CONSOLIDATED FINANCIAL REPORT [IFRS]
for Fiscal 2022 (Year Ended March 31, 2023)

May 15, 2023
Eisai Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange (TSE)TSE Code: 4523
URL: https://www.eisai.com
Representative: Haruo Naito, Representative Corporate Officer & CEO
Contact: Sayoko Sasaki, Vice President, Corporate Communications
Telephone: +81-3-3817-5120
Expected date of ordinary general meeting of shareholders: June 21, 2023
Expected date of annual report submission: June 21, 2023
Expected date of dividend payment commencement: May 29, 2023
Preparation of annual supplementary explanatory material: Yes
Annual results briefing held: Yes(Figures are rounded to the nearest million yen)

1. Consolidated Annual Financial Results (April 1, 2022 – March 31, 2023)(1) Consolidated Operating Results(Percentage figures show year on year change)
Profit before
income taxes

Operating profit

Revenue

Profit for the year

Profit for the year
attributable toowners of theparentComprehensive
income for theyear(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)

FY 2022744,402-1.6

40,040-25.5

45,012-17.3

56,83624.3

55,432

15.6

96,893

6.7

FY 2021756,22617.1

53,7504.3

54,4584.1

45,717

8.1

47,954

14.3

90,777

28.1

Earnings per share
attributableto owners of theparent (basic)

Earnings per share
attributableto owners of theparent (diluted)

Profit ratio to equity
attributable to ownersof the parent

Profit before income
taxes ratio to total
assetsOperating profit ratio
to revenue

(¥)

(¥)

(%)

(%)

(%)

FY 2022193.31

193.31

7.2

3.6

5.4

FY 2021167.27167.25

6.6

4.7

7.1

(Reference) Equity in earnings of affiliates: for FY 2022: ¥7 million, for FY 2021: -¥160 million(2) Consolidated Financial Position

As of March 31, 2023(¥ million)
1,263,350(¥ million)
822,571(¥ million)
799,959

Ratio of equity
attributable toowners of the parent
(%)
63.3

As of March 31, 2022

1,239,315

771,534

748,82160.4

Total assets

Equity attributable toowners of the parent

Total equity

Equity per share
attributable toowners of the parent(¥)
2,789.32
2,611.82(3) Consolidated Cash Flows
Operating activities

Investing activities

Financing activities

Cash and cash
equivalents at end of year(¥ million)(¥ million)(¥ million)

FY 2022-1,772-22,723-24,522

267,350

FY 2021

117,590-28,848-48,967

309,633

1(¥ million)

2. Dividends
End of
Q1(¥)

End ofQ2(¥)

End ofQ3(¥)

End of
FY
(¥)

Total
(¥)

(¥ million)(%)

Dividend on equity
attributable toowners of the parent
ratio (consolidated)(%)

FY 2021

—

80.00

—

80.00

160.0045,881

95.7

6.3

FY 2022

—

80.00

—

80.00

160.0045,90482.8

5.9

FY 2023(Forecast)

—

80.00

—

80.00

160.00

Annual dividend per share

Dividend payout
ratio(consolidated)

Total
dividends

120.7

3. Consolidated Financial Forecast for Fiscal 2023 (April 1, 2023 – March 31, 2024)
Revenue

FiscalYear

Operating profit

Profit before
income taxes(Percentage figures show year on year change)
Profit for the year
Earnings per share
attributable toattributable toProfit for the year
owners of theowners of the parent
parent(basic)(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)

(%)

(¥)

712,000-4.4

50,00024.9

52,00015.5

39,000-31.4

38,000-31.4

132.60* Explanatory Notes(1) Changes in number of significant subsidiaries during the year (changes in specified subsidiaries resulting
in a change in scope of consolidation): No(2) Changes in accounting policies and accounting estimates:
1) Changes in accounting policies required by IFRS: Yes
2) Changes in accounting policies other than 1): No
3) Changes in accounting estimates: No(3) Number of shares issued (common shares):
1) Number of shares issued(including treasury shares)

As of March 31, 2023

296,566,949

As of March 31, 2022

296,566,949

2) Number of treasury shares

As of March 31, 2023

9,667,799

As of March 31, 2022

9,801,133

3) Weighted average numberof shares outstanding

For FY 2022

286,757,124

For FY 2021

286,685,347

The Company’s shares held through a trust (105,164 shares) are not included in the number of treasury shares as ofthe end of this fiscal year, but are included in the average number of shares outstanding as treasury shares that are
deducted from the calculation of earnings per share.

2

(Reference) Non-consolidated Annual Financial Results (April 1, 2022 – March 31, 2023)(1) Non-consolidated Operating Results
Net sales(Percentage figures show year on year change)
Operating income

Ordinary income

Net income(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)

FY 2022359,949-13.7-3,884—-206—

30,520352.7

FY 2021417,134

20.7

14,588104.5

14,074

67.6

6,741

-4.4

Basic earnings
per share

Diluted earnings
per share(¥)(¥)

FY 2022106.43106.43

FY 2021

23.51

23.51

(2) Non-consolidated Financial Positions
Total assets

Shareholders’ equity per
share

Shareholders’equity ratio

Equity(¥ million)(¥ million)

(%)

(¥)

As of March 31, 2023

742,147

454,54761.2

1,584.92

As of March 31, 2022

822,250

465,93856.7

1,625.06(Reference) Shareholders’ equity:
As of March 31, 2023

¥454,547 million

March 31, 2022

¥465,911 million* This financial report is not subject to audit procedures by independent auditors.
* Explanation concerning the appropriate use of results forecast and other special instructions:(Caution concerning forward-looking statements)
Materials and information provided in this financial disclosure may contain “forward-looking statements” based on
expectations, business goals, estimates, forecasts and assumptions that are subject to risks and uncertainties as of the
publication date of these materials. Accordingly, actual outcomes and results may differ materially from these statements
depending on a number of important factors. Please refer to pages 16-17, 55-64 for details with regard to the assumptions
and other related matters concerning the consolidated financial forecast.
(Methods for obtaining supplementary materials and content of financial results disclosure meeting)
Supplementary materials are attached to this financial report. The Company plans to hold a financial results disclosure
meeting for institutional investors and securities analysts on Monday, May 15, 2023. The handouts from the disclosure
meeting will be made available on the Company’s website after the event.

3

Supplemental Materials: Table of Contents
1. Overview of Operating Results and Other Information(Page)

1) Overview of Operating Results and Financial Position for Fiscal 2022
(1) Overview of Operations･･･････････

5(2) Overview of Operating Results･･･････････

6(3) Overview of Financial Position･･･････････

9(4) Research & Development Pipeline, Alliances, and Other Events･･･････････

92) Outlook for the Future3) Basic Policy on Profit Appropriation and Dividend for Fiscal 2022/23･･････････････････････

16
171) Corporate Concept･･･････････

172) Medium- to Long-Term Corporate Management Strategy andIssues that Need to be Addressed･･･････････

173) Basic Policy for Capital Strategy･･･････････

20･･････････････････････

21
22･･･････････

22

1) Consolidated Statement of Income2) Consolidated Statement of Comprehensive Income･･････････････････････

23
243) Consolidated Statement of Financial Position･･･････････

25

4) Consolidated Statement of Changes in Equity･･･････････

27

5) Consolidated Statement of Cash Flows･･･････････

29(Going Concern)･･･････････

30(Basis of Preparing Consolidated Financial Statements)･･･････････

30(Significant Accounting Policies)･･･････････

31(Significant Accounting Estimates and Judgments)･･･････････

44(Segment Information)･･･････････

45(Consolidated Statement of Income)･･･････････

48(Earnings Per Share)･･･････････

52(Consolidated Statement of Cash Flows)･･･････････

53(Sale of Subsidiaries)･･･････････

54(Significant Subsequent Events)･･･････････

54

5. Other
1) Forecasts and Risk Factors･･･････････

55

2) Overview of the Eisai Group･･･････････

653) Proposed Changes in Directors and Corporate Officers･･･････････

69

2. Management Policy

4) Enhancing Non-Financial Value including ESG andInformation Disclosure5) Compliance and Risk Management
3. Basic Approach to the Selection of Accounting Standards
4. Consolidated Financial Statements and Major Notes

6) Notes to Consolidated Financial Statements

4

1．Overview of Operating Results and Other Information
1) Overview of Operating Results and Financial Position for Fiscal 2022
(1) Overview of Operations〇 Based on the medium-term business plan “EWAY Future & Beyond” which started in April
2021, Eisai Co., Ltd. (“the Company”) and its affiliates (collectively referred to as “theGroup”) have expanded the perspective from “patients and their families” to “patients andthe people in the daily living domain” and aim to build an ecosystem by collaborating withother industries in order to provide solutions for relieving anxiety over health and reducing
health disparities.
〇 Alzheimer’s disease (AD) treatment Leqembi (lecanemab) obtained accelerated approvalin the United States in January 2023, and we are expediting efforts to obtain regulatory
approval and expand access in other countries around the world. By providing Leqembi as
a new treatment option to eligible people living with AD, we are aiming to create social
impact, including not only the clinical value of the drug, but also the economic value of
improving patients’ and caregivers’ quality of life (QOL) and productivity, and reducing thefinancial burden of medical and long-term care. In addition, to contribute to relieving
anxieties over health and reducing health disparities for all people living with dementia, weare building an ecosystem with solutions including a one-stop online health platform fordementia in China, and collaboration with other industries and non-profit organizations in
Asia.
〇 The Deep Human Biology Learning (DHBL) drug discovery and development system, which
is based on the genomic and pathophysiological information associated with the underlying
causes of disease, is now in operation. Based on our unique knowledge of human biology
and genomic information obtained from high quality clinical samples, we focus on drug
discovery for Eisai’s focus fields of neurodegenerative diseases and refractory cancers, aswell as the global health field including neglected tropical diseases (NTDs).

5

(2) Overview of Operating Results[Revenue and Profit]〇 The Group recorded the following consolidated financial results for the fiscal year from April
1, 2022 to March 31, 2023.

(¥billion)
FY 2021

FY 2022

Year on yearchange (%)

Revenue

756.2

744.4

98.4

Cost of sales

174.8

177.8

101.7

Gross profit

581.4

566.6

97.4

Selling, general andadministrative expenses

366.4

358.3

97.8

Research and development
expenses

171.7

173.0

100.7

53.7

40.0

74.5

54.5

45.0

82.7

8.7

(11.8)

－

45.7

56.8

124.3

48.0

55.4

115.6

90.8

96.9

106.7

¥167.27¥193.31

115.6

Operating profit
Profit before income taxes
Income taxes
Profit for the year
Profit for the year
attributable toowners of the parent
Comprehensive income
for the year
Earnings per share
attributable toowners of the parent(basic) (yen)〇 While global brands such as anticancer agent Lenvima continued to grow, revenue
decreased mainly due to decrease in sales milestone payments from Merck & Co., Inc.,
Rahway, NJ, USA (¥16.7 billion in this fiscal year and ¥69.2 billion in the previous fiscal
year) as well as the recording of an upfront payment (¥49.6 billion) from Bristol Myers
Squibb (the U.S.) under strategic collaboration for antibody drug conjugate MORAb-202 in
the previous fiscal year. Revenue of pharmaceutical business increased significantly to¥684.4 billion (110.9% year on year).
〇 Regarding revenue from global brands, revenue for Lenvima, anticancer agent Halaven,antiepileptic agent Fycompa and insomnia treatment Dayvigo was ¥249.6 billion (129.8%
year on year), ¥41.3 billion (104.9% year on year), ¥37.1 billion (116.5% year on year) and¥29.4 billion (178.7% year on year), respectively.
〇 Selling, general and administrative expenses decreased due to significant decrease in
expenses related to AD treatment ADUHELM following the amendment of collaboration

6

agreements, despite increase in shared profit paid to Merck & Co., Inc., Rahway, NJ, USAfollowing Lenvima’s revenue growth.
〇 While efficiency was enhanced through the partnership model, research and development
expenses stood at the same level as in the previous fiscal year due to factors such as
aggressive resource investment with good progress of clinical trials for Leqembi and thedepreciation of the Japanese yen.
〇 As a result of the above, although operating profit decreased, segment profit ofpharmaceutical business increased significantly achieving ¥325.6 billion (125.3% year onyear).
〇 Profit for the year increased compared to profit before income taxes following recording ofa credit of income taxes due to the Company’s recognition of losses on transferring ofinvestments in subsidiaries for tax purposes following a repayment of paid-in capital froma consolidated U.S. subsidiary to the Company in order to collect capital from theconsolidated U.S. subsidiary as part of the Group’s capital policy to optimize the global
allocation of cash in the Group.

[Performance by Segment](Revenue for each segment indicates revenue from external customers)
The Group’s business is comprised of pharmaceutical business and other business. The
pharmaceutical business is organized into the following six reporting segments in this report:
Japan, Americas (North America), China, EMEA (Europe, the Middle East, Africa, Russia andOceania), Asia and Latin America (primarily South Korea, Taiwan, India, ASEAN, Central andSouth America), and OTC and others (Japan). Effective from this fiscal year, Hong Kong has
been changed from the “Asia and Latin America” segment to the “China” segment. Also, as the
co-development and co-promotion agreements with Biogen Inc. (the U.S., hereinafter “Biogen”)
regarding ADUHELM were amended in March 2022, expenses related to ADUHELM (selling,
general and administrative expenses) which the Company should share have been included in
the “Group headquarters’ management costs and other expenses”. In addition, gains andlosses on sale of non-current assets have been included in the “Group headquarters’
management costs and other expenses” and upfront payments and other factors received asconsideration for the grant of license have been included in “other business”. The year on yearchanges in the segment performance for this report are based on this new segmentation.

<Japan pharmaceutical business>〇 Total revenue came to ¥215.4 billion (100.6 % year on year), with a segment profit of ¥67.8
billion (111.1% year on year).
〇 Regarding revenue by products, from neurology products, revenue for Dayvigo and
Fycompa both achieved significant growth coming to ¥24.2 billion (190.3% year on year)and ¥6.1 billion (112.6% year on year), respectively. Among oncology products, revenue
for Lenvima came to ¥13.7 billion (132.6% year on year) achieving significant growth dueto the impact of additional indications. Revenue for Halaven came to ¥8.5 billion (101.8%
year on year). Fully human anti-TNF-α monoclonal antibody Humira earned revenue of7¥47.2 billion (93.2% year on year). Revenue for chronic constipation treatment Gooficecame to ¥6.5 billion (107.3% year on year). Revenue for Jyseleca, a JAK (Janus kinase)inhibitor, came to ¥7.3 billion (¥1.5 billion in the previous fiscal year) achieving significant
growth.
〇 Anti-rheumatic agent Metoject was launched in November 2022.

<Americas pharmaceutical business>〇 Total revenue came to ¥212.7 billion (126.9% year on year), with a segment profit of ¥133.4
billion (146.3% year on year).
〇 Regarding revenue by products, from neurology products, revenue for Fycompa came to¥15.2 billion (104.1% year on year). Revenue for Dayvigo achieved growth coming to ¥4.8
billion (129.9% year on year). Among oncology products, Lenvima earned ¥161.6 billion(138.8% year on year) achieving significant growth due to the impact of additional
indications. Revenue for Halaven came to ¥13.9 billion (97.3% year on year).
〇 Leqembi was launched in the United States in January 2023.

<China pharmaceutical business>〇 Revenue totaled ¥110.8 billion (106.7% year on year), with a segment profit of ¥55.6 billion(106.1% year on year).
〇 Regarding revenue by products, revenue for Lenvima came to ¥32.2 billion (89.9% year onyear) mainly due to the impact of generic pharmaceuticals. Revenue for peripheral
neuropathy treatment Methycobal achieved growth coming to ¥14.5 billion (114.7% year
on year). Proton pump inhibitor Pariet earned ¥8.4 billion (92.4% year on year). Liverdisease and anti-allergy agents Stronger Neo-Minophagen C and Glycyron Tablets
together recorded ¥7.9 billion (83.0% year on year).

