Translation from Japanese:

Good Days Come with an Open Mind

Global Strategy◆Expand profit by active resource
investment in growing markets
ーU.S.A., Asia, Europe◆Ensure profitability in our home basemarket (Japan)◆ Continuous growth of Aricept andAciphex/Pariet
ーAricept ： ¥180 Billion (FY2006)
ーAciphex/Pariet ： ¥220 Billion (FY2006)

U.S. Strategy◆Reinforcement of Eisai Inc.
Increase Sales Force to 500 during FY2003, with potential
further increases in the future
Purpose: - Cover main prescribers of Aciphex and Aricept- Enhance our independency for full integrationof functions in the U.S.
- Increase opportunities for business development◆Cooperation with Partners
Aciphex
Increase sales force to achieve 15% market share(Eisai Inc.: 500 MRs to achieve significant increase in share of voice)

Aricept
Achieve sales increase through new indication via effective
resource investment

U.S. Strategy◆Reinforcement of Eisai Research Institute of
Boston, Inc.（ERI）

・The drug discovery facility second in size to
Tsukuba Research Laboratories, is locatedin the Boston cluster, a concentration ofindustrial, technological and life science
expertise.
・Unique drug discovery research is conducted based on our original
approach of ‘Target Oriented, Chemistry Integrated’
Enables further reinforcement of drug discovery
research which starts from natural bioactive
substances, state-of-the-art high sensitivity
screening approach, structural biology, process
research, pharmacokinetics and safety research.

- Increase current staff from 180 to 250- Invest $ 75M by FY2006

U.S. Strategy◆ Establishment of Eisai Medical Research Inc.
（EMR）
・Established in June 2002
・130 staff members composed of senior scientists in oncology
and neurology (reflects an increase of 30 staff)・Play a role as a powerful engine for global development◆Reinforcement of Manufacturing Capability
at Research Triangle Park (RTP)・Estimated Production Capacity:$2.4 Billion (FY2004)
・Staff： 230 Employees(As of January 2003)
・Invest: $12.8M(Completion of Construction Expansion : October 2003)

U.S. Strategy◆Eisai Inc. to build own distribution capability
・ Direct and prompt grasp of customer needs
・ Efficient inventory management◆Active Business Development in neurology
for the U.S. market.

Strategic investment of estimated$100 million
in the U.S. by FY2006

Asia Strategy
Leap in China
Estimated Sales of ¥20 Billion in FY2006◆Sales Force: 250, Covered cities: 100◆Expand Aricept, Pariet, Methycobal, and Selbex etc.
◆Active business development◆Expand manufacturing capability at Suzhou Plant

EU Strategy◆Increase coverage along with EU expansion- New territory expansion◆ Better response to the EU as one market- Establishment of a new operational systemappropriate for the new EU◆Expansion of Aricept and Pariet- Aricept: 70% of dementia market- Pariet: 5% of PPI market◆Active business development

Japan Strategy◆Rapid expansion of Aricept and Pariet
Aricept : Estimated sales of ¥ 50 Billion in FY2006
Pariet : Estimated sales of ¥ 60 Billion in FY2006◆Two-digit profitability in Consumer Health Care,
Diagnostic and Generic Business Operations◆Active business development in the JapanesemarketR&D Strategy◆Discover drugs and cooperate with threeclusters in the U.S., EU, JP
Tsukuba Research Laboratories
Create projects exploiting the latest proteomics withbasic techniques. Discover target molecules for drug
creation based on gene information and investigationof mechanism of pharmacological actions

KAN Research Institute (Kyoto)
Investigate new pathological mechanism utilizing
Cellomics and Organomics and hunt genes related
to such mechanisms

Eisai Research Institute of Boston, Inc.

‘Target oriented, Chemistry Integrated’
Eisai London Research Laboratories, Ltd.
Focus on neurodegenerative diseases considering
regeneration medical treatment

R&D Strategy◆Flexible and Agile ClinicalDevelopment in the U.S., EU. and JP- Coordination among the Clinical Research Center (JP),Eisai Medical Research Inc.(US) and Eisai Ltd. (EU)-Reinforce regulatory affairs staff dealing withregulations that change dramatically◆Develop Franchises- Neurology- GI- Oncology (Franchise candidate)What is the situation of the next
global product after
Aricept and Aciphex/Pariet ?

