Daiwa Investment Conference Tokyo 2011
March 9, 2011

Haruo Naito
President and CEO
Eisai Co., Ltd.

Safe Harbor Statement
•

•

•

•
•
•

1

Forecast or target figures in this material are not official earnings guidance but present
the midterm strategies, goals, and visions. Official earnings guidance should be referred
to in the disclosure of the annual financial report (kessan tanshin) in accordance with therules set by Tokyo Stock Exchange.
Materials and information provided during this presentation may contain so-called“forward-looking statements.” These statements are based on current expectations,forecasts and assumptions that are subject to risks and uncertainties which could cause
actual outcomes and results to differ materially from these statements.
Risks and uncertainties include general industry and market conditions, and generaldomestic and international economic conditions such as interest rate and currency
exchange fluctuations. Risks and uncertainties particularly apply with respect to productrelated forward-looking statements. Product risks and uncertainties include, but are notlimited to, technological advances and patents attained by competitors; challenges
inherent in new product development, including completion of clinical trials; claims andconcerns about product safety and efficacy; regulatory agency’s examination period,
obtaining regulatory approvals; domestic and foreign healthcare reforms; trends toward
managed care and healthcare cost containment; and governmental laws and regulations
affecting domestic and foreign operations.
Also, for products that are approved, there are manufacturing and marketing risks anduncertainties, which include, but are not limited to, inability to build production capacity tomeet demand, unavailability of raw materials, and failure to gain market acceptance.
The Company disclaims any intention or obligation to update or revise any forwardlooking statements whether as a result of new information, future events or otherwise.
This English presentation was translated from the original Japanese version. In the eventof any inconsistency between the statements in the two versions, the statements in theJapanese version shall prevail.

Mid-term Strategic Plan
“HAYABUSA”(FY2011-2015)- Era of Transformation -Hayabusa:
Hayabusa, an asteroid explorer, hastraveled over 6 billion kilometers
overcoming two major crises
yet returned having achieved
its original objectives.

Adapting to the Era of Great Globalization
Launch New Strategic Plan “HAYABUSA”

More Stringent Environment andStagnant Growth in Matured Markets
1. General Environment:• Governments to introduce further costcontainment measures due to economic
downturn and augmented medical costs

Significant Growth Opportunity in
Emerging Markets
1. General Environment:••• HTA(Health Technology Assessment) as defacto hurdle for drug reimbursement

2. Drug Discovery/Development:•••

Innovative Ideas
Cutting-edge Technologies
Stratified Patients Trial

3. Taxation System:••

3

R&D expense benefit
Patent Income benefit(Innovation Box, Patent Box)

Rapid expansion of middle-income class
China, South Korea, India, Brazil, Russia,
Indonesia, and Turkey:• Exceeding 20% of the global
pharmaceutical market by FY2015• CAGR 15% (40% of global
pharmaceutical market growth)

2. Drug Discovery/Development:•••

Conventional Technologies
Large-Scale Screening
Large-Scale Trials

3. Taxation System:• Tax Holiday (SEZ: Special Economic Zone)• Tariff reduction(TPP：Trans-Pacific Partnership,
EPA：Economic Partnership Agreement)

Aspiration
We Will Benefit Millions More Patientsin the Great Globalization Era,
Wind Down Japan/US/Europe-Centric
Relationship with Global Partners,
and Transform Ourselves intoa Global Top-Tier
High-Performing Company
4Enhancing Contributions to Patientsin the Era of Great Globalization
5-year cumulative number of patients
served by Eisai Products

Number of countries
served by Eisai products(Million)
114

500+

10

More Than
DoubleNorth America
Middle East

12

Central/South America

13

Africa37

Europe40

Asia / Oceania

66

10
200+

2

2

6

3

23

22
FY2006-10(internal estimates)
5

FY2011-15

FY2006-10

FY2011-15

Note: including all types of market entry (affiliates, branches,
distributors, and rep offices) and countries to provide DEC for
lymphatic filariasis

Dawn of Great Globalization

Entries to All Top 20 Countries in Next 5 years
Outlook of global pharmaceutical market

6

2010

2014

Globalshare(%)($ million)
CAGR

Significant expansion ofcontributions to patients throughour corporate mission “humanhealth care” concept*1