<EMEA pharmaceutical business>〇 Revenue totaled ¥72.2 billion (121.6% year on year). A segment profit totaled ¥41.6 billion(137.9% year on year).
〇 Regarding revenue by products, from neurology products, revenue for Fycompa came to¥11.7 billion (127.2% year on year) achieving significant growth. Among oncology products,
revenue for Lenvima/Kisplyx achieved significant growth recording ¥30.9 billion (142.2%
year on year). Revenue for Halaven came to ¥13.6 billion (106.2% year on year).
〇 Lenvima and other products were launched in Israel in January 2023.

<Asia and Latin America pharmaceutical business>〇 Revenue totaled ¥49.8 billion (102.5% year on year), with a segment profit of ¥22.1 billion(108.4% year on year).
〇 Regarding revenue by products, Lenvima achieved significant growth, recording revenueof ¥11.1 billion (140.1% year on year). Revenue for Aricept, a treatment for Alzheimer’s
disease dementia, came to ¥13.0 billion (109.8% year on year).
〇 Dayvigo was launched in India and Singapore in April 2022, in Taiwan in May 2022, in
8

Philippines and Thailand in November 2022, in Indonesia in December 2022, and in
Malaysia in February 2023.

< OTC and others business>〇 Revenue totaled ¥23.5 billion (98.6% year on year), with a segment profit of ¥5.1 billion(108.6% year on year).
〇 Revenue for Chocola BB Group came to ¥14.1 billion (98.8% year on year).

(3) Overview of Financial Position[Assets, Liabilities, and Equity]〇 Total assets as of the end of the period amounted to ¥1,263.4 billion (up ¥24.0 billion fromthe end of the previous fiscal year). While cash and cash equivalents decreased, assets ofoverseas consolidated subsidiaries increased due to the depreciation of the Japanese yen.
In addition, deferred tax assets of the Company increased. Also, inventories increased due
to proceeding the production of Leqembi following the launch in the United States.
〇 Total liabilities as of the end of the period amounted to ¥440.8 billion (down ¥27.0 billion
from the end of the previous fiscal year). While short-term borrowings increased, accounts
payable-other to partners decreased.
〇 Total equity as of the end of the period amounted to ¥822.6 billion (up ¥51.0 billion from theend of the previous fiscal year). Exchange differences on translation of foreign operations
increased following the depreciation of the Japanese yen.
〇 As a result of the above, the ratio of equity attributable to owners of the parent was 63.3%(up 2.9 percentage points from the end of the previous fiscal year).

[Cash Flows]〇 Net cash from operating activities amounted to an outflow of ¥1.8 billion (inflow of ¥117.6
billion in the previous fiscal year). The working capital increased mainly due to increase ininventories as a result of proceeding the production of Leqembi following the launch in the
United States, and payment of accounts payable-other to partners.
〇 Net cash used in investing activities amounted to an outflow of ¥22.7 billion (down ¥6.1
billion from the previous fiscal year). There were capital expenditures following the
expansion of research facilities and production facilities.
〇 Net cash used in financing activities amounted to an outflow of ¥24.5 billion (down ¥24.4
billion from the previous fiscal year). Dividends were paid, while short-term borrowings wereincreased.
〇 As a result of the above, cash and cash equivalents as of the end of the year stood at¥267.4 billion (down ¥42.3 billion from the end of the previous fiscal year). Free cash flow
(cash flow from operating activities excluding capital expenditures) for the year was an
outflow of ¥24.3 billion.

(4) Research & Development Pipeline, Alliances, and Other Events[Status of Ongoing Research & Development Pipelines]〇 Anticancer agent Lenvima (product name for renal cell carcinoma indication in Europe:
Kisplyx, lenvatinib, jointly developed with Merck & Co., Inc., Rahway, NJ, USA)9

Approved for use in the treatment of thyroid cancer (monotherapy) in over 80 countries
including Japan, the United States, in Europe, China and in Asia.



Approved for use in the treatment of hepatocellular carcinoma (first-line, monotherapy)
in over 80 countries including Japan, the United States, in Europe, China and in Asia.



Approved for use in the treatment of unresectable thymic carcinoma (monotherapy) inJapan.



Approved in combination with everolimus for use in the treatment of renal cell carcinoma(second-line) in over 65 countries, including the United States and in Europe.

Approved in combination with pembrolizumab, Merck & Co., Inc., Rahway, NJ, USA’santi-PD-1 therapy, for use in the treatment of renal cell carcinoma (first-line) in over 45

countries including Japan, the United States, in Europe and in Asia.
Approved (including conditional approval) in combination with pembrolizumab for use in
the treatment of endometrial carcinoma (following prior systemic therapy) in over 45
countries including Japan, the United States, in Europe and in Asia.

In August 2022, a Phase III trial investigating the combination therapy withpembrolizumab versus Lenvima monotherapy as a first-line treatment in patients with
hepatocellular carcinoma did not meet its dual primary endpoints of overall survival (OS)and progression-free survival (PFS). There were trends toward improvement in OS and
PFS for patients who received the combination therapy versus Lenvima monotherapy;
however, these results did not meet statistical significance per the pre-specified
statistical plan. Therefore, the development was finished. The median OS of the Lenvima
monotherapy arm in the trial was longer than that observed in previously reported clinical
trials evaluating Lenvima monotherapy in hepatocellular carcinoma. The safety profile ofLenvima plus pembrolizumab was consistent with previously reported data on the
combination.

In April 2023, a Phase III trial investigating the combination therapy with pembrolizumab
for colorectal cancer (non-microsatellite instability-high [MSI-H] / mismatch repair
proficient [pMMR], third-line) did not meet its primary endpoint of OS. A trend toward
improvement in OS was observed compared to regorafenib or TAS-102 (trifluridine andtipiracil hydrochloride); however, these results did not meet statistical significance per
the pre-specified statistical plan. Additionally, a Phase III trial investigating the
combination therapy for melanoma (first-line) was discontinued based on therecommendation of an independent Data Monitoring Committee which reviewed datafrom a planned interim analysis and determined the combination therapy did notdemonstrate an improvement in OS, one of the study’s dual primary endpoints. In both
trials, the safety profile was consistent with previously reported data on the combination.
A full evaluation of the data from these studies including pre-planned key subgroup
analyses is ongoing and the results will be shared with the scientific community incooperation with the investigators.

Regarding studies of the agent in combination with pembrolizumab, respective Phase III
studies for endometrial carcinoma (first-line), nonsquamous non-small cell lung cancer(first-line, in combination with chemotherapy), non-small cell lung cancer (second-line),head and neck cancer (first-line), hepatocellular carcinoma (first-line, in combination withtranscatheter arterial chemoembolization), esophageal carcinoma (first-line, in10

combination with chemotherapy), and gastric cancer (first-line, in combination withchemotherapy) are underway in the United States, Europe and other countries.


Regarding studies of the agent in combination with pembrolizumab, Phase II studies formelanoma (second-line) and head and neck cancer (second-line), as well as a Phase II
basket trial in multiple cancer types are underway in the United States and Europe.

〇 Anticancer agent Halaven (eribulin) Approved for use in the treatment of breast cancer in over 85 countries including Japan,
the United States, in Europe, China and in Asia.


Approved for use in the treatment of liposarcoma (soft tissue sarcoma in Japan) in over

80 countries, including Japan, the United States, in Europe and in Asia.
A Phase I/II study for the combination therapy of the liposomal formulation of Halavenand anti-PD-1 antibody nivolumab of Ono Pharmaceutical Co., Ltd. (Osaka, Japan) is
underway in Japan.

〇 Antiepileptic agent Fycompa (perampanel)

Approved as an adjunctive therapy for use in the treatment of partial-onset seizures inpatients with epilepsy 12 years of age and older in over 75 countries including Japan,
the United States, in Europe, China and in Asia. The agent was approved formonotherapy and adjunctive use in the treatment of partial-onset seizures in patientswith epilepsy 4 years of age and older in Japan, the United States and China. The agent
was approved for adjunctive use in the treatment of partial-onset seizures in patientswith epilepsy 4 years of age and older in Europe.
Approved as an adjunctive therapy for use in the treatment of primary generalized tonicclonic seizures in patients with epilepsy 12 years of age and older in over 70 countries
including Japan, the United States, in Europe and in Asia. The agent was approved as
an adjunctive therapy for primary generalized tonic-clonic seizures in pediatric patientswith epilepsy 7 years of age and older in Europe.



In August 2022, an application was filed in Japan seeking approval for an injection
formulation as a new route of administration.



A Phase III study for Lennox-Gastaut syndrome is underway in Japan, the United Statesand Europe.

〇 Orexin receptor antagonist Dayvigo (lemborexant)

Approved for the treatment of insomnia in more than 15 countries including Japan, theUnited States and in Asia.



A Phase III study for insomnia is underway in China.

A Phase II study for irregular sleep-wake rhythm disorder associated with Alzheimer's
disease dementia has finished and consideration for future development is underway.

〇 Alzheimer’s disease (AD) treatment Leqembi (lecanemab, development code: BAN2401,
jointly developed with Biogen)In September 2022, the primary endpoint and all key secondary endpoints of the Clarity
AD study (Phase III study) in early-stage AD were met with highly statistically significant
11results. The amyloid-related imaging abnormality (ARIA) expression profile was within
expectations.
In December 2022, submission of data was initiated for a Biologics License Application(BLA) to the National Medical Products Administration (NMPA) in China and has been
designated for Priority Review in February 2023.



In January 2023, based on the Study 201 (Phase II) data that demonstrated that Leqembi
reduced the accumulation of Aβ plaque in the brain, a defining feature of AD, the U.S.
Food and Drug Administration (FDA) approved the agent under the Accelerated
Approval Pathway for the treatment of AD. Treatment with Leqembi should be initiatedin patients with mild cognitive impairment or mild dementia stage of disease, thepopulation in which treatment was initiated in clinical trials.
In January 2023, following the accelerated approval in the United States, a supplemental
Biologics License Application (sBLA) was submitted to the FDA for traditional approval
based on the data from the Phase III confirmatory Clarity AD clinical trial. In March 2023,
the sBLA was accepted by the FDA and has been designated for Priority Review with a
Prescription Drug User Fee Act (PDUFA) date of July 6, 2023. The FDA is planning tohold an Advisory Committee on June 9, 2023 to discuss this application. The agent was
granted Breakthrough Therapy designation and Fast Track designation for AD treatment

in the United States.
In January 2023, a marketing authorization application was submitted and accepted by
the European Medicines Agency (EMA).

In January 2023, a marketing authorization application was submitted to thePharmaceuticals and Medical Devices Agency (PMDA), and has been designated forPriority Review by the Ministry of Health, Labour and Welfare (MHLW) in Japan.



AHEAD 3-45 (Phase III study) for preclinical (asymptomatic) AD is underway in countries
including Japan, the United States and in Europe. In this study, the agent has been
selected by the Alzheimer's Clinical Trials Consortium (ACTC) as a treatment to beevaluated.



Development of a subcutaneous injection formulation is underway to enhance
convenience for patients. In addition, a study to determine a new dosing regimen formaintenance treatment after removal of brain Aβ is also underway.

〇 In May 2022, ultrahigh-dose mecobalamin received orphan drug designation with aprospective indication for delaying the progression of disease and functional impairment of
amyotrophic lateral sclerosis (ALS), by the MHLW in Japan. With the result of aninvestigator-initiated Phase III trial, Eisai plans to submit a new drug application during the
fiscal year 2023.
〇 In November 2022, Aricept (donepezil hydrochloride), a treatment for Alzheimer’s disease
and dementia with Lewy bodies, was approved for its application for a partial change tolabel regarding dosage and administration based on the results of a reexamination for
dementia with Lewy bodies. The indication for dementia with Lewy bodies remains
unchanged.
〇 In November 2022, Eisai received notification from Japan’s MHLW that the “all-case study”
specified post-marketing observational study condition required at the time of approval of12anti-epileptic agent Inovelon (rufinamide) as an adjunctive therapy to other antiepileptic
drugs for Lennox-Gastaut syndrome, had been lifted in Japan.
〇 A Phase II part of Phase I/II clinical trial of anticancer agent E7386 in combination withpembrolizumab for solid tumors has been initiated and is underway in Japan, the UnitedStates and Europe.
〇 Regarding folate receptor α targeted antibody drug conjugate MORAb-202, a Phase II study
for non-small cell lung cancer has been initiated and is underway in the United States andEurope. A Phase II study for ovarian cancer, peritoneal cancer and fallopian tube cancer
has been initiated and is underway in Japan, the United States and Europe.
〇 A Phase III REMAP-COVID study of eritoran, a Toll-Like Receptor (TLR) 4 antagonist, forsuppression of increasing severity of COVID-19 in Japan and the United States was
discontinued.
〇 Development of E2730 (a treatment for neurological diseases) for epilepsy at the Phase IIstage in the United States has finished.

[Major Alliances, Agreements and Other Events]○ In April 2022, Centers for Medicare and Medicaid Services (CMS) announced the finalized
National Coverage Determination (NCD) for monoclonal antibodies directed against
amyloid for the treatment of AD and decided to cover treatments receiving accelerated
approval based upon evidence of efficacy from a change in a surrogate endpoint only ifpatients are enrolled in CMS-approved randomized controlled clinical trials. At the sametime, CMS has committed to reconsider the NCD for treatments which have obtained full
approval with quality evidence on clinical benefit.
○ In May 2022, Eisai established pharmaceutical sales company Eisai Pharmaceuticals Africa(Pty) Ltd as its subsidiary in Republic of South Africa.
○ In May 2022, EA Pharma launched a high dose formulation which is a new dosage form of
Movicol in Japan. Eisai co-promotes the product with EA Pharma.
○ In June 2022, Eisai announced that a brain health check utilizing “NouKNOW”, a digital tool
(non-medical device) for self-assessment of brain performance (brain health) developed by
Eisai, will be promoted as part of the FY2022 dementia examination project conducted by
Bunkyo City, Tokyo.
○ In June 2022, Eisai signed the Kigali Declaration on neglected tropical diseases (NTDs)
and expressed its continued support for the elimination of NTDs towards the achievementof the road map for NTDs 2021-2030 launched by the World Health Organization (WHO).
○ In June 2022, Eisai entered into a business alliance agreement with E.design InsuranceCo., Ltd. (Tokyo), a direct non-life insurance company of the Tokio Marine Group, aiming
to realize a society where people can safely enjoy driving for a longer period of their lives
under the theme of “Improving Brain Health for Safe Driving”.
○ In July 2022, partnership with Pfizer Inc. (the U.S.) for Lyrica, a pain treatment, was ended
due to expiration of the co-promotion agreement in Japan.
○ In July 2022, under the concept of Deep Human Biology Learning (DHBL), Eisai transitioned
to a new DHBL drug discovery that is based on Eisai’s R&D with creating synergy of “C&I”
13

(Collaboration & Incubation) and “A&I” (Academia/ Industry Alliance). The functions forclinical development and establishment of a solid launch structure for next-generation AD
treatments and dementia-related disease treatments were reorganized as Alzheimer's
Disease and Brain Health (ADBH) under the Global AD Officer. Eisai integrated H3
Biomedicine Inc., an R&D subsidiary in the United States, into its parent company, Eisai
Inc. (the U.S.) in December 2022.
○ In August 2022, Eisai entered into a capital and business alliance agreement with LIFENET
INSURANCE COMPANY (Tokyo), aimed at building an ecosystem to reduce the burden of
medical and nursing care for people.
○ In August 2022, Eisai entered into a joint research agreement with Honda Motor Co., Ltd.
(Tokyo), Oita University (Oita, Japan) and the Usuki City Medical Association (Oita, Japan)
to verify the relationship between changes in cognitive function and daily physical condition,and driving ability, with the aim of realizing a society in which elderly drivers can maintaintheir safety and health.
○ In August 2022, U.S. subsidiary Eisai Inc. entered into a memorandum of understanding
with C2N Diagnostics (the U.S.) to build awareness and real-world evidence for blood-based
assays in the diagnosis of people living with cognitive impairment in clinical practice in the
United States outside of clinical trial settings.
○ In September 2022, Eisai’s subsidiary Sunplanet Co., Ltd. (Tokyo) was made a wholly
owned subsidiary through a share exchange.
○ In September 2022, nippon medac Co., Ltd. (Tokyo), a subsidiary of medac GmbH
(Germany) obtained an approval in Japan for the indication of the anti-rheumatic agent
Metoject (methotrexate) for the treatment of rheumatoid arthritis. Based on the license
agreement with medac GmbH, Eisai is responsible for product distribution in Japan.
○ In September 2022, Eisai completed construction of the new injection/research building at
the Kawashima Industrial Park located in Gifu Prefecture, Japan, with aim of strengthening
its injectable drug formulation development research function and drug delivery systemdevelopment function.
○ In November 2022, Eisai (Thailand) Marketing Co. Ltd., Eisai’s Thai sales subsidiary, madean agreement with Thai Life Insurance Public Company Limited, a leading life insurancecompany in Thailand, to collaborate in supporting access to treatments for dementia,
including AD, in Thailand.
○ In November 2022, Eisai entered into an agreement to divest its rights for muscle relaxant
Myonal (eperisone hydrochloride) and vertigo and equilibrium disturbance treatment
Merislon (betahistine mesilate) in 9 countries/regions in Asia (excluding Japan, China,
South Korea and others) to a subsidiary of DKSH Holding Ltd. (Switzerland).
○ In November 2022, Eisai commenced joint research with Shimadzu Corporation (Kyoto,
Japan), Oita University, and Usuki City Medical Association to develop Japan’s first bloodbiomarker-based diagnostic workflow for dementia.
○ In December 2022, Eisai and Washington University School of Medicine in St. Louis (theU.S.) entered into a comprehensive research collaboration agreement aiming to create
potential novel treatments for neurodegenerative disorders, including AD and Parkinson’s
disease.