E7070Cell cycle G1 phase arresting agent
・Anti-tumor effects were found in Ph-IIa studies (EU) in colorectal
cancer, breast cancer and non-small cell lung cancer.
・Manageable toxicity profile (Main side effects are hematologicallyrelated)・Being developed in JP, US, EU (JP: Ph I)◆ Combination therapy studies will start 2003 1Q
With irinotecan for colorectal cancer
With capecitabine for breast cancer
With carboplatin for non-small cell lung cancer◆ Monotherapy for renal cancer is ongoing with leukemia
under consideration◆ Ph-II trials for stomach cancer and breast cancer
will start in Japan in FY2003.

Expected Submission： FY2006

E7070
PhⅡa Clinical Studies Types of Cancer

Colorectal cancer

EU（Completed）

Breast cancer

EU（Completed）

Non-smallcell lung cancer
MelanomaEU（Completed）
EU（Completed）

Head & neck cancer U.S.（Enrollment Completed）
Renal cancer

EU&U.S.（Ongoing）

Leukemia

U.S.（Planned）

E7070Development Plan
We aim to prove efficacy in combination therapy for colorectal
cancer, breast cancer and non-small cell lung cancer for which
the efficacy of the drug is suggested.
The possibility of monotherapy for breast cancer is also underconsideration◆Colorectal cancer- Combination therapy with irinotecan (Campto®)- Starting in 1Q of 2003, expected submission: FY2006◆Breast cancer- Combination therapy with capecitabine (Xeloda®)- Starting in 1Q of 2003, expected submission: FY2006◆NSCLC- Combination therapy with carboplatin (Paraplatin®)- Development strategy for submission will be
determined after Ph I/II in Europe.

E5564
Endotoxin Antagonist◆Ph II trial for Sepsis
・1st Stage ： Completed
FDA Review complete
・2nd Stage： Just started
Estimated completion: December 2003
・3rd Stage ： Will start in 2Q 2004
Estimated completion: December 2004

◆ Ph II trial for CABG（improvement of coronary-artery
bypass graft surgery prognosis ）Patients with a low serum concentration of anti endotoxin antibody
have a poor prognosis after coronary surgery. Use of E5564 before
operation is expected.

Expected Submission: FY2007

E2007Novel Oral AMPA receptor antagonist
・Compound which can be administered orally,
antagonizes AMPA receptors selectively,
and prevents apoptosis by inhibiting exceeding
influx into Ca++ cells.
・The first AMPA receptor antagonist that has
shown efficacy in the multiple sclerosis animalmodel.

◆Ph II study is ongoing in EU◆Indication：Parkinson’s Dyskinesia, Epilepsy, MS

Expected Submission: FY2006

E7389Tubulin Polymerization Inhibitor
・ Inhibits the M phase in the cell cycle
・ A synthetic analogue of halichondrin-B, anatural substance found in sea sponge・ Potentially more effective and safer thanpaclitaxel (in vivo data)◆Ph I trials have been conducted by the U.S. NCI◆Eisai will submit IND in March 2003
◆Expect the Subpart H approval for indication ofcolorectal and/or breast cancer

Expected Submission： FY2006

◆E7070 has a controllable toxicity profile and has
antitumor effects in colorectal cancer, breast cancer
and non small cell lung cancer.
◆E5564 has completed 1st stage and moved to 2nd stage.
Ph II of CABG (Improvement of prognosis after coronaryartery graft bypass surgery) has started.
◆E2007（AMPA Receptor Antagonist） has shown the datasuggesting the efficacy in clinical research. Ph II study
for Parkinson Dyskinesia has started.
◆Ph I of E7389 （（Tubulin
Tubulin Polymerization Inhibitor) is
being conducted by the U.S. National Cancer Institute(NCI). Eisai IND will be submitted in March 2003.

The probability of successfor future global products
has increased since last year

What is the statusof the pipeline?

