ANNUAL REPORT 2012
Year ended March 31, 2012 KYORIN Holdings, Inc.

Consolidated Financial Highlights
KYORIN Holdings, Inc. and Consolidated Subsidiaries(Fiscal years ended March 31)
Millions of yen
FY2007

FY2008FY2009FY2010FY2011

Net sales

81,07090,88999,764

104,069

103,232

Operating income

6,251

8,952

13,261

16,443

14,464

7.7

9.8

13.3

15.8

14.0

2,189

2,037

8,848

10,927

9,231

2.7

2.2

8.9

10.5

8.9

Net cash provided by operating activities

4,444

4,575

12,027

6,805

8,913

Net cash used in investing activities(6,144)(4,229)412(1,806)(4,926)(1,700)346

12,439

4,999

3,987

10,826

10,531

11,807

12,495

13,964

13.4

11.6

11.8

12.0

13.5

Capital expenditure

1,952

1,612

1,291

1,668

1,952

Depreciation and amortization

4,536

3,799

2,810

2,458

2,363

ROE (%)

2.2

2.1

8.8

10.1

8.0

ROA (%)

1.8

1.6

6.8

7.7

6.3

Total assets

122,398

124,552

137,190

147,234

145,673

Total net assets

97,18496,501

104,911

111,706

118,201

79.4

77.5

76.5

75.9

81.1

Results of Operations

Operating income/Net sales ratio (%)
Net income
Net income/Net sales ratio (%)

Free cash flow
R&D expenses
R&D expenses/Net sales ratio (%)

Financial Position at Year-end

Total shareholders’ equity ratio (%)

YenAmounts per Share
Net assets

1,298.89

1,290.67

1,403.60

1,494.83

1,581.94

Basic net income

29.26

27.24

118.37146.21123.54

Cash dividends

22.50

13.00

50.00

45.00

45.00

76.9

47.7

42.2

30.8

36.4

Cash dividends payout ratio (%)

Net sales

Consolidated net sales decreased 0.8% year on year to ¥103,232 million. Our pharmaceuticalbusiness in Japan was up slightly year on year, reflecting orders brought forward out of consideration of possible inventory shortages due to the Great East Japan Earthquake in March 2011.
However, the generic drug, ethical drug sales overseas, over-the-counter drugs and others, andconsumer healthcare (skincare) businesses were down year on year.

Operating income

Operating income amounted to ¥14,464 million, down 12.0% year on year. The main factor
behind this decrease was a drop in gross profit of ¥208 million, mainly due to lower sales, anddespite our efforts to reduce the cost of sales. Also selling, general and administrative (SG&A)
expenses were up by ¥1,770 million, primarily because R&D expenses increased on progress inthe development of new drugs.

Net income

Net income decreased 15.5% year on year to ¥9,231 million mainly due to the recording of
higher deferred income taxes resulting from the reversal of deferred tax assets in line with thecorporate income tax rate reduction announced in December 2011.

ROE

ROE was 8.0%, declining 2.1 percentage points year on year due to lower profits.

Net sales

Operating income

Net income(Millions of yen)

(Millions of yen)

(Millions of yen)

120,000

20,000104,069 103,232
99,76412,00090,88990,00010,927

16,44315,00060,0009,000

13,261

8,952

10,000

9,231

8,848

14,464

81,070

6,000

6,251
30,00005,0002007 2008 2009 2010 2011 (FY)

0

3,000

2007 2008 2009 2010 2011 (FY)

02,189 2,037

2007 2008 2009 2010 2011 (FY)ROE

Total shareholders’ equity ratio

(%)

(%)

(Yen)(%)

12.0

82.0

180

81.1

10.1

8.0

80.0

123.54

120

60.0
47.7

6.0

42.2
78.0

0

146.21118.37

79.4

79.0

3.0

90.0
76.9

81.0

8.8
9.0

Net income per share/
Dividend payout ratio

77.0
2.2

2.1

2007 2008 2009 2010 2011 (FY)

76.0
75.0

36.4

77.5
30.8

60

76.5

30.0

29.26 27.24
75.9

2007 2008 2009 2010 2011 (FY)02007 2008 2009 2010 2011 (FY) 0n Net income per share (Left scale)n

Dividend payout ratio (Right scale)

KYORIN Holdings, Inc.

1

Profile
Since the founding of its core subsidiary, KYORIN Pharmaceutical, the Kyorin Group has taken its mission of contributing tobetter health seriously. Today, Kyorin is working to discover, produce, and sell pharmaceuticals through its pharmaceuticalbusiness and to develop a consumer healthcare business based on skincare. By promoting the faster development ofsuperior new drugs and diversifying its businesses to respond to expanding healthcare needs, the Kyorin Group aims torealize its role as an organization supporting healthy living and to further enhance its corporate value.

Our Milestones

1923

1977 1980

1923

1965

1980

• Toyo Shinyaku Sha, the predecessor of KYORIN Pharmaceutical Co., Ltd., was founded.

• KYORIN AP-2, an analgesic,
was launched.
• Deamelin-S, an oral hypoglycemic agent,
was launched.
• The Head
Office wascompleted.

• Norfloxacin (NFLX), an antibacterial agent, was licensed to
Merck & Co., Inc. (USA).

1967

1981
• Mucodyne, a mucoregulant,
was launched.

1982• Kyorin Chemical Laboratory
was established.

• The Nogi Plant was started(now closed).

• NFLX was licensed to Astra(Sweden, present AstraZeneca)
and Boots (UK, present Abbott).

1940

1971

1983

• Cholexamin, a lipid metabolism
and peripheral circulation
improving agent, was launched.

• NFLX was licensed to American
Home Products (USA,present Wyeth).

1974

1984

• Hespander, a plasma substituteand extracorporeal c­ irculation
flow improver, was launched.

• Baccidal (NFLX), a broadspectrum oral antibacterial
agent, was launched.

1976

1986

• The medical journal bulletin
Doctor Salon was started.

• Hydroxyethylstarch (HES) was
licensed out to Pfrimmer(Germany, present Baxter
Deutschland).

1961

1977

• Fleroxacin (FLRX), an antibacterial agent, was licensed to F.
­Hoffmann-La Roche (Switzerland).
• Aplace, an agent for gastritis
and gastric ulcers, waslaunched.

1931• The company was renamed
KYORIN Pharmaceutical Co.,
Ltd., and Kyorin Yakuhin Co.,
Ltd. was organized as anindependent marketing division.

1946• The Okaya Plant was started;and the Tokyo, Osaka, andNagoya branches were opened.

1957• Behyd, a diuretic and anti-­
hypertensive agent, waslaunched.

• Central Research Laboratories(present Discovery ResearchLaboratories) was established.

1962• Kyorin Chemical Laboratory(later Technical Center ofDevelopment) was established.

• Baccidal Eyedrops, a broadspectrum ophthalmic antibacterial agent, was launched.

1991• Baccidal Tablets for Children
was launched.

1992• KYORIN Pharmaceutical Co.,
Ltd. and Kyorin Yakuhin Co.,
Ltd. were merged, and the new• KYORIN Pharmaceutical Co.,
Ltd. was founded.

1993• Megalocin (FLRX), a long-acting
new quinolone agent, waslaunched.

1995• The Noshiro Plant was started.
• The Research Center (nowDevelopment ResearchLaboratories) was founded byintegrating the Research Centerof Organic Syntheses, TechnicalCenter of Development,
Technical Center of Product
Formulation and TechnicalCenter of Safety Assessment.

1989• Ketas, for bronchial asthma andcerebrovascular disorders,
was launched.

Contents

19

Products under Development

Inside Cover

20

Corporate Governance24

Directors, Auditors, and Corporate Officers

25

Corporate Social Responsibility

28

Organization Chart/
Major Subsidiaries and Affiliates

29

Corporate Information

Consolidated Financial Highlights

2

02

Profile04

To Our Stakeholders

10

Feature: The Source of Value Creation

18

Alliances

Annual Report 2012

Our Philosophy
Kyorin continues to fulfill its mission of cherishing life, and benefiting society
by contributing to better health.

1999 2000

2012

1996

2000

2006

• A joint venture, Nisshin KYORIN
Pharmaceutical Co., Ltd., wasestablished with Kyorin’s capital
participation.
• Gatifloxacin was licensed toBristol-Myers Squibb (USA).

• The company’s stock was
issued on the Tokyo Stock
Exchange, First Section.
• Gatifloxacin-eyedrops was
licensed to Allergan (USA).

1998• Kipres, the leukotriene receptor
antagonist and bronchialasthma treatment medicine,
was launched.
• A subsidiary company, Kyorin
USA, Inc. (USA), was established.

• The Kyorin Group shifts to aholding company structure
through a share exchange withKYORIN Co., Ltd. (currently
KYORIN Holdings, Inc.).
(KYORIN Pharmaceutical Co.,
Ltd. is delisted, and KYORIN
Co., Ltd. is listed on the First
Section of the Tokyo Stock
Exchange market.)• The new Noshiro Plant began
operating.

• Milton, an effervescentdisinfectant business,
was acquired from P&G.

2001

2002
• A subsidiary company, Kyorin
Europe GmbH (Germany),
was established.
• Gatiflo (GFLX), a broad-spectrum, oral antibacterial agent,
was launched.

2004• ActivX Biosciences, Inc.
became a wholly owned
subsidiary.

2005
1999
• The company’s stock was
issued on the Tokyo Stock
Exchange, Second Section.

• The stocks of Toyo Pharmar
Co., Ltd. (present KYORIN
Rimedio Co., Ltd.) wereacquired, making it into a
subsidiary company.
• Dr. Program Co., Ltd. became awholly owned subsidiary.

2007• A business transfer agreement
was made with the Fresenius
Kabi AG Group in Germany
concerning Hespander andSalinhes, plasma substitutes
and hemodilution agents.
• Uritos Tablets 0.1 mg, anoveractive bladder drug, waslaunched.
• Kipres Oral Granules 4 mg, abronchial asthma treatment
drug, was launched.

