March 2, 2005

Press Conference
March 3, 2005

Information Meeting
Haruo Naito, CEO, Eisai Co., Ltd.
1

Goal of Eisai Management
Pursuit of Efficiency and Productivity
in Creation of Patient Value

2

Concept of Patient Value– Fulfillment of Unmet Medical Needs– Stable Supply of Quality Products– Promotion of Safe Use of Drugs by
Providing Efficacy and Safety
Information

3

“Continuous launch of new products,indications and formulations inareas of focus is the best prescription
for sustainable growth.”
Therapeutic focus will facilitate
accumulation of latest information fromupstream to downstream and enablestrategic decisions based on it, thereby
enhancing the success rates of R&Dprojects.
4Areas of Focus–Neurology–Gastroenterology–Oncology and Critical Care

5

Pursuit of Efficiency& Productivity
in R&D6

Evaluating R&D Targets Based on
Current States of Treatment,
Patient Satisfaction, Undiagnosed Patientsin Areas of Focus– Treatment states and satisfaction levels classified
by factoring in undiagnosed/diagnosed patient
population and market potential– Treatment states and levels of satisfaction
A: Almost completely cured
B: Almost complete symptom control and somepatients cured
C: Periodic symptom control or effective in lifespanextension
D: Medical treatment not established7

Unmet Medical Needs (Neurology)
DiseaseTreatment state &satisfaction level(High-Low: A-D)

Undiagnosed
patients(JP, US, EU)

Eisai approach

Alzheimer’s
disease

C: Disease modifier andcure needed

10.09MM

Aricept, Aricept sustained
release preparation,
Aβ modulator, etc.

Vasculardementia

D: Medical treatment notestablished3.82MM

Aricept

Mild cognitiveimpairment

D: Disease state notestablished19.57MM

Migraine

C: More effective
preventive drug needed

65.17MM

Maxalt (treatment),
Aricept (prevention)

Epilepsy

B/C: Incomplete seizure
control

5.84MM

Zonegran, rufinamide, E2007(AMPA receptor antagonist)

Parkinson’sdisease

C: Poor control with Ldopa long-term treatment

2.81MMrasagiline, E2007,
E3210 (adenosine antagonist)

Multiplesclerosis

C: More effective
treatment needed

0.78MM

E2007

Aricept

The above undiagnosed patient number was estimated in 2003. Source: Decision Resources and Eisai Co., Ltd.

8Unmet Medical Needs(Gastroenterology)
DiseaseGastroesophageal reflux
disease (GERD)Treatment state &satisfaction level

Undiagnosed
patients(High-Low: A-D)

(JP, US, EU)

B: PPIs effective; nocturnalacid secretion control andrecurrence needs to be
improved

80.09MM

Pariet, Pariet extended
release preparation

Eisai approach

Irritable bowel
syndrome (IBS)

C: Improvement of safety
and efficacy needed

72.31MM

E3620 (5HT 3 receptor
antagonist, 5HT4 receptor
agonist), E3210(adenosine antagonist)

Crohn’sdisease

C: Anti-TNF monoclonal
antibody effective but
duration of remission
problem remains

0.55MM

Integrin inhibitorUlcerativecolitis

C: Safety and efficacy(duration of remission)
problem remains

1.20MM

Integrin inhibitor

Hepatitis-B

B/C: Almost complete virus
control possible withantiviral drugs

165MM(China, India)

clevudine

The above undiagnosed patient numbers were estimated in 2003. Source: Decision Resources and Eisai Co., Ltd.

9

Unmet Medical Needs(Oncology & Critical Care)
DiseaseTreatment state & satisfaction level(High-Low: A-D)

Undiagnosed
patients

Eisai approach(JP, US, EU)

E7070 (cell cycle G1 phasetargeting) , E7389 (tubulinpolymerization inhibitor), E7820

Breastcancer

C: Treatment needed to extend life
expectancy and lower side effects

Non-smallcell lungcancer

C: Treatment needed to extend life
expectancy and lower side effects

0.42MM

Colorectal
cancer

C: Treatment needed to extend life
expectancy and lower side effects

1.34MM

Gastric
cancer

C: Treatment needed to extend life
expectancy and lower side effects

0.49MM(JP)