1

United States

308,436368,262

33.5%

4.5%

2

Japan

85,672

102,812

9.3%

4.7%

3

Germany

44,88649,720

4.5%

2.6%

4

France43,71946,469

4.2%

1.5%

5

China

32,076

71,889

6.5%

22.4%

6

Italy

28,94632,168

2.9%

2.7%

7

Spain

25,27030,747

2.8%

5.0%

8

United Kingdom

21,64024,574

2.2%

3.2%

9

Canada21,58225,356

2.3%

4.1%

10

Brazil

17,09725,487

2.3%

10.5%

11

Russia12,09918,977

1.7%

11.9%

12

South Korea

11,161

16,322

1.5%

10.0%

13

Australia

10,961

13,132

1.2%

4.6%

14

Turkey10,531

15,071

1.4%

9.4%

15

India

9,761

16,932

1.5%

14.8%

16

Poland

7,373

9,674

0.9%

7.0%

17

Mexico

7,344

7,661

0.7%

1.1%

18

Netherlands

6,633

6,657

0.6%

0.1%

Current presence

19

Greece

6,500

6,443

0.6%

-0.2%

Markets to enter

20

Venezuela

6,004

18,952

1.7%

33.3%

© 2011 IMS Health. All rights reserved.
Source: Estimated based on IMS Knowledge Link
Reprinted with permission*1CAGR: Compound Annual Growth Rate; *2PPP: Public Private Partnership

Global number of patients Eisai serves tosignificantly expands from 200 million+
during FY2006-2010 to 500 million+ during
FY2011-2015
Contribution to over 250 million populations
at risk of lymphatic filariasis in 37 countries,
providing 2.2 billion tablets of DEC(Diethylcarbamazine) at price zero incollaboration with WHO
Entries to all top 20 countries during FY20112015 to achieve further patient contribution
Providing disease solutions, enhancing
access by PPP*2, and providing products ataffordable pricing*1 hhc: The Eisai Group’s corporate philosophy: To give firstthought to patients and their families and to increasing thebenefits healthcare provides.
*2PPP: Public-Private PartnershipToward Global Top Tier (1)Transformation of P/L structure

15％

17％

16％

13％

22％

4％

25%+

OperatingprofitLess than
1%

Alliance
fees

27％

27％

27％

19％

20％

21％

28％

FY2010
Forecast
7

Cost
efficiency

R&D expenses
Proactive
investment

18％

21％

SG&A (Others)

26％

27％

FY2013
TargetWind down the partner
dependence
Efficient and leanorganizational structure
Increasing investment
for securing growth byinnovation
18% to 20%+

26％

COGS
FY2011
TargetSignificant increase inoperating profit ratio
15% to 25%+

FY2015
TargetThorough cost
reduction

Target 26%

Toward Global Top Tier (2)Streams of ROE, EPS, and Cash Income
(Yen)
600
500

25.0%
20.0%

ROE*1

400

15.0%

300
200

10.0%

EPS *2

100

5.0%

0

0.0%
FY2010(Billion Yen) Forecast

FY2011
Target

FY2013
Target

FY2015
Target200• EPS will increase to nearly
500 yen by FY2015 (CAGR 15%)
• ROE enhancing from 17% in
FY2010 to 20%+ in FY2015• Cumulative cash income during
FY2006 – 2010 is approx.
570B yen

Cash Income*3160

Cash income to increase toapprox. 750B yen level during
FY2011 - 2015

120
80
40
0
FY2010
Forecast

FY2011
Target

FY2013
Target

FY2015
Target*1ROE: Return On Equity*2EPS: Earnings Per Share*3Cash income is the total amount of cash available for investments for growth, business development, dividend payment, and repayment of borrowings, etc.

8Cash income = Net income + Depreciation of PP&E and Amortization of intangible assets + In-process R&D + Amortization of goodwill + Loss on impairment(including loss on devaluation of investment securities)

Overview of Plan “HAYABUSA”
1. Rise of East Asia Region to drive growth of global Eisai
2. Dawn of the great globalization era: benefiting millions
more patients with our product line-up including zero-priceproduct and entering all of global top 20 markets
3. Efficient and lean commercial structure to create value forpatients
4. Thrusting into global top 10 in oncology by reaching
US$2 billion sales through women’s oncology strategy
5. Evolving towards “focused” medicines to maximize patient
benefits
9

Roadmap for the Plan “HAYABUSA”

Resuming growth trajectory from FY2013; record-high level in FY2015
Aim for 800B yen+
770B yen

Aim for 200B yen+
OP margin at 25%+

Net sales

OP margin at approx. 22%

Operatingincome116B yen(OP margin at 15%)

FY2010
Forecast

10

FY2011
TargetAssumed average exchange rates:
FY2010: $1 = 85.6 yen; 1 Euro = 112.0 yen; and 1 GBP = 131.9 yen
FY2010-2015: $1 = 85 yen; 1 Euro = 110 yen; and 1 GBP = 135 yen

FY2013
Target

FY2015
TargetRoadmap Supported by Key Events
Endometrial (US)Melanoma (US)New product schedule
Chronic hepatitis B(CN)
Insomnia (JP)Breast cancer -3L(EU)
Breast cancer –2L/3L (JP)FY 2011

1. Launch of Eisai East Asia
(Japan, China, Hong Kong,
Taiwan, South Korea)
2. Start of New Business
Models in US and Europe

Obesity (US)Partial Onset
Seizures (US, EU)