2008• Kipres Tablets 5 mg, a bronchialasthma and allergic rhinitis
treatment drug, was launched.

• Domestic licensing agreementfor FLUTIFORM signed with
SkyePharma PLC (U.K.).
• KYORIN Pharmaceuticalmerged with Nissin Kyorin
Pharmaceutical.
• Ulcerative colitis and Crohn’sdisease therapeutic agent
Pentasa Tablets 500 mg waslaunched.

2009• Marketing rights in China were
granted to Senju Pharmaceutical for ­Gatifloxacin Ophthalmic
Solution.
• A license agreement for
Neramexane, a tinnitus drug,
was made with Merz Pharmaceuticals (Germany) for theJapan region.

2010• KYORIN Co., Ltd. changed its
name to KYORIN Holdings, Inc.
• Mucodyne DS50%, a mucoregulant, was launched.

2011• A license agreement for
Aclidinium Bromide, a COPD
drug, was made with Almirall(Spain) for the Japan region.
• Uritos Orally Disintegrating (OD)
Tablets 0.1 mg, an overactive
bladder drug, was launched.

Disclaimer Regarding Forward-looking Statements
Statements made in this annual report with respect to KYORIN
Holdings, Inc.’s forecasts, plans, strategies and other statements other than those of historical facts are forward-looking
statements about the future performance of the Company andits consolidated subsidiaries and are based on management’s
rational assumptions and beliefs in light of information currently
available. As a consequence, readers should understand that,for a variety of reasons, actual results could differ materiallyfrom projections presented in this report. Key factors that could
impact our results include, but are not limited to, economic
conditions, social trends, competition from rival companies,
laws and regulations, uncertainties in drug development andexchange rate fluctuations.

KYORIN Holdings, Inc.

3

To Our Stakeholders

Based on its corporate philosophy “to cherish life andbenefit society by contributing to better health,” the Kyorin
Group is determined to contribute to disease treatment
through the provision of superior drugs. To this end, theGroup is building a portfolio of businesses that can respondto diversifying health needs, from health maintenance andadvancement to disease prevention, as we work to enhance
our identity as a Group and our corporate value.

Masahiro Yamashita
Representative Director,
President and Chief Executive Officer

HOPE 100 Long-term Vision: Realization and Completionof the HOPE 100 Stage 1 Medium-term Business Plan
HOPE 100 is a long-term vision that embodies the corporate philosophy of the Kyorin Group. Asa business strategy, the focus of HOPE 100 is on becoming a company that can respond todiversifying healthcare needs, centered on the pharmaceutical business, while working to diversify management risk and achieving sound, sustainable growth. As an organizational strategy,
HOPE 100 places great value in the idea that “a business is only as good as its people,” and weseek to become a place in which employees can bring passion to their work: in short, a leading
company for pursuing fulfilling careers.
As the first step in achieving the Kyorin Group’s long-term vision, the HOPE 100 Stage 1
medium-term business plan promotes the multi-core (MC) strategy*1 comprising our pharmaceutical business and consumer healthcare business. In the pharmaceutical business, we
promote a concept that we call the Pharma Complex (PC) Model*2, an approach encompassing
multi-faceted development in the “New Drugs Group,” the “Original Drugs Group,” and the“Generic Drugs Group” to respond flexibly to changes in the operating environment. In the
consumer healthcare business, we are compensating for risks in our pharmaceutical business4

Annual Report 2012

To Our Stakeholders

Q& A

and promoting Group growth by cultivating our existing skincare business and the Milton brand,
while striving to create new operations.
In fiscal 2011, ended March 31, 2012, revenue and earnings fell in the aftermath of the Great
East Japan Earthquake. Fiscal 2012 marks the third year of HOPE 100 Stage 1, and Kyorin
Group employees are united in their determination to push ahead with greater pride and passion
than ever to further develop our business, and to achieve both record sales and profits.
July 2012

Masahiro Yamashita
Representative Director, President and Chief Executive Officer
Structure of HOPE 100 Stage 1
HOPE 100 Stage 1, the Kyorin Group’s

S

new medium-term business plan for

Business Strategy

Strategyachieving its long-term vision, comprises

P Performance

three elements: Strategy, Organization,
and Performance. By working to steadily
implement each of these components,

TargetsO

we aim to enhance corporate value

Performance
Organization Strategy

Consumer healthcare
business

Organizationeven further.

¥20.0 billion¥6.5 billion

Pharmaceutical business¥120.0 billion¥98.2 billion
2009

2010

2011

Long-term growth

2012

2013

2014

2015

2016

2017

2018

2019

Stage 2

Stage 1

2020

2021

2022

2023 (FY)Stage 3

*1 Multi-core (MC) Strategy
Diversify the Consumer Healthcare Business by Centering on the Ethical Drug BusinessPharmaceutical Business

Consumer Healthcare Business*2 Pharma Complex (PC) Model

Cultivate existing businesses and create
new businesses

Multi-faceted business development(New drugs, original drugs, generic drugs)

Diagram of Ethical Drugs Business Activity under the PC Model
Pharma Complex (PC) Model
Franchise
Customer (FC)Strategy

呼吸器内科
Respiratory
Otolaryngological
Urological

New DrugsGroup

Original Drugs
Group

Generic Drugs
Group

Other

CommonPlatform

Integration of wholesale sales channels
Consider optimization of total production system

Deploy a flexible strategy that can address changes in the environment(including functional reorganization of KYORIN Pharmaceutical and KYORIN Rimedio)

KYORIN Holdings, Inc.

5

Q1–1
The past fiscal year was
one of turmoil for Japan in
the aftermath of the Great
East Japan Earthquake.
What was the year like forthe Kyorin Group?

Q1–2
How would you evaluate
the last fiscal year from abusiness strategy
perspective?

6

Annual Report 2012

Answer: 01–1
Our performance was very sluggish owing to the impact of the disaster. Thatsaid, our underlying business growth trend of seven straight years of revenue
increase was unchanged.
We faced a tough business climate in fiscal 2011 because of the earthquake, although the Groupsuffered no personal injuries or fatalities, with only minimal physical damage. Combined domestic
sales for new, original, and generic drugs increased only slightly. Performance was partially affectedby increases in channel inventory as of the end of March 2011, when people front-loaded orders
out of concerns that there would be stock shortages in the post-quake turmoil. Overall sales of thepharmaceutical business, including from overseas operations, were down froma year earlier. Consumer healthcare business sales also dropped, reflecting
reduced consumer spending in a lackluster economy. As a result, consolidated
sales decreased ¥836 million, or 0.8% year on year, to ¥103,232 million.
Operating income declined ¥1,978 million, or 12.0% year on year, to¥14,464 million. One key negative factor was that SG&A expenses, including
R&D expenses, were significantly higher than a year earlier, although this was
because R&D spending rose with progress in the development pipeline.
Another factor was lower gross profit due to a drop in sales.
Although both sales and earnings were lower, there was no change in theunderlying growth trend that had seen the Group boost sales for seven consecutive years. During the period under review, we also saw good prospects
for the years ahead, including better-than-expected progress in the R&D
pipeline and emerging growth in the environmental hygiene business within ourconsumer healthcare business.

Answer: 01–2
It was a year that saw enhancement of the development pipeline in new drugs,
and new growth buds in consumer healthcare, which took the initiative in creating new businesses.
We saw promising progress in the development pipeline of the pharmaceutical business. For
example, we completed Phase III clinical trials at the end of last fiscal year for KRP-108, a
bronchial asthma treatment. For KRP-AB1102, a chronic obstructive pulmonary disease (COPD)
treatment, we started Phase II trials in February 2012. Similarly, we completed Phase III trials fora suppository version of Pentasa, an ulcerative colitis treatment. The Kyorin Group is pushingahead with a franchise customer (FC) strategy focusing on the respiratory, otolaryngology, andurology fields. We believe that our pipeline progress in the year under review enhanced ourpresence, especially in the respiratory field.
In the consumer healthcare business, we expanded and cultivated new businesses in addition to the existing Milton brand business. In the environmental hygiene business, we focused onbuilding a base for the future. Among other steps, we examined the potential for offering a
product that cleans and sterilizes surfaces to manage hygiene, notably in medical institutions
and nursing homes. We also prepared to introduce product lines registered as disinfectants with
the U.S. Environmental Protection Agency. In December 2011, we introduced Kyocurmin, ahigh-bioavailability curcumin compound supplement. In the skincare business, we will further
reinforce our initiatives and advance new sales strategies to get back on the path for growth.

To Our Stakeholders

Answer: 02

Q2

The business environment is increasingly challenging, but we will pursue
sustainable growth by capitalizing on diverse health needs.

How are you positioning
fiscal 2012?

Fiscal 2012 will be pivotal for leaping ahead. We expect the business environment in the domestic
pharmaceutical industry to remain adverse, as the government will probably continue implementing various measures to reduce drug costs. In April 2012, the government revised medical service
fees and lowered prices on the National Health Insurance drug price list by about 6% for the industry
as a whole (around 6% at KYORIN Pharmaceutical). At the same time, people have diversifying
health needs. We consider it important to develop businesses to accommodate such needs.
Fiscal 2012 is vital for establishing a path for the Group to focus on the targets of its mediumterm business plan. We will resolve priority issues while closely monitoring changes in the business environment.

Answer: 03–1

Q3 –1

In fiscal 2012, we seek to steadily mark results and progress with our plan inheading toward fiscal 2015, the last year of HOPE 100 Stage 1.

Tell us about issues you
face with HOPE 100 Stage
1, your medium-term business plan, and your specific initiatives in fiscal
2012, the plan’s third year.