14

○ In December 2022, Eisai entered into an agreement to transfer the United Statescommercial rights for Fycompa to Catalyst Pharmaceuticals, Inc. (the U.S.), as well as toprovide Catalyst Pharmaceuticals, Inc. with an exclusive negotiation period for an asset in
Eisai’s epilepsy pipeline. Closing of the transaction took place in January 2023.
○ In December 2022, Eisai and Astellas Pharma Inc. (Tokyo), Daiichi Sankyo Company,
Limited (Tokyo), and Takeda Pharmaceutical Company Limited (Osaka, Japan) agreed tocollaborate to reduce environmental burden in the field of pharmaceutical packaging.
○ In December 2022, Eisai entered into a share purchase agreement concerning the transfer
of all shares of Eisai’s wholly-owned subsidiary Eisai Distribution Co., Ltd. (Kanagawa,Japan) to Yasuda Logistics Corporation (Tokyo). The share transfer was completed in
March 2023.
○ In January 2023, fully-fledged operations and business activities began at Eisai Israel Ltd.,a pharmaceutical sales subsidiary.
○ In February 2023, Eisai completed a major renovation of its Tsukuba Research Laboratories(Ibaraki, Japan), which is a part of strategic investment to execute the Group’s mediumterm business plan “EWAY Future & Beyond”.
○ In March 2023, Eisai transferred all shares in Bracco-Eisai Co., Ltd. (Tokyo), the joint
venture between Eisai and Bracco Imaging S.p.A. (Milan, Italy, “Bracco”) to Bracco, andthe company name was changed to Bracco Japan, Co., Ltd. (Tokyo, “Bracco Japan”).
Regarding non-ionic contrast agent Iomeron (iomeprol) and macrocyclic non-ionic contrast
agent ProHance (gadoteridol) for MRI, Eisai and Bracco-Japan will continue to co-promotethese products between April 1, 2023 and March 31, 2024, with Bracco-Japan as thedomestic manufacturer and Eisai as the distributor.
○ In March 2023, the co-promotion agreement with Biogen Japan (Tokyo) for multiple
sclerosis (MS) treatments was terminated.
○ In March 2023, the U.S. Veteran’s Health Administration (VHA) began providing coverageof AD treatment Leqembi to veterans living with early stages of Alzheimer’s disease (AD).
○ In March 2023, Eisai entered into an agreement with the National Cancer Center (Tokyo)
to collaborate on investigator-initiated clinical research for the anticancer agent Tazverik(tazemetostat) based on the Japanese “Patient-Proposed Healthcare Services” system.
○ In March 2023, partnership with Nobelpharma Co., Ltd. (Tokyo) for anticancer agent Gliadel(carmustine) was ended and Eisai continues to exclusively commercialize it as amanufacturer and distributor.
○ In April 2023, Eisai entered into a joint development agreement with Bliss
Biopharmaceutical (Hangzhou) Co., Ltd. (China), for BB-1701, an antibody drug conjugate,with option rights to develop and commercialize globally, excluding China, Hong Kong,
Macau and Taiwan.

152) Outlook for the Future (April 1, 2023 – March 31, 2024)[Consolidated Financial Forecast]

Revenue(¥ million)

Operating profit(%)(¥ million)(%)

Profit before
income taxes(¥ million)(%)(Percentage figures show year on year change)
Earnings per
Profit for the year
share
attributable toProfit for the year
attributable toowners of theowners of theparentparent (basic)(¥ million)

Fiscal
712,000-4.4
50,00024.9
52,00015.5
39,000Year*Assumptions: 1 USD = ¥130.0, 1 EUR = ¥140.0, 1 GBP = ¥159.0, 1 RMB = ¥19.2(%)(¥ million)

(%)

(¥)

-31.4

38,000-31.4

132.60<Revenue>〇 Global brands of Lenvima and Dayvigo are expected to continue to grow steadily. On theother hand, mainly due to impacts of expiration of the development and marketing
agreement for Humira in Japan (June 2023), decrease of upfront payments mainly fromstrategic options, and exchange rate effects following appreciation of the Japanese yen,revenue is expected to be ¥712.0 billion (down 4.4% year on year).
〇 Revenue for Lenvima, Dayvigo and Halaven is expected to be ¥261.0 billion (up 4.6% year
on year), ¥42.5 billion (up 44.7% year on year), and ¥34.5 billion (down 16.5% year onyear), respectively. Although revenue for Fycompa is expected to be ¥25.5 billion (down
31.3% year on year), the growth is expected in regions excluding the United States in which
the rights were transferred in FY 2022.
<Profit>〇 Regarding expenses, the Group will thoroughly ensure efficiency based on financial
discipline and allocate resources for medium- to long-term growth. While the Group willcontinue to invest resources proactively on important projects in the dementia area
including lecanemab, and the oncology area, which will support the Group’s future growth,research and development expenses are expected to be ¥152.0 billion (down 12.1% year
on year, ratio to revenue: 21.3%) due to revision of development themes and optimizationof expenses following the transition to the DHBL drug discovery and development system,
as well as no longer incurring Eisai’s share of expenses for aducanumab. While the Groupwill continue to invest resources for the launch of lecanemab and growth of Lenvima andDayvigo, and shared profit paid to Merck & Co., Inc., Rahway, NJ, USA following Lenvima’s
revenue growth will continue to increase, selling, general and administrative expenses are
expected to be ¥353.0 billion (down 1.5% year on year) due to the implementation ofefficient marketing through enhancing digitalization, and efficiency mainly throughoptimization of global procurement costs, as well as no longer incurring Eisai’s share of
expenses for aducanumab. As a result, operating profit is expected to come to ¥50.0 billion(up 24.9% year on year).
〇 Profit for the year attributable to owners of the parent is expected to come to ¥38.0 billion(down 31.4% year on year) in response to the transient decrease in income taxes due to16

capital loss for tax purposes at the Company in the previous fiscal year. Return on equity(ROE) is expected to be 4.9%, with an expected five-year average of 8.7%.

3) Basic Policy on Profit Appropriation and Dividend for Fiscal 2022 and 2023
At the Company, the dividend payments are determined by a resolution of the Board of Directors
as specified in the Company’s Articles of Incorporation. The Company has set the year-end
dividend for FY 2022 at ¥80 per share as previously projected. With the interim dividend of ¥80
per share, the Company intends to pay the total dividend of ¥160 per share for the year (the sameamount as the previous fiscal year). In this context, the Dividends on Equity (DOE) ratio is 5.9%.
The annual dividend for FY 2023 (the fiscal year ending March 31, 2024) is expected to be ¥160
per share (¥80 for interim and ¥80 for year-end dividend), the same amount as in FY 2022.
For further information on the Company’s dividend policy, please refer to “2. Management Policy3) Basic Policy for Capital Strategy (2) Sustainable and Stable Shareholder Returns” on page20.

2. Management Policy
1) Corporate Concept
The Group defines its corporate concept as “to give first thought to patients and the people in thedaily living domain, and to increase the benefits that health care provides to them.” Guided by thisconcept, all directors, corporate officers and employees aspire to meet the various needs of global
health care as representatives of a “human health care (hhc) company” that is capable of making
a meaningful contribution under any health care system. The Group’s mission is to increase thesatisfaction of patients and the people in the daily living domain, and to empower them to realize
their fullest life through an hhc ecosystem based on collaboration with other industries and groups.
The Group believes that revenues and earnings will be generated by fulfilling this mission. The
Group places importance on this sequence of placing the mission before the ensuing results.
Translating this hhc concept into action, the Group is committed to deepening the relationships
built on trust with its principal stakeholders, namely patients and customers, shareholders, andemployees, while continuously ensuring compliance with applicable laws and ethical standards,
thereby enhancing corporate value. The Company codified this corporate concept into its Articles
of Incorporation and endeavors to share its basic concept with shareholders.
Based on hhc concept, the Group seeks to increase long-term corporate value by creating social
impact through efficient realization of social good in the form of relieving anxiety over health andreducing health disparities.

2) Medium- to Long-term Corporate Management Strategy and Issues that Need to be
Addressed
The Group launched “EWAY Future & Beyond”, a new medium-term business plan, in April 2021.
(1) Medium-Term Business Plan “EWAY Future & Beyond”
In “EWAY Future & Beyond”, the first five years starting in FY 2021 is “EWAY Future”, while FY
2026 onward is “EWAY Beyond”. The most important stakeholders to whom the Group17

contributes were expanded from “patients and their families” to “patients and the people in thedaily living domain”. In line with our desire to empower patients and the people in the daily living
domain to “realize their fullest life,” we aim to evolve into an hhceco (hhc concept + ecosystem)company by creating solutions based on science and data in the neurology and oncology fields,
where we have our greatest strength and unmet medical needs are extremely high, through anecosystem developed in collaboration with other industries.
The basis for the hhceco model is data mainly obtained from clinical trial results that areproprietary to the Group, genome data for disease, and real-world and personal health records.
In the hhceco model, research and development based on data input plays a key role in creating
value. Under the Deep Human Biology Learning (DHBL) structure, which implements drug
discovery research based on human biology evidence by viewing diseases as a Disease
Continuum, we aim to create pharmaceuticals, digital medicines, predictive models for diseases
and more, and provide them as solutions for people at all stages of life, from the daily living
domain to the medical domain. In addition, through collaboration with various partners such asother industries, local governments, academia, and startups, the hhceco model will be enhancedby the interaction of data generation and solution provision to deliver social impact to key
stakeholders.
(2) Major Progress and Initiatives under Medium-Term Business Plan “EWAY Future & Beyond”
In October 2022, Eisai reformed its R&D organization, and fully launched the DHBL drug
discovery and development structure. In the DHBL structure, based on the evolution of
biomarkers, we will view diseases as Disease Continuum based on pathophysiology, and practicedrug discovery research based on human biology evidence. We are promoting research, fromthe establishment and validation of drug discovery hypotheses to obtaining regulatory approval,
focusing on the five drug discovery domains in which the Group can most quickly and deeply
access the relevant human biology. Specifically, the drug discovery domains consist of“microenvironment”, “proteostasis disruption”, “cell lineage and cell differentiation”, “inflammation,
hypoxia, oxidative stress with cell senescence” and “elimination of neglected tropical diseases
and pandemics”. We aim to be a frontrunner in the fields of neurodegenerative diseases, such as
Alzheimer’s disease (AD), and refractory cancer, while also to making ongoing contributions to
global health.
(a) Initiatives to Maximize the Value of Lecanemab (brand name in the United States: Leqembi)
and Progress in the AD Area
Regarding AD treatment lecanemab, in September 2022, the Clarity AD study (Phase III study)in early-stage AD met its primary endpoint and all key secondary endpoints with highly
statistically significant results. In the United States, lecanemab received accelerated approval
from the U.S. Food and Drug Administration (FDA) for the treatment of AD based on the resultsof Study 201 (Phase II study) that demonstrated that lecanemab reduced the accumulation ofAβ plaque in the brain, a defining feature of AD. Eisai submitted a supplemental Biologics
License Application (sBLA) to the FDA for approval under the traditional pathway, which was
accepted and has been designated for Priority Review, with a Prescription Drug User Fee Act(PDUFA) action date of July 6, 2023. Submissions have been completed in Japan, Europe andChina, and have been designated for Priority Review in Japan and China.
18

AHEAD 3-45, a Phase III clinical study for preclinical (asymptomatic) AD is also currently
underway. In addition, in Japan, joint developments of amyloid β blood tests and joint
researches of a blood biomarker-based diagnostic workflow for dementia are in progress withseveral partner companies.
The Group believes that the price of innovative drugs should reflect the societal value theybring, and that this value should be returned to all stakeholders. In the United States,
lecanemab was priced based on the thought that the societal value will be returned to bothpublic (people living with AD, their families, caregivers, healthcare professionals, payers andgovernments) and private (Eisai’s shareholders and employees).
The other development projects based on the AD continuum are also in progress. The Tau
NexGen Study (Phase II / III), conducted by the Dominantly Inherited Alzheimer Network Trials
Unit (DIAN-TU) to evaluate the efficacy of anti-microtubule binding region (MTBR) tau antibody
E2814, is ongoing in Japan, the United States and Europe. E2814 was selected in the clinicalstudy for Dominantly Inherited AD as the first investigational medicine among anti-tau drugs,
and lecanemab was selected as the background anti-amyloid agent in the same study. A Phase
II clinical study of E2814 targeting sporadic AD is being planned. Phase I clinical study for
E2511, the selective Tropomyosin receptor kinase A (TrkA) synapse binding regenerant whichis expected to help the restoration of damaged cholinergic nerves to functional neuron andprevent the degeneration of cholinergic nerves, is underway in the United States. In Japan, theEisai-Keio Innovation Lab for Dementia (EKID) research focuses on discovery of novel drug
targets related to maintenance and enhancement of the brain’s inherent robustness andprotective mechanisms.
(b) Oncology Area
Approvals have been obtained globally for the anticancer agent Lenvima mainly for thetreatment of thyroid cancer, hepatocellular carcinoma, renal cell carcinoma and endometrial
carcinoma. Of these, Lenvima in combination with the anti-PD-1 antibody pembrolizumab from
Merck & Co., Inc., Rahway, NJ, USA has been approved for the treatment of renal cell
carcinoma and endometrial carcinoma in Japan, the United States, Europe, Asia and others.
Thus, efforts to maximize the value of Lenvima are progressing steadily. Currently, clinicalstudies (LEAP studies) for the combination therapy of Lenvima and pembrolizumab are
underway for obtaining additional indications in more than 10 different tumor types. In addition,as an agent against resistivity related to the combination therapy of Lenvima andpembrolizumab, development of the CBP/β-catenin inhibitor E7386, which is expected to inhibit
Wnt signaling pathway that is involved in the development of cancer, has achieved the clinical
POC (Proof of Concept), and the Phase I/II clinical trial of E7386 plus pembrolizumab iscurrently underway. Regarding MORAb-202, the next-generation antibody drug conjugate(ADC) which conjugates the approved anticancer agent eribulin, the co-development with
Bristol-Myers Squibb of the agent as a treatment for low sensitivity related to cancer
immunotherapy is progressing, with two Phase II clinical trials underway. Furthermore, we areproceeding with the development of new next-generation pipelines, such as protein
degradation inducing agents and neoantigen inducers, through joint R&D that is merged withexternal technologies.