Platinum-sensitive
ovarian cancer(US)
Platinum-resistantovarian cancer(US)
Generalized TonicClonic Seizures(US, EU)

Breast cancer -2L(US)Breast cancer -2L(EU)
Breast cancer –2L/3L (CN)FY2012FY2013

1. Termination of Aricept
Agreement with global partner
in Japan
2. Aricept 23mg Peak Sales
at US$ 600M in the US

3. China Strategic Investment
4. Market Entry to Canada
and Russia
5. Termination of Pariet
Agreement w/ Global
Partner in China
6. Aricept LOE in Europe andJapan (mild to moderate)

3. DEC Supply for Lymphatic
Filariasis

Idiopathic
thrombocytopenic
purpura (US, EU)

Hepatocellular
Carcinoma (CN)

Low-grade NonHodgkin
Lymphoma (JP)Thrombocytopenia
associated with liverdisease (CN)Thyroid Cancer(US, EU, JP)
Platinum-sensitive
ovarian cancer(EU)
Partial Onset
Seizures Monotherapy(US)
Sarcoma(US, EU, JP)FY2014

1. Sales Expansion of
Halaven (global)
2. Sales Expansion of
Hepatology Area in China
3. Full Capacity Utilization at
2B Tablets at Vizag in India
4. Market Entry to Brazil,
Mexico and Turkey

4. Commencement of Pilot
Plant for mAb in the US

5. UK Patent Box Start

5. LOE of Pariet in Europe

6. Net DER < 0.3
7. LOE of AcipHex and
Aricept 23mg in the US

Lennox-GastautSyndrome (US,EU)
Non-Small-Cell
Lung Cancer(US, EU)
Non-Small-Cell
Lung Cancer(JP)perampaneleszopiclone
E5501 (AKR501)
farletuzumab
clevudine
lenvatinib
lorcasein
Treakisym

FY2015

1. Global Top 3 with Women’s
Oncology Products
2. Transformation of Production
Sites (Japan and Asia)
3. Strategic Investment to New
Business Models in Emerging
Markets

1. Top 10 in Oncology
2. No. 1 Epilepsy Company inEurope
3. NDA Submission of AD
Project Based on Aβ Hypothesis
4. First IND from H3 Biomedicine

Key Business Events
Business Expansion

8. Aricept LOE in Japan (SAD)

11

Halaven

Structural Transformation

Business Scheme ChangeTransformation of Regional Balance
From U.S. to East Asia and New Markets• East Asia to lead overall
growth, especially in Japanand China, expanding from
49% in FY2010 to 63% in
FY2015 with 6% CAGR (26%
CAGR in China, 5% CAGR in
Japan)

Revenue By Region

CAGR(FY2010-15)(Billion Yen)

900

OthersEurope

5%

23%

US

-9%

4%

Emerging /34%
New Mkts

800
7%

700

6%

600

• Emerging / New Markets ininvestment period, increasingfrom 1% to 4% and focusing
on India, Brazil, Russia,
Canada and ASEAN with
CAGR of 34%• Streamlined and refocused
US and Europe operations,shifting to specialty
businesses such as oncology
and epilepsy
12

40%

500
400

1%

300
200

63%

49%

East Asia

6%(Japan)(5%)(China)

(26%)

100
0
FY2010 FY2011
Forecast Target

FY2013
Target

FY2015
TargetOutline of East Asia Region

•

•

•

Concept of East Asia

Framework of East Asia

Ahead of the competition,synergy of knowledge sharing,
local talents across East Asia Region

East Asia
RegionHead

Sharing and expanding hhc knowledge– Local talents across East Asia to experience
hhc with Eisai Japan and bring back knowledge
to East Asia
– Globalization of Eisai Japan
Sharing business practices (CNS, Oncology, RA,
GI/Liver) such as KOL (Key Opinion Leader)exchange– Aricept: Japan/ China/ South Korea/ Taiwan/HK– Pariet: Japan/ China/ South Korea/ Taiwan/ HK– Halaven: Japan/ China/ South Korea / Taiwan/HK– Humira: Japan/ South Korea/ Taiwan– Stronger Neo Minophagen C: Japan/ China/
TaiwanTo be led by strong local leadership– Advancement of the management by local head
– Acceleration of clinical development in East

Asia with JAC (Japan/Asia Clinical Research
PCU)

13

Japan

China

Korea

TaiwanHong Kong

Local top

Local top

Local top

Local top

Local top

Prescription

OTC

Diagnostics

Generics

Japan

✓

✓

✓

✓

China

✓

TBD

TBD

TBD

Korea

✓

Taiwan

✓

✓

Hong
Kong

✓

✓

Transformation to Efficient andLean Commercial Structure

Japan
•

Transform from Solo Eisai Japan to
the Core of East Asia

From “building supportive communities for patients” to “Patient Journey” business model”; Expanding
further to East Asia
“Patient journey” business model: provide value-added services and information throughadvantage of four integrated segments (prescription drug, OTC, diagnostics, and generics)
from prevention, diagnosis, treatment to prognosis•