E7070

Liver cancer

D: No treatment establishedto prevent recurrence

0.18MM(JP)

E0167 (Glakay)

Severesepsis

C: More effective treatment with fewerside effects needed

0.77MMCABG

D: No effective treatment for preventionof complications after surgery

0.62MM

1.74MM(integrin alpha-2 expression
inhibitor), E7080 (VEGF receptor
tyrosine kinase inhibitor)

E7389, E7820, E7080

E7070, E7820, E7080

E5564 (endotoxin antagonist)

The above undiagnosed patient numbers were estimated in 2003. Source: Decision Resources and Eisai Co., Ltd.

E5564
10

Significance of Potential
New Treatments in
Areas of Focus– A large number of patients remain
undiagnosed in 3 areas of focus– Existing therapies in 3 areas of focus
are not at high treatment states orhigh levels of satisfaction.
11Leveraging “-omics” Technology toAmeriorate Critical Path for Research& Clinical Development
Discovery
Improvement of compoundselection
Introduction of innovativeidea

Drug Discovery
Database

Transcriptomics
Proteomics

Development

ClinicalReducing path for clinical study
Early assessment ofApproach to tailor-madecompound potential
Clinical safety perspective medicine

Drug Safety
Study Database

Biomarker Exploration

Toxicogenomics
Metabolomics

Diagnosis marker
Surrogate marker
Drug safetymarker

Bioinformatics driven collaboration
12Pursuit of Efficiency& Productivity
in Global Marketing13

Pursuit of Efficiency & Productivity
in Prescription Pharmaceuticals
Business in Japan– Expanding sales force to 1,300 (FY2006)– Maintaining high productivity per MR
Comprehensive drug coverage by each MR– Development of all channels including
university/core/private hospitals and clinics(Billion yen/person)

FY2003
Net Sales

Numberof MRs

FY2003 Total
Sales per MR

Takeda426.3

1,4500.294

Eisai

241.2

1,0000.241

Yamanouchi

291.5

1,3000.224

Sankyo247.7

1,2430.199

Santen70.93600.197

Source: Monthly MIX (2003 supplemental issue)

14

Vision of OTC Business– Redefine our role as innovative drug
manufacturer
Develop new OTC products
Expand and maintain national brand product line
Promote customer communication through website
and other IT tools– Achieve operating margin 10% in FY2006

15

Pursuit of Efficiency &Productivity
in US Prescription
Pharmaceuticals Segment

Net sales were adjusted based on FY2003 data surveyed by a research company.
MR number was sourced from MedAd News 2004 issue. FTE = Full Time Equivalent.

16

Efficiency and Productivity
in US Marketing
Operating Income and theMargom(MM$)
Before Royalty Reduction (%)

Neurology
Team
Zonegran
Aricept

20300

15200

10100

500

Synergy

Synergy

PCP Team
Hospital
TeamCerebyx
Aricept

400Aciphex
Aricept

Synergy

CNS Team
Aricept
Zonegran2001 2002 2003 2004
(Fiscal Year)

3Q
17

“Promotion of Globalization”
Maintain continuous investment in
US/EU markets as high priority
andfocus on building infrastructure in
Middle Income Countries(MICs)
18

Globalization(US)– $75MM invested in expansion of Boston
Laboratory– Leveraging the manufacturing facilities inNorth Carolina
Manufacture of next-generation products(e.g., Oncology)– Pursuit of acquisitions and strategic alliancesin areas of focus– Preparation for launch of global products

19

Globalization (Europe)– European Regional Headquarters established– Marketing subsidiary (Eisai S.r.l.) establishedin Italy and branch offices established inAustria and Ireland
Expansion to other EU countries initiated(Nordic countries, Switzerland, Portugal, etc.)– Pursuit of acquisitions and strategic alliancesin areas of focus– Preparation for launch of global products
20

Globalization (Asia)–Subsidiary established in India (Mumbai)
Launch of Aricept and Pariet within FY2005 expected–Expansion of sales forces, market coverage andproduct line in China
Aggressive acquisitions, strategic alliances
Anti-hepatitis B agent clevudine (Phase III in preparation)–Expansion of product portfolio in South Korea
Selbex, Glakay, Exegran, etc. in addition to Aricept,
Pariet and Myonal

