March 31, 2016
Corporate

For Immediate Release

Company name: DAIICHI SANKYO COMPANY, LIMITED
Representative: Joji Nakayama, Representative Director, President and CEO
(Code no.: 4568, First Section, Tokyo Stock Exchange)
Please address inquiries to Noriaki Ishida, Executive Officer,
Vice President, Corporate Communications Department
Telephone: +81-3-6225-1126
http://www.daiichisankyo.com/

Daiichi Sankyo Announces 5-year Business Plan (FY 2016 - FY 2020)

TOKYO, JapanMarch 31, 2016 - Daiichi Sankyo Company, Limited today announced its 5-year

Business Plan for fiscal 2016 - 2020  (hereafter, 5YBP).

 

1. 2025 Vision

Daiichi Sankyo Group aspires to be a “Global Pharma Innovator with Competitive Advantage in Oncology” as its 2025 Vision by positioning its innovative pharmaceutical business, centered on oncology, as a core business in order to become a global company developing and marketing innovative products for diseases with unmet needs to change standard of care. The main goals of the 2025 Vision are as follows:

- To have specialty area*1 business centered on oncology business as the core business

- To have enriched regional value products*2 aligned with regional market

- To have innovative products and pipeline changing SOC*3

- To realize shareholders’ value through highly efficient management

*1 Specialty area: Drugs mainly prescribed at hospital and/or by specialty practitioners

*2 Regional value products: Products aligned with regional market

*3 SOC: Standard of Care

 

2. Outline of the 5YBP

The following two management issues are addressed within the plan to provide a basis for realizing our 2025 Vision.

Grow beyond FY2017 LOE

To overcome the patent cliff of the antihypertensive “Olmesartan,” one of our main products, we will make efforts for revenue recovery and profit generation, aiming at a revenue of 940 billion JPY and an operating profit of 100 billion JPY in FY 2017.

 

- Measures of revenue recovery

Accelerate the marketing of the anticoagulant “edoxaban” and major products in Japan, and Luitpold business.

- Measures of profit generation

Profit generation through cost reduction and streamlining

 

Establish Foundation of Sustainable Growth

To establish a basis for sustainable growth, we developed the following business strategy,investment policy for future growth and shareholder returns policies in order to achieve the targets in FY 2020.

- Targets in FY 2020

Numerical goals                                                                                        (Billion JPY)

 

FY 2015

(Forecast)

FY 2017

(Target)

FY 2020

(Target)

Revenue

980

940

1,100

Operating Profit

130

100

165

Assumption: Exchange rate of 1 USD = 120 JPY; 1 EUR = 130 JPY

Increase value of late-stage pipeline

3 to 5 products launched within the next five years with peak-sales of more than 100 billion JPY each

 

ROE: 8% or more (FY 2020)

 

- Business Strategies

Strategy 1: Grow Edoxaban with a revenue of 120 billion JPY or more

Strategy 2: Establish Oncology Business with a revenue of 40 billion JPY or more

Strategy 3: Grow as No.1 company in Japan

Strategy 4: Expand US Businesses

-Pain Franchise: Revenue of 100 billion JPY or more

- Luitpold:  Revenue of 150 billion JPY

Strategy5: Continuously Generate Innovative Medicine Changing SOC

- Create new drugs in Oncology/New Horizon area

- Realize clinical application of innovative technology

Strategy 6: Enhance Profit Generation

 

- Investments for future growth and shareholder returns

Aimed at enhancing shareholder returns, while giving priority to investments of future growth

 

- Investment for Future Growth: Allocate investments according to the above strategies 1-5, with the highest priority to oncology field

- Shareholder Returns (during 5YBP):

Total return ratio*4: 100% or more

Annual ordinary dividends: more than 70 JPY

Flexible acquisition of own shares

 

*4 The total shareholder return ratio(dividends + total acquisition costs of own shares) / profit attributable to owners of the company may be different from the numbers Daiichi Sankyo forecasts due to factors involving strategic investments, including R&D costs and business development investments, material changes of the business environment surrounding Daiichi Sankyo or business performance of Daiichi Sankyo, legal or compliance issues such as insider trading regulations, or other facts or circumstances.  The increase of cash flow related to the total shareholder return ratio may not be realized as expected in this material due to a variety of circumstances, such as the market penetration of generic drugs, delay or cancelation of approvals for new drugs, payment of damages or compensation in connection with litigation or other legal proceedings.