19

(c) Dementia Ecosystem
Based on the Disease Continuum concept, we pursue creating a variety of solutions toempower people in the daily living and medical domains to “realize their fullest life”. Expected
solutions include the following: in the areas of daily living (before the onset of disease),solutions for maintaining good health, disease awareness and prevention, checkups andhospital searches; in the medical field (at the onset of disease, during treatment, and after the
prognosis), solutions for accurate diagnosis and confirmation of the effectiveness of treatments(drug and non-drug treatments) as well as measures that will contribute to improving quality oflife.
In Japan, Eisai is progressing with various collaborations with other industries, such ascommunications, food, insurance, financial, automobile and fitness to expand the dementia
ecosystem, including the use of digital tool “NouKNOW” (non-medical device) on smartphones
to monitor cognitive function. In China, we offer online medical consultations through Yin Fa
Tong, a one-stop online health platform from daily life to medical treatment, and are working to
reduce health care disparities through the use of digital technology. In Asia, we are also
expanding our ecosystem with other industries and non-profit organizations to increase diseaseawareness, early detection, early diagnosis, and access to dementia drugs.
3) Basic Policy for Capital Strategy
The Group’s capital strategy policy is to improve shareholder value based on “medium- to longterm Return on Equity (ROE*1) management”, “sustainable and stable shareholder returns” and“value-creative investment criteria for growth”, while maintaining the integrity of its finances.
(1) Medium- to Long-term ROE Management
The Group believes that ROE is an important indicator of the sustainable creation of value forshareholders. In terms of medium- to long-term ROE management, the Company aims for an
ROE that exceeds the cost of capital (creation of a positive equity spread*2) by constantly
improving profit margins, financial leverage and asset turnover in the medium- to long-term.
(2) Sustainable and Stable Shareholder Returns
In terms of shareholder returns, profits are returned to all shareholders in a sustainable andstable way based on factors such as a healthy balance sheet and comprehensive considerationof the consolidated financial results, DOE*3 and free cash flow, as well as taking into
consideration the signaling effect. Because DOE indicates the ratio of dividends to consolidated
net assets, the Group has positioned it as an indicator that reflects balance sheet management,
and, consequently, capital policy. Acquisition of treasury stock will be carried out appropriately
after factors such as the market environment and capital efficiency are taken into account. The
Group uses the ratio of equity attributable to owners of the parent and net debt equity ratio as
indicators to measure a healthy balance sheet.

20

(3) Value-Creative Investment Criteria for Growth
To ensure that strategic investments create shareholder value, the Group invests selectively
using its Value-Creative Investment Criteria based on Net Present Value and the Internal Rateof Return spread using a risk-adjusted hurdle rate.

*1 ROE = Profit attributable to owners of the parent / equity attributable to owners of the parent*2 Equity spread = ROE – Cost of shareholder capital*3 DOE = Dividends paid / equity attributable to owners of the parent

4) Enhancing Non-Financial Value including ESG and Information Disclosure
While engaging in business with the hhc concept at the core, the Group has been strengthening
its ESG-related efforts such as reducing the impact on the global environment (environment),
improving access to medicines, respecting of human rights and developing human resources(society), and ensuring fairness and transparency of management (governance). In addition, theGroup positions these efforts as consistent with the Sustainable Development Goals (SDGs),
which are international goals adopted by the United Nations Summit, and believes they enhance
the corporate value of the Group as non-financial value.
Among ESGs, in particular, the Group considers making efforts to resolve the global issue ofaccess to medicines to be its duty as well as a long-term investment for the future. The Group is
promoting such efforts proactively under public-private partnerships with governments,
international organizations, private non-profit organizations and others. For the elimination oflymphatic filariasis, one of the NTDs endemic in developing and emerging countries, we areproviding lymphatic filariasis treatment diethylcarbamazine (DEC) tablets to the World HealthOrganization (WHO) for price zero (free of charge). These DEC tablets are manufactured at theGroup’s Vizag Plant in India. The Group will continue to supply DEC tablets until lymphatic
filariasis is eliminated in all endemic countries that need DEC tablets. As of the end of March 2023,
2.13 billion tablets have been supplied to 29 countries. Furthermore, the Group is carrying out
new drug development and generation of new evidence to eliminate tuberculosis, malaria and
NTDs such as mycetoma under the partnership with the Japan-based Global Health Innovative
Technology (GHIT) Fund, and non-profit organizations and non-governmental organizations withextensive experience in drug discovery related to NTDs. We are also involved in diseaseawareness activities. In June 2022, the Group signed the Kigali Declaration for eliminating NTDs
announced at the Kigali Summit on Malaria and NTDs held in Kigali, the capital of the Republicof Rwanda, and expressed our continued support for the elimination of NTDs.
Regarding the environment, the “Eisai Environmental Management Vision” was established in
April 2022. In addition to climate change countermeasures aimed at achieving carbon neutrality
by fiscal 2040, we have formed a medium- to long-term plan for environmental issues including
efficient use of water, recycling of resources, preservation of biodiversity, and proper
management of chemical substances, and will work to advance these efforts. As one of themeasures to combat climate change, the entire Group is actively working for the formation of alow-carbon society with initiatives such as systematically increasing the rate of renewable energy.
Regarding water resources, we also aim to achieve sustainable use through efficient use of water
including recycling, and high-quality wastewater treatment that contributes to water quality
preservation, and are working on proper waste disposal and effective use of resources. The Group21

is analyzing based on the TCFD (Task Force on Climate-related Financial Disclosure), aninternational framework for analyzing the risks and opportunities of climate change impacts oncompanies and seeking information disclosure, and is constantly investigating how to strengthen
the Group’s climate strategy.
Regarding human rights, the Group has been working on further to improve non-financial value
by creating a human rights policy and conducting human rights due diligence based on the United
Nations “Guiding Principles on Business and Human Rights”, which is internationally recognized
as a guideline. In order to promote procurement activities that emphasize human rights, labor andsafety, the environment, ethics, and other aspects of sustainability throughout the supply chain(sustainable procurement), we have joined the Pharmaceutical Supply Chain Initiative (PSCI), aninternational non-profit organization for the pharmaceutical and healthcare sectors.
Information regarding non-financial value of the Group, including ESG, is disclosed in the Value
Creation Report (former Integrated Report) and Environmental Report, based on the frameworkof the IIRC (International Integrated Reporting Council).
https://www.eisai.com/ir/library/annual/index.html
https://www.eisai.com/sustainability/index.html
The Company is always aiming for the best corporate governance and strives continually for its
enhancement. The Company’s corporate governance initiatives, including the Corporate
Governance Report, are posted on our corporate website.
https://www.eisai.com/company/governance/index.html
5) Compliance and Risk Management
The Group defines “compliance” as the observance of the highest legal and ethical standards andpositions it at the core of its management activities. In addition, the Group defines “internal control”
as the systems and processes that are constructed and operated within the company in order tocarry out its business activities properly and efficiently and shares the “ENW Internal Control
Policy” with all its officers and employees. At the same time, the Group has appointed a Chief
Compliance Officer and Corporate Officer in charge of Internal Control to further enhancecompliance and risk management. These compliance activities periodically undergo objective
reviews by the Compliance Committee that consists of external experts for further improvement.
3. Basic Approach to the Selection of Accounting Standards
In order to make it more convenient for various stakeholders including shareholders and investors
in Japan and overseas by improving disclosure and comparability of financial information on aninternational basis, the Company voluntarily adopted IFRS from the fiscal year ended March 31,
2014 and has disclosed its consolidated financial statements in accordance with IFRS from thefirst three-month period ended March 31, 2015.

22

4. Consolidated Financial Statements and Major Notes
1) Consolidated Statement of Income(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

Revenue

744,402756,226

Cost of sales(177,837)(174,831)

566,566

581,395

Selling, general and administrative expenses(358,292)(366,430)

Research and development expenses(172,999)(171,738)

Other income

8,313

14,645

Other expenses(3,548)(4,122)40,04053,750Financial income

7,239

2,401

Financial costs(2,266)(1,692)45,01254,458

11,824(8,741)

56,83645,717

Owners of the parent

55,432

47,954Non-controlling interests

1,404(2,237)

Basic (yen)193.31167.27

Diluted (yen)193.31167.25Gross profit

Operating profit

Profit before income taxes

Income taxes
Profit for the year

Profit for the year attributable toEarnings per share232) Consolidated Statement of Comprehensive Income(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

56,83645,717

Financial assets measured at fair value
through other comprehensive income (loss)

5,541

(847)

Remeasurements of defined benefit plans

1,055(1,059)Subtotal

6,596(1,906)33,42446,897

37

69

Subtotal

33,461

46,965

Total other comprehensive income (loss), net of tax

40,05745,05996,89390,777

Owners of the parent

95,50093,002

Non-controlling interests

1,393(2,225)

Profit for the year

Other comprehensive income (loss)
Items that will not be reclassified to profit or loss

Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Cash flow hedges

Comprehensive income (loss) for the year

Comprehensive income (loss) for the year attributable to243) Consolidated Statement of Financial Position(Millions of yen)
As ofMarch 31, 2023

As ofMarch 31, 2022

AssetsNon-current assets
Property, plant and equipment

166,633

169,926

Goodwill

208,817

191,758

Intangible assets

89,23095,451Other financial assets

52,46344,033

Other assets

21,412

20,919Deferred tax assets

102,592

76,622

Total non-current assets

641,148598,709

Inventories

140,41799,008Trade and other receivables

187,256

207,950

540

432

Other assets

26,63923,584

Cash and cash equivalents

267,350

309,633

Total current assets

622,202640,606

1,263,350

1,239,315

Current assets

Other financial assets

Total assets

25

(Millions of yen)
As ofMarch 31, 2023

As ofMarch 31, 2022

EquityEquity attributable to owners of the parent
Share capital

44,98644,986

Capital surplus

78,81377,605

Treasury shares(33,638)(33,936)

Retained earnings

522,774

506,583

Other components of equity

187,024

153,584

Total equity attributable to owners of the parent

799,959

748,821

Non-controlling interests

22,612

22,712

Total equity

822,571771,534

Borrowings

84,904

94,893

Other financial liabilities

36,98939,213

Provisions

1,299

1,473

Other liabilities

17,97818,386664

483

141,834

154,449

Borrowings

41,201－

Trade and other payables

86,826108,065

Other financial liabilities

34,66840,865

Income taxes payable

2,223

6,877

Provisions

22,994

17,949Other liabilities

111,033

139,576

Total current liabilities

298,945

313,333

440,779

467,782

1,263,350

1,239,315

Liabilities
Non-current liabilities

Deferred tax liabilities
Total non-current liabilities

Current liabilities

Total liabilities
Total equity and liabilities

264) Consolidated Statement of Changes in Equity
Fiscal year ended March 31, 2023
(Millions of yen)
Equity attributable to owners of the parent
Other components of equity
Share
capitalCapitalsurplusTreasurysharesRetainedearnings

Financial assets
measured atfair value
through othercomprehensive
income (loss)

Remeasurementsof defined
benefit plans

As of April 1, 2022

44,986

77,605(33,936)

506,583－－

Profit for the year

－

－

－

55,432

－

－

－

－

－

－

5,541

1,086

－

－

－

55,432

5,541

1,086

Dividends－－－(45,893)－－

Share-based payments

－

(27)

－

－

－

－

Acquisition of treasury shares

－

－

(20)

－

－

－

Disposal of treasury shares

－

43

73

－

－

－

Changes in equity in existing
subsidiaries

－

1,192

244

－

－

－

Reclassification

－

－

－

6,627

(5,541)(1,086)

Other changes

－

－

－

25

－

－

－

1,208

298

(39,241)(5,541)(1,086)44,98678,813(33,638)

522,774－－

Other comprehensive income(loss)
Comprehensive income (loss)
for the year

Total transactions with owners
As of March 31, 2023

Equity attributable to owners of the parent
Other components of equity
Exchangedifferences ontranslation offoreign operations

Cash flow
hedgesTotal othercomponentsof equity

Equityattributable toowners of theparentNon-controllinginterests

Total
equityAs of April 1, 2022

153,584－

153,584

748,821

22,712

771,534

Profit for the year

－

－

－

55,432

1,404

56,83633,40437

40,06840,068(11)

40,05733,40437

40,06895,5001,393

96,893

Dividends－－－(45,893)(44)(45,937)

Share-based payments

－

－

－

(27)

－

(27)

Acquisition of treasury shares

－

－

－

(20)

－

(20)

Disposal of treasury shares

－

－

－

116

－

116

Changes in equity in existing
subsidiaries

－

－

－

1,437

(1,449)(13)

Reclassification－－(6,627)－－－

Other changes

－

－

－

25

－

25

Total transactions with owners－－(6,627)(44,362)(1,493)(45,855)

186,98837

187,024

799,959

22,612

822,571

Other comprehensive income(loss)
Comprehensive income (loss)
for the year

As of March 31, 2023

27

Fiscal year ended March 31, 2022
(Millions of yen)
Equity attributable to owners of the parent
Other components of equity
Share
capitalCapitalsurplusTreasurysharesRetainedearnings

Financial assets
measured atfair value
through othercomprehensive
income (loss)

Remeasurementsof defined
benefit plans

As of April 1, 2021

44,986

77,628(34,049)

506,403－－

Profit for the year

－

－

－

47,954

－

－

－

－

－

－

(847)

(1,057)－－－47,954(847)(1,057)

Dividends－－－(45,878)－－

Share-based payments

－

(26)

－

－

－

－

Acquisition of treasury shares

－

－

(29)

－

－

－

Disposal of treasury shares

－

18

142

－

－

－

Acquisition of subsidiaries

－

－

－

－

－

－

Reclassification

－

－

－

(1,904)

847

1,057

Other changes

－

(16)

－

8

－

－

－

(24)

113

(47,774)

847

1,057

44,986

77,605(33,936)

506,583－－

Other comprehensive income(loss)
Comprehensive income (loss)
for the year

Total transactions with owners
As of March 31, 2022

Equity attributable to owners of the parent
Other components of equity
Exchangedifferences ontranslation offoreign operations

Cash flow
hedgesTotal othercomponentsof equity

Equityattributable toowners of theparentNon-controllinginterests

Total
equityAs of April 1, 2021

106,702(69)

106,633

701,601

24,759726,360

Profit for the year

－

－

－

47,954(2,237)45,71746,882

69

45,04745,04712

45,05946,882

69

45,04793,002(2,225)90,777

Dividends－－－(45,878)(144)(46,023)

Share-based payments

－

－

－

(26)

－

(26)

Acquisition of treasury shares

－

－

－

(29)

－

(29)

Disposal of treasury shares

－

－

－

160

－

160

Acquisition of subsidiaries

－

－

－

－

280

280

Reclassification

－

－

1,904

－

－

－

Other changes

－

－

－

(8)

42

34

Total transactions with owners

－

－

1,904

(45,781)178(45,603)

153,584－

153,584

748,821

22,712

771,534

Other comprehensive income(loss)
Comprehensive income (loss)
for the year

As of March 31, 2022

28

5) Consolidated Statement of Cash Flows(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

Profit before income taxes

45,01254,458Depreciation and amortization

39,98138,398

Impairment losses

2,019

11,429(61,514)

34,135Interest and dividends received

4,561

1,876

Interest paid

(1,484)(1,286)

Income taxes paid

(22,612)(10,593)

－

3,484

Other

(7,735)(14,312)Net cash from (used in) operating activities(1,772)

117,590

Purchases of property, plant and equipment(22,576)(29,031)

Purchases of intangible assets(11,983)(11,436)576

13,445－(1,217)

5,035

－

175

－

Purchases of financial assets(3,701)(3,131)

Proceeds from sale and redemption of financial assets

9,907

2,489

Payments of time deposits exceeding three months

(0)

(0)

Proceeds from redemption of time deposits exceeding
three months

139

1

Other

(295)

31

(22,723)(28,848)

31,201－

Proceeds from long-term borrowings－

44,874

Repayments of long-term borrowings(29)(40,000)

Repayments of lease liabilities(9,884)(10,280)

Dividends paid

(45,893)(45,878)

83

2,317

(24,522)(48,967)

6,735

21,118Net increase (decrease) in cash and cash equivalents(42,282)

60,892

Cash and cash equivalents at beginning of year

309,633

248,740

Cash and cash equivalents at end of year

267,350

309,633

Operating activities(Increase) decrease in working capital

Income taxes refund

Investing activities

Proceeds from sale of property, plant and equipment andintangible assets
Net cash outflow on acquisition of subsidiaries
Proceeds from sale of subsidiaries
Proceeds from sale of investments in associates

Net cash from (used in) investing activities
Financing activities
Increase (decrease) in short-term borrowings

Other
Net cash from (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

296) Notes to Consolidated Financial Statements(Going Concern)
Not applicable(Basis of Preparing Consolidated Financial Statements)(1) Compliance
As the Company meets the requirements of a “Specified Company,” pursuant to Article 1-2 of the Consolidated
Financial Statement Ordinance, the consolidated financial statements of the Group have been prepared in accordancewith IFRS subject to the provisions of Article 93 of said Ordinance.

