A Global Pharmaceutical Company Born in Japan

Transcription

1 A Global Pharmaceutical Company Born in Japan 1. Astellas Business Philosophy & Basic Strategy 2. Business Plan Through FY Astellas Growth Strategy for Ethical Drug Business -- November 9, 2004 (Tuesday) Yamanouchi Pharmaceutical Co., Ltd. Fujisawa Pharmaceutical Co., Ltd. On April 1, 2005, Astellas Pharma Inc. will be formed with the merger of Yamanouchi and Fujisawa, subject to relevant regulatory clearances.

2 Note About Forward-Looking Statements and Forecasts The forecasts, figures, and results quoted in these materials are based on managerial judgments made according to currently available information, and are based on numerous presumptions and ideas drawn from information that may involve significant risks and uncertainties. Please note that actual results may differ greatly from those forecast herein. There are numerous factors that may impact actual results, including but not limited to a worsening in economic conditions, exchange rate fluctuations, changes to legislative and administrative systems, delays in the market release of new products, pressures caused by pricing and product strategies of competitors, declines in the sales power of existing or new products, interruptions to production, infringements of intellectual property rights, and disadvantageous judgments handed down in legal proceedings. 1

3 A Global Pharmaceutical Company Born in Japan 1. Astellas Business Philosophy & Basic Strategy

4 Astellas Raison D être Contribute toward improving the health of people around the world through the provision of innovative & reliable pharmaceutical products. To go beyond all others in exploring and tapping the potential of the life sciences. To continue tackling new challenges and creating innovative pharmaceutical products. To deliver quality products along with accurate information and retain solid credibility among customers. To support healthy living for people around the world. To continue shining on the global pharmaceutical field. 3

5 Astellas Mission Sustainable Enhancement of Enterprise Value Astellas will seek to enhance its enterprise value in a sustainable manner. Astellas will seek to be the company of choice among all its stakeholders, including its customers, shareholders, employees, and the global community. Astellas will strive to gain the trust of all stakeholders and thereby enhance its enterprise value. 4

6 Astellas Mission: Relationships with Stakeholders Customers Enhance quality of medicine, health and life Remuneration based on role and performance Job satisfaction, opportunity for personal growth Employees Select goods and services Trust the Astellas Group Trust in management Entrusting shareholder equity Sustainable Enhancement of Enterprise Value Bring value-added contributions Sources of competitive advantage Upgrading and providing business infrastructure and resources Enhancing shareholder value Ethical behavior/ corporate citizenship Living in harmony with the environment Shareholders Environment and Community Astellas promises to perform its obligations toward all stakeholders by acting ethically and seeking to actively disclose information. 5

7 Astellas Beliefs Our beliefs provide the code of conduct we prize at all times. Astellas will always be a group of people who act upon these beliefs. High Sense of Ethics We will always manage our business with the highest sense of ethics Customer Focus We will always seek to understand customer needs and our focus will always be on achieving customer satisfaction Creativity We will not be complacent and will always seek to innovate to create new value Competitive Focus Our eyes will always be directed to the outside world, and we will continue to create better value faster 6

8 Astellas Profile Head Office Location: Nihonbashi-Honcho, Chuo-ku, Tokyo (Current location of the head office of Yamanouchi and the Tokyo head office of Fujisawa) Official Launch: April 1, 2005 Management: See relevant section Outline of Business: Ethical drug products (to be deployed globally), OTC drugs (Zepharma), home care, and medical supplies and systems 7

9 Financial Position Full-Year Forecasts for FY2004 (Fiscal Year Ending March 31, 2005) (Unit: billion yen) Yamanouchi Fujisawa Combined Total Sales R&D Expenses Operating Income Ordinary Income Net Income

10 Astellas Management and Organization Board of Auditors Kenichiro Saito Masaya Ishii 9 Divisions and 2 Overseas Businesses Corporate Strategy Division Heads Hirofumi Onosaka Kanji Kobayashi Hideo Yamada Management Committee Product Strategy Executive Committee Corporate Administration Corporate Finance & Accounting Toshio Osawa Osamu Nagai Information Systems Management Isao Kishi Board of Directors Chairman Hatsuo Aoki Toichi Takenaka Toshinari Tamura Masafumi Nogimori Kunihide Ichikawa Koichi Sejima President Toichi Takenaka Vice President Toshinari Tamura Masafumi Nogimori Drug Discovery Research Development QA, RA and Pharmacovigilance Technology Sales & Marketing Isao Yanagisawa Masao Shimizu Iwaki Miyazaki Hitoshi Ohta Kunihide Ichikawa Akiro Kojima Makoto Matsuo North America Europe Makoto Nishimura (President, Astellas USA) Yasuo Ishii (President, Astellas Europe) 9