Sales of Kipres(Billions of yen)

40.0
30.0
20.0

36.8

37.9

40.0

2012

2015

10.0
0

2011

(Results)(Projected)(FY)(Target)Sales of Uritos(Billions of yen)

10.0
8.0
6.0
10.0

4.0
2.0

6.3

7.6

0

2011

(Results)

Q& A

2012

(Projected)

2015(Target)(FY)

In new drugs, the top priority is undoubtedly to reinforce and enhance our development pipeline.
We are moving full speed to prepare for the approval and launch of KRP-108, a bronchialasthma treatment that we aim to make a key offering during HOPE 100 Stage 2 (fiscal 2016
through 2019). We will accelerate clinical development projects with a view to concentrating
launches of new drug candidates during Stage 2. For Stage 3 (fiscal 2020 through 2023), it willbe critical that we build a new drug discovery framework so we can meet the challenge oflaunching world-class pharmaceuticals.
A key issue is to maximize the adoption of our core products. We will clarify the scopes for
growth with these products, reinforce trust with medical professionals in certain treatment fields(respiratory medicine, otolaryngology, and urology), and deploy initiatives matching specificproduct situations. For example, we are positioning Kipres as a base treatment for asthma as
well as both chronic and seasonal allergic rhinitis, while encouraging its wider and further prescription. For Uritos, an overactive bladder drug, we will endeavor to expand our market share.
In original drugs, we are using life-cycle management to enhance product value. With the mucoregulant Mucodyne, we will work to increase prescriptions for the new DS50% formulation introduced
in 2010 for children through to adults. With our Pentasa ulcerative colitis and Crohn’s disease treatment, we anticipate expanding prescriptions for ulcerative colitis with a new once-daily dosage thatshould be approved in fiscal 2012, alleviating some of our exposure to intense competition. We
expect a new suppository formula that we aredeveloping to match treatment needs andcontribute to medical treatment.
In generic drugs, we aim to enhance ourmarket presence through various measures.
One initiative is an alliance strategy for joint
development and expansion of licensed
production as part of efforts to plan andimplement a distinctive and competitive
generic pharmaceutical business plan. Other
measures include reinforcing our lineups inspecific fields and engaging in collaborations
within the Group.

KYORIN Holdings, Inc.

7

Answer:03-1
Sales of Mucodyne(Billions of yen)

25.0
20.0
15.0
10.0

21.5

21.3

24.0

5.0
0

2011

(Results)

2012(Projected)

2015

(FY)

In the consumer healthcare business, we will strive to penetrate the market with RUBYSTA,
a multipurpose disinfectant, building foundations for our environmental hygiene business.
One priority for the Group has been to establish a production system to stably supply highquality products at low cost. To resolve this issue, we concluded an agreement regarding thetransfer and acquisition of the Shiga Plant of MSD K.K. on May 28, 2012. The plant ownershipwill be transferred to wholly owned KYORIN Pharmaceutical Facilities Co., Ltd. (established June15, 2012) on October 1, 2012. This move will promote the total optimization of our production
system and enhance manufacturing efficiency through low-cost operations.

(Target)Sales of Pentasa(Billions of yen)

20.0
15.0
10.0

18.0

17.0

19.0

2012

2015

5.0
0

2011

(Results)(Projected)(FY)(Target)Q3 –2

Answer: 03–2

What is your performance
forecast for fiscal 2012?

The business environment is the toughest we have seen, and we expect competition to intensify.
Still, fiscal 2012 will be important for the Group’s next leap forward. In this climate, consolidated
net sales are expected to increase 1.4% year on year to ¥104.7 billion. This improvement will be
driven largely by growth in sales of key products in our lineup of new drugs such as Kipres, atreatment for bronchial asthma and allergic rhinitis, and Uritos, a therapeutic agent for overactive
bladder, along with increased sales of generic drugs.
We aim to reach record operating income through cost-cutting efforts and increased sales. We
expect SG&A expenses to decrease with lower R&D spending from reviews in the R&D pipeline.
We therefore look for operating income to increase 23.8% year on year in fiscal 2012, to¥17.9 billion. Net income should improve 27.8%, to ¥11.8 billion. The end result should berecord sales and earnings for the year.

We aim to again post record consolidated sales and operating income.

Projected Sales of Mainstay Products
FY2010(Actual)8

Annual Report 2012

(Billions of yen)

FY2011(Actual)

FY2012(Projected)

YoY Change

YoY (%)

Kipres

34.5

36.8

37.9

1.1

3.1

Mucodyne

21.3

21.5

21.3

(0.2)

(0.4)

Pentasa

19.4

18.0

17.0

(1.0)

(5.1)

Uritos

5.5

6.3

7.6

1.3

20.4

To Our Stakeholders

Q4
What is your stance regarding shareholder returns?

Q& A

Answer: 04
We will properly balance investments to pursue growth, ensure businesssustainability, and generate shareholder returns.
The Kyorin Group will work to strengthen its management base through balanced implementation of investments for growth, investments for business continuity, and shareholder returns.
Investments for growth include proactive investments to license in new products to expand the
R&D pipeline in the Group’s core pharmaceuticals business, coupled with strategic investmentsin the consumer healthcare business. As for shareholder returns, we target a consolidated
payout ratio of 30% when deciding dividends.
The dividend per share for fiscal 2011 was ¥45, unchanged from the previous year, representing a consolidated payout ratio of 36.4%. In fiscal 2012, we aim to increase the dividend pershare by ¥5, to ¥50 (including a ¥10 interim dividend), for a consolidated payout ratio of 31.7%.
Performance Target
Balance between Investment
and Shareholder Returns

Shareholder
returns

Investment
for growth

FY2015 (Target) (Billions of yen)

Consolidated net sales

140.0

Pharmaceutical business

120.0

Consumer healthcare business*

20.0

Consolidated operating income

20.0* Skincare, over-the-counter drugs and others

Investment forbusiness
continuity

Q5
What message do you
have for stakeholders?

Answer: 05
To ensure sustainable growth for the Kyorin Group, while we need to deliver short-term results
we must also address basic sustainable growth issues over the longer term, and lay out milestones for verifying that we have done so along the way. I intend to make fiscal 2012 a year inwhich we ensure an exit path for HOPE 100 Stage 1, using this halfway point to focus on the
improvements and reforms that we must enact now by viewing the present in terms of where wewant to go in the future.
All eyes today are on achieving sound, sustainable growth as we strive to make our HOPE
100 long-term vision for the Kyorin Group a reality. As we actively disclose information, we hopethat stakeholders will recognize the progress we have made as a corporate group in terms ofbusiness performance and in bringing HOPE 100 to fruition. I look forward to the continued
understanding and support of all our stakeholders.

KYORIN Holdings, Inc.

9

Feature

The Source of Value Creation
The Kyorin Group aims to achieve sustainable growth as a solid and sound enterprise.
Based on our belief that “a business is only as good as its people,” Kyorin is working to energize its workforce and its organization through the practice of employee-centric management
to achieve solid growth. By allowing each of our employees to grow, and by pushing ahead togreater heights as an organization, we will make our long-term HOPE 100 vision a reality.

Aspiring to New Heights as a Unified GroupThe Kyorin Group’s business consists of two segments, the pharmaceuticals business and the consumer
healthcare (skin care) business. Anchored by the diversified business portfolio built in our pharmaceuticals
business, we are working to evolve into a company that supports healthy lifestyles, as set forth in our
long-term vision, and through our healthcare business, we hope to contribute to individual health.

KYORIN Pharmaceutical Co., Ltd.

KYORIN Rimedio Co., Ltd.

http://www.kyorin-pharm.co.jp/en/http://www.kyorin-rmd.co.jp/

KYORIN Pharmaceutical aspires to be a drug manufacturer that is

As the generic drug business subsidiary of the Kyorin Group, KYORIN

trusted by patients and medical professionals, and is recognized

Rimedio aims to become a highly reliable generic drug manufacturer.

for its significant presence in society. To this end, the company is

To contribute to the health of patients and play a critical social role instriving to enhance its presence in specific fields, including

reducing healthcare costs and helping to maintain social security

respiratory medicine, otolaryngology, and urology, while

infrastructure, KYORIN Rimedio will continue to ensure astable supply of high quality products and information, andaiming to discover novel, global new drugs.

to deliver distinctive generic drug products to the market
as a characteristic generic drug company.

Kyorin Group
Dr. Program Co., Ltd.
http://www.drprogram.co.jp/
Dr. Program manufactures products based on nanocapsuletechnology—a pharmaceutical formulation concept that wehave cultivated through research into new beauty-enhancing ingredients and development of technologies for penetration of ingredients.
Going forward, the company will continue to listen closely to its
customers, working to create completely new value in the market andcontributing to the beauty and good health of women everywhere.

10

Annual Report 2012

KYORIN Medical Supply Co., Ltd.
http://www.kyorin-ms.co.jp/
KYORIN Medical Supply is involved in a wide range ofcommunications-related business activities centered onplanning and production of pharmaceutical advertising. It is also
actively engaged in the environmental hygiene business, projected
to become a core Kyorin Group business in the future, contributing
to society as a characteristic company supporting healthy living.

Feature: The Source of Value Creation

Research andDevelopment

Creating Value
through
Collaboration

Sales (Medical
Representatives (MRs))

Production

The Core Driver of Further Growth
In promoting HOPE 100 Stage 1, the Group is maintaining its core pharmaceutical business while diversifying throughthe consumer healthcare business. The goal of our pharmaceutical business, on which the Group was founded, is tocontribute to the health of the world’s people through the R&D, manufacture and sale of superior products.

Research andDevelopment

Sales(Medical Representatives(MRs))

Production

P.12
Discovering novel, global original new drugs is themission of R&D at the Kyorin Group. To accomplish
this, it is important that we explore more efficient drug
discovery research efforts, focusing on respiratory
medicine, urology, and infectious diseases.
We are working to accelerate and improve thequality of drug discovery research by utilizing smallscale advantages such as information-sharing
enabled through open communication.