(2) Basis of measurement
The consolidated financial statements are prepared on an acquisition cost basis except for the financial instrumentsthat are measured at fair value, assets (liabilities) of post-employment benefit plans and other factors.

(3) Presentation currency and unit
The consolidated financial statements are presented in Japanese yen, which is the Company’s functional currency,
and figures less than 1 million yen are rounded to the nearest million yen.

(4) Changes in accounting policies
Below are the accounting policies and interpretations the Group applied from the fiscal year ended March 31, 2023.
None of the following accounting standards and interpretations applied by the Group has any major impact on the
consolidated financial statements for the fiscal year ended March 31, 2023.
Mandatory
application(Date ofcommencement)

To be appliedby the GroupIAS 16

Property, Plant andEquipment

January 1, 2022

Fiscal year ended
March 31, 2023

Amendments to proceeds
before intended use ofproperty, plant andequipment

IAS 37

Provisions, Contingent
Liabilities and Contingent
AssetsJanuary 1, 2022

Fiscal year ended
March 31, 2023

Clarifying cost of fulfilling
onerous contracts

IFRS 3Business Combinations

January 1, 2022

Fiscal year ended
March 31, 2023

Amendments to reference to
the Conceptual Framework

Accounting standards
and interpretations

30

Description

(5) New accounting standards and interpretations not yet applied by the GroupAs of the date of approval of the consolidated financial statements by the Group, main new accounting standards andinterpretations that have been issued are as follows:
Accounting standards
and interpretations

Mandatory
application(Date ofcommencement)

To be appliedby the Group

IAS 1

Presentation of Financial
Statements

January 1, 2023

Fiscal year ending
March 31, 2024

IAS 8

Accounting Policies,
Changes in Accounting
Estimates and Errors

January 1, 2023

Fiscal year ending
March 31, 2024

IAS 12

Income Taxes

January 1, 2023

Fiscal year ending
March 31, 2024

IAS 1

Presentation of Financial
Statements

January 1, 2024

Fiscal year ending
March 31, 2025

IFRS 16

LeasesJanuary 1, 2024

Fiscal year ending
March 31, 2025

IFRS 10

Consolidated Financial
Statements
Investments in Associates
and Joint Ventures

Not decided

Not decided

IAS 28Description
Amendments to disclosure ofmaterial accounting policy
information
Clarifying the distinction betweenchanges in accounting policies
and changes in accounting
estimates
Clarifying the accounting
treatments of recognizing deferred
tax assets and deferred tax
liabilities
Clarifying of the classification of
liabilities as current or non-current
Clarifying the accounting
treatments of lease liabilities in asale-and-leaseback
Amendments to accounting for
selling assets to associates

As of the reporting date, the Group has not yet applied these accounting standards and interpretations. The impact on
the consolidated financial statements by these standards and interpretations which are to be applied by the Group isunder evaluation.

(Significant Accounting Policies)
The Group’s significant accounting policies described below are applied to the consolidated financial statements
throughout the period.

(1) Basis of consolidation
The Group’s consolidated financial statements are prepared based on the financial statements of the Company, its
subsidiaries, its associate and its equity in joint ventures (associated companies accounted for using the equity method)under uniform accounting policies. In cases where accounting policies applied by a subsidiary or associated companies
accounted for using the equity method are different from those applied by the Group, adjustments are made to theirfinancial statements as needed. In addition, all inter-company transactions, balances and unrealized gains/losses frominter-company transactions are eliminated in the consolidated financial statements.
a) Subsidiary
A subsidiary is an entity that is controlled by the Group. The Group controls an entity when the Group has the powerover the investee, is exposed to variable returns from involvement with the investee, and has the ability to use powerover the investee to affect the investor’s return.
A subsidiary’s financial statements are included in the consolidated statements from the date the Group obtains
control of the subsidiary until the date the Group loses control of it. Changes in the Group’s interest in a subsidiarythat do not result in losing control of the subsidiary are accounted for as equity transactions in which the difference
between the adjustment amount of non-controlling interests and fair value of the consideration is directly recognized
as retained earnings and made attributable to the owners of the parent.

31b) Associate
An associate is an entity over which the Group has significant influence on their management policies but does nothave control. An investment in an associate is accounted for using the equity method on all associates from thedate the Group obtains significant influence until the date the Group loses significant influence.
c) Joint arrangements
A joint arrangement is an arrangement in which the Group has joint control. Joint control is the contractually agreed
sharing of control of an arrangement, which exists only when decisions about the activities that significantly affectthe returns of the arrangement require the unanimous consent of the parties sharing control.
The Group classifies its involvement in joint arrangements, depending on the rights and obligations of the parties
involved in the arrangements, into joint operations (where the Group has rights to the assets and obligations to theliabilities in relation to the arrangements) and joint ventures (where the Group has only rights to the net assets inthe arrangements).
The Group recognizes its share of the assets, liabilities, income and expenses related to joint operations.
The Group accounts for its equity in joint ventures using the equity method.

(2) Business combinations
Business combinations are accounted for using the acquisition method.
Based on the acquisition method, acquisition costs are the sum of the considerations measured at fair value at theacquisition date and the amount of non-controlling interest in the acquiree. Non-controlling interests are measured ateither fair value or the proportionate share in the recognized net amount of the acquiree’s identifiable assets andliabilities. Acquisition-related costs are recognized as expenses in the period during which the costs are incurred.
In the case that the sum of fair value of the consideration, non-controlling interests in the acquiree and the fair value ofthe proportionate share that the Group has held before at the date the Group obtains control of the acquiree exceeds
the net amount of identifiable assets and liabilities, the difference is recognized as goodwill. On the other hand, if thesum of the considerations of acquisition is lower than the net amount of identifiable assets and liabilities, the difference
is recognized as profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the provisional amounts for the items for which the accounting is incomplete are reported in the
consolidated financial statements. The provisional amounts recognized at the acquisition date are retrospectively
adjusted during the measurement period. The measurement period is the period starting from the acquisition date andlasting up to a maximum of one year, during which the Group obtains comprehensive information about facts andcircumstances that existed at the acquisition date.

(3) Foreign currency translation
Each company in the Group determines its own functional currency for its separate financial statements, andtransactions of these companies are presented in their functional currency. However, the consolidated financial
statements of the Group are presented in Japanese yen, which is the functional currency of the Company.
Foreign currency transactions are translated into the Company’s functional currency using exchange rates at the dateof transactions or approximations of rates at the date of transactions. Monetary assets and liabilities denominated inforeign currencies are translated into the functional currency using the spot exchange rates at the consolidated fiscal
year-end date. Exchange differences arising from translation or settlement are recognized in profit or loss.

32

For the purpose of recording operating results and financial positions of foreign operations in the consolidated financial
statements, assets and liabilities of foreign operations are presented in Japanese yen translated at spot exchange
rates at the consolidated fiscal year-end date. Income and expense items of foreign operations are translated ataverage exchange rates. The resulting translation differences are recognized as other comprehensive income, while
the cumulative amounts are recognized as other components of equity. In addition, accumulated translation differences
are recognized as profit or loss when the foreign operations are disposed of.

(4) Revenue
The Group recognizes revenue from contracts with customers based on the following five-step approach.
Considerations of revenue recognized by the Group are usually received within one year from satisfaction of
performance obligations and do not include any significant financing component.

Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligationa) Revenue from pharmaceutical goods sales
The Group usually recognizes revenue from pharmaceutical goods sales on delivery of the goods as the Groupjudges that its performance obligations are satisfied when the customer obtains control of the goods on delivery.
The amount of revenue is measured as the promised considerations in a contract with the customer less discounts,
rebates and returned goods estimated by the most likely amount method, based on the contract conditions and past
results.
b) License revenue
The Group recognizes license revenue such as upfront payments, milestone payments and sales-based royalties
for its developing or developed products.
For revenue related to upfront payments and milestone payments, in case that the Group judges that theperformance obligations are satisfied when the customer obtains control of the license at the point in time that thelicense is granted, the Group recognizes the revenue at that point in time.
The Group recognizes revenue from sales-based royalties when subsequent sales occur or the performanceobligations allocated to sales-based royalties are satisfied, whichever is later.
c) Co-promotion revenue (provision of services)
The Group recognizes co-promotion revenue when it provides co-promotion activities to the customer as the Groupjudges that its performance obligations are satisfied at the point in time. The Group recognizes its portion of theexpenses incurred from the co-promotion activities as selling, general and administrative expenses.

(5) Co-development and co-promotion
The Group has signed co-development and co-promotion agreements on its developing or developed products with its
alliance partners. Pharmaceutical goods sales (goods sales) are recorded on revenue and the relevant expenses arerecorded in total on cost of sales, selling, general and administrative expenses and research and development
expenses (R&D expenses), respectively. The Group records the partners’ proportionate share of revenue generated
from its pharmaceutical goods sales on selling, general and administrative expenses as co-promotion expenses.

33Based on the above agreements and the economic conditions, the Group allocates the received considerations (upfront
payments, milestone payments) from the alliance partners to license grant, co-development activity, and co-promotion
activity.
a) License grant
In accordance with the above “(4) Revenue: b) License revenue”, license grant is recognized as revenue. Based on
the above agreements and the economic conditions, revenue, which does not fall under the category of revenue
from contracts with customers, is classified as revenue arising from other sources.
b) Co-development activity
Considerations allocated as co-development activity are recorded as reversal of R&D expenses according to theprogress of co-development activity.
c) Co-promotion activity
Considerations allocated as co-promotion activity are recorded as reversal of other income or the relevant expenses(cost of sales and selling, general and administrative expenses) according to the progress and results of copromotion activity.

Global Strategic Collaboration for anticancer agent Lenvima between Eisai Co., Ltd. and Merck & Co., Inc., Rahway,
NJ, USAIn March 2018, the Company entered into Global Strategic Collaboration for anticancer agent Lenvima with Merck &Co., Inc., Rahway, NJ, USA focusing on the oncology field. Under the agreement, the Company and Merck & Co.,
Inc., Rahway, NJ, USA are co-developing and co-promoting Lenvima, both as monotherapy and in combination withMerck & Co., Inc., Rahway, NJ, USA’s anti-PD-1 therapy, pembrolizumab.
Accounting procedures regarding the agreement are as follows:・

Since establishment of the collaboration, revenue and cost of sales for Lenvima are recorded by the Group.
Selling, general and administrative expenses related to Lenvima in the Group as well as shared profit for
Lenvima paid by the Group to Merck & Co., Inc., Rahway, NJ, USA are recorded on selling, general andadministrative expenses.

・R&D expenses related to Lenvima in connection with monotherapy and in combination with pembrolizumab are
also shared equally between the two companies. When the agreement was conducted, the Group received$450 million as reimbursement for R&D expenses from Merck & Co., Inc., Rahway, NJ, USA and recorded it asdeposits received. On each occasion that R&D expenses related to Lenvima occur in the Group, the Group
withdraw these deposits received and record as reversal of R&D expenses. All deposits received from Merck& Co., Inc., Rahway, NJ, USA have been fully withdrawn.

・

Under this agreement, the Group allocates the upfront payment, certain option rights and sales milestone
payments to the consideration of the license grant. For the regulatory milestone payments applied, the Group
allocates them to the considerations of the licensing and co-development activity, respectively.

Global Strategic Collaboration for Alzheimer’s disease treatment Leqembi between Eisai Co., Ltd. and Biogen Inc.
(the U.S.)In January 2023, the U.S. Food and Drug Administration granted accelerated approval for Alzheimer’s disease
treatment Leqembi (lecanemab) in the United States. Based on the co-development and co-promotion
agreements on Alzheimer’s disease treatment Leqembi with Biogen Inc. (hereinafter “Biogen”), the Company

34

serves as the lead of development and regulatory submissions globally with both companies co-commercializing
and co-promoting the product based on the Company’s final decision-making authority.
Accounting procedures regarding the agreement are as follows:・

Since establishment of the collaboration, revenue and cost of sales for Leqembi in the regions after obtaining
approval are recorded by the Group. Selling, general and administrative expenses related to Leqembi in theGroup as well as shared profit for Leqembi paid by the Group to Biogen are recorded as selling, general andadministrative expenses. If the shared profit is negative and the Group receives the profit share from Biogen, it
is recognized as the reversal of selling, general and administrative expenses.

・R&D expenses related to Leqembi are shared equally between the Group and Biogen, and the Group
recognizes its portion of expenses incurred in the Group as R&D expenses. The expenses for the cocommercialization in the regions before obtaining approval are shared equally between the two companies, and
the Group recognizes its portion of the expenses incurred in the Group as selling, general and administrative
expenses.

・

The Group also incurs the milestones paid to BioArctic AB (Sweden), which out-licensed the rights for Leqembi
to the Company. The milestones are also shared equally with Biogen, and the Group recognizes its portion of
the milestones incurred as intangible assets. Amortization of the intangible assets is recognized as cost of sales.

Global Strategic Collaboration for Alzheimer’s disease treatment ADUHELM between Eisai Co., Ltd. and Biogen
Although the Company and Biogen had been co-developing and co-promoting Alzheimer’s disease treatment
ADUHELM (aducanumab) based on the co-development and co-promotion agreements on Alzheimer’s disease
treatment between two companies, the co-development and co-promotion agreements for ADUHELM were changedin March 2022. Effective as of January 1, 2023, a new scheme has commenced where the Company receives atiered royalty based on net sales of ADUHELM.
As a result, effective as of January 1, 2023, the Company records a tiered royalty based on net sales of ADUHELM
as revenue.
The Group’s accounting procedures in the period on or prior to December 31, 2022, are as follows:・The profit or loss related to ADUHELM generated by the Group and Biogen is aggregated, and the aggregatedprofit or loss is shared between the Group and Biogen in proportion to the profit-sharing ratio by region. The
following profit or loss is shared with the Group: 45% share of potential profit or loss in the United States,
31.5% share of potential profit or loss in Europe, 80% share of potential profit or loss in Japan and Asia
(excluding China and South Korea), and 50% share of potential profit or loss in the rest of the world.