11 Astellas Basic Strategy: Ideal Cycle & Ignition Keys Consolidate Knowledge, Integrate Different Cultures Largest No. of MRs and Presence Strong Capabilities for Generating New Products Establish Global Sales Network Efficient Organization and Cost Structures Output Input Vesicare Japan Europe Maximize Enterprise Value Ignition Keys USA Strong B/S Strategic Initiatives 10

12 Astellas Basic Strategy and Key Issues 1. Realize Stronger Product Capabilities for Generating New Products Build a stronger and more advanced R&D structure by integrating and consolidating the corporate cultures, skills, and specialties of both companies. Concentrate R&D on projects in selected R&D fields. Prioritize resource allocation through R&D selectivity and concentration. Improve and strengthen R&D effectiveness by consolidating the operations of the global R&D network. 2. Establish Global Sales Network Achieve Number 1 presence in the Japanese market. Achieve improved efficiencies and sustainable growth in Europe. Accelerate business operations in North America. 11

13 Astellas Basic Strategy and Key Issues 3. Achieve Efficient Organization and Cost Structures Fast and efficient decision-making. - Strengthen corporate governance - Coordinate global group management Make ongoing reforms to cost structures. 4. Pursue Strategic Initiatives Pursue strategic business investments backed by strong B/S. Strengthen the product and development pipeline. 5. Implement a Capital Policy to Boost Enterprise Value Invest internal cash into promising business opportunities. Improve returns to shareholders taking into account capital efficiency. 12

14 Astellas Strengths = Greater Strategic Freedom Expand R&D capabilities both quantitatively & qualitatively Highest level of R&D investment in Japan. Strong Capabilities for Generating New Products Management Flexibility Efficient Organization and Cost Structures Merits of Scale in Japan Largest MR team in Japan Establish Global Sales Network Expanded global presence Japan Europe USA Maximize Enterprise Value Strong B/S An attractive partner for alliance Strategic Initiatives 13

15 Astellas: Building a Global Mega Company This merger is a first step on the path to building Astellas into a global mega pharmaceutical company. Ongoing efforts will focus on strengthening the Ideal Cycle in accordance with the timeframe of the mid-term plan. X = 14

16 A Global Pharmaceutical Company Born in Japan 2. Business Plan Through FY Astellas Growth Strategy for Ethical Drug Business -

17 Overview of Astellas Mid-term Plan Speedy Business and Management Integration Expansion in Profitability of Ethical Drug Business Strategies for Growth Improvement in Capital Efficiency and Shareholder Returns 16

18 Speedy Business and Management Integration Merger Schedule Efficient and Flexible Group Management

19 Integration Schedule April 2005 October 2005 Launch of Astellas Japan New Sales & Marketing Team (Integration of branches and offices) Integration of Research Labs and Development Divisions Spinning Off of Former Yamanouchi Formulation Plants into Separate Companies Outsourcing of Distribution Functions Integration of Basic Labor Systems and Evaluation Systems Integration of IT Systems (Accounting/ Sales and Marketing) Reorganization of Domestic Group Companies Integration of wage systems Overseas Integration of North American Operations Integration of European Operations Integration of Korean Sales Subsidiaries Integration of European Sales Subsidiaries Integration of Taiwanese Sales Subsidiaries April 2006 and after Integration of Chinese Sales Subsidiaries 18

20 Efficient and Flexible Group Management Asia Development Production Sales Europe R&D Production Sales North America R&D Production Sales Overseas Group Companies: Strengthen Existing Infrastructures, Matrix Management in Functions & Areas Boost Global Competitiveness Astellas Pharma Boost the value of ethical drug business Formulate group policies and strategies Generate Synergies in Short Term Through Mergers Domestic Group Companies: Increase Efficiency by Incorporating Group Companies on a Functional Standard, Implementation of Appropriate Reorganization Support of Divisions Shared Services Production Plants Research/Technical Sales & Marketing IT Home Care HR, General Admin, Equipment Training Real Estate Insurance Zepharma (OTC) 19

21 Expansion in Profitability of Ethical Drug Business Targets for FY2007* Sales 1 trillion yen (820 billion yen for FY2004**) Operating Income 250 billion yen (165 billion yen for FY2004**) * Exchange Rate Conversion $1 = 110 yen 1 Euro = 130 yen ** Combined Total