Leverage strong network with KOLs in common therapeutic areas•

Headcounts from 2,400 to 2,300+

China

Massive Fieldforce Model to Focus Approach
Adaptive to Areas and Product Characteristics•

Improve employee turnover rate and productivity through dissemination of hhc, personnel
exchanges, and enhanced career programs in East Asia•

Cancer, liver disease, CNS: marketing-driven business model by establishing business units
for covering major cities•

Sales-led business model through alliance with local partners to efficiently expand coverage
to rural areas•

Headcounts in principle flat at approximately 1,300

14Transformation to Efficient andLean Commercial Structure
Transform from Mass Market/Co-Promotion Model
US to Independent
Neuroscience/Oncology Franchise Model• Optimize smaller cross-functional field teams, including clinical nurse educator team andManaged Markets, to reach customers• Accelerate shift to oncology franchise model by focusing in women’s oncology• Further enrich neuroscience franchise with addition of epilepsy product line
• Headcounts from under 1,600 to 1,000+

EU

Transform from Country-Based Business Modelto “One Europe” Business Model• One Europe with three pan-European business units (Epilepsy, Institutional Care, Mature
Brands) and three sub-European regions (North, Central, South) to create value for patientswith more optimized resources• Pan-European Market Access Team: purpose is to acquire price and reimbursement basedon Health Technology Assessment in a timely manner• Headcounts from under 900 to under 700
15

New Business Models
in Emerging Markets
Provide Disease Solution Model leveraging Eisai’s strengths•

Focus Diseases: CNS (elderly), Oncology (breast cancer), Liver Diseases, and Epilepsy•

Wide Range of Product Lineup: Brand Products + Branded Generic Products

Approach to rapidly growing Middle-Income Class population

16•

PPP(Public Private Partnership)
Establish medical network and enhance awareness by collaborating with public sectors•

Local Partnership
Provide products to wider area by leveraging local partners’ strength•

Affordable Pricing
Realize pricing policy that matches with patients’ out-of-pocket costs

Transformation of Franchise Portfolio
From Aricept/Pariet to Oncology, Epilepsy, and Liver Diseases• Oncology represents significant
unmet medical needs in bothmatured and emerging markets –rapid expansion surpassing
180B+yen in FY2015 to place Eisai
in top 10 globally (150B yen in
women oncology alone)

Revenue By Franchise(Billion Yen)

800

• Aim for global leadership position
within neuroscience700- Further enhancement of patient
values with Aricept (23mg etc.) in the$5B+ AD market
Growth in East Asia and emerging
markets- Franchise expansion (perampanel,
Zebinix, Banzel/Inovelon, etc.)
towards global top3 in $4B+ market
of epilepsy

600• Build-up of liver business inemerging markets (clevudine,
Stronger Neo-Minophagen C, Livact,
etc.)

CAGR
(FY2010-15)

900

27%
24%
3%

500

18%

400
10%

300

4%
9%

22%

GI/
Liver

Liver disease
treatments, etc.

9%

Pariet/Aciphex -12%

Oncology

18%

7%
22%

200

Epilepsy, etc.

29%

Neuroscience

100

38%
16%

0
FY2010 FY2011
Forecast Target
17

3%

Others

FY2013
FY2015
TargetTargetNote: assuming no acquisitions

Aricept-15%

7 Major NMEs Expected to be Launched
During the Plan “HAYABUSA”
HalavenMicrotubule dynamics inhibitor

CancerApproved

clevudine

DNA polymerase inhibitor

Hepatitis B

Filedperampanel AMPA receptor antagonist

Epilepsy

Preparation
for Filinglorcaserin

5HT2C receptor agonist

Obesitylenvatinib

VEGF receptor multi target
tyrosine kinase inhibitor

Cancerfarletuzumab
E5501
18

Humanized IgG1 Molecular antibody that
Cancertargets folate receptor alpha (FRA)

Thrombopoietin receptor agonist Thrombocytopenia

Filed(Preparation for
Reply to FDA)Ph IIIin preparation
Ph IIIPh IIIin preparation

Prioritize Projects
with High Probability of Success•

Focus on the in-house projects with POC completed
to deliver meaningful result by 2015
Project

Indication

Development Stage

Submission Schedule

Halaven LCM

Breast cancer 2nd line

Ph III

FY2012

Non-small cell lung cancer

Ph III in preparation

Beyond FY2014

Sarcoma

Ph III in preparation

FY2013

perampanel LCM

farletuzumab

lenvatinib

E5501
19

Generalized seizures

FY2013

Partial onset seizures(monotherapy)