・

Biogen recognizes revenue on sales of ADUHELM in the United States, where Biogen started to market
ADUHELM. The Group recognizes the amount of the expenses recognized by the Group in co-promotion
activities (selling, general and administrative expenses) plus its portion of operating profit or loss (excluding
R&D expenses) as revenue. If this amount is negative, it is recognized as selling, general and administrative
expenses.

・

The Group recognizes its 45% portion of R&D expenses on ADUHELM as R&D expenses. Regarding theexpenses on the co-commercialization in the regions before obtaining approval, the Group recognizes its
portion of the expenses based on the above-mentioned profit-sharing ratio by region as selling, general andadministrative expenses .

・

The Group also incurs the milestones paid by Biogen to Neurimmune (Switzerland), which out-licensed therights for ADUHELM to Biogen, in proportion to the above-mentioned profit-sharing ratio by region, and the35Group recognizes its portion of the milestones incurred as intangible assets. Amortization of the intangible
assets is recognized as cost of sales.

Global Strategic Collaboration for antibody drug conjugate MORAb-202 between Eisai Co., Ltd. and Bristol Myers
Squibb (the U.S.)In June 2021, the Company entered into an exclusive global strategic collaboration agreement for the codevelopment and co-commercialization of antibody drug conjugate MORAb-202 with Bristol Myers Squibb. Under
this agreement, the Company and Bristol Myers Squibb will co-develop and co-commercialize MORAb-202 incollaboration territories. Bristol Myers Squibb will be solely responsible for developing and commercializing MORAb202 in regions outside of the collaboration territories.
Bristol Myers Squibb paid the Group an upfront payment of $650 million including $200 million as payment toward
R&D expenses of the Group incurred after the time of agreement. In addition, the Group will receive a maximum of
up to $2,450 million for the achievements of development, regulatory and sales milestones. Assuming theachievement of all development, regulatory and sales milestones, the total amount of payments to the Group,
including the upfront payment at the time of agreement, has the potential to reach up to $3,100 million.
The Group’s accounting procedures regarding the agreement are as follows:・After the time of agreement, R&D expenses on MORAb-202 are jointly shared between the Group and Bristol
Myers Squibb. Based on the agreement, the Group recognizes its portion of the incurred R&D expenses on
MORAb-202 as R&D expenses.

・At the time of agreement, the Group received $200 million as reimbursement for R&D expenses from Bristol
Myers Squibb and recognized it as deposits received. On each occasion that R&D expenses related to
MORAb-202 occur in the Group, the Group withdraws these deposits received and recognizes them as reversalof R&D expenses.

・

Under this agreement, the Group allocates the upfront payment (excluding reimbursement for R&D expenses)
and sales milestone payments to the consideration of the license grant. According to the development andregulatory milestone payments applied, the Group allocates them to the considerations of the license grantand co-development activity, respectively.

(6) Research and development expensesa) Research expenses
Expenditures on research activities (including collaborative research and contract research) are recognized as R&D
expenses.
b) Development expenses
Expenditures on development activities are recognized as intangible assets only if they meet the conditions ofinternally generated intangible assets. Internally incurred development expenses in the Group do not meet these
conditions as there are risks that developing products may not get marketing authorization and developing activities
may be delayed or discontinued. Therefore, these are recognized as R&D expenses.
Acquired in-process research and development investments from external entities are recognized as intangible
assets.

36

In case that the Group receives contributions for developments from alliance partners in accordance with thecollaborative research and development agreement, the contributions are deducted from R&D expenses according
to the progress of development activities.

(7) Employee benefitsa) Post-employment benefits
The Group has adopted defined benefit plans and defined contribution plans.
Regarding defined benefit plans, current service costs are recognized as expenses using the projected unit credit
method in actuarial calculations made at each consolidated fiscal year-end date. All of the actuarial gains/losses
incurred in the period are recognized as other comprehensive income, while the cumulative amounts are reclassified
to retained earnings after they are recognized as other components of equity. Retirement benefit liabilities
recognized in the consolidated financial statements are the net defined benefit plan obligations that the present
value of the defined benefit obligations less the fair value of the plan assets, while retirement benefit assets will berecognized if the fair value of the plan assets exceeds the present value of the defined benefit plan obligations.
Regarding defined contribution plans, contributions of the Group are recognized as expenses at the time employees
render services that give pension rights to them.
b) Termination benefits
Termination benefits are provided in case that the Group decides to terminate an employee’s employment before
the normal retirement date, or an employee voluntarily decides to accept an offer of benefits in exchange for thetermination of employment. The termination benefits are recognized as expenses upon termination of employment
when the Group can no longer withdraw the offer of the benefits or the restructuring costs related to termination
benefits are recognized, whichever comes first. Termination benefits are measured based on the number of
employees expected to accept the offer if the Group offers incentives to early voluntary retirement to employees.

(8) Share-based paymentsa) Stock option system
The Company had granted a part of directors, corporate officers and employees equity-settled share-based
payments (stock options) until the fiscal year ended March 31, 2013.
Services received as considerations of stock options are recognized as expenses, while corresponding amounts
are recognized as an increase in equity. These expenses are the fair value of stock options that are evaluated byusing appropriate price models at the grant date, and recognized as expenses using the straight-line method overthe vesting period. Expired rates at the time of final vesting are considered when the Company makes estimations
for evaluation. In case that the estimation is revised, adjustments are made over the remaining vesting period.
b) Performance-related share-based compensation system
The Company has introduced a performance-related share-based compensation system that distributes theCompany’s shares to corporate officers every year based on performance from the fiscal year ended March 31,
2014. The Group measures considerations of services rendered referring to the fair value of the Company’s shares
granted. Considerations of services calculated are recognized as expenses while the corresponding amount isrecognized as an increase in equity.

37

(9) Income taxes
Income taxes are presented as the sum of current income taxes and deferred income taxes.
a) Current income taxes
Current income taxes are calculated based on current taxable income. Tax rates that have been enacted or
substantively enacted at the consolidated fiscal year-end date are used for tax calculation. Income taxes receivableand payable are measured at the amount expected to be paid to or refunded from the taxation authorities.
b) Deferred income taxes
Deferred income taxes are calculated based on temporary differences between the tax base and the carrying
amount for assets and liabilities using the balance sheet liability method. In principle, deferred tax liabilities arerecognized for all taxable temporary differences, while deferred tax assets are recognized only when it is probablethat taxable income will be available against which the deductible temporary differences can be utilized. However,the following deferred tax assets and liabilities on temporary differences are not recognized.
(i) Temporary differences arising from goodwill(ii) Temporary differences arising from the initial recognition of assets or liabilities in transactions which affectneither accounting profit nor taxable income (except for a business combination).
Regarding taxable temporary differences arising from investments in subsidiaries and associates, deferred tax
liabilities are not recognized if the Company is able to control the timing of the reversal of the temporary differences,and it is probable that the temporary differences will not reverse in the foreseeable future.
Furthermore, regarding deductible temporary differences arising from investments in subsidiaries and associates,
deferred tax assets are recognized only when sufficient taxable income in order to realize benefits from thetemporary differences will be available, and it is probable that the temporary differences will reverse in theforeseeable future.
Deferred tax assets and liabilities are calculated using tax rates that will be expected to be applied when the deferred
tax assets will be recovered or the deferred tax liabilities will be settled based on acts that have been enacted or
substantively enacted by the consolidated fiscal year-end date.
Deferred tax assets and liabilities are offset when the Company or its subsidiaries have legally enforceable rights tooffset income tax receivables and payables, and they intend to settle them as offset amounts.

(10) Property, plant and equipment
Property, plant and equipment is measured using the cost model and is presented at acquisition cost less accumulated
depreciation and accumulated impairment loss.
The acquisition cost includes any costs directly attributable to purchase of assets and present value of removal andrestoration costs. In case that certain conditions are met, borrowing costs that are directly attributable to the acquisitionand construction of assets are included in the acquisition costs of the assets.
Depreciation is recognized by reducing acquisition cost of assets less residual value using the straight-line method
over the estimated useful lives of the assets. Estimated useful lives, residual value and depreciation methods arereviewed at each consolidated fiscal year-end date, and the effects of any changes in estimation are reflected on aprospective basis.
The estimated useful lives of significant property, plant and equipment are as follows. Details of Right-of-use assets
are described in “(18) Leases”.
(i) Buildings

15 to 50 years

38

(ii) Machinery and equipment

5 to 20 years(iii) Right-of-use assets

3 to 20 years

Gains/losses arising from sales or disposal of property, plant and equipment are presented as other income or otherexpenses.

(11) Intangible assets
Intangible assets are measured using the cost model and are presented at acquisition cost less accumulated
amortization and accumulated impairment loss.
Intangible assets acquired separately are measured at the acquisition costs upon initial recognition. Those acquired
through business combinations are measured at fair value at the acquisition date.
Amortization is recognized by using the straight-line method over the estimated useful lives of the intangible assets.
Estimated useful lives, residual value and amortization methods are reviewed at each consolidated fiscal year-end
date, and the effects of any changes in estimation are reflected on a prospective basis.
The estimated useful lives of significant intangible assets are as follows:(i) Sales rights

5 to 15 years(ii) Core technology

20 years(iii) Software

5 years

Accounting treatments for in-process research and development investments are as follows:a) In-process research and development investments (IPR&D assets) acquired separately
Intangible assets acquired separately that meet the following conditions are recognized as assets:(i) It is probable that the expected future economic benefits attributable to the asset will flow to the Group(ii) The cost of the asset can be measured reliably
Expenditures of acquiring IPR&D investments from external entities (upfront payments and milestone payments)
are recognized as IPR&D assets as they meet these conditions.
Subsequent internal development expenses on IPR&D assets are recognized as R&D expenses.
IPR&D assets are reclassified to sales rights when their products become available for sale, and are amortizedusing the straight-line method over their estimated useful lives. Estimated useful lives are determined by the
projected cash flow period, which is based on the period of legal protection granted by patents.
b) IPR&D investments acquired through business combinations
IPR&D investments acquired through business combinations and recognized separately from goodwill meet theconditions listed in a) above. Therefore, these are measured at fair value at the acquisition date and recognized as
IPR&D assets.
IPR&D assets are reclassified to sales rights when their products become available for sale, and are amortizedusing the straight-line method over the estimated useful lives. Estimated useful lives are determined by the projectedcash flow period, which is based on the period of legal protection granted by patents.

(12) Impairment of property, plant and equipment and intangible assets
At the end of each fiscal year, the Group assesses whether there is any indication that property, plant and equipment
and intangible assets are impaired, and if any such indication exists, an impairment test is performed. Intangible assets

39with indefinite useful lives or not yet available for use are tested for impairment at the same time every year or when
there is an indication that the assets might be impaired.
As an impairment test, a recoverable amount is estimated and compared with a carrying amount. The recoverable
amount is the higher of fair value less expenses for sales or value in use. Value in use is calculated as the present
value of estimated future cash flows. In case that a recoverable amount of the asset is lower than the carrying amount,
an impairment loss is recognized, and the carrying amount is reduced to the recoverable amount.

(13) Goodwill
Goodwill arising from business combinations is recognized as an asset at the date the Group obtains control of theentity (acquisition date). Goodwill is measured as the amount by which the sum of the fair value of the consideration,
non-controlling interests in the acquiree and fair value of the proportionate share that the Group holds at the date theGroup obtains control of the acquiree exceeds the net amount of identifiable assets and liabilities. On the other hand,
if the sum of the acquisition costs is lower than the net amount of identifiable assets and liabilities, the difference isdirectly recognized as profit or loss.
Goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to benefit from thesynergies of the combination. Goodwill is not amortized; however, an impairment test is performed for cash-generating
units or groups of cash-generating units to which goodwill is allocated at the same time every year or when there is anindication that the assets might be impaired. In case that a recoverable amount of cash-generating units or groups ofcash-generating units is lower than the carrying amount, the reduction is recognized as an impairment loss.

(14) Inventories
Inventories are measured at the lower of cost or net realizable value. The costs are determined using the weighted average cost method. The net realizable value is determined as the estimated selling price less the estimated costs
necessary to complete goods and expenses necessary to sell.

(15) Financial assetsa) Classification of financial assets
All financial assets are classified at initial recognition as financial assets measured at amortized cost, financial assets
measured at fair value through other comprehensive income (FVTOCI financial assets) or financial assets measured
at fair value through profit or loss (FVTPL financial assets).
1) Financial assets measured at amortized cost
Debt financial assets that meet the conditions below are classified as financial assets measured at amortized
cost.
(i) The assets are held within a business model whose objective is to hold assets in order to collectcontractual cash flows(ii) The contractual terms of the financial assets give rise on specified dates to cash flows that are solely
related to payments of principal and interest on the principal amount outstanding
The financial assets measured at amortized cost are initially recognized as the sum of the fair value andtransaction costs, and recognized at amortized cost calculated by the effective interest method less impairment
loss after initial recognition.
2) FVTOCI financial assets (Debt financial assets)
Debt financial assets that meet the conditions below are classified as FVTOCI financial assets.

40

(i) The assets are held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets(ii) The contractual terms of the financial assets give rise on specified dates to cash flows that are solely
related to payments of principal and interest on the principal amount outstanding
The financial assets are initially recognized as the sum of fair value and transaction costs. Movements of fairvalue as well as gains/losses on derecognition are recognized in other comprehensive income.
3) FVTOCI financial assets (Equity financial assets)
All equity instruments are classified as FVTOCI financial assets.
The financial assets are initially recognized as the sum of fair value and transaction costs. Movements of fairvalue as well as gains/losses on derecognition are recognized in other comprehensive income, while thecumulative amounts are reclassified to retained earnings after they are recognized as other components of equity.
Dividends on the financial assets are recognized as financial income when a right to receive dividends is vested
except for the case that the dividend obviously indicates the collection of acquisition cost of investment.
4) FVTPL financial assets
Debt financial assets that are not classified as financial assets measured at amortized cost or FVTOCI financial
assets are classified as FVTPL financial assets.
FVTPL financial assets are initially recognized at fair value, and any movements of fair value as well as
gains/losses on derecognition are recognized as financial income/expenses after initial recognition.
b) Impairment of financial assets
The Group estimates expected credit losses on financial assets measured at amortized cost as well as FVTOCI
financial assets (debt financial assets) and recognizes the loss allowance. The loss allowance for these financial
assets is measured at an amount equal to 12-month expected credit losses if the credit risk of a financial asset has
not increased significantly since initial recognition. As for trade receivables that do not contain a significant financing
component, the allowance is measured at an amount equal to lifetime expected credit losses, regardless of whether
the credit risk of a financial asset has not increased significantly since initial recognition.
The allowance is recognized as profit or loss. The reversal of loss allowance is recognized in profit or loss when acertain event occurs to reduce the allowance amount in latter periods. Previously recognized impairment loss isreversed by adjusting an allowance account when a certain event occurs to reduce the allowance amount in later
periods.
c) Derecognition
The Group derecognizes financial assets only when the contractual right to the cash flows from the financial assets
expire or the Group transfers the financial assets and almost all the risks and rewards of ownership of the asset tocounterparty. Gains/losses on derecognition relating to financial assets measured at amortized cost and FVTPL
financial assets are recognized as financial income/expenses. Gains/losses on derecognition relating to FVTOCI
financial assets are recognized as a component of other comprehensive income.

(16) Hedge accounting
The Group reduces the risks related to changes in interest and exchange rates by utilizing derivatives including interest
rate swap contracts and forward foreign exchange contracts and other factors. These derivatives are measured at fairvalue and recognized as assets or liabilities at the contract date.