22 Astellas Strengths: Competitive Advantages in the Treatment of Diseases Strengthen global leadership in urology and transplants Establish competitive advantages in selected therapeutic areas Urology Harnal D/ OCAS Vesicare Inflammatory Immune disorders Transplants Prograf Prograf Modified Release Dermatology Protopic Aczone Motor organs YM177 Prograf Rheumatoid Arthritis tacrolimus Cream/Gel YM529 Cardiovascular/ Lipitor Micardis Adenoscan Dorner Ca antagonists Diabetes Starsis YM087 regadenoson RSD1235 Gastrointestinal Organs Gaster D Ganaton Coronel YM060 Prograf Ulcerative Colitis Infectious Diseases Ketek Funguard Cefzon AmBisome Cefamezin Central Nervous System (CNS) Seroquel Luvox Myslee Major products Development beyond P-III Stage 21

23 Top-Line Growth Achieve about 7% CAGR driven by contributions from new products and by expansion of existing mainstay products. CAGR About 7% 1 trillion yen Expansion of existing main products About 820 billion yen Contribution of new products FY2004 Forecasts (Combined Total) FY2007 Mid-term Target *New Products YM905, YM177, micafungin (overseas), Aczone, YM087, YM060, tacrolimus gel, tacrolimus cream, Prograf (for R.A.), Prograf (ulcerative colitis), Prograf (for lupus nephritis), RSD1235, newly licensed products 22

24 Top-Line Growth: Expansion in Existing Products Astellas Portfolio of Leading Products (Existing Lineup) FY2004 Forecasts Astellas Mid-term Plan (FY2007) Harnal billion yen About 125 billion yen *1 Prograf billion yen About 140 billion yen *2 Lipitor 86.0 billion yen About 115 billion yen Gaster 74.5 billion yen About 65 billion yen Micardis 24.0 billion yen About 50 billion yen Adenoscan 32.7 billion yen About 40 billion yen Protopic 21.1 billion yen About 30 billion yen Total for Anti-Infection Drugs 69.2 billion yen About 65 billion yen *3 Total for Central Nervous System Drugs 46.9 billion yen About 75 billion yen *4 *1: Including sales of both Harnal D and Harnal OCAS *2: Excluding sales of Prograf for additional indications / additional formulations *3: Cefzon, Funguard, Ketek, etc. *4: Myslee, Seroquel, Luvox, etc. 23

25 Top-Line Growth: Contribution of New Products Develop and introduce new products to global markets on an ongoing basis. New products scheduled for launch during the timeframe covered in the Midterm Plan (includes some that have already been launched) Japan Harnal D YM177 Prograf R.A. YM905 Prograf Ulcerative Colitis YM060 Prograf Lupus Nephritis Europe Vesicare Harnal OCAS micafungin Prograf Modified-release North America Vesicare micafungin YM087 Aczone Prograf Modified-release RSD1235 tacrolimus Cream/Gel 24

26 Further Expansion in Japan, Europe, and the U.S. Sales in FY2004 (Forecast) CAGR (mid-term) Japan About 465 billion yen Over 4% Europe About 180 billion yen Over 2% North America About 130 billion yen Over 14% Japan: Ethical Drug Business (excluding exports) Europe: Segment Sales (including exports) N. America: Segment Sales 25

27 Strong Capacity for Profit Growth Realize about 15% CAGR in operating income in the three years following Astellas launch. About 165 billion yen (Operating Margin: 20%) CAGR About 15% 250 billion yen (Operating Margin: 25%) Improvement of Operating Margin: 5 points Improvement of cost to sales percentages/ ratio of SG&A expenses: 2.5 points Decline of R&D ratio: 2.5 points Improvement of Cost-to-Sales Ratio Improve product mix Cut production costs Improvement of SG&A expense ratio Make Investments to improve growth (promotional expenses, etc.) Deploy expenses more effectively - Curb increases in labor costs - Cut back other SG&A expenses FY2004 Forecasts (Combined Total) FY2007 Mid-term Target 26