R&D Progress
T-614（Careram: JP）
・Expected Submission: 2Q-3Q 2003
・Mode of Action: DMARD
・Indication: Rheumatoid Arthritis

E6010(Cleactor, Additional Indication: JP)・Expected Submission: May 2003
・Mode of Action: Second generation t-PA
・Indication: Pulmonary Embolism

KES524（sibutramine： JP）
・Stage： Ph II
・ Expected Submission: FY2005
・ Mode of Action: Inhibiting reuptake ofserotonin and noradrenaline・Indication: Obesity Management

R&D Progress

E7070（Global Development）

・Stage: Ph II・Expected Submission: FY2006
・Mode of Action: Cell cycle G１arrest
・Indication: Various cancers

E2007（Global Development）

・Stage： Ph II・Expected Submission： FY2006
・Mode of Action：Selective AMPA receptor antagonist
・Indication： Parkinson’s Dyskinesia, epilepsy, MS

E5564（Global Development）
・Stage： Ph II・Expected Submission: FY2007
・ Mode of Action: Endotoxin antagonist
・Indication: Sepsis, CABG (Prevention of endotoxinrelated complications after coronary artery bypass graft surgery)R&D Progress
E3620（Global Development）

・Stage: Ph II・Mechanism: 5-HT3 Receptor Antagonist, 5-HT4
Receptor Agonist
・Indication: GERD, IBS

E2014（JP）

・Stage: Preparation for Ph II・Expected Submission: FY2005
・Mechanism: Botulinum toxin (Type B)
・Indication: Cervical dystonia

E3309（Global Development）

・Stage： Ph I
・Expected Submission: FY2005
・Mechanism: Eradication of H.pylori via membrane
injury・Indication: H. pylori eradication

R&D Progress

D2E7（JP）

・Stage： Ph I
・Expected Submission: FY2005
・Mode of Action: Anti TNFαantibody
・Indication: Rheumatoid Arthritis

E7389（Global Development）
・Stage： Ph I
・Expected Submission： FY 2006
・Mode of Action: Tubulin polymerization inhibitor
・Indication： Various cancers

E2101（Global Development）
・Stage： Ph I
・Expected Submission: FY 2007
・Mode of Action： Inhibition of serotonin receptor
・Indication: Spastic paralysis by MS, etc.

R&D Progress
E7820（Global Development）
・Stage: IND in March 2003
・Expected Submission: FY2010
・Mode of Action: Angiogenesis Inhibitor
・Indication： Various Cancer

E5555（Global Development）

・Stage： IND in March 2003
・Expected Submission: FY2010
・Mode of Action： Inhibition of thrombin receptor
・Indication： Acute coronary syndrome

E0167（JP）

・Stage： Clinical study in prepararion
・Expected submission： FY2011
・Mode of Action: Reduction in the recurrence of Hepatocellular carcinoma by vitamin K2
・Indication: Reduction in the recurrence of
Hepatocellular carcinoma

Our R&D Pipeline ProgressFebruary 2002
Preclinical(AfterCompoundSelection)

Neuro

E2051
E2014

Ph I

Ph II

E2101
E2007

GI

E3309

PhIII

E2020(VaD)
E2020(SA)

February 2003
Blue：
Blue： Projects that have advanced
Filed
Pre Filed
E2000(MyonalTransderm al
Patch)

E3810(H.pylori:US)
E3810

E3620

P r e c lin ic al(Aft e r
Co mpo u n d
S e le c t io n )

Ph I

Ph II

E2101
E2051

E2014
E2007
E2020

Treatm ent of
Neuropathic pain
Treatm ent ofDepression andanxiety

PhIII

E2020(SA)E2020(PD)(Migraine)

IBS Treatment

E3309

E3620

Angiogenesis
Inhibitor

E7389
E7820

E7070

RA
Treatment

E6040
D2E7

E3810
(H.pylory:JP)(GERD
Maintenance:JP)

Cancer

E7820
E7389

Allergy &ImmunolRA
Treatment

E6040
D2E7

Infection(Vaccine
Adjuvant)

E1010

Contrast
media

MRI Contrast
Media

E7210

E7070

Hyperlipemia
CV,
E5555
Metabolic

T-614(Vaccine
Adjuvant)

E5564

E7155

KES524E6010

E2020(VaD)
E2000(MyonalTransdermal
Patch)E3810(GERD
Maintenance:JP)

T-614

E5564

MRI Contrast
Media

Treatment ofdiabetes

Filed
Pre Filed

E7210

E5555

KES524
E0735(Tambocor Sporadic
Atrial Fibrillation)

Total Projects:
33 (Increase of 5 since last year)
Advanced Projects: 18

E6010

Our pipeline has increasedin quality and quantity
since last year

What is the statusof the franchise?

