1st Mid-term business management plan FY2007-FY2009 FAQ for investors,securities analyst and media representatives

Q1. What is the reason for the increase in the recently announced “Cost + SGA” over the target figures for fiscal 2009, which were announced at the briefing on corporate integration in May of 2005?

A1. The primary reason is, we had to increase the staff count significantly over the originally anticipated Medical Reps count for the US, in light of the unanticipated acceleration in the original launch schedule for new products in the US including CS-8663.

Q2. With regard to the picture of fiscal 2009 and onward, the Levofloxacin patent will expire in the US. According to the present plan, can we still expect to see both sales and profit continue to grow without a significant dip against the backdrop of an impact from the patent expiration?

A2. The plan is currently devised as a 3-year plan, however, CS-8663, WelChol for diabetes, and Prasugrel, which will be launched in fiscal 2007 or later will start to make large contributions to revenue in fiscal 2010 and onward. Therefore, we wish to grow these others more, since the Levofloxacin patent will expire.

Q3. We hear that your target is a total return ratio of 100%, however, in the event strategic investments will be performed, how are we to interpret this?

A3. Certainly, if there is a large project in the period of this first Mid-term Business Management Plan, we will need to make considerations, including whether to secure funds. However, our principle target is a total return ratio of 100%.

Q4.On the domestic business, we hear that you will move forward the enforcement of life cycle management on the heels of Olmetec and Cravit as growth drivers, however, what specifically do you anticipate?

A4. For example, in the case of Cravit, in addition to the development of high-dose formulations, we have to date added efficacy for paratyphoid and abdominal typhus. Also with regard to Olmetec, one aspect of life cycle management is combination drug with Calblock.

Q5. What is the optimum cash position for a company of the scale of Daiichi Sankyo?

A5. At present, in terms of immediate liquidity, the cash position is approximately 600 billion yen, which includes securities and cash on deposit. Approximately 200 billion yen of this amount is needed as so-called funds for operation. And the balance is what can be directed immediately to strategic investments. We really do not know what matters there will be in the next three years, however, we believe that this level is the optimum level at the present time.

Q6. With regard to the domestic business, do you mean that you will still maintain a 2,300 person Medical Reps structure in 2009?

A6. We explained the sales volume in fiscal 2009 per MR person at the current drug price. Under this understanding, the number is 2,300 persons.

Q7. With regard to, for example, infectious diseases domain, which is not included in the four critical areas of 2015, will non-critical projects be suspended?

A7. We do not mean that. The four critical domains are areas in which we deploy research and development resources with priority in preparation for 2015, and this certainly is an aspect of our research and development strategy. In addition, we, of course, have been considering how we can develop and maintain the domains over which Daiichi Pharmaceutical and Sankyo have had a significant presence to date.

Q8. The sales and marketing agreement with Forest Laboratories, which co-performs the sales of Benicar in America, will complete at end of March 2008. What are the current conditions in the plan for the American business?

A8. The current co promotion agreement with Forest is through end of March 2008, and we are devising a business plan on this understanding.

Q9. CS-8958 is presently in Phase 1. May we take it that you will accelerate the development, and the application will be approved in the next 2～3 years?

A9. CS-8958 is an influenza drug, and the regulatory authority have also placed high priority on this, and we wish to move the development along swiftly. The development in Japan is also moving forward on schedule.

Q10. On the clinical trial of Prasugrel, what is the reason for the increase to 13,600 patients from the 13,000 that was originally planned as the registered patient count?

A10. The reason for the increase in patient count from 13,000 to 13,600 is based on number of events. In November, we assessed how many events there would be and prepared a projection, and upon a review of the necessary patient count, we increased this number.

Q11. Can you not file the application for DU-176b by fiscal 2009?

A11. On DU-176b, the competition is very intensive. At present, we are in Phase 2b of DVT, and plan to perform Phase 2b on AF in fiscal 2007. We wish to complete these trials as soon as possible, and start Phase 3 in 2008.
To outperform the competitors, we believe that the period until application needs to be reduced as much as possible, however, we have not announced the specifics.