28 Synergy Effects in FY2007 Synergies to be generated by Astellas (Astellas FY2007 Combined total on a standalone basis) Sales Synergies About 25 billion yen Products expected to yield synergies: Lipitor, Micardis, Myslee, Ketek, Vesicare for Europe, Protopic, etc. Expansion in customer coverage Expansion in volume (quantity) of product details that are provided Sales Synergies in FY2007: Astellas Sales - combined total sales of Yamanouchi and Fujisawa on a standalone basis Cost Synergies About 40 billion yen Labor costs: 16 billion yen Others: 24 billion yen Cut production costs Reduce SG&A expenses Labor costs (e.g., optimal number of personnel) Distribution expenses (outsourcing) IT/Head office expenses, etc. Effective utilization of R&D expenses Cost Synergies in FY2007: Total costs for the both companies on a standalone basis - Astellas costs Total SG&A expenses for the both companies on a standalone basis - Astellas SG&A expenses 27

29 Optimal Number of Personnel March 31, 2008: Workforce of 15,500 People in Ethical Drug Business Japan Asia Europe Personnel in Mid-term Plan (as of March 2008) Over 9,000 people Under 1,000 people Over 3,000 people North America Under 2,000 people (Ref:) Personnel as of Sept. 30, ,500 People Synergy in Labor Costs (Savings) (FY2007) About 16 billion yen * Curb increases in personnel; pursue transfers to group firms Synergies (FY2007): Combined expenses on a standalone basis Astellas expenses 28

30 Strategies for Growth R&D Production Domestic Sales Asian Business European Business North American Business

31 Framework for Promoting R&D Maximize strengths of both companies and establish efficient R&D system. Drug Discovery Research Development Exploratory Research Optimization Research Developmental Research Clinical Development Launch Fermentation Research Labs Pharmacology Research Labs Drug Metabolism Research Labs Japan: Tokyo Concentrated at Fujisawa Tsukuba Yamanouchi Tsukuba/ Fujisawa Osaka Concentrated at Yamanouchi Tokyo Concentrated at Yamanouchi Tokyo Molecular Medicine Research Labs Chemical Research Labs Concentrated at Yamanouchi Tsukuba Yamanouchi Tsukuba/ Fujisawa Osaka Lead Discovery Research Labs Analysis and Pharmacokinetics Research Labs Drug Safety Research Labs Concentrated at Yamanouchi Tsukuba Yamanouchi Tsukuba/ Fujisawa Osaka Yamanouchi Tokyo/ Fujisawa Osaka US: Illinois US: Illinois UK The Netherlands The Netherlands / Germany 30

32 Increase Productivity of Drug Discovery Research Integration of Drug Discovery Platforms - Allocating resources to promising fields and top-priority fields Franchise Areas: urology, immunology and inflammation (transplants) Priority Research Areas: infectious diseases, diabetes, gastrointestinal organs, and the central nervous system. Increasing drug discovery targets, expanding of chemical library, and boosting capacity to produce lead compounds by fusion of specialties Exploratory research targeting drug discovery Exploratory research for lead compounds Optimization of lead compounds Chemical compound candidates to develop Expansion centered on drug discovery Expand exploratory research capabilities for lead compounds Substantially improve the certainty of finding development candidates Increase drug discovery targets Enhance ability to carry out targeted exploratory research Expand genome technology base Integrate and enhance the efficiency of existing bases Expand partnerships with ventures and academia Utilize high-quality and varied drug development resources to establish an advantage in basic technologies Chemical compounds (including combinatorial chemistry) Natural fermentation products and microbe-library Expand screening capabilities Strategic merging of expertise and technology Chemical synthesis (e.g. Gaster, Harnal) Natural products (e.g. Prograf) Chemical modification (semi synthetic; e.g. micafungin) Enhance pharmacological evaluations To pre-clinical stage Enhance HTS and in-silico (computer) screening Improve multi-faceted ADME and safety assessments from the initial stages 31

33 Development: Maximize Product Value and Speed Up Development Process Carry out the right clinical development in the right location (Japan, Europe or the USA) Pre- Clinical P-I, P-IIa P-IIb, P-III Application, Approval Post-market Establish a seamless development framework that carries through from the R&D stages to sales and marketing. Maximize Product Value on the Global Market Formulate a development plan and promote development based on market needs. Improve development capabilities through the integration of development bases. Maximize Cost Effectiveness and Shorten Development Period Go / no go decision in early clinical phases (before P-IIa). Global use of clinical data. Priority allocation of resources through R&D selectivity and concentration. Priority projects include Prograf modified-release preparation, YM060, FK614, YM150 32