FY2013

Lennox-Gastaut syndrome

Beyond FY2014

Platinum-sensitive ovariancancerPh III

FY2012

Platinum-resistant ovariancancerPh II

FY2012Thyroid cancer

Ph III in preparation

FY2013

Melanoma

Ph II

FY2012Endometrial cancer

Ph II

FY2012

Hepatocellular carcinoma

Ph I/II

Beyond FY2014

Idiopathic thrombocytopenic
purpura (ITP)

Ph III in preparation

FY2013“(Approval of Halaven was) a Triumph ofChemistry and Tenacious Research”-Wall Street Journal-

 An article on Wall Street Journal titled “New Breast Cancer Drug Found
Deep in the Sea” by Peter Landers on January 3, 2011
Amid a dry spell for breakthrough cancer drugs, recent U.S. approval of Eisai Co.'s
Halaven represents some vindication for a small group of researchers who believe,
contrary to recent pharmaceutical fashion, that molecules from nature hold promise
against hard-to-treat diseases.

Halaven is derived from a substance in a
Japanese black sponge Okadai
20
20

The Food and Drug Administration's
approval of Halaven in November fortreating late-stage breast cancer was atriumph of chemistry and tenacious
research. Its path, extending nearly three
decades from the first studies,demonstrates not only potential benefits
but also some of the hurdles in the hunt
within nature's bounty for drugs of the
future. (excerpts)

Halaven and Perampanel
2 Blockbuster Candidates

Halaven
Liposomal Formulation
Combination therapy
strategy with in-houseanti-cancer agent
Breast Cancer Adjuvant

Breast Cancer 1st Lineperampanel

Aim at$1
Beyond FY2015 billion
levelof salesAim at$2
Up to FY2015
billionlevelof salesUp to FY2015

Sarcoma, prostate, etc.

Breast Cancer 2nd Line

Breast Cancer 3rd Line21

(Pediatric Adjunctive)

Lennox-GastautSyndrome

Partial Onset Seizures
Monotherapy

Non-small-cell lungCancer

Aim at$1billionlevelof salesPartial Onset Seizure

Aim at$500
millionlevelof salesPrimary Generalized
Tonic-Clonic Seizures
Adjunctive

Partial Onset Seizures
Adjunctive

Contribution to Alzheimer’s Disease Treatment

Next generation AD treatment in addition to Aricept franchise

Aricept franchise strategy
Growth Ratio of
Dementia Population
over next 20 years(internal estimates)

US

Japan

China

South
Asia
Latin
America
22+63%• Position Aricept 23mg as essential drug formoderate-to-severe AD• Rapid uptake of 23mg to achieve $600
million sales in FY2012+57%• Realize “AD life-time care” for AD patientsand caregivers by providing product, services,
information, and network for disease
prevention, diagnosis, and treatment• Maintain approx. 100 billion yen sales
annually

+117%

+107%
+77%

• Establish Aricept business unit
• Expand market access with business unit
focused on AD• Pursue five-fold sales increase from FY2010
to FY2015• Expand market access through diseaseawareness programs and affordable pricing• Increase 10mg contribution for upcoming
23mg launches

Next generation
AD treatment
BAN2401
Novel fully humanized monoclonal
antibody that removes neurotoxic
beta-amyloid protofibrils, which isconsidered as one of the causes of
AD

E2609
Next-generation AD treatment that
reduces total beta-amyloid, aiming
not only symptomatic improvement
but also disease modification

E2212
Next-generation AD treatment that
expects symptomatic improvement aswell as disease modification

Focus in women’s oncology
Vying for a Top 10 Oncology Spot($ million)
Global Women’s Oncology franchisesales outlook

Halaven
Aloxi/netupitantfarletuzumab
lenvatinib

others• Top 10 Global Oncology Player– 2009 top 10 ranking entry point of atleast $1.5B with market growth at 8%
per year– FY2015 revenue target of $2B+ vying
for a top 10 spot

• Top 3 Position in Women’s Oncology

23

FY2010
Forecast

FY2011
Target

FY2013
Target

FY2015
Target– Halaven in breast cancer +Farletuzumab in ovarian cancer +lenvatinib in endometrial cancer andthyroid cancer + Aloxi/netupitant for
supportive care totaling $1.5B+ in
FY2015 and 10%+ market share– Aiming a top 3 spot in women’s
oncology by 2015

Aim for Global Top Three
Epilepsy Player
Perampanel to Drive Growth

Global Epilepsy Franchise
Sales Outlook• Extensive epilepsy treatment lineup
with different mechanism of action,
including perampanel, Banzel/Inovelon,
Zebinix, and Zonegran(billion yen)
800
80

600
60

perampanel• Perampanel as first-in-class AMPA
receptor antagonist to provide a newtreatment option to epilepsy patients

others• Further enhancement of patient value
by perampanel: adjunctive therapy ofprimary generalized tonic-clonicseizures, monotherapy of partial
seizures, and Lennox-GastautSyndrome