P.14

P.16

Quality assurance systems in the manufacturing

To enhance our presence in specific fields, it is vital

process are critical to producing a stable supply ofthat we create an organization that has a precise

high-quality products at low cost. To this end, all of thegrasp of the needs of doctors and healthcare

Kyorin Group’s plants are working to enhance good

institutions in those areas, and can quickly respondmanufacturing practice (GMP) levels, while a quality

to them. KYORIN Pharmaceutical is pushing ahead

assurance system under direct supervision of the headwith a franchise customer (FC) strategy that places

office ensures a stable supply of high-quality products.

priority on activities in specific fields.

KYORIN Holdings, Inc.

11

Research and Development
The discovery of new drugs that can be licensed out worldwide
can enhance the Kyorin Group’s profile and presence as a new
drug manufacturer, and lead to sustainable growth. Recognizing
this, the Group is pursuing more efficient and effective drug discovery activities focused on respiratory medicine, urology, andinfectious diseases.

Masakatsu Komuro
Head of Research &Development Headquarters,
KYORIN Pharmaceutical Co., Ltd.
Executive Director,
KYORIN Holdings, Inc.
Senior Executive Director,
KYORIN Pharmaceutical Co., Ltd.

12

Annual Report 2012

Creating Value through Collaboration

Sales
Research

Development

Production(MedicalRepresentatives(MRs))

Focus on Timelines in the
Discovery, Development, andLife Cycle Management (LCM)
The Kyorin Group promotes research and developmentwith an emphasis on timelines. We have established atimeline for each role in the process, beginning with
HOPE 100 Stage 1, which emphasizes maximizing product value through LCM. Stages 1 and 2 focus on bringing
products to market through development, with the goal ofbuilding a significant presence in specific fields by Stage
3. In Stage 3 and beyond, the emphasis is on the creationof new drugs that can contribute to the health of theworld’s people. By clearly positioning the functions ofeach department with these goals and strengthening
internal collaboration, we promote efficient research anddevelopment, with the aim of being trusted by both medical professionals and patients.

Feature: The Source of Value Creation

Small-scale Advantages and Core Technologies as Our Strengths
The Kyorin Group’s strength in research and development lies in the

R&D Expenses

advantages of our smaller scale. In particular, excellent cross-(Billions of yen)departmental collaboration and the ability to nurture staff with diverse
research capabilities are the source of our competitiveness in new

14.0

15.0
12.0

10.5

11.8

12.5

11.1

drug discovery. In core technologies, our strengths also come fromour drug discovery technologies, based on foundational research in

9.0

inflammation, immunology, and infectious disease, which we exploit

6.0

to efficiently synthesize new compounds.

3.0

At the same time, we are systematically nurturing human resources, an important key to taking full advantage of these strengths.

0

2008

2009

2010

2011

2012
(Projected)(FY)

While the skills required in discovery research, development research,and clinical development differ, our strength is in having personnel
capable of handling everything from drug discovery to clinical development, and this is what enables us to bring multi-faceted knowledge to our research activities.

Drug Discovery, Development, and LCM with
Medical Professionals and Patients in Mind
The direction of our drug discovery efforts is focused on creation of

in-house that refers to formulating development policies with a strong

innovative new drugs in Stage 3, with a focus on the development of low

awareness of our vision for a product after launch. We focus not onlymolecular weight (LMW) drugs under the key concept of creating drugs

on accelerating development speed, but work under the belief thatthat will change existing therapeutic systems. While some have spoken

development’s mission is to create products that meticulously meet theof the limits to LMW drug discovery, we currently see some potential forneeds of the patients who will actually use them.

LMW drugs in modulating protein-to-protein interactions. LMW drugs

In the LCM activity, we work to build evidence by implementing

are also highly economical, and can be used in multi-targeted drug

high-quality research, maximizing product value by incorporating that

discovery. Our joint research partners around the globe have high regard

evidence into guidelines for medical care and therapeutic policies. By

for the Kyorin’s optimized LMW drug research. By leveraging thedoing so, we hope to improve product and brand strength in ways

Group’s particular attributes, we will continue to meet the challenge ofthat will ultimately contribute to society. The desire to earn the trust

discovering new and innovative LMW drugs going forward.

and gratitude of medical professionals and patients will continue toIn the development process, our goal is to bring a “developer-

propel our efforts in the LCM.

producer’s” awareness to creating products. This is a phrase created

Employee Message

Promoting Pinpoint Research with an Awarenessof Marketability, Profitability, and Feasibility
The aim guiding our research and development activities is to have
patients consistently use the drugs we bring to market. When setting
research and development themes, we give ample consideration tomarketability, profitability and feasibility, pursuing drug design thatemphasizes effectiveness, safety and convenience. We are working
to create new drugs acceptable worldwide, in an open environment
in which anyone can proactively establish new research themes andotherwise take action.

KYORIN Holdings, Inc.

13

Production
By introducing leading-edge production equipment, as well as flow bin production systems that automate the transfer of raw materials and intermediates, the KYORIN Pharmaceutical works to improve production efficiency andreliability, promoting the creation of highly productive, worker-friendly plants.
In addition, all of our plants have acquired both ISO 14001 and OHSAS 18001
certification, and under the slogan “Protecting this wonderful planet throughour actions,” our goal is for all plants to run on the concepts of enhanced
good manufacturing practice (GMP) and flexible production infrastructure, andto become worker-friendly, highly efficient, highly reliable facilities.

Creating Value through Collaboration

Sales
Research

Development

Production(MedicalRepresentatives(MRs))

Mitsutomo Miyashita
Head of Production & Manufacturing Headquarters,
KYORIN Pharmaceutical Co., Ltd.
Executive Director,
KYORIN Holdings, Inc.

Establishing a Globally
Trusted Production Division

Representative Director,
President and Chief Executive Officer
KYORIN Pharmaceutical Co., Ltd.

In addition to maintaining and continually improving our
production infrastructure to provide a stable supply ofhigh-quality products at low cost, Kyorin Group aims tocreate a production division that is trusted not only
where our plants are located, but everywhere in theworld our products are made available. To achieve this,
we must maintain a positive, energetic workplace, andact as a Group to exploit our full creativity. Day to day,our efforts focus on the pursuit of quality assurance,
supply stability, and cost reductions.

14

Annual Report 2012

Feature: The Source of Value Creation

Reliability Born of a Stable Supply of Products and a World-class
Level of Quality Management
Our mission is to manufacture pharmaceuticals and deliver them topatients and medical professionals. We believe that a stable supplyof products is critical to achieving this. Given the impact of last year’s
power shortages resulting from the Great East Japan Earthquake, we
moved to convert our Noshiro Plant (in Noshiro, Akita Prefecture)entirely to in-house power generation. This has given us the infrastructure to ensure a stable supply of products.
Further, to deliver products that can be safely used around theworld, KYORIN Pharmaceutical is working to enhance its good
manufacturing practice (GMP), a quality assurance standard, at all of
its production plants. At the same time, through a quality assurance
structure under direct supervision of the head office, we are able toprovide a stable supply of high-quality products.

In-house power generation facilities at the Noshiro Plant

Quality Assurance, Stable Supplies, and Cost Reductions Achievedby Enhancing Capabilities in the Field
The production division is working strategically on four key issues:

strengthen our production infrastructure. With the coming addition of

overall optimization of the Group’s production infrastructure, low-cost

KYORIN Pharmaceutical Facilities Co., Ltd., we hope, even more

operations, roll-out of a new global production infrastructure, andthan before, to continue providing a stable supply of high-quality

human resource development.

products, while improving manufacturing technology, streamlining

In terms of overall optimization of the Group’s production infra-

costs, and expanding globally. Finally, in terms of human resource

structure, we are working to ensure efficient production at each ofdevelopment, we continue to promote the creation of workplaces in

the Group’s plants, in line with the business plan. Where low-cost

which all employees are motivated to improve, and can make full use

operations are concerned, we are aiming to simultaneously lowerof their creative energies.

costs and improve quality through better visualization of operations.

Kyorin Group will continue working to strengthen both the physicalAnd in our roll-out of a new global production infrastructure, we are

and intangible aspects of its production infrastructure in order tostriving to meet farsighted global standards while working tofurther enhance Group value.

Employee Message

Aiming to Become Japan’s Top-level
Production Plant through QDC* andEnvironmental ResponsivenessAt the Noshiro Plant, the Kyorin Group’s central production facility,
in addition to flow bin production systems that automate the transferof raw materials and intermediates, and other automated highefficiency equipment, each employee engages in their work with anawareness of the importance of making dramatic improvements in
productivity. Going forward, we will continue to pursue quality assurance, supply stability, and cost reductions as an energetic, highly
creative production facility.
*Quality, Delivery, Cost

KYORIN Holdings, Inc.

15

Sales (Medical Representatives (MRs))
MRs are responsible for providing, collecting, and conveying
information that encourages the proper use of pharmaceuticals,
and serve as drug treatment partners to medical professionals andpatients. The Kyorin Group is expanding the activities of its MRs
based on its franchise customer (FC) strategy, which prioritizes actionin the fields of respiratory medicine, otolaryngology, and urology.

Creating Value through Collaboration

Sales
Research

Development

Production(MedicalRepresentatives(MRs))

Masahide Sugibayashi
Head of Sales & Marketing Headquarters,
KYORIN Pharmaceutical Co., Ltd.
Corporate Officer,
KYORIN Pharmaceutical Co., Ltd.

Enhancing Our Presencein Specific Fields
The Kyorin Group is working to build solid trust relationships with its customers by emphasizing action in
specific fields, while also working to improve individual
employee skills and enhance our organizational capabilities. By working toward an ideal of the Kyorin MR
trusted by doctors, and by taking advantage of ourunique team structure, in which specific geographic
areas are covered by multiple MRs, our MRs contributeto record revenue and operating income through theirdetailed efforts.