34 R&D: Pipeline to Facilitate Long-Term Growth Pending Approval P-III Urology YM905 J/E/U Omnic OCAS E Harnal D J YM152 J YM617 AI J Immunology & Inflammation Aczone U Prograf Heart transplants E Prograf Lupus J tacrolimus Eye drops J tacrolimus Cream U Prograf Modified-release E/U Motor Organs YM177 J Prograf RA J YM529 J Prograf RA U Diabetes CV YM087 U RSD1235 U regadenoson U YM086 AI J YM026 AI J Gastrointestinal Organs Prograf UC J YM643 AI J YM060 AI J Infectious Diseases micafungin U telithromycin micafungin Infant J micafungin E* Central Nervous System fluvoxamine AI J tacrolimus Psoriasis U YM178 E tacrolimus Asthma E FK481 J FK352B J YM443 U FK949 AI J P-II YM617 AF E Prograf Modified-release J FK778 E/U YM974 J Prograf RA E YM978 J YM177 AI J YM087 E/U YM150 E carperitide U FK614 J/U YM060 E AI: Supplemental indication AF: Additional dosage form * : Preparations underway for application FK962 U J: Japan U: USA E: Europe 33

35 R&D Costs Achieve scale required for growth as a global pharmaceutical company. Promote effective deployment of costs via selectivity and concentration policy. Deploy Expenses More Effectively Total for Both Companies About 140 billion yen (Ratio to sales: 17%) FY2004 Forecasts Astellas About 145 billion yen (Ratio to sales: 14.5%) FY2007 Mid-term Plan Integration and concentration of both R&D functions & locations. Prioritization of projects. Expand Investments into Growth Priority investments in strategic areas, diseases, and projects. Expansion of in-house development opportunities. Active promotion of strategic alliance. 34

36 Production: Establish High-Quality, Efficient Production System Production System: Build the optimal production system while maintaining stable supply and quality. End Sept Japan: 10 locations Overseas: 10 locations June 2005 Close Taiwan plant (Fujisawa) March 2006 Close Osaka plant (Fujisawa) Further promote more efficient functions and optimization of locations. End March 2008 Rebuilding of Production System Achieve Cost Competitiveness with Global Competitors Reduce materials costs. Reorganization of production plants. Curb capital expenditures through promotion of outsourcing. 35

37 Domestic Sales & Marketing: Basic Strategy to Achieve No.1 Rank in Quality and Quantity Sales & Marketing Organization (as of April 2005) 22 business branches with 181 offices Number of MRs: 2,700* (Largest level in Japan) Area MRs + Therapeutic Area Specialists (CNS, etc.) Deployment of Area Marketing Supporters (AMS) Deployment of Prograf Managers Maximize Sales / Pursue Synergies Establish much stronger profitability base Improve efficiency in support functions Outsource distribution functions * 2,700 = 2,400 MRs (thus far disclosed) + Newly Employed in CNS MRs 36

38 Domestic Sales & Marketing : Smooth Integration of Sales & Marketing Systems FY2005: Realize the Sales Potential FY2007: Maximize Synergies FY2005 FY2006 FY2007 Basic Strategy Product Strategy Customer Strategy Smooth integration. Astellas brand penetration. Mutual understanding of products. Maintain and top-up sales to existing customers. Collaborate on major products. Build franchises in CNS, etc. Expand sales to existing customers. Improve databases. Maximize sales with Astellas, realizing synergies as soon as possible. Selectivity and Concentration. Improve quality and quantity of customer coverage. Achieve fully integrated MR sales promotion system. Allocate resources using selectivity and concentration in primary business areas. Expand specialist franchises in urology, etc., corresponding to the release of new products. Promote sales by extending coverage to new customers. Pursue effective sales promotion activities targeting existing customers. 37

39 Domestic Sales & Marketing: Maximize Sales and Pursue Synergies Improve both quality and quantity of details Prioritize details for major products Accelerate market penetration of new products Total number of details per annum: Over 10 million (FY2005) Increase number of details Lipitor, Micardis, Gaster, Myslee, Ketek Improve quality of details Harnal, Prograf (R.A.), Funguard, Seroquel, Luvox Accelerate market penetration of new products YM177, Prograf RA, YM905, YM060 Utilize cutting-edge IT Provide product information, improve information infrastructure 38

40 Domestic Sales & Marketing: Establish Competitive Advantages in Selected Therapeutic Areas Strong Product Portfolio / Product Detailing = Pursuing No.1 Rank in Both Quality and Quantity Gaster Colonel Harnal Ganaton YM060 YM905 Prograf Ulcerative Colitis Prograf Gastrointestinal Urology Myslee Protopic YM177 Prograf (RA) Inflammation / Motor Organs CV/Diabetes Infectious Diseases CNS Luvox Seroquel Lipitor Micardis Funguard Dorner Starsis Ca Antagonists Ketek Cefzon Blue: New Products 39