Neurology Pipeline
In-house Research・AD

Aricept−Post-Aricept−Disease
Modification

Aricept

・Treatment of
Neuropathic pain,
psychotic disorder
Improvement of QOL
Effective compoundfor neurogenic pain
Effective compoundfor depression andanxiety

Aricept

Migraine
Aricept
VaD
prophylaxis Dementia associated with・PD

−Disease
Modification

Severe AD

Parkinson’s Disease

E2007

Parkinson’s Dyskinesia,
Epilepsy, MS

E2101

Spasticity
Due to MS, etc.

E2051

Acute Ischemic
Stroke

Filed

Ph. Ⅲ

Ph. Ⅱ

Ph.Ⅰ

E2014

MaxaltMigraine
treatment（co-promotion
with Kyorin）

Cervical dystonia(JP)（Botulinum Toxin TypeB）

Active Alliances in Neurology◆Alzheimer’s Disease
Research agreement with Neurogenetics, Inc. (California,
U.S.) was concluded for identifying genes that causelate-onset Alzheimer’s disease in October 2002

◆Migraine
Agreement concluded for jointly marketing rizatriptan
benzoate (migraine drug) with Kyorin PharmaceuticalCo., Ltd. in February 2003

◆Epilepsy
Under negotiation for obtaining worldwide development,
manufacturing and sales rights of an anti-epileptic drugin late clinical development stage◆Others
Sales affiliations have been considered in other fields
including Parkinson’s disease therapies

GI Franchise Pipeline◆Upper-tract
・Acid-relateddisease・H. pylori
eradication◆Lower-tract
・IBS

ParietE3309
H.
H. Pylori
Pylori
eradication
eradication

Effective
Effectivecompoundcompoundfor
fordiarrhea
type
IBS
diarrhea-type IBS
Effective
Effectivecompoundcompoundfor
forConstipation-type IBS
Constipation-type
IBS

Ph. Ⅰ

ParietParietH. Pylori
GERD
eradication
Maintenance(JP)(in preparation, JP）
Ph.Ⅱ

E3620
GERD/IBSGERD/IBS

Ph. Ⅲ

Filed

Oncology Franchise Pipeline
Discover molecule
Targeted medicines
Existing anticancer agents
inhibit normal call division.
However

KDR Kinase inhibitor
reduces development ofblood vessels which serve
to supply nutrition tocancer cells by inhibiting
signal transmission toincrease blood vessel cells.
Administration orally
for a long term.
Drug resistant cancer
appears lessAngiogenesis
Inhibitor(KDR kinase inhibitor)

Angiogenesis
Inhibitor(Integrin α2 inhibitor)

Ph. Ⅰ

Preclinical

E7389

Tubulinpolymerization
Inhibitor

New anti cancer
agent(Effective for Multi-drug– resistant tumors)

E7070

G1 phasearresting agent

Ph.Ⅱ

Sales in Neurology Franchise Area
Aricept

71.1

FY 2000

FY 2001

95.8

FY 2002
Estimation

115.0

Methycobal

Myonal28.6 9.7¥109.4 B

29.7 9.5¥135.0 B

30.0 9.0¥154.0 B(114%)(¥ Bil)

0

50

100

150

200

Sales in GI Franchise Area
Aciphex/Pariet

54.7

FY 2000

98.8

FY 2002
Estimation

114.0

50

Glucagon¥88.9 B

29.7 4.5

FY 20010

Selbex30.1 4.5 ¥133.4 B

27.0 4.0100

150¥145.0 B(108%)(¥ Bil)200

Three Franchise Areas havebeen further developed

Aricept and Aciphex/Pariet
Lifecycle Management
Aricept
・ VaD(FDA Advisory Board Meeting in 2Q 2003)
・ Severe Alzheimer’ Disease(Expected Submission: FY 2004 in the U.S. and EU)・ Migraine Prophylaxis(Expected Submission: FY2005 in the U.S. and EU)

・ Dementia associated with Parkinson’s disease(Expected Submission: FY2005 in EU)

Aciphex/Pariet
・ GERD Maintenance・ Symptomatic GERD

(January 2002： Filed in Japan)(February 2002： Approved in the U.S.)・ H. pylori Eradication(November 2002： Approved in the U.S.)H. pylori Eradication Period
for PPIs in the U.S.