21

Increasing Significance ofMiddle Income Countries(MICs)- India in FY2005: IP protection
system to be established- China in FY2005: Eligibility as aWTO member to be proven22Progress After Establishmentof IP Protection System in India– Since copyright law revision in 1994, many
software companies have started business inBangalore– Encourage foreign investment in line withgovernment policy– Bangalore being called “Silicon Valley in India”– Consultation conference launched by Prime
Minister Mohan Singh– Aiming for the status of global R&D center– India became global leader in IT software
field
23

“Reinforcement ofValue Chain”
Eisai is an R&D-based pharmaceuticalmanufacturer. We pursue efficiency andproductivity to create patient value bybuilding a seamless value chain, while
responding to various changes.
24

Reinforcement ofValue Chain
Pursuit of stable supply of quality products based on
in-house manufacture– Seeking stable manufacturing by maintaining productivity, quality
assurance, training, safety programs, environmental protection andmanufacturing cost reduction– Actively incorporate opinions from consumers– Strict management of quality and instruction of contractors andmaterial suppliers throughout the world– Use of Indian and Chinese infrastructure, resources to build global
supply chain

Ready for low-cost era with further reduction
in COGS25

“Creation ofShareholder Value”
The priority of management is:- Seek investor confidence in theincumbent management- Implement measures to meetshareholder expectations

26

Continuous Improvementin Shareholder Value– Implementation of hybrid policy: Capture growth
opportunities, increase corporate value, and enhance returnto shareholders
DOE (Dividends On Equity) = ROE x Dividend Payout
ROE: Proactive investment for enhancing corporate value
Dividend payouts: More inclination to dividends and thereby higher
dividend payouts– Seek DOE of 5% in FY2007– Strive to earn trust from investors

27

Dividend Policy
Accelerate Achievement of Targeted DOE of 3% by 2 Years(from FY06 to FY04)(DPS: Yen)
10090

DPSDOE

DOE = 5%80
7060

2.4504030

2.5

2.0

2.6

36.0
29.0

32.0

23.0

20
FY00

(DOE: %)
4.5
Mid-term target:
4.3
4.1
3.7
3.9
(FY2007)
3.7
3.5
3.3
3.1
56.0
2.9
2.7
2.5
2.3
2.1
1.9
1.7
1.5

FY01

FY02

DOE = Dividends On Equity (= ROE x Dividend Payout)

FY03

FY04 (est.)

DPS = Dividends Per Share28

Emphasis on Return to Shareholders
vis-à-vis Free Cash Flow(%)

1009080706050403020100

Share BuybackDividends

FY2000FY2001

FY2002

FY2003

FY2004 (est.)*Assumption of FY2004: Dividend Per Share = 56 yen (est.), Share Buyback 1.97 million (completed)
Free Cash Flow = 54 billion of Net Income + 24 billion of Depreciation/Amortization – 50.5 billion of Capital Expenditure29

Progress of Millennium Plan
– Achieving major numerical targets
Sales: 600 billion yen
Operating income before R&D spend:
200 billion yen– Every possible effort will be made to realize
R&D performance targets by FY2006– Accomplishment of globalization goal (overseassales/profit ratio) is expected– Achievement of target figures for DOE and EPS
30

“Build the next five-year plan(FY2007-2011) with thetarget of net sales at
1 trillion yen and Operating
income before R&D spend at
400 billion yen”
31

Goals of Next Five-year Plan
(FY2007-2011)–Pursue efficiency and productivity in marketing and R&D–Leverage global supply chain to reduce COG–Successful development of 4 global products
E5564, E7070, E7389, E2007–Progress the development of new molecular entities
2 anticancer agents, oral acute-coronary-syndromes treatment,
new AD medications, IBS/IBD treatment, etc.

–Develop new indications and additional indications for Aricept,
Aciphex/Pariet for further expansion–Promote globalization
60% of net sales from overseas–Active acquisitions and strategic alliances32

Efficient Discovery
Expedited Development
Stable Supply33