400
40

200
20

• Provide value-added information
utilizing rich clinical data and patientdata

0

２０１０年度FY2010

Forecast
見通し

24

２０１１年度FY2011

目標
Target２０１３年度FY2013目標
Target２０１５年度FY2015目標
Target• Evaluate for potential combination
therapy within Eisai products

Accumulate knowledge about epilepsy while providing physicians
and patients with value-added services as well as information

Growth of Liver Disease Franchise

Expansion in East Asia and New Markets
with clevudine, Livact, Stronger Neo-Minophagen C, and E5501(billion yen)24
240

Product lineup to cover liver diseases
from diagnostics to treatment
Diagnosis
PIVKA
Hepatitis B clevudine, Stronger Neo-Minophagen C
Hepatitis C Stronger Neo-Minophagen C
Hepatic cirrhosis
LivactHepatocellular carcinoma DC-Bead, lenvatinib, E7050
Idiopathic thrombocytopenic purpura (ITP)
E5501

リーバクト
Livactクレブジン
clevudine
強力ネオミノファーゲン
Stronger Neoシー
Minophagen C

120
12

0
２０１０年度FY2010見通し
Forecast

25

２０１１年度FY2011
目標
Target２０１３年度FY2013目標
Target２０１５年度FY2015
TargetFulfill Asian-specific unmet medical needs with multiple treatment
options in different stages of liver diseases

Transformation of Global Manufacturing Operations
Shift of Product Supply from Japan-Centered to Overseas

Upfront Strategic Investment inIndia, UK and US (Oncology)(DLP)

Increase in Product Supply
from Overseas such as India(Plan HAYABUSA)

Increase in Global-basePatient Contribution
Commitment to Absolute Quality
Uninterrupted Supply
Realization of Affordable Pricing

Toward Implementation Phase of Global Logistics
26

Commitment to Maximization of Shareholder Value
Solid Foundation lies in One of the Most Advanced
Corporate Governance Systems in Japan(since June 2004)

General Meeting of Shareholders
Board of Directors: 11 members (7 Independent, 1 from Management), Chair: Independent

Audit Committee
5 members(3 independent, 2 Inside)
Chair: Independent

Nomination
Committee
3 members(All members are
Independent)

Compensation
Committee
3 members(All members are
Independent)

Audit by Audit
Committee

Corporate Management- CEO and Chairperson of the Board are segregatedwith the Chair being an independent outside director- Three Committees (Audit, Nomination, Compensation)with each Chair thereof being an independent outside director
27Redefining Repatriation to Shareholders,
Debt Repayment, and Strategic Investments(Yen)

Image of Dividend Trajectory

Image of net DER Migration

200

150
Target100
Financial flexibility subject toinvestment opportunities

500FY2010
Forecast

FY2011
Forecast

FY2013
Target

FY2015
Target

FY2010
Forecast

FY2011
Target

FY2013
Target

FY2015
Target• DPS (dividend per share)150 yen+
• Cash generating capability to enable debt
repayment in line with maturity ladder• DOE (dividend on equity) 8%+• Strive to achieve the targeted net DER of• FY2011-15 cumulative dividends= approx. 1/3 level of cumulative cash income 0.3 by FY201328

Investment for Growth
Case
Cash income
approx.
300B yen

1. Objectives of M&A and businessdevelopment (BD):
750B yen level– Accelerating growth in East Asia
– Establish new business model in newmarkets– Enhance CNS product portfolio

Shareholder
return30%+– Enrich the product line-up in the area of
women’s oncology
2. Technology platform:-Investment for transforming to “focused”

Debt
repayment
25-30%

FY2006-2010
Forecast

29

FY2011-2015
Targetmedicine
3. Strategic CAPEX:– Production of monoclonal antibody– Expansion of manufacturing facility inIndiaToward Global Top-Tier with
the Metrics of Shareholder Value Creation
 ROE: 20％ or more-

Positioned as top priority indicator for
shareholder value creation-

Far exceeding Cost of Equity-

Aim at world-class 15% of Equity-Spread*1-

Enhance capital efficiency by reducing crossshareholdings and other means

ROE
(%)

 DOE: 8% or more-

Intend to reimburse Cost of Equity
with actual cash dividend- Allotting 1/3 of Cash Income as dividend- Stability policy for sustainable dividend payout

 Net DER*1: 0.3 or less-Decreasing WACC*2and maintaining credit rating-

Secure the financial leeway in balance sheet
management

FY2011

Forecast

TargetTarget*1Equity spread: ROE – cost of equity (%)*2WACC: Weighted Average Cost of Capital

30*3Assuming 8% level of cost of equity

TargetRobust Increase of Cash Income
FY2015 Target
Aim at cash income of 170B+ yen
Strategic
investment