◆AcipHex:®

7 days・ Prilosec®(omeprazole) : 10〜14 days®
®
・ Prevacid / Prevac(lansoprazole): 10〜14 days®

・ Nexium (esomeprazole) : 10〜14 days
No Indication®

・ Protonix (pantoprazole)Prospect of Aciphex Business in the U.S.-1◆Two additional indications were approved in
FY2002（Symptomatic GERD, H. pylori Eradication）◆By increasing sales force to over 500 during
2003, we aim to expand the share of voice◆Aciphex will keep growing during the patent
protection period（until 2013）, although generics
will launch in the market◆We target to achieve 15% of market share in
FY2006

Prospect of Aciphex Business in the U.S.-2◆The ratio of profit sharing with the partner
will not change.
◆The ratio of cost of goods will decrease.
◆MR fees and promotion fees will increase,
however, the ratio of these to the sales will
decrease.

As a result,
The profitability of Aciphex will improve.

Aciphex Sales and Share:
Results, Estimates in the U.S.
PPI Market

Sales
（$MM）

Sales

9500

Total Rx

Rx
Sales
(Million) （$MM）
100.0

9200

Share

1400

90.0

9000
8500

Sales and Share

8300

8400 8400

8500
8300

80.0
70.0

8000

Sales
1200

12.0%

1000
800

50.0
7000
40.0
6500

30.0

6000

9%
8%

1250

10.0

5000

0.0
FY2001 FY2002 FY2003 FY2004 FY2005 FY2006

Source: Eisai

10.0%
8.0%

600
400

695

6.0%

820

4.0%

20.0

5500

16.0%
14.0%

Share

60.0
7500

15%

200

2.0%

0

0.0%
FY2001

FY2002

FY2006

Estimate

TargetPariet in Japan(¥ Bil)706050Duodenal ulcer Prescriptions for Stomach Ulcer（Share）
H2RA PPI Others
Gastric Ulcer
GERD

40

FY2002 63%: 12%: 25%
FY2006 30%: 50%: 20%

¥60 B
30

340

30
20
10
0

¥10 B
¥6 B
5
45
10

FY2002Estimate

107020FY2003
Estimate

GERD （Diagnosed & Prescribed）

FY2002
PPI 9.6 M

FY2006
16.6 M(1.7 times)

230
FY2006
Target◆Stomach Ulcer: Increase of patients with ulcers due to mental stress, orwith NSAIDs ulcer . Early recovery and improvement ofpain by PPI treatment◆GERD: Increase in patients due to increase in western dietary habits, lossof esophaegeal muscle strength accompanying age

Aciphex/Pariet Sales:
Results, Estimates by Region
US

JP

EU

AS

Overseas

0.9

FY2001 5.4

87.0

FY2002 6.0
Estimate

FY2006
Target5.5¥114 B(115%)

108.0

60.0

0

50

¥98.8 B
(181%)

100

160.0¥220 B150200 (¥ Bil)

Development of U.S. Aricept
Market and Sales($ MM)

Target Market

($MM)

3500

Sales of Aricept

1000

850

Migraine

3000

50
20
130

800
2500

SevereAD 600

2000
1500

VaD

400

1000

533
AD

500
0

FY2002 FY2003 FY2004 FY2005 FY2006

Source: Eisai

VaD

Severe AD
Migraine

600

650

200

0

FY2001 FY2001
Estimate

FY2006
TargetAricept Sales in Japan
Sales(¥ Bil)500
400¥50.0 B
Sales
Penetration Ratio（Patient Number/Potential Patients)

300
200
100
0

43.5%

¥23.0 B
¥13.7 B

Penetration
Ratio (%)

60%

50%

40%

28.3%
30%

21.6%
FY2001

FY2002Estimate

FY2006
Target20%

Aricept Sales:
Results, Estimates by Region
JP

US

EU
1.8

FY2001 13.7

66.7

FY2002 23.0
Estimate

FY2006
Target13.6¥95.8 B
(135%)¥115 B(120%)

92.0

50.0

OverseasAS¥180 B

130.0(¥ Bil)
0

50

100

150

200

Profitability

FY 2002 Consolidated
Sales and Income Estimates
Estimate

CY/PY%Net Sales¥ 460.0 Bil

107%

Operating
Income75.0

103%

Net Income

40.0

110%

EPS
ROE
ROA

¥136.810.7%
7.0%

Eisai Inc.(U.S.)