16

Annual Report 2012

Feature: The Source of Value Creation

Aiming for Optimal Results in Response to Changing Business Conditions
Fiscal 2011 was a year in which the unprecedented experience of thestructure that can make us the most highly motivated company in the

Great East Japan Earthquake brought a renewed awareness of theindustry. To enhance our presence in specific fields, we have intro-

importance of risk management. While an increase of inventory in

duced tablet computers for all of our MRs, providing them with a new

distribution channels at the end of fiscal 2010 had an impact on

way to provide and collect information from physician specialists. We

revenue, blunting growth, excluding the effects of the disaster, we

will also create a system by which people in our research divisions

continued on a solid growth trend.

can proactively participate in seminars and lectures set up for

For the pharmaceutical industry, fiscal 2012 will represent a major

specialist physicians by the sales division, involving the entire com-

shift in business conditions, with the enforcement of Guidelines forpany in efforts to improve our relationships with these specialists.

Transparency and the new Fair Competition Code for ethical drugs.

Building the industry’s most motivated sales and human resource

The Kyorin Group is also seeking to establish new internal standards,

development infrastructure will involve further evolving our uniqueand is vying to ensure that its MR activities are in strict compliance.

team-based sales structure, as we work to create an atmosphere in

At the same time, initiatives this fiscal year will focus on maximizing

which MRs can share the excitement of meeting team goals. In

the spread of our principal products (Kipres, Mucodyne, Uritos, andhuman resource development, we will provide a model for Kyorin

Pentasa), as we aim for the end goal of HOPE 100 Stage 1. The

MRs who are trusted by doctors, with managers providing regularembodiment of this focus will involve two primary aims—enhancing

on-the-job training to enhance MR skills. These initiatives will contrib-

our presence in specific fields (respiratory medicine, otolaryngology,

ute to ensuring that in fiscal 2012, the Kyorin Group achieves bothand urology), and building a sales and human resource development

record revenue and record operating income.

Kipres

Mucodyne

UritosPentasa

Mobility of MRs Achieved through Team Structure
To accurately grasp the needs of medical professionals and provide

his or her own role, and is highly goal-oriented, but working together

rapid responsiveness as an organization, KYORIN Pharmaceuticaland sharing knowledge and experiences encourages both individual

has introduced a team structure. The structure is unique in that eachand organizational growth, and makes it possible to respond quickly

team works together toward meeting a common goal. Each MR has

and flexibly.

Employee Message

Building a Competitive Sales Structure, with theGoal of a Comfortable Doctor-MR RelationshipAs a pharmaceutical company whose role is to provide treatment throughdrugs, our goal is to nurture MRs who can provide useful information to doctors,
and who can solve the problems those doctors face. To prioritize our sales
activities in specific fields, based on our franchise customer (FC) strategy, we arenotable for the level of relationships we maintain with doctors in those key fields.
In addition, through the introduction of a team structure, and the sharing ofindividual experiences and capabilities, team members work toward their mutual
improvement, engaging in their day-to-day activities with their eyes on a common
goal. In building relationships of trust with doctors, it is important that MRs be able
to provide appropriate information in response to physicians’ needs. Goingforward, we will continue to contribute to medical care, and to the health ofindividuals, through our ability to understand the kinds of drug treatments doctors
provide, and to deliver a variety of solutions based on that understanding.

KYORIN Holdings, Inc.

17

Alliances
Reinforcing Our Pipeline in Specific Fields through Alliances

and KRP-AB1102, a treatment for chronic obstructive pulmonary

KYORIN Pharmaceutical, a core compamy in the Kyorin Group,

disease (COPD). These results are due to the fact that all of thehas set a goal of establishing a greater presence in specificcompanies, which out licensed these products, found the prospect

fields, and is working to reinforce its R&D pipeline. In addition toof working with the Kyorin Group attractive, and were confident thatthe harsh environment owing to the number of competitors, thewe would prove to be a reliable partner. We believe this is evidencelack of promising novel new drugs in the world makes itthat the FC strategy we are pursuing is gaining a firm hold in theextremely difficult to acquire in-licensing opportunities.

pharmaceutical industry, both in Japan and the rest of the world.

Under these conditions, in the four years since fiscal 2008, weGoing forward, our employees will work together to build an

have been able to license three new products in the franchise cus-even more attractive product pipeline, which is to be trusted bytomer (FC) field (respiratory medicine, urology and otolaryngology),

physicians and patients and to be recoginized for the significant

KRP-108, an inhalant for asthma, KRP-209, a treatment for tinnitus,

presence of Kyorin Group in society.

Promoting Alliances with Domestic and Overseas Pharmaceutical Companies
In addition to its own drug discovery efforts, through proactive collaboration with outside firms, the Kyorin Groupis working to enrich and strengthen its R&D pipeline, its most critical issue as a pharmaceuticals manufacturer.
Eisai

Yungjin (Korea)

Taisho Pharmaceutical

Merz (Germany)

Novartis (Switzerland)
Kaken PharmaceuticalSenju Pharmaceutical

Meiji Seika
Handok (Korea)

Chugai Pharmaceutical
LG Life Sciences(Korea)MSD

KYORIN
Pharmaceutical

Merck & Co. (U.S.)

Sato Pharmaceutical
Ono PharmaceuticalSekisui Medical
Shinlin Sinseng (Taiwan)
Chong Kun Dang (Korea)

SkyePharma (U.K.)

Nichi-Iko
Pharmaceutical

SPIMACO*(Saudi Arabia)

Allergan(U.S.)

Nisshin Pharma
Ferring (Switzerland)

MediciNova (U.S.)

Galderma
Almirall (Spain)* SPIMACO: Saudi Pharmaceutical Industries & Medical Appliances Corporation

Promotion of Distinctive Generic Drug BusinessWe pursue quality assurance, stable supply, and lower costs in
the generic drug business by promoting stronger collaboration

Domestic and overseas alliances

within the Group and local and global alliances. Reducing ourcost-of-sales ratio is a particularly important issue.
We also intend to begin working on initiatives to gain competitive advantage through our product lineup in specific areas.
Specifically, we will focus on infectious diseases as one key area,

Business developmentemphasizing infections(product lineup)

Quality assurance
Stable supply
Lower costs

and are currently seeking to enhance our product lineup in
adequate kinds of antibacterial agents that are needed in Japan.
In addition to in-house development, we are actively expanding joint development and production work as a contract manufacturer in a bid to reinforce its distinctive and competitive
generic drug business.

18

Annual Report 2012

Stronger in-group collaboration(includes functional realignment with ethical drug business)

Products under Development (As of July 31, 2012)
Ph III~Application
Compound/Code Therapy area/Action

OriginFeatures

Comments

Stage
Pre-clinical

Pentasa(tablet)Ulcerative
colitisFerringPharmaceuticals(Switzerland)

New dosage regimen for ulcerative colitis
in the remission phase (once a day)Pentasa(suppository)

Ulcerative
colitisFerringPharmaceuticals(Switzerland)

Consideration of a new dosage form forthe active phase of ulcerative colitis(once a day)• Development of a
new dosage form
• Ph III completed(2/2012)

KRP-108(inhalant)

Antiasthmatic

SkyePharma(U.K.)

A combination product with a steroid(ICS: fluticasone) and long-acting
beta-agonist (LABA: formoterol), which
offers better convenience and compliance to patients• License agreement
Domestic
with SkyePharma(4/2008)• Phase III Completed
Overseas(3/2012)

Ph I

Ph II

Ph III

NDA

Domestic

11/2011

Domestic

In preparation

In preparation*1*1 United States: SkyePharma (3/2009), Europe: Mundipharma (3/2010) • (Approved 7/2012)

Proof of Concept (POC) Projects (Ph I~Ph II)
Compound/Code Therapy area/Action

OriginFeatures

Comments

Stage
Pre-clinical

KRP-104

KRP-209

KRP-AB1102(inhalant)

Anti-diabetes
agent

Tinnitus

Chronic
Obstructive
Pulmonary
Disease(COPD)

In-house

Merz(Germany)

Almirall (Spain)

A DPP IV inhibitor to reduce blood
glucose through suppression of thedegradation of insulin-releasing hormone.
Diabetic therapy with fewer side effects is
expected than existing treatments.

• Overseas Ph IIb
completed (3/2011)• Domestic Ph IIb
completed (3/2010)

KRP-209 (Neramexane) is expected to
improve the patients’ annoyance anddifficulties in their life caused by tinnitus,
mainly through its two pharmacologicalproperties: 1) NMDA antagonistic activity and2) Nicotinic acetylcholine antagonistic activity• License agreementwith Merz (11/2009)– New chemical entity: Aclidinium bromide– Long acting muscarinic agonist (LAMA)– Twice daily administration– Onset of action on the first day

License agreementwith Almirall (2/2011)

KRP-203

Chronic
Obstructive
Pulmonary
Disease (COPD)

Transplantation,
autoimmune
diseases,and IBDPh II

Ph III

NDA

Domestic
Overseas

Domestic

8/2011

Overseas*3

Domestic

2/2012

Genuair®
1) Designed with a feedback system, which
through a ‘colored control window’ and an
audible click helps confirm that the patient
has inhaled correctly2) Counter for remaining doses3) Safety features such as an anti-doubledosing mechanism and an end-of-dose
lock-out system to prevent use of anempty inhaler

KRPAB1102F(inhalant)

Ph I

Almirall (Spain)

In-house

KRPAM1977X(Oral agent)

New quinolone synthetic
antibacterial
agent

In-house

KRPAM1977Y(Injection)

New quinolone synthetic
antibacterial
agent

In-house

Overseas

Combination of aclidinium bromide withthe long acting beta agonist formoterol:
This combination is aimed at providing
higher efficacy than each component
alone, as well as the improved convenience of having the two products in thesame easy to use inhalation device.
This is currently in phase III clinicaldevelopment.
An immunosuppressant with a novel
mechanism called an S1P-agonist. It may
have a better safety profile than previous
ones as well as an excellent effect underconcomitant use with other types of
immunomodulators.

