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Mid-term business management plan

To Contribute to the Enrichment of Quality of Life around the World through the Creation and Provision of Innovative Pharmaceuticals

I. Overview of the Second Mid-term Business Management Plan

Under its First Mid-term Business Management Plan (FY2007-FY2009), the Daiichi Sankyo Group expanded its foundation for future growth by focusing on optimizing operational synergies and accelerating business globalization efforts in line with the corporate vision of becoming a "Global Pharma Innovator" by 2015.
Through the Second Mid-term Business Management Plan, the Daiichi Sankyo Group aims to achieve a corporate growth rate that exceeds the average growth rate of the global pharma market by supplying pharmaceutical products that meet increasing market and customer diversity and by promoting a "Hybrid Business Model." From a business operations standpoint, the plan will focus on strengthening and enriching the Group's innovative pharmaceutical products, vaccines, established pharmaceuticals (generics and certain Daiichi Sankyo long-listed drugs) as well as over-the-counter pharmaceuticals. Regionally, the plan will generate synergy with Group company Ranbaxy Laboratories of India and focus on the extraordinary growth potential of emerging markets in addition to the traditional core markets of Japan, the United States, and Europe.

II. Basic Policies of the Second Mid-term Business Management Plan

Regional Business Strategies

■ Japan

  • Innovative Pharmaceuticals
    As the core business of the Daiichi Sankyo Group, continue to maximize sales of the Olmesartan® franchise centered on combination antihypertensive prescription drug Rezaltas®, featuring ARB (angiotensin 2 receptor blocker)Olmetec® and long-acting CCB (calcium channel blocker) Calblock®, and bring new products to market such as anti-influenza drug Laninamivir and Memantine, a treatment of Alzheimer's type Dementia, in order to sustain growth, generate earnings and develop new blockbuster drugs.
  • Vaccines
    Strengthen linkages between research and development facilities in Japan and overseas, including The Kitasato Institute, to continue to expand the vaccine business in which medical needs are strong.
  • Established Pharmaceuticals
    Develop business operations of Group company Daiichi Sankyo Espha Co., Ltd. around generics and a predefined number of Daiichi Sankyo long-listed drugs, which have already established a strong market reputation, to continue to meet diversifying market needs going forward.
  • Over-the-counter Pharmaceuticals
    Develop and promote through Group company Daiichi Sankyo Healthcare Co., Ltd. over-the-counter self-medications from the viewpoint of the consumer

■ UNITED STATES

  • Target to achieve net sales revenue of 3.5 billion dollars and secure a 1% share of the US prescription drug market through Group companies Daiichi Sankyo Inc., Luitpold Pharmaceuticals, Inc. and Ranbaxy's US operations. Specifically, through Daiichi Sankyo Inc., continue to maximize sales of the antihypertensive prescription drug Olmesartan® franchise and position the antiplatelet agent Effient® as the first-choice treatment for ACS-PCI (acute coronary syndrome patients with percutaneous coronary interventions).

■ EUROPE

  • Attempt to generate 1.2 billion euros in net sales revenue through Group company Daiichi Sankyo Europe GmbH and Ranbaxy's European operations. Specifically, bolster in-house sales and marketing competencies of Daiichi Sankyo Europe GmbH to maximize sales of the antihypertensive prescription drug Olmesartan® franchise and antiplatelet agent Effient®.

■ ASCA*

  • Implement the Hybrid Business Model through the Daiichi Sankyo Group and Ranbaxy Laboratories, Limited, to realize growth exceeding the Japan, United States and Europe markets, with the target to exceed 150 billion yen in net sales revenue. Specifically, expand business promptly in the region by generating further growth of the antihypertensive prescription drug Olmesartan® franchise and launching as well as steadily building sales of novel antiplatelet agent Prasugrel.

*In-house term referring to markets outside Japan, the United States and Europe

Research and Development Strategies

  • In aiming to achieve the 2015 Vision, continue to bolster research efforts to enhance product competitiveness in fields where significant unmet medical needs remain, such as oncology and cardiovascular-metabolic, while continuing to focus on the core areas of hypertension, bacterial infections, and hyperlipidemia.
  • Promote simultaneous global development for development projects currently underway, especially those focusing on the next anticipated global blockbuster drug, such as the oral factor Xa inhibitor Edoxaban.
  • Actively discover new lines of research through open innovation.

III.. Global CSR Initiatives and Human Resource Development

  • Harmonize with society and the global environment by enhancing employee diversity and valuing consideration of others as a company that supports humanity and health.
  • Continue to build a corporate culture in which all our employees are professional, responsible and accountable, and where they feel both satisfaction and challenge from their work and are able to demonstrate their abilities and talents.

IV. Shareholder Returns

  • Ensure a balance between growth-oriented investment, such as research and development and business strategy planning, and retained earnings.
  • Continue corporate policy to payout steady shareholder dividends and conduct reviews based upon profit levels regarding an increase in dividend going forward.

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