center of Daiichi Pharmaceutical, the final shipment date of end of March may be sped up.

Q9. How much were special profit and loss?

A9. We expect a loss of 31 billion yen in total. This would be more loss than initially planned, however, this is due to having not posted the integration related expenses of ZEPHARMA and DAIICHI SANKYO HEALTHCARE, and due to an increase in system integration expense over the original plan.

Q10. Are early retirements having a good effect?

A10.Because we are calling for early retirement from December 4th, it is not appropriate to discuss this point now.

Q11.Can DU-176b be differentiated from products released first by other companies.

A11.We understand that there is no difference in the effects of any product. Drugs such as this that is administered for long periods have issues of safety, particularly toxicity. With regard to DU-176b, through various safety trials, we are confident about the safety to the liver at the present time. We however are moving forward the development by taking careful actions on aspects of safety.

Q12.SUN11031 may also be effective for obesity, no? Can we not expect this to be performed on a large scale?

A12.This drug is ghrelin, and has an effect to promote appetite. We wish to consider cahexia in the future.

Q13.Will you take the strategy of co-promotion for CS-8663?

A13.We will sell this at Daiichi Sankyo Inc, which is our US subsidiary. However, the kind of strategy is still under review. A number of firms including the majors have indicated an interest.

Q14.We wish to know the outline of the mid-term management plan (time period, result of CS-747, expiration of levofloxacin patent).

A14.At Daiichi Sankyo Group, we have positioned the mid-term management plan as a 3-year plan. It is positioned to be first 3 years out of long-term vision.
As a result of CS-747, we may need to review some scenarios. Expiration of the levofloxacin patent in the US will not be reflected in the mid-term 3 years management plan that we are currently considering.

Q15.What is the mechanism of AJD101?

A15.The precise mechanism is still unclear at present, that is, whether the mechanism is insulin-like.