*4

Domestic

5/2012

Overseas• License agreementwith Novartis(2/2006)• New license
agreement IBD(11/2010)

1. S uperior ability to combat drugresistant gram-positive bacteria(incl. MRSA)
2. O
 utstanding ADME (oral absorption,
tissue migration)
3. H
 igh degree of safety expected sincesafety hurdles cleared prior to clinical
trials*5

Domestic

12/2010

Overseas*2

Domestic

8/2011

Domestic

7/2012*2 Ph II (POC) Novartis (12/2010)*3 Merz*4 Europe: Almirall (7/2011), United States: Forest Laboratories (6/2011)*5 Europe: Almirall, United States: Forest Laboratories
Others• Glaucoma treatment Alphagan 0.1% ophthalmic solution: Launched May 2012 from Senju Pharmaceutical.
• Development of KRP-110 stopped. Removed from list of pipeline products.

Licensing Development
Compound/Code

Licensee/
Therapy area/Action
Collaborative research

KRP-203

Novartis(Switzerland)

OriginComments

Stage
Pre-clinicalTransplantation,
autoimmune
diseases, andIBD

In-house• An immunosuppressant with a novel mechanism
called an S1P-agonist. It may have a better safety Domestic
profile than previous ones as well as an excellent
effect under concomitant use with other types of
immunomodulators. License agreement with
Novartis (2/2006) and new license agreement for Overseas
inflammatory bowel disease (11/2010).

Ph I

Ph II

Ph III

NDA

12/2010

POC 12/2010

KYORIN Holdings, Inc.

19

Corporate Governance
Basic Management Policies
As a group, our corporate philosophy is “to cherish life and benefit society by contributing tobetter health.” To realize this philosophy we will pursue diverse expansion and development ofour consumer healthcare business under our long-term vision HOPE 100 (aiming for the Health
Of People and our Enterprise), striving to be a group that supports sound and healthy lifestyles.

Basic Policy on Corporate Governance
The most important management goal for KYORIN
Holdings, Inc. is to continue raising shareholder value.
To achieve this goal requires fostering a management
environment that enables us to build trust with thegeneral public. Therefore, having given better corporate governance a high priority, we seek to ensure
prompt decision-making, strong monitoring of theappropriateness of management, and ethical andtransparent corporate activities. To ensure transparency and fair disclosure, we release appropriate information without delay for the benefit of shareholders
and investors. Within the Kyorin website, we havecreated a shareholder and investor information section
on which we list business performance data, information presented at meetings, our securities report, news
releases and other corporate information, enabling
anybody to access information about Kyorin at any
time. In the future, we intend to actively increase ourdisclosure of information, and expand and improve
our communications with all stakeholders.
We are an audit- and committee-based company
under Japanese law. The Board of Auditors endeavors to fully demonstrate its auditing and supervising
functions and ensure the transparency of the deci-

sions being made by the Board of Directors. Corporate auditors conduct audits in line with an auditing
policy and plan set by the Board of Auditors at the
beginning of each fiscal year. Corporate auditors
carry out a diverse range of activities in fulfilling theirauditing function. In addition to participating in important meetings, including those of the Board of Directors and the Management Committee, corporate
auditors implement comprehensive audits by checking documents and other materials relating to key
decisions and inspecting departments, facilities, andGroup companies.
In addition, in recognition of our corporate social
responsibility (CSR), for every Kyorin Group company
we appoint compliance and risk management promotion officers. We have established a Group-wide
compliance and risk management system that is
administered by the Compliance Committee and Risk
Management Committee. We have established guidelines for each affiliated company based on the Kyorin
Compliance Guidelines and set up a system for
employees to report and seek advice about possible
irregularities. As well as the above measures, we havecreated management guidelines for affiliatedCorporate Governance and Management Structure (As of June 22, 2012)
Ordinary General Shareholders’ Meeting
Appointment/dismissal

Reports

Accounting
Auditing Firm
(Independent
Auditor)Appointment/dismissal

AuditsBoard ofAuditors(5 members)

Board ofDirectors(6 members)

Exchangeofopinions

AuditsAppointment/dismissal

Cooperation
Representative
Director
Internal
Audit Office(7 members)

Supervision

OutsideLegal
CounselManagement
Committee

AuditsAuditsAffiliated Companies
Guidance

20

Annual Report 2012

Executive Officers/
Departments

Corporate Governancecompanies and built a system of support that
respects their autonomy. Under this system, we
receive regular business reports from these companies and hold meetings with their management before
deciding important issues. The Internal Audit Officeconducts audits of affiliated companies based oninternal audit guidelines. Based on the results of theseaudits, departments that oversee the operations of
the affiliated companies issue instructions or warnings
and provide appropriate guidance.

Management Organization and Internal Control System
1. Management Organization
To clarify the roles of our six directors, who areresponsible for making business decisions and supervising business execution, and five executive officers,
who are responsible for business execution, Kyorin
has established an executive officer system. The
Board of Directors usually meets once a month,deciding important operational matters in a timely
manner after debating the issues as well as supervising each director’s duties. To oversee business execution, we established a Management Committee,
comprising the president and directors, which discusses key operational matters concerning the Group.
We also utilize a corporate auditor system with two
statutory corporate auditors and three outside corporate auditors. By capitalizing on such auditing andsupervisory functions, we have built a system thatfacilitates highly transparent decision-making.

2. Internal Control System and Risk
Management System
Kyorin is building an internal control system in accordance with the following basic policy: In keeping withour corporate philosophy of “cherish life and benefit
society by contributing to better health,” we undertake
our activities in Japan and overseas guided by a highstandard of corporate ethics as we respect humanrights and comply with the letter and spirit of all laws
and codes of conduct.
1 We established the Compliance Committee, which
is chaired by a director in charge and includes the
Director of the Internal Audit Office who serves as amember of the committee. Thoroughgoing guidance is provided to executives and regular employees via training programs, while the Corporate
Ethics Hotline has been set up for consultations
and reporting matters concerning internal violations. Moreover, we have set Company rules toensure the accuracy of financial reporting, anddeveloped systems for ensuring the validity andreliability of internal controls over financial reportingof the Group.
2 We have built and are operating a structure for
reducing and preventing risks. As part of this structure, we established the Risk Management Committee, chaired by a director in charge, with the
General Affairs & Human Resources Department
responsible for overseeing the committee. For risks
concerning compliance, the environment andaccidents, we also formulated the Risk Management Guidelines and the Corporate Ethics andCompliance Guidelines as part of a quick-response
structure. Additionally, to handle crisis management
when dealing with any contingencies, we have set
up the Contingency Measures Headquarters under
the leadership of the president.
3 In accordance with the Documentation Management Guidelines and other internal regulations, we
carry out the appropriate preparation, preservation,and management of information regarding directors’ decisions, their execution of other duties andreports concerning directors.
4 To ensure that auditors effectively perform audits,
the accounting auditing firm explains the details of
the accounting audit to the corporate auditors andexchanges various information while cooperatingwith the Internal Audit Office in ensuring appropriate communication and effective auditing.
5 Along with establishing compliance committees
and risk management committees at each Kyorin
Group company, the Compliance Committee andRisk Management Committee oversee and promote compliance and risk management for theentire Group. In addition, we have built a structure
for consultation and reporting that covers thewhole Group.
We will create management guidelines for affiliated companies and build a system of support that
respects their autonomy. Under this system, we will
receive regular business reports from these companies and hold meetings with their management
before deciding important issues.
The Internal Audit Office performs audits ofaffiliated companies based on internal audit guidelines. Depending on the results of these audits,
departments that oversee the operations of theaffiliated companies issue instructions or recommendations and provide appropriate guidance.
Moreover, we have also built a structure thatenables managers to prepare reliable internal
control reports for financial reporting. Under thisstructure, the Internal Audit Office also evaluates
and reports on internal controls related to financial
reporting based on the newly established Standards and Practice Standards for Management
Assessment and Audit Concerning Internal Control
over Financial Reporting.

KYORIN Holdings, Inc.

21

6 Basic rationale on the elimination of anti-social

forces and the establishment of related measures.
Giving consideration to our corporate philosophy, we formulated the Kyorin Group Corporate
Charter to ensure a high standard of corporate
ethics and thoroughgoing compliance. This charter
clearly states that we will “stand firmly against any
anti-social forces or groups that pose a threat tothe order and safety of society.”
The Company will eliminate any relationships
with and strongly confront anti-social forces orgroups. As an internal structure for overall monitoring of our corporate ethics and our compliancestructure, we established the Group Compliance
Committee, with the director in charge of the committee also handling overall coordination. As thedepartment in charge of compliance, the Group
General Affairs & Human Resources Department isworking to strengthen and promote a wider permeation of corporate ethics and compliance througheducation and other measures in collaboration with
relevant departments.
We have also established standard measures toprepare for any possible undue demands fromanti-social forces. To this end, we have built astructure that includes designating a “person
responsible for prevention of undue claims” at our
Head Office and all branch offices to respond toencounters with any anti-social forces or groups.
We also maintain close communications with police
departments with relevant jurisdictions, special
crime prevention units, and legal advisers to ascertain the latest trends and gather other information
on anti-social forces or groups as well as for guidance, consultation, and assistance. Also, we have
prepared Responding to Telephone Calls and Visits
to the Company during the Initial Phase of ClaimRelated Problems as a manual, to ensure that
employees make appropriate initial responses. In
this manner, we have established a structure forproperly responding to any demands from antisocial groups.