FY2010 Forecast
Cash income of 121B yen

Debt
repayment

Dividends
Strategic
investment

Debt repayment

CAGR8%

Dividends
Allocating
approx. 1/3 ofcash incomein the mid-term range

DOE of 8%+31

Striving to maintain andincrease dividends

Reference Information

Overview of the
Dramatic Leap Plan (DLP*)*DLP: Mid-term Strategic Plan
during FY2006 and FY2011
replaced by plan “HAYABUSA”

Global success ofAricept and Pariet/AcipHex


AriceptPeak sales: approx. 323B yen (FY2009)
Established its market position as a gold standard treatment for mild,moderate, and severe Alzheimer's disease

Pariet/AcipHex
Peak sales: approx. 176B yen (FY2007)
Contributed to significant number of patients as one of the few patentprotected branded PPIs in the U.S. and Europe
Gained No.1 share among branded PPI products in the Japanese market

Established global capabilities in all functions
including manufacturing and commercial
by these two products
34

Establishment of oncology franchise







Equipped with drug discovery capabilities for both small molecules andantibodies
Aim for full-fledged product line from chemotherapy agents, moleculartargeting agents, antibodies, to supportive care agents
Established franchise with 3 acquisitions: Ligand products, Morphotek,
and MGI

Success of drug discovery for Halaven

Oncology franchise accounts for 10% of global sales

Successfully entered oncology therapeutic area
where largest unmet medical needs exist globally
35

Proactive M&A with leveraging strategy•••

2006 Acquisition of Ligand products (US$205M) = cash deal
2007 Acquisition of Morphotek (US$325M) = cash deal
2008 Acquisition of MGI (US$3.9B) = debt financing
Funding with pecking order of shareholder value creation,
thereby avoiding dilution and improving capital efficiency- Significant enhancement of EPS, cash EPS, and ROE- Net DER to maintain credit rating of A or above by B/S management••••

EPS will be reaching 246 yen (FY2010) from 222 yen (FY2005)
Cash EPS will be increased to 425 yen (FY2010) from 311 yen (FY2005)
ROE will be improved to 17% (FY2010) from 13% (FY2005)*FY2010 figures are forecasts
Net DER at 0.5 level in FY2010

Realized strategic vision to enter into oncology therapeutic area by M&A
36

Pros and Cons of product creationConsequences of challenging unmet medical needsTerminated projects
Parkinson’s disease: perampanel (AMPA receptor antagonist)
Pediatric indications in the U.S. and Europe: AriceptProjects lagged behind the schedule
Halaven (previously assumed filing under subpart H: microtubule dynamics
inhibitor)
eritoran (endotoxin antagonist)
E5555 (PAR-1 antagonist)
AcipHex-ER (long-acting PPI)

Major development projects in Japan progressed as scheduled
Achieved approvals of Aricept 23mg and Halaven, and successful
phase III study for perampanel in FY2010

Deviated from the original plan to launch new products
37

Pros and Cons of global partnershipGlobal partnership greatly contributed to global expansion of Aricept
and Pariet/AcipHex (R&D, regulatory, manufacturing, and commercial),
thereby leading to accumulation of knowledge obtained from suchpartners

Established own commercial structure and full value chain in the U.S.
and Europe

Increase of alliance fees in accordance withsales expansion
38

Pros and Cons of Financials





39

FY2010 net sales will underperform the DLP target due to delays of new
products (perampanel, Halaven, and eritoran), project termination for Aricept
pediatric indication in the U.S., foreign exchange impact, and other factors.
Operating profit will also fall short of the DLP target due to non-achievement oftargeted sales of new products and the Aricept in the U.S., attributed to theamortization of marketing rights, and the increase of COGS
Enhanced cash generation capability as a result of success of Aricept andPariet/AcipHex, strategic investment in MGI, and cost efficiency (thecumulative cash income, excluding foreign exchange impact from FY2006
through FY2010, outperformed the DLP target)

Allocating 1/3 of cash income to investment for growth,
1/3 to shareholder return, and 1/3 to debt repayment
in the mid-term range

Transformationfrom “mass” medicine
to “focused” medicine

Alzheimer’s disease:
Development of disease modifiers
Development of disease modifiers for AD: Two high-priority projects plus biomarker research moving inparallel; confirm POC for both symptomatic and disease modification (DM) claims within one study

BAN2401 (anti-Aβ protofibril humanized monoclonal antibody)
Milestone

POM*1/POP*2
in patients

Biomarker research

POC*3
Interim to confirm
symptomaticthen continue to confirm DM

BLA*4 submission(symptomatic)
FY2015-FY2016
Symptomatic data ofpivotal study

Response biomarker: imaging
response; biomarkers in CSF
and plasma

Pharmacodynamics
biomarkers: biomarker in
CSF

Submission(DM)
FY2017Full data of pivotal study

Surrogate biomarker: imaging
response to show
hippocampal degeneration

E2609 (beta secretase inhibitor)
Milestone
Ph I

POM/POPIn healthy
volunteers

in patients

Biomarker research
Pharmacodynamics
biomarkers: biomarker
in CSF

41

NDA/MAA
submission
POC
Interim to confirm(symptomatic)
symptomaticthen continue to confirm DM FY2016
Symptomatic data ofpivotal study