41

Change in fair value after initial recognition are recognized as profit or loss if the hedged items and hedging instruments
do not meet the conditions of hedge accounting. The accounting treatments that meet the conditions of hedge
accounting are as follows:a) Fair value hedges
Regarding derivatives for the purpose of hedging risks of changes in fair value of hedged items, these changes infair value are immediately recognized in profit or loss. At the same time, the changes in fair value on the hedged
items attributable to the hedged risk adjust the carrying amount of the hedged items, and are recognized in profit orloss.
b) Cash flow hedges
Regarding derivatives for the purpose of hedging risks of changes in fair value of hedged cash flows, the change infair value of derivative assets or liabilities are recognized in other comprehensive income, while cumulative amounts
are recognized as other components of equity until the changes in fair value of hedged items are recognized as
profit or loss. The amounts recognized as other components of equity are reclassified to profit or loss when thechange in fair value of hedged items are recognized as profit or loss, in order to offset the effects.

(17) Provisions
Provisions are recognized when the Group has a legal or constructive obligation arising from a past event that can bemeasured with sufficient reliability as a present obligation, and it is likely that an outflow of resources embodying
economic benefits will be required to settle the obligation.
The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation
at the consolidated fiscal year-end date, considering risks and uncertainties. The carrying amount of a provision ismeasured at estimated cash flows that are discounted to be the present value when the effect of the time value ofmoney is material. When discounting is used, the increase in carrying amount of a provision in each period to reflect
the passage of time is recognized as a financial cost.
a) Provision for sales rebates
To account for possible sales rebates for finished goods and merchandise sold that may be incurred after the
consolidated fiscal year-end date, provision for sales rebates is provided by multiplying the amount of revenue by
the estimated sales rebate ratio. It is expected to be mainly settled within one year from the consolidated fiscal yearend date.
b) Provision for asset retirement obligations
To account for the obligation of restoring the rental buildings and lands on which the Group is located and removing
harmful materials related to property, plant and equipment which the Group is using, a provision for asset retirement
obligations is estimated and recognized depending on individual circumstances that is based on an estimated usage
period determined by past results of restoration and the useful lives of additional fixtures in the rental buildings. It is
expected to be mainly settled over one year from the consolidated fiscal year-end date.
c) Provision for restructuring costs
Provision for restructuring costs is mainly related to restructuring of the business organization and expected to bemainly settled within one year from the consolidated fiscal year-end date. Provision for restructuring costs is
recognized when the Group has a detailed formal plan for restructuring and has raised a valid expectation to thoseaffected that it will carry out the restructuring by starting to implement that plan or announcing its scheme.

42(18) Leasesa) Lessee accounting
Right-of-use assets and lease liabilities are recognized by the Group at the lease commencement date.
Right-of-use assets are measured applying a cost model and the amount shown in the consolidated statement offinancial position equals the cost less accumulated depreciation and accumulated impairment losses. The cost
comprises the amount of the initial measurement of the lease liabilities, plus any initial direct costs incurred, and thepresent value of an estimate of costs to be incurred in removing and restoring the underlying assets, less any lease
incentives received. Depreciation is recognized on a straight-line basis over the period from the leasecommencement date to the end of the estimated useful life of the right-of-use asset or the end of the lease term,
whichever comes first.
Lease liabilities are initially measured at the present value of the lease payments that are not paid at thecommencement date. The lease payments are discounted using the interest rate implicit in the lease. If the ratecannot be readily determined, the Group generally uses the Group’s incremental borrowing rate as the discount rate.
After the initial measurement, lease liabilities are measured by increasing the carrying amount to reflect interest on
the lease liabilities and reducing the carrying amount to reflect the lease payments made. In case that lease
contracts are modified or renewed, the lease liabilities are subsequently reassessed by remeasuring to reflectchanges to the lease conditions. Following the remeasurement of lease liabilities, a revision to the carrying amountof right-of-use assets is recognized.
The Group elects not to recognize right-of-use assets and lease liabilities for those leases with a short term of no
more than 12 months and those with small amount of assets, but recognizes the lease payments related toaforementioned leases as expenses by applying a straight-line method over the lease terms.
b) Lessor accounting
Leases that transfer substantially all the risks and rewards incidental to ownership of underlying assets are classified
as a finance lease. Assets held as a finance lease are recognized and presented as a receivable at an amountequal to the net investment in the lease.
Leases that do not transfer substantially all the risks and rewards incidental to ownership of underlying assets areclassified as an operating lease. Lease payments from operating leases are recognized as income by applying astraight-line method over the lease terms.

43

(Significant Accounting Estimates and Judgments)
Preparation of the consolidated financial statements of the Group requires management estimates and judgments.

(1) Significant accounting estimates and assumptions
Significant items that require management estimates and assumptions are as follows. Underlying assumptions for
estimation are continuously reviewed. Effects of changes in estimates are recognized in that period and future periods.
Furthermore, significant revisions to carrying amounts of assets and liabilities may be required in the future as a resultof uncertainties related to these estimates and assumptions.
a) Impairment test of goodwill and intangible assets
Impairment test of goodwill and intangible assets is performed based on the method of estimating future cash flows
expected to arise from cash-generating units or groups of cash-generating units, growth rates and discount rates
for measuring present value.
b) Estimates of useful lives of property, plant and equipment and intangible assets
Useful lives of property, plant and equipment and intangible assets are reviewed at the consolidated fiscal year-end
date.
c) Evaluation of fair value of financial instruments
Evaluation methods including input that are not based on observable market data are used in order to estimate thefair value of specific financial assets.
d) Post-employment benefits
Defined benefit obligations are affected by assumptions used for actuarial calculation. Discount rate, future payroll
level, turnover and mortality rates and other factors used for assumptions are determined based on the latest market
data and statistics.
e) Income taxes
Current income taxes are recognized as the amount expected to be paid to each tax authority by reasonableestimates in accordance with tax laws and regulations.
Deferred tax liabilities are recognized based on the estimates of revised current income taxes as a result of the tax
audit. The Group offsets deferred tax assets and deferred tax liabilities levied on the same taxable entity. If theactual amount settled by the tax audit is different from the estimated amount, the difference is recognized in the
period in which the actual amount is settled.
Furthermore, deferred tax assets are recognized only when it is probable that taxable profit will be available against
which the deductible temporary differences and tax loss carryforwards can be utilized. Based on its business planand other factors, the Group makes reasonable estimates of the period and the amount of taxable profit will beavailable in future period, and evaluates the potential taxable profit.

(2) Significant accounting judgments
Significant judgements of recognizing the date and the amount of revenue generated from the contracts with customers
is described in the above “(Significant Accounting Policies) (4) Revenue and (5) Co-development and co-promotion”.

44

(Segment Information)(1) General information
Reporting segments are units for which the Group can obtain independent financial information and for which top
management undertakes periodic reviews in order to determine the allocation of management resources and evaluate
performance.
The Group’s business is comprised of pharmaceutical business and other business. The pharmaceutical business isorganized into the following six reporting segments in this report: Japan, Americas (North America), China, EMEA (Europe,
the Middle East, Africa, Russia and Oceania), Asia and Latin America (primarily South Korea, Taiwan, India, ASEAN,
Central and South America), and OTC and others (Japan).
Hong Kong has been changed from the “Asia and Latin America pharmaceutical business” to the “China pharmaceuticalbusiness” since April 1, 2022. This change has been reflected on “Revenue” and “Segment profit (loss)” for the fiscal year
ended March 31, 2022 provided in Segment Information.
As the co-development and co-promotion agreements on Alzheimer’s disease treatment ADUHELM with Biogen wereamended in March 2022, expenses related to ADUHELM (selling, general and administrative expenses) which theCompany should share based on the agreements have been included in the “Group headquarters’ management costs
and other expenses” since April 1, 2022. In addition, in order to more accurately reflect the condition of the business,gains and losses on sale of non-current assets have been included in the “Group headquarters’ management costs andother expenses” and upfront payments and other factors received as consideration for the grant of license have been
included in “Other business”. For the fiscal year ended March 31, 2022, the above changes have been reflected in
Segment Information.

(2) Reporting segments(Millions of yen)
Fiscal year ended March 31, 2023
Segment

Revenue

profit (loss)

Fiscal year ended March 31, 2022
Segment

Revenue

profit (loss)

Pharmaceutical businessJapan

215,422

67,775

214,046

60,980Americas212,742

133,420

167,592

91,216

China

110,768

55,623103,825

52,433

EMEA

72,15941,55359,33930,137

Asia and Latin America

49,83922,11948,637

20,402

OTC and others

23,505

5,106

23,8294,702

684,434

325,595

617,268

259,870

59,96948,484

138,958

130,662

744,402374,079

756,226

390,532－(172,999)－(171,738)－(161,040)－(165,045)－

40,040－53,750

Reporting segment total
Other business (Note 1)
Total
R&D expenses (Note 2)Group headquarters’ management
costs and other expenses (Note 3)
Operating profit in the consolidated
statement of income

45

(Note 1) “Other business” mainly includes the license revenue and pharmaceutical ingredient business of the parent
company and other factors. For the fiscal year ended March 31, 2023, milestone payment of ¥16,691 million
from Merck & Co., Inc., Rahway, NJ, USA under the strategic collaboration for anticancer agent Lenvima is
included in “Revenue” and “Segment profit (loss)”. For the fiscal year ended March 31, 2022, an upfront paymentof ¥49,649 million from Bristol Myers Squibb under the strategic collaboration for antibody drug conjugate
MORAb-202 and milestone payments of ¥69,171 million from Merck & Co., Inc., Rahway, NJ, USA under the
strategic collaboration for anticancer agent Lenvima were included in “Revenue” and “Segment profit (loss)”.
(Note 2) “R&D expenses” are not allocated to any particular segment as the Group manages such expenses on a global
basis.
(Note 3) “Group headquarters’ management costs and other expenses” are the costs and expenses covering Group-wide
operations which include the amount of other income and expenses, and the amount of profits and expenses
shared under strategic collaborations with partners. For the fiscal year ended March 31, 2023, shared profit of¥121,279 million (¥90,705 million for the fiscal year ended March 31, 2022) for anticancer agent Lenvima paidby the Group to Merck & Co., Inc., Rahway, NJ, USA was included in Group headquarters’ management costs
and other expenses.
(3) Information on major products
Revenue from external customers(Millions of yen)
Neurology

Oncology

products

products

Others

Total

Fiscal year ended March 31, 2023

144,502

299,074

300,827

744,402

Fiscal year ended March 31, 2022

135,613238,540

382,073756,226(4) Information on major customers
Major customers (including group companies) in the consolidated statement of income are as follows:
Fiscal year ended March 31, 2023
(Millions of yen)
Name of customer

Revenue

Related segment

Medipal Holdings Corporation

56,025

Japan pharmaceutical business, etc.

McKesson Corporation

52,968Americas pharmaceutical business, etc.

Alfresa Holdings Corporation

51,046

Japan pharmaceutical business, etc.

Fiscal year ended March 31, 2022
(Millions of yen)
Name of customer

Revenue

Related segment

Merck & Co., Inc., Rahway, NJ, USA

69,171Other business

Medipal Holdings Corporation

56,113

Japan pharmaceutical business, etc.

Alfresa Holdings Corporation

53,919Japan pharmaceutical business, etc.

46

(5) Information on major regions
Revenue from external customers (Note 1)(Millions of yen)
AmericasJapan
Fiscal year ended
March 31, 2023
Fiscal year ended
March 31, 2022

(Note 2)
(Note 3)

Europe(Note 4)China

OthersTotal

250,327

239,293

86,026

108,562

60,195

744,402

243,385

226,719

126,745

106,592

52,784756,226(Note 1) Revenue from external customers are categorized by country or region based on the location of the customer.
Major areas and countries included in this category other than Japan and China are as follows:a) Americas: North America, Central and South Americab) Europe:
United Kingdom, France, Germany, Spainc) Others:Asia, Middle East, Oceania(Note 2) Revenue for the fiscal year ended March 31, 2023, in the U.S., which is included in Americas, was ¥231,356
million (¥172,496 million for the fiscal year ended March 31, 2022).
(Note 3) For the fiscal year ended March 31, 2022, revenue included an upfront payment of ¥49,649 million from Bristol
Myers Squibb under the strategic collaboration for antibody drug conjugate MORAb-202.
(Note 4) For the fiscal year ended March 31, 2023, revenue included milestone payments of ¥16,691 million from Merck& Co., Inc., Rahway, NJ, USA under the strategic collaboration for anticancer agent Lenvima (¥69,171 million for
the fiscal year ended March 31, 2022).
Non-current assets (Note 1)(Millions of yen)Japan

Americas(Note 2)EuropeChina

OthersTotal

As of March 31, 2023

172,418

254,734

16,83916,043

7,187

467,220

As of March 31, 2022

179,114240,843

16,29017,381

7,014

460,643(Note 1) Non-current assets are categorized by country or region based on the location of assets.
Major areas and countries included in this category other than Japan and China are as follows:a) Americas: North America, Central and South Americab) Europe:c) Others:

United Kingdom, France, Germany, Spain
Asia, Middle East, Oceania

Non-current assets are mainly composed of property, plant and equipment, goodwill and intangible assets,
excluding financial assets, deferred tax assets and retirement benefit assets.
(Note 2) The carrying amount of non-current assets as of March 31, 2023, in the U.S., which is included in Americas, was¥254,587 million (¥240,677 million as of March 31, 2022).

47

(Consolidated Statement of Income)(1) Revenue
The Group disaggregates revenue by type of goods or services. Disaggregation of revenue by reporting segment is asfollows.

Fiscal year ended March 31, 2023
(Millions of yen)
Revenue frompharmaceutical

License revenue

Other revenue

Total

goods sales
Pharmaceutical businessJapan

209,276

2,819

3,327

215,422

Americas212,232509－

212,742

China

110,74820－

110,768

EMEA

72,159－－72,159Asia and Latin America

49,454384－

49,839OTC and others

23,505－－23,505

Reporting segment total

677,374

3,732

3,327

684,434

Other business (Note 1)－

49,525

10,44359,969677,374

53,258

13,771

744,402677,374

52,258

13,771

743,402

－

1,000

－

1,000

Total
Revenue recognized fromcontracts with customers
Revenue recognized fromother sources (Note 2)(Note 1) “Other business” mainly includes the license revenue and pharmaceutical ingredient business of the parent
company. For the fiscal year ended March 31, 2023, license revenue included milestone payments of ¥16,691
million from Merck & Co., Inc., Rahway, NJ, USA under the strategic collaboration for anticancer agent
Lenvima.
(Note 2) Revenues recognized from other sources are not from contracts with customers, but from partner companies
that share the risks and benefits of co-promotion activities.

48

Fiscal year ended March 31, 2022
(Millions of yen)
Revenue frompharmaceutical

License revenue

Other revenue

Total

goods sales
Pharmaceutical businessJapan

202,554

2,972

8,520

214,046

Americas167,198

260

134

167,592

China

103,825－－

103,825

EMEA

59,339－－59,339Asia and Latin America

48,286351－

48,637

OTC and others

23,829－－23,829

Reporting segment total

605,032

3,582

8,654

617,268

Other business (Note 1)－

130,0888,870

138,958

605,032

133,670

17,524756,226

Total(Note 1) “Other business” mainly includes the license revenue and pharmaceutical ingredient business of the parent
company. For the fiscal year ended March 31, 2022, an upfront payment of ¥49,649 million from Bristol Myers
Squibb under the strategic collaboration for antibody drug conjugate MORAb-202 and milestone payments of¥69,171 million from Merck & Co., Inc., Rahway, NJ, USA under the strategic collaboration for anticancer agent
Lenvima were included in “License revenue”.
(Note 2) All revenue for the fiscal year ended March 31, 2022 was recognized from contracts with customers.