3. Audit Organization
1 Internal Auditors

Internal audits are conducted by the Internal Audit
Office, which is staffed by seven employees,
reports directly to the president and is independent
from other sections. Based on yearly auditing
plans, the Internal Audit Office regularly assesses
and evaluates the effectiveness and efficiency ofthe legal compliance and internal control systems
in the parent and Group companies. After an audit,
the office communicates any problems or areasthat need improvement directly to the president
and makes the appropriate recommendations.
Another function of the office is to evaluate the22

Annual Report 2012

Group’s internal controls over financial reporting.
The office evaluates the development and operation of these internal controls according to a predetermined scope for evaluation, and makes a reportto the president.
2 Corporate Auditors
Corporate auditors conduct audits in line with anauditing policy and plan set by the Board of Auditors at the beginning of each fiscal year. In addition to participating in important meetings,
including those of the Board of Directors and theManagement Committee, corporate auditors
implement comprehensive audits by checking
documents and other materials relating to important decisions and inspecting departments, facilities, and Group companies.
Under our adopted system, if someone discovers that an executive officer or employee is acting
in contravention of either laws and regulations, or
the Company’s Articles of Incorporation, they
immediately notify the corporate auditors. We areworking to establish an environment conducive tomore efficient audits by corporate auditors bycoordinating closely with executives and regular
employees and by fostering deeper understandingof audits. Furthermore, we assign auditing staff toassist the duties of the corporate auditors as necessary, and these human resources are carefully
checked by directors and auditors to ensure thatthey are independent.
Moreover, the statutory corporate auditor, Seiyu
Miyashita has experience as a director and head ofaccounting of KYORIN Pharmaceutical Co., Ltd,and has a considerable level of knowledge about
finance and accounting.
3 Outside directors and outside corporate
auditors
Kyorin has three outside auditors who are neutrally
positioned and not compromised by relationships
with management or specified parties having a
special interest. These outside auditors all have aconsiderable level of knowledge of corporate legal
matters, and matters of finance and accounting. We
utilize their specialist understanding and wideranging knowledge and experience to strengthen
and enhance our auditing functions. While we currently have no fixed criteria defining the independence of outside auditors, we do not consider
auditors from major shareholding companies andkey trading partners to be truly independent. To
ensure that execution of duties by directors is legal,transparent, and fair, we believe that outside auditors who have a high level of neutrality that is notcompromised by a relationship with management or
parties having a special interest, and for whom there
is no risk of forming a contradiction of interest withgeneral shareholders, are the most independent.

Corporate GovernanceOur outside corporate auditor, Masaji Obata is
well versed in the Corporation Law as a lawyer, andhas considerable knowledge concerning financeand accounting.
Moreover, KYORIN Holdings has not appointed
an outside director. Compared to an outside director, who would be appointed for only one year, thecorporate auditors, who do not execute businessduties at KYORIN Holdings, have a more stable
position of four years, and have independent compensation and authority. With respect to appointments, the corporate auditors have the auditors’right of agreement, the right to make proposals
and to carry out comprehensive surveys. For thesereasons, we believe that corporate auditors are
more independent from management than outside
directors. Moreover, our outside corporate auditors
make an active contribution to Board of Directors
and Board of Auditors meetings, offering comments and advice from a specialist perspective
informed by wide ranging knowledge and experience. This helps to ensure that execution of duties
by the directors is appropriately legal, transparent,
and fair, and we believe it is the best way tostrengthen oversight functions through links
between directors and corporate auditors.
4 Independent Auditors
In accordance with the Corporation Law and the
Financial Instruments and Exchange Law, we
receive annual audits by Ernst & Young ShinNihon
LLC. We benefit from its valuable advice as anaccounting auditing firm, as well as from its services as an auditor of our financial accounts.
The following certified public accountants performed the audit of KYORIN Holdings, Inc.:(Names of certified public accountants)
Shigeyuki Tsunamoto, designated limited liability
partner and engagement partner;
Hidemitsu Kato, designated limited liability partnerand engagement partner
A further 11 certified public accountants and 9
assistant accountants assisted with the audit.
The Board of Auditors provides a forum for close,
regular exchange of information and opinions with
the Internal Audit Office and the accounting auditing firm, thereby enhancing the auditing system.

4. Overview of Personnel, Capital and Trading
Relationships between the Company and theOutside Directors and Outside Auditors
None to report.

5. Compensation of Directors and Corporate
Auditors
In fiscal 2011, ended March 31, 2012, compensation
paid to directors and corporate auditors was ¥201
million: ¥172 million to 7 directors (excluding outside

directors), and ¥29 million to 2 corporate auditors(excluding outside auditors).
There were no payments to directors corresponding to employee salaries.
Remuneration for outside auditors totaled ¥16
million for 3 auditors.

6. Number of Directors
The number of directors is limited to 15 as set out in
the Company’s Articles of Incorporation.

7. Conditions for Resolution on Appointmentsof Directors and Corporate Auditors
The Company’s Articles of Incorporation stipulate thata resolution to appoint a director or corporate auditor
must be by majority vote of attending shareholders
holding at least one-third of the voting rights of shareholders who are eligible to exercise voting rights.

8. Ordinary General Shareholders’ Meeting
Matters that May Be Resolved by the Boardof Directors
1 Acquisition of treasury stock

Pursuant to the provisions of Article 165, paragraph
2 of the Corporation Law of Japan, the Company’s
Articles of Incorporation stipulate that the Company
may acquire treasury stock by resolution of theBoard of Directors. The aim is to allow management
to swiftly exercise capital policies as deemed appropriate in response to changes in the operating
environment, by allowing the Company to acquire
treasury stock through market transactions, etc.
2 Decision-making body for cash dividends fromretained earnings
Pursuant to Article 459, paragraph 1 of the Corporation Law of Japan, and except where otherwise
specified in a separate applicable legal or regulatory provision, the Company’s Articles of Incorporation stipulate that cash dividends are to be decided
by resolution of the Board of Directors, and not theordinary general shareholders’ meeting. The aim is
to allow management to exercise capital policy as
deemed appropriate.

9. Requirements for Special Resolution by theOrdinary General Shareholders’ Meeting
Pursuant to Article 309, paragraph 2 of the Corporation Law of Japan, the Company’s Articles of Incorporation stipulate that special resolutions by the ordinary
general shareholders’ meeting must be passed by atleast a two-thirds majority vote of attending shareholders holding at least one-third of the voting rights
of shareholders eligible to exercise voting rights. The
aim is to lower the required quorum for a special
resolution of the ordinary general shareholders’ meeting to facilitate the smooth operation of the meeting.

KYORIN Holdings, Inc.

23

Directors, Auditors, and Corporate Officers

1 Representative Director, President

and Chief Executive Officer

Masahiro Yamashita

4 Senior Executive Director

2 Executive Director(As of June 22, 2012)

3 Senior Managing Director

Mitsutomo Miyashita

Minoru Hogawa

KYORIN Pharmaceutical Co., Ltd.
Representative Director, President andChief Executive Officer

Management Planning
Finance & Accounting

5 Executive Director

6 Executive Director

Tomiharu Matsumoto

Yutaka Ogihara

Masakatsu Komuro

General Affairs & Human Resources
Legal

President’s Office
Corporate Communication
Information System Management

Intellectual Property

Outside Corporate Auditors

Senior Corporate Officers

Corporate Officer

Seiyu Miyashita
Shigeru Abe

Masaji Obata
Junji Honda
Yasuyuki Hirota

Takayoshi Ishizaki
Yoh ItoSatoru Kanai
Shigeru Ogihara

Masanori Masui

24

Senior Corporate Auditors

Annual Report 2012

2

5

1

4

3

6

Corporate Social Responsibility
The starting point of the Kyorin Group s corporate social responsibility (CSR)
endeavors is its corporate philosophy, that is to cherish life and benefit society bycontributing to better health. For sustainable growth, Kyorin will prioritize building
and maintaining trust-based relationships with medical professionals, customers,
shareholders, investors, employees, business partners, and local communities.
The Group will continue to work to realize that goal by providing trusted products
and services, and by fulfilling its corporate social responsibility in the areas ofenvironmental and industrial safety and hygiene through activities that contributeto health and society.

Corporate Social Responsibility
In recognition of the importance of its corporatea system of compliance in line with the approachsocial responsibility, the Kyorin Group is enhancing

set out below.

its corporate ethical standards and putting in place

Compliance Measures
Basic policy

3. In March 2006, the Compliance Committee was

An enterprise should pursue profits through fairestablished to provide overall supervision ofcompetition as an economic entity, and at thecorporate ethics and compliance systems. Eachsame time should be a force for the greater good

Kyorin company has a compliance promotionof society.

manager who is responsible for the understand-

Based on its corporate philosophy “to cherish
life and benefit society by contributing to bettering and instilling of corporate ethics andcompliance.

health,” the Kyorin Group will conduct its activities

Education and training

in every country based on a high standard of cor-

In-house training courses are conducted to pro-porate ethics, respecting human rights andmote understanding of and instill corporate ethics

observing all laws, as well as standards of conductand compliance.

and the spirit thereof.

1. Compliance managers organize education andMeasurestraining courses on corporate ethics and com-

To ensure the Group’s activities are based on apliance, which are conducted at each level ofhigh standard of corporate ethics, the Company

the organization on a Companywide basis, andhas built a compliance framework. It has updated

run instructional activities for Company officers

the KYORIN Holdings Corporate Charter and its
Compliance Guidelines to their current form inand employees.
2. Details relating to corporate ethics and compli-

August 2010, and holds a Compliance Committee

ance are incorporated into job function-specificmeeting once a month.

training conducted by each division to promote

1. The KYORIN Holdings Corporate Charter wasunderstanding and instill a sense of ethics anddeveloped to specify matters of corporate ethics

awareness of compliance among employees.

and compliance in accordance with our corpo-

3. Each November is designated as compliance

rate philosophy, and serves as the starting point

enhancement month, during which time thefor our corporate activities.

Company works to tighten up on compliance at

2. The Compliance Guidelines complement the

every level.

KYORIN Holdings Corporate Charter by clarifying the standards to be followed for sound andproper business activities.

KYORIN Holdings, Inc.