FY2002 Sales and Income Estimates
Estimate

CY/PY$1,420M

116%

$50M

111%

Op. Income before
royalty deduction $210M

121%

Sales
Operating
IncomeFY2002 1st Harf Results
Sales
Operating
IncomeResults

CY/PY

$700M

116%

$19M

50%

Op. Income before
royalty deduction

$95M

102%

Eisai Inc. (U.S.)

Operating Income
Before Royalty Deduction by Products
($MM)

250
200

230.0

Aricept

Aciphex
170.0

150
111.3

128.3

100

140.0

70.0
43.4

50
14.7

0
FY2000FY2001

FY2002Estimate

FY2006
TargetWe will maintain aggressive
investment in U.S. operations.
Increasing sales will improve
profitability

The Ratio of Operating Income
Before Royalty Deduction by Area
¥ 100 Bil

¥ 75 Bil
18%

18%

Japan

15%

U.S.

17%
11%

Asia
EuropeFY2002Estimate

18%
18%
12%
FY2006
TargetProfitability
Profitability has
has been
been increasing
increasing steadily.
steadily.
Sales
Sales andand incomesincomes areare expected
expected toto keep
keep
growinggrowing based
based onon robustrobust U.S.
U.S. operations
operations
andand expansion
expansion ofof indication
indication forfor Pariet
Pariet ininJapan.
Japan.
We
We will
will continue
continue ourour global
global strategy
strategy totoachieveachieve Eisai’s
Eisai’s Millennium
Millennium Plan.
Plan.

Consolidated Net Sales Estimate
by AreaJP

FY 2001

US

246.6

Japan 57%
FY 2002
Estimate

AS

157.0

7.0
21.1

Japan 54 %¥ 431.7 B(119%)

Overseas 43%¥ 460.0 B(107%)

Overseas 46%¥ 600.0 B

320.0

280.0

0

Overseas

210.0

250.0

FY2006
TargetEU

Japan 47%

Overseas 53%

100

300

200

400

500

600

700

(¥ Bil)Consolidated Net Income Estimate
by AreaJP
FY 2001

US

31.3

Japan 86%
FY 2002
Estimate

EU
3.3 1.2
0.8

FY2006
Target6.5

20¥ 60.0 B

18.0

Japan 70%10

¥ 40.0 B(110%)

Overseas 16%

42.0

0

¥ 36.5 B

Overseas 14%

33.5

Japan 84%

Overseas

AS

Overseas 30%
30

40

50

60

70

(¥ Bil)Operating Income
Before Royalty Deduction(¥ Bil)-FY2002 V.S. FY 2006-

120.0
100.0

¥100.0 Bil¥75.0 Bil

80.0
60.0

31.0

Overseas
41%

44.0

Japan
59%

50.0

Overseas
50%

50.0

Japan
50%

40.0
20.0
-

FY2002Estimate

FY2006
TargetConsolidated Financial Estimate
Net Sales, R&D exp., Operating Income, Net Income

500¥431.7 B(119.3%)

Net Sales

72.7

400

100
0

Net
Income（Sales%）R&D exp.
（Sales%） (¥ Bil)

120¥600.0 B¥460.0 B

100.0 100

(106.5%)(16.7%)

75.0(16.3%)

80(16.8%)

300
200

Operating
Income（Sales%）

60.0

55.0

(13.0%)

36.5

40.0

(12.8%)

60

60.0(10.0%)(8.5%)(8.7%)

EPS: 123.5円
ROE: 10.3%
ROA: 6.6%

EPS: 136.8
ROE: 10.7
ROA: 7.0

EPS: 200.0
ROE: 12.0
ROA: 8.5

FY 2001

FY 2002
Estimate

FY 2006
Target40
20

Operating Income, R&D exp., Net Income(¥ Bil)
600

Net
Sales
（CY/PY%）0
FY2006：$1= ¥ 115.00

Eisai will maintainstability and sustainable growththrough Vision Driven Operations
And Management Leadership& Compliance