Response biomarker: imaging
response; biomarkers in CSF
and plasma

Submission(DM)
FY2017Full data ofpivotal study

Surrogate biomarker: imaging
response to show
hippocampal degeneration

POM*1: Proof of mechanism POP*2: Proof of principle POC*3: Proof of concept BLA*4: Biologics License Applications

Evolving towards “Focused” Medicines
to Maximize Patient Benefits
Focused Drug Discovery• Identification of target-pathologically relevant/root
cause of disease:– Genetic / physiological / pathological information frompatients; application of advanced bioinformatics• Assays-relevant to function of target:– Phenotypic screens reflecting pathology of diseases
using ES/iPS technology– Unique cell-based screening system, e.g. proteinprotein-interaction• Compound Libraries:– Therapeutic area specific compound libraries– DOS libraries

Biomarker-driven Product Creation• Pharmacodynamics and Response Biomarkers:– Establish POM and POP in Phase I/II
– Increase of probability of success and evidence ofefficacy in Phase II• Stratification Biomarkers :– Phase III study focusing on appropriate patient
populations• Integrative Biomarker Technologies:– Tissue bank, immunohistochemistry (IHC),
bioinformatics, imaging (SPECT, PET, MRI),
integrative omics, diagnostics• In-vivo Models:– Disease models: well characterized disease-target
relationship– Non-human disease models

At least 50% of new projects during the Plan
“HAYABUSA” are specific to single target; Enabling “Focused” medicines
42

New projects should have biomarker strategy

H3 Biomedicine: Realization of personalized
medicine Higher efficacy and better safety profile forselected patient population

Patient

Patient
Target selection based on
patient genetics

Patients selection basedon patient genetics
related Bio-marker

TargetIdentification

Target Validation/
Assay Development

Optimization /Compound Selection

Unique Bioinformatics
technique

Unique cellbased assay
systems

DOS
CompoundLibrary

H3 Drug Discovery Platform

Clinical Studies(Pipeline)

DOS: Diversity Oriented Synthesis

Knowledge of Scientific Founders / Leveraging Eisai Resources / Strong Leadership Team43

43

Starting from oncology; applied to other therapeutic areas

Enriching PipelinePipeline Engine:
Over 40 NME and LCM Submissions
FY2011FY2012FY2013

perampanel- Partial Onset Seizures(US, EU)

Aricept-Lewy Body Dementia(JP)

Aricept- Dry Syrup (JP)- New ODT (JP)lorcaserin-Obesity (US)perampanel-Primary Generalized
Tonic-Clonic Seizures(US, EU)-Partial Onset Seizures
Monotherapy (US)

Zonegran- Monotherapy (EU)- Pediatric (EU)
Lyrica- Fibro-myalgia (JP)Humira- Ulcerative Cholitis (JP)Livact- Liver Cirrhosis (CN)cinitapride- Functional Dyspepsia(CN)
Uritos- Overactive bladder(CN)
Humira- Inhibition of Joint
Damage in RA (JP)45

Lyrica-Central Neuropathic
Pain (JP)Halaven-Breast cancer 2L (US, EU)-Breast Cancer 2L/3L (CN)farletuzumab-Ovarian Cancer (US, EU)lenvatinib (E7080)-Melanoma (US)-Endometrial Carcinoma(US)
Treakisym-Low-grade Non-Hodgkin
Lymphoma (JP)HumiraNew indication (JP)Halaven-Sarcoma (US, EU)lenvatinib (E7080)-Thyroid Cancer(US,EU,JP)
netupitant-Chemotherapy Induced
Nausea and Vomiting(US)
E5501 (AKR501)-Idiopathic
thrombocytopenic
purpura (ITP)(US, EU)

Beyond FY2014
perampanel-Lennox-GastautSyndrome (US, EU)-Partial Onset Seizures(JP, CN)
Aricept-Patch (JP)-23mg (JP)Halaven-Non-Small-Cell
Lung Cancer (US,EU,JP)

BAN2401-AD (US, EU, JP)
LUSEDRA-Sedation (CN)Halaven-Breast Cancer 1L(US,EU)
E5501 (AKR501)-Acute TLD (US, EU)lenvatinib (E7080)-Hepatocellular
Carcinoma (JP, CN)
Treakisym-Multiple Myeloma (JP)-Low-grade Non-Hodgkin
Lymphoma (JP)E5501 (AKR501)-Thrombocytopenia
associated with liverdisease (TLD) (CN)Neuroscience
Oncology
GI/LiverImmunology/
Inflammation

Own Pipeline
Product
In-licensed
Products