41 Asian Business: Establish Presence in Growing Markets Asian Subsidiaries Integration of Local Sales Companies Utilize Existing Organizations China Korea Taiwan Thailand Indonesia Philippines East Asia Southeast Asia Market Appeal Target High market growth rates (China, Southeast Asia, etc.) Rank among top 10 foreign companies in East Asian markets (currently 13th) Strategies Concentrate resources in two major franchise areas urology and transplants. Major Products Strengthen sales system and boost profitability via consolidation of management resources. Prograf, Harnal, Vesicare, Protopic, Gaster, Nasea, micafungin, Perdipine, Dorner 40

42 European Business: Strengthen Profitability Base, Achieve Sustainable Growth Astellas: European Business R&D, Manufacturing, Sales & Marketing, and Export Sales bases in 18 European countries (Covering 22 countries) Leading company in the fields of urology, immunology (transplants) and dermatology F Y y Y Y S&M F F Y R&D Manufacturing Top-line Growth Contribution of new products Vesicare, micafungin Expansion of existing mainstay products/ maximize value Prograf, Protopic, Harnal (incl. OCAS formulation) Synergistic Benefits Stronger Sales/Marketing in GP market Vesicare, Dermatological products Better product mix Shift promotion focus to new products and to major existing products Complementary sales bases Reduced costs Optimize number of personnel and locations; mutual use of IT 41

43 North American Business: Aiming at Further Growth Achieve continued growth of existing franchise (transplants, cardiovascular, dermatology, and infectious diseases). Maximize the product value of Prograf (speed up development of the modified-release preparation). Get early approval for micafungin. Expand franchise on dermatological products. Get early approval for YM087. Build a profitable urology business as early as possible. Fast Vesicare market penetration, successful co-promotion of Flomax. Ongoing collaboration with partners. Step-by-step expansion of PCP business Maximize and capitalize on urology franchises. (200 MRs for PCPs, covering urology products at initial stage) Build a market-entry strategy in line with progress of in-house development of compounds. Decision-making points and timing; product portfolio and cost effectiveness. Actively promote strategic alliances (product acquisition, asset purchase) 42

44 North American Business: Product Portfolio - FY2004 FY2005 FY2007 FY2008 Onwards Urology Flomax * Vesicare YM178 IPD1151T VALTREX* Transplants Prograf Prograf Modified-release FK778 Dermatology Protopic Aczone tacrolimus Cream tacrolimus Psoriasis gel Cardiovascular/ Diabetes Adenoscan YM087 RSD1235 carperitide YM150 FK614 Gastrointestinal YM443 YM060 Infectious Diseases AmBisome micafungin CNS FK962 Products mainly for specialist doctors Products that will be marketed to specialist doctors and PCP **. *Co-promotion rights **PCP= Primary Care Physicians (GPs) 43

45 Further Expansion in Japan, Europe, and the U.S. Sales in FY2004 (Forecast) CAGR (mid-term) Japan About 465 billion yen Over 4% Europe About 180 billion yen Over 2% North America About 130 billion yen Over 14% Japan: Ethical Drug Business (excluding exports) Europe: Segment Sales (including exports) N. America: Segment Sales 44

46 Improve Capital Efficiency and Shareholder Returns Pursue Growth Investments Asset purchase, product acquisition / in-licensing, etc. Improve Shareholder Returns FY2005 Annual Dividend Per Share: 50 yen (planned; subject to approval at Shareholders Meeting) Flexible implementation of share buy-back strategies Aim for Dividend-on-Equity (DOE)* Ratio of 3.5% over medium term * DOE = ROE x Dividend Payout Ratio 45

47 A Global Pharmaceutical Company Born in Japan Mid-term Prospects for Astellas Achieve strong profits and earnings growth. Establish strong presence in urology and transplants. Increase global competitiveness and maximize new-product potential. R&D Production Sales Strengthen capabilities for drug discovery. Develop strong development pipeline, and expand in-house development capabilities. Realize further cost competitiveness. Japan: Achieve No. 1 ranking in terms of quality and quantity. Europe: strengthen profit base & achieve sustainable growth. North America: Expand business presence (specialists + entry into PCP market). Strategic business expansion backed by a strong cash position Sustainable growth of enterprise value over the long term Emergence as a global mega company 46

48 Astellas: Astellas will contribute to the health of people around the world as a global pharmaceutical company born in Japan 47