25

Ongoing Environmental Initiatives
The main subsidiary of the Kyorin Group, KYORIN
Pharmaceutical, is implementing the following

5. Preventing water pollution• Process wastewater, including by primary pro-activities on an ongoing basis.

cessing plants, and management of pH, bio-

1. Preventing global warming• Reduce the amount of fuel used by installingchemical oxygen demand (BOD), andcogeneration systems and using smaller boilers

6. Preventing deforestation• Recycle paper, use recycled paper, and promote• Reduce power consumption by controlling air

suspended solids (SS) levels

conditioning settings to 28°C in summer anda paperless office environment

21°C in winter7. Preventing destruction of the ozone layer• Swiftly replace equipment that uses specified• Use eco-cars and hybrid vehicles to improve fuelefficiency and reduce exhaust emissions

chlorofluorocarbons

2. Reducing waste volume• Reduce waste emissions and promote recycling

8. Preventing ground subsidence• Check for ground subsidence and improve thetowards achieving zero final landfill, and introduce

utilization rate of piped watera negative carbon printing system

9. Preventing contamination of soil and surface

3. Managing chemical substances• Manage substances covered by the Pollutant

water• Locate tanks above ground, install oil barriers,

Release and Transfer Register (PRTR) Law, andand implement emergency response training

evaluate methods for reducing amounts used
and the use of alternatives

10. Noise reduction• Take steps to measure and manage noise levels

4. Preventing atmospheric pollution• Measure and control the amounts of soot and11. Preventing foul odors• Install draft chambers and use scrubbers tosmoke, nitrogen oxides (NOx) and sulfur oxides

remove odors(SOx) emitted by boilers and generators

CO2 Emissions from Factories andResearch Laboratories(t)
20,00015,00010,000
5,000
0

2007

2008

2009

2010

2011 (FY)*FY2007–FY2008 data is from the Environmental Report*FY2009–FY2011 data is from the Periodic Report

Measures Relating to Industrial Safety and Hygiene
In 2004, subsidiary KYORIN Pharmaceuticalage. There have been no fatal accidents since theobtained occupational health and safety manage-

start of operations.

ment system certification (OHSAS 18001) for all

2. Vehicle accidents

production and research divisions, and in 2005,

Despite setting a target of a year-on-year reduction

consolidated its ISO 14001 and OHSAS 18001

in the number of vehicular accidents per branch, inmeasures. The Rimedio Center of KYORIN Rimedio

fiscal 2011 there were 211 accidents, 9 more thanobtained ISO 14001 certification in 2008 andthe previous year. To turn around this increasing

OHSAS 18001 certification in 2009.

trend in vehicle accidents, for fiscal 2012, the

1. Rate and severity of work accidents

Kyorin Group is implementing various accident-

As a result of measures implemented to prevent

prevention measures, incorporating both physicalwork accidents, the frequency and severity of suchand systematic approaches.

accidents are much lower than the industry aver-26

Annual Report 2012

Corporate Social Responsibility

Risk Management Measures
The passing of the Corporation Law in May 2006

izing and deal with any risks that do materialize.

made it necessary to set up an internal control

Also, a risk management promotion officer has

system. Kyorin established a Risk Management

been appointed at each company to raise aware-Committee in order to prevent risks from material-

ness relating to risk management.

Local Community Activities
Cherry blossom viewing party

Employees of the Noshiro Plant participate in

The KYORIN Pharmaceutical Discovery Research

voluntary activities to maintain the Kaze-no-

Laboratories and Development Research Labora-

Matsubara, a pine forest and recreational area thattories hold an annual party for viewing the blos-

acts as a barrier protecting the locality from winds.

soms on cherry trees that are more than 40 years

In our head office, employees participate on aold. As usual, this year’s party had many partici-

voluntary basis in cleanup campaigns carried out

pants. The occasion was also used as an opportu-

twice a year by the local Chiyoda City authorities.

nity to explain Kyorin’s environmental andoccupational safety activities.
Summer evening parties
Each year, the KYORIN Pharmaceutical Development Research Laboratories and various plants
hold summer evening parties to which local residents are invited. These are popular events thatprovide an opportunity to further promote understanding of the Company’s activities.
Distribution of Doctor Salon booklets
Radio Nikkei broadcasts Doctor Salon, a program aimed at physicians. These broadcasts
have been compiled into booklets, which KYORIN
Pharmaceutical’s medical representatives distributeduring their monthly calls on doctors. A wide rangeof diseases is covered, providing timely coverageof current topics, making the booklets very popularwith primary-care physicians.
Local cleanup activities

Supporting sporting events

For ten years, the Okaya Plant has been a “foster

The Kyorin Group supports sporting events thatparent” responsible for beautifying a section of thehelp to promote health. Among these is theshore of Lake Suwa as part of the Lake Suwa

Shimotsuke Soccer Workshops for children, with

Adoption Program. The plant recently received anformer J-League players and other soccer athletes

award in recognition of these activities. Employees

serving as instructors.

also help to keep the lakeside park clean.

Employee Voluntary Community/Health Activities (Kyorin Smile Program)
The Kyorin Group launched its corporate branding

In fiscal 2011, the Kyorin Group donated a total

program in March 2006. To help achieve a happyof ¥128,395 contributed by employees to UNICEF.

society, the aim of the corporate branding program

The Group also collected 2.4 kilograms of used

is to change the awareness and actions of eachstamps, which were donated to the Japaneseand every employee by promoting the Kyorin Smile

Organization for International Cooperation in Family

Program, a set of employee initiatives for making a

Planning (JOICFP). The stamps will be used tocontribution to society and people’s health. The

help fund White Ribbon Campaign activities aimed

activities in this program include donating blood,at protecting the lives of mothers and babies

local beautification schemes, and fund-raising.

throughout the world.

KYORIN Holdings, Inc.

27

Organization Chart (As of June 22, 2012)
General Shareholders’ Meeting
Board of Corporate Auditors
Board of Directors

President’s Office

Representative Director,
President and Chief Executive Officer

Management PlanningManagement Meeting

Corporate Communication
Finance & Accounting
General Affairs & Human Resources
Legal
Information System Management
Intellectual Property
Auditing

Major Subsidiaries and Affiliates (As of July 2012)
Consolidated
Subsidiaries

KYORIN Pharmaceutical Co., Ltd.
¥4,317 million
Capital:Percentage of ownership: 100%
5, Kanda Surugadai 2-chome, Chiyoda-ku, Tokyo 101-8311
Head office:
Manufacture and sales of prescription medicines and quasi-drugs, diagnostics, and industrial chemicals
Operations:
KYORIN Medical Supply Co., Ltd.
¥488 million
Capital:Percentage of ownership: 100%
Kyorin Nishi-Shinjuku Building, 25-13, Nishi-Shinjuku 6-chome, Shinjuku-ku, Tokyo 160-0023
Head office:Sales promotion, planning and production of advertising, etc.
Operations:
KYORIN Rimedio Co., Ltd.
¥1,200 million
Capital:Percentage of ownership: 100%
287-1, Shimocho Moroe-cho, Kanazawa-shi, Ishikawa 920-0017
Head office:
Manufacture and sales of prescription medicines and quasi-drugs, diagnostics, and industrial chemicals
Operations:Dr. Program Co., Ltd.
¥251 million
Capital:Percentage of ownership: 100%
3rd Floor, 4-40, Minami-Aoyama 5-chome, Minato-ku, Tokyo 107-0062
Head office:Development and sales of skincare products
Operations:

KYORIN PharmaceuticalCo., Ltd. Subsidiaries

Kyorin USA, Inc.
US$500,000
Capital:Percentage of ownership: 100%
500 Frank W. Burr Boulevard, Teaneck, New Jersey 07666, United States
Head office:Research and analysis of other companies’ technologies and collection of information concerning clinical trials
Operations:
Kyorin Europe GmbH
50,000Capital:Percentage of ownership: 100%
Kaiserstrasse 8, 60311 Frankfurt am Main, Germany
Head office:Research and analysis of other companies’ technologies and collection of information concerning clinical trials
Operations:
ActivX Biosciences, Inc.
US$1
Capital:Percentage of ownership: 100%
11025 N. Torrey Pines Rd., La Jolla, California 92037, United States
Head office:Discovery and evaluation of candidate compounds
Operations:

Equity-method Affiliates

28

Annual Report 2012

Nippon Rika Co., Ltd.
¥411 million
Capital:Percentage of ownership: 29.2%
2-2, Nihonbashi Honcho 4-chome, Chuo-ku, Tokyo 103-0023
Head office:Production and sales of pharmaceuticals, reagents, intermediates, and other products
Operations:Corporate Information (As of March 31, 2012)
KYORIN Holdings, Inc.

Head Office
5, Kanda Surugadai 2-chome, Chiyoda-ku, Tokyo 101-8311
Phone: +81-3-3293-3451
URL: http://www.kyorin-gr.co.jp/en/

Establishment

1958

Common Stock¥700 million

Outstanding Shares

74,947,628

Shareholders

3,261

Major Shareholders

Percentage
of totalsharesoutstanding

Apricot Co., Ltd.
KM Godo Kaisha
Yoshiko Ogihara
Tsurukame Co., Ltd.
Mykam Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)Hiroko Ogihara
Minoru Ogihara
Banrina Co., Ltd.
Archans Co., Ltd.
Listing

Tokyo Stock Exchange, First Section

Transfer Agent

Mizuho Trust & Banking Co., Ltd.,
2-1, Yaesu 1-chome, Chuo-ku, Tokyo 103-0028
Phone: +81-3-3278-8111

6.67％
4.82％
3.90％
3.86％
3.66％
3.36％
3.17％
3.00％
2.97％
2.60％
2.60％

KYORIN Holdings, Inc.

29

KYORIN Holdings, Inc.
5, Kanda Surugadai 2-chome, Chiyoda-ku, Tokyo
101-8311, Japan
Corporate Communication
TEL+81-3-3293-3414
E-mail http://www.kyorin-gr.co.jp/en/contact/
URL
http://www.kyorin-gr.co.jp/

This report was printed using vegetable oil ink.
Printed in Japan