(2) Cost of sales
For the fiscal year ended March 31, 2022, estimated future cash flows related to Alzheimer’s disease treatment
ADUHELM decreased due to changes in business environment and other factors. As the recoverable amount of theassociated sales rights is lower than the carrying amount, the Group recorded total carrying amount of ¥7,989 million
related to sales rights as impairment losses in cost of sales. The impairment losses were not allocated to any particularsegment but were included in Group headquarters’ management costs and other expenses.

(3) Employee benefits
For the fiscal year ended March 31, 2023, the Group recognized termination benefits of ¥1,367 million due to office
and research laboratory closure of H3 Biomedicine Inc. (hereinafter “H3”), a U.S. consolidated subsidiary of theCompany. The details are described in “(5) Research and development expenses”.
For the fiscal year ended March 31, 2022, the Company’s consolidated subsidiary EA Pharma Co., Ltd. (Tokyo)
decided to implement a special second career program (voluntary retirement program) so as to make further
contributions to patients through strengthening its solid corporate foundation. Accordingly, termination benefits(premium retirement payments) of ¥2,894 million were recorded. Breakdown of the termination benefits by item wascost of sales of ¥240 million, selling, general and administrative expenses of ¥2,461 million and R&D expenses of¥192 million.

49

(4) Selling, general and administrative expenses
For the fiscal year ended March 31, 2023, the Group recognized shared profit of ¥121,279 million (¥90,705 million for
the fiscal year ended March 31, 2022) for anticancer agent Lenvima paid by the Group to Merck & Co., Inc., Rahway,
NJ, USA as selling, general and administrative expenses.

(5) R&D expenses
For the fiscal year ended March 31, 2023, H3 was integrated into Eisai Inc. (the U.S.). H3's research functions andassets such as drug discovery platform and investigational products were transferred to the Group, and H3's office andresearch laboratory were closed. Following this closure of office and research laboratory, the Group recognizedtermination benefits of ¥1,367 million as research and development expenses. For the fiscal year ended March 31,
2023, the Company’s consolidated subsidiary EA Pharma Co., Ltd. discontinued development of some medical devices.
As a result, the Group made the recoverable amount of those discontinued devices zero, and recorded its impairment
losses of ¥1,410 million related to IPR&D assets as R&D expenses.
For the fiscal year ended March 31, 2022, the Company’s consolidated subsidiary EA Pharma Co., Ltd. revaluated its
R&D pipeline so as to make further contributions to patients through strengthening its solid corporate foundation. Since
the development of some new drug candidates has been discontinued as a consequence of the above, the Groupmade the recoverable amount of those discontinued new drug candidates zero, and recorded its impairment losses of¥2,026 million related to IPR&D assets as R&D expenses. In addition, the Group recorded ¥5,262 million in R&D
expenses due to the return of subsidies received in the previous fiscal year regarding some developing products that
had been discontinued due to revaluation of its R&D pipeline.

(6) Details regarding expenses
Information on the nature of cost of sales, selling, general and administrative expenses (SG&A expenses), and R&D
expenses is as follows:

Fiscal year ended March 31, 2023
(Millions of yen)
Cost of sales

SG&A expenses

R&D expenses

16,830

10,153

12,99839,981

Impairment losses (Note 1)

75

1

1,943

2,019

Reversal of impairment losses (Note 2)

(14)

－

－

(14)

15,857

95,70561,051

172,612

Post-employment benefits

739

3,893

2,268

6,899

Termination benefits (Note 3)

－

574

1,367

1,940

Depreciation and amortization

Short-term employee benefits

Total(Note 1) The impairment losses recognized in “Japan pharmaceutical business” and “EMEA pharmaceutical business”
are ¥62 million and ¥13 million respectively. Impairment losses recognized as R&D expenses were not allocatedto any particular segment. The impairment losses are described in “(Consolidated Statement of Income) (5) R&D
expenses”.
(Note 2) The reversal of impairment losses recognized in “China pharmaceutical business” was ¥14 million.
(Note 3) The termination benefits are described in “(Consolidated Statement of Income) (3) Employee benefits”.

50

Fiscal year ended March 31, 2022
(Millions of yen)
Cost of sales

SG&A expenses

R&D expenses

Total

Depreciation and amortization

17,326

9,583

11,49038,398

Impairment losses (Note 1)

9,228

175

2,026

11,429

Short-term employee benefits

15,24093,12051,968160,328

Post-employment benefits

690

3,572

1,937

6,199

Termination benefits (Note 2)

240

4,534

192

4,967

(Note 1) The impairment losses recognized in “China pharmaceutical business” and “Other business” are ¥1,329 millionand ¥85 million, respectively. Impairment losses of ¥7,989 million related to sales rights of Alzheimer’s disease
treatment ADUHELM and impairment losses of ¥2,026 million recognized as R&D expenses were not allocatedto any particular segment.
(Note 2) The termination benefits are described in “(Consolidated Statement of Income) (3) Employee benefits”.

(7) Other income
For the fiscal year ended March 31, 2023, the Group recognized gain on sale of subsidiaries of ¥3,803 million for thetransfer of all shares of the Company’s consolidated subsidiary Eisai Distribution Co., Ltd. (Kanagawa, Japan). Thistransfer of subsidiary is described in (Sale of Subsidiaries).
For the fiscal year ended March 31, 2022, the Group recognized gains on sale of non-current assets of ¥13,398 million
as other income. The gains on sale of non-current assets consisted mainly of the gains arising from the divestiture of
its rights for the antiepileptic agent Zonegran in Europe and other regions.

(8) Other expenses
For the fiscal year ended March 31, 2023, the Group recorded exchange loss of ¥2,199 million (¥2,083 million for the
fiscal year ended March 31, 2022).

(9) Income taxes
For the fiscal year ended March 31, 2023, as part of the Group’s capital policy to optimize the global allocation of cashin the Group, the Company received a repayment of paid-in capital of ¥63,622 million from its consolidated U.S.
subsidiary, Eisai Corporation of North America. As a result, the Company recognized losses on transferring ofinvestments in subsidiaries for tax purposes and income taxes decreased by ¥21,588 million.

51

(Earnings Per Share)(1) Earnings per share attributable to owners of the parent (basic)
The basis for calculating earnings per share attributable to owners of the parent (basic) for the fiscal years ended March
31, 2023 and March 31, 2022, respectively, is as follows.
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

Profit for the year attributable to owners of the parent (Millions of yen)

55,432

47,954Weighted average number of common shares during the year
(Thousands of shares) (Note 1)

286,757

286,685

Earnings per share attributable to owners of the parent (basic) (Yen)

193.31167.27(Note 1) Treasury shares that are excluded from the calculation of earnings per share include ones held as a trust.

(2) Earnings per share attributable to owners of the parent (diluted)
The basis for calculating earnings per share attributable to owners of the parent (diluted) for the fiscal years ended
March 31, 2023 and March 31, 2022, respectively, is as follows.

Profit for the year attributable to owners of the parent (Millions of yen)

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

55,432

47,954－－

Adjustment of profit for the year attributable to owners of the parent(Millions of yen)
Profit for the year used for calculating diluted earnings per share(Millions of yen)
Weighted average number of common shares during the year
(Thousands of shares) (Note 1)
Increase in number of common shares under stock options(Thousands of shares) (Note 2)
Weighted average number of diluted common shares during the year
(Thousands of shares)

55,432

47,954

286,757

286,6854

43286,761

286,729

Earnings per share attributable to owners of the parent (diluted) (Yen)

193.31167.25(Note 1) Treasury shares that are excluded from the calculation of earnings per share include ones held as a trust.
(Note 2) There are no common shares reserved under the stock option plan that are excluded from the calculation of
earnings per share attributable to owners of the parent (diluted) due to antidilutive effects for the fiscal years
ended March 31, 2023 and March 31, 2022.

52

(Consolidated Statement of Cash Flows)(1) The breakdown of the (increase) decrease in working capital for the fiscal years ended March 31, 2023 and March 31,
2022, respectively, is as follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

(Increase) decrease in trade receivables

37,386(40,140)(Increase) decrease in inventories(36,885)(6,337)(Increase) decrease in other receivables(8,842)

504

Increase (decrease) in trade payables

4,571

1,033

Increase (decrease) in deposits received(1,911)

21,516

Increase (decrease) in other payables(55,834)

57,558(Increase) decrease in working capital(61,514)

34,135(2) Proceeds from sale of property, plant and equipment and intangible assets
For the fiscal year ended March 31, 2022, proceeds from sale of property, plant and equipment and intangible assetsof ¥13,445 million consisted mainly of proceeds from the divestiture of the Group’s rights for the antiepileptic agent
Zonegran in Europe and other regions.

(3) Net cash outflow on acquisition of subsidiaries
For the fiscal year ended March 31, 2022, the Company acquired shares of Arteryex Inc. (Tokyo) and spent ¥1,217
million as net cash outflow on acquisition of subsidiaries.

(4) Proceeds from sale of subsidiaries
It is described in “(Sale of Subsidiaries) (2) Proceeds from sale of subsidiaries”.

53

(Sale of Subsidiaries)
In accordance with the share transfer agreement signed with Yasuda Logistics Corporation (Tokyo) in December 2022,
the Company transferred all of the shares (100% of the number of shares issued) of Eisai Distribution Co., Ltd. in March
2023. As a result, the Company has lost control of Eisai Distribution Co., Ltd.

(1) Consideration received, assets and liabilities with the loss of control(Millions of yen)
As of the date of the share transfer ofinvestments in subsidiaries(March 31, 2023)
Consideration received

5,500

Assets and Liabilities with the loss of control
2,823

Property, plant and equipment
Cash and cash equivalents

416

Other non-current assets

465

Other current assets

618

Non-current liabilities and current liabilities(2,626)

Gain on sales of subsidiaries

3,803(2) Proceeds from sale of subsidiaries(Millions of yen)
As of the date of the share transfer ofinvestments in subsidiaries(March 31, 2023)
Consideration received in cash

5,500

Cash and cash equivalents owned by the subsidiary sold

465

Proceeds from sale of subsidiaries

5,035(Significant Subsequent Events)
Not applicable54

5. Other
1) Forecasts and Risk Factors
The materials and information provided in this announcement include current forecasts, targets,
evaluations, estimates, assumptions that are accompanied by risks, and other matters that are
based on uncertain factors. Accordingly, it is possible that actual results will deviate significantly
from forecasts, etc., due to changes to a variety of factors. These risks and uncertainties
include general industry and market conditions, fluctuation of interest rates and currency
exchange rates, and other aspects of economic conditions in Japan and internationally.
Risks and uncertainties that could cause significant fluctuations in the results of the Group or
have a material effect on investment decisions are as follows. However, these do not cover allof the risks and uncertainties faced by the Group, and it is possible that they will be affected in
the future by other factors that cannot be foreseen, or are not deemed to be important, at thispoint in time. These are judgments as of the time of the announcement, and statements in the
text regarding the future are not guarantees that they will occur or be achieved.
(1) Corporate Concept
Management

The Company has redefined the key players in our corporate concept of human health care (hhc)

based on theas “people in the daily living and medical domains” and expanded the key players we should

Corporate

contribute to from “patients and their families” to “patients and the people in the daily living domain.”

Concept

In June 2022, the Articles of Incorporation were partially amended to stipulate that the Company’s
corporate concept is to give first thought to patients and the people in the daily living domain, andto increase the benefits that health care provides to them. These aims are shared with stakeholders
and considered as our “Purpose.” We also believe that the increased benefit to patients and thepeople in the daily living domain resulting from achievement of these aims will lead to improved
performance of the Group and increased corporate value in the long term. The strategic intent of
the medium-term business plan “EWAY Future & Beyond,” which started in April 2021, and theestablishment of a business model that promotes collaboration with other industries in the hhceco(hhc concept + ecosystem) Declaration issued in May 2022, are also based on the hhc corporate
concept. As a company that seeks to effectively achieve social good in the form of relieving anxiety
over health and reducing health disparities, our strong motivation based on our understanding of
the true needs of patients becomes the source of the Group’s innovation. In addition, we view theimportance of promoting the information management/provision, etc., needed to promote further
the research and development of new drugs, produce and sell high-quality products, and achievesafe use of pharmaceuticals, on a foundation of controls, aimed at creating patient value, as“Integrity.” This concept is also the building block of our ESG efforts, such as activities for improving
access to medicines including free provision of a lymphatic filariasis treatment, and building of acommunity that coexists with dementia.
Accordingly, insufficient permeation of the corporate concept throughout the Group, stagnation of
the implementation of management aimed at implementing the concept, and other factors thathinder the full increase of benefit to patients and the people in the daily living domain may havesignificant impact not only on the Group’s business performance, but also on the improvement ofcorporate value, including non-financial value.

55

(2) Business Strategy
Maximizing the

The Group has determined that maximizing the value of next-generation Alzheimer’s disease (AD)value oftreatments including the anti-amyloid-β protofibril antibody lecanemab is one of the most importantlecanemab andstrategies in the medium-term business plan “EWAY Future & Beyond.” In the process of executing

next-generationthat strategy, the Group aims to develop a simple patient journey through disease awareness andAlzheimer’s

dissemination, establishment of diagnostic methods using cognitive function tests, amyloid-β tests

disease (AD)(positron emission tomography (PET), cerebrospinal fluid (CSF), blood biomarkers, etc.) as well as

treatmentsa follow-up system to ensure safety, in accordance with the journey that patients follow from therecognition of the disease to diagnosis, treatment, and subsequent life. If these cannot becompleted, next-generation AD treatments might not sufficiently reach patients and it may not be
possible to earn the revenue anticipated in the future.
In the United States, the Group also aims to promote access for a wider range of parties, reduce
financial burdens, and contribute to the sustainability of the healthcare system by setting prices
with transparent explanations based on the concept of social value. However, if patients’ access tolecanemab is limited by various factors, we may not be able to earn revenue anticipated in the
future. For example, in April 2022, the U.S. Centers for Medicare & Medicaid Services made thedecision to limit insurance coverage of anti-amyloid-β antibodies in the United States to participantsin limited clinical trials. Similarly, if the National Coverage Determination requirements cannot be
met for lecanemab with the results of the Clarity AD study (Phase III study), insurance coverage
may be similarly limited and access for patients may be restricted.

Maximizing the

The Group and Merck & Co., Inc., Rahway, NJ, USA are conducting multiple clinical trials for thevalue ofcombined treatment of the anticancer agent Lenvima and the anti-PD-1 antibody pembrolizumab

Lenvimafor multiple cancer types. However, it is possible that we will not be able to achieve the sales planfor Lenvima due to changes in positioning resulting from unanticipated trial results for competingproducts or approval timing, preventing the acquisition of approval of additional indications forLenvima at the originally expected timing, and weakening the competitiveness of the product. Sales
milestones have been established for the revenue obtained through the partnership model for
Lenvima, and if these are not achieved due to a failure to achieve sales targets, it may not be
possible to earn the revenue anticipated in the future.

56

Partnership

The Group considers partnerships to be an effective means of improving business efficiency andmodel

productivity. Partnerships are established with the aim of accelerating new drug development
through utilization of the latest science and technology, or for efficient resource usage, maximizing
business value, and co-developing new solutions with collaborative partners in each region.
If differences of opinion arise with partners or changes in the business environment make it difficultfor partners to continue their business or to collaborate in pharmaceutical research anddevelopment, production, and sales activities that utilize partnerships to deliver pharmaceuticals
as well as new solutions for people in the daily living and medical domains, the aforementioned
activities may be delayed or become inefficient. It is also possible that unanticipated partnership
expenses will be generated due to the impact of foreign exchange fluctuations or other factors,
thereby reducing the planned and anticipated profits, or otherwise hindering maximization ofbusiness value. In addition, in the event of differences in interpretation of contracts, it is possiblethat such differences will develop into litigation or mediation between the Group and partners,
ultimately leading to dissolution of the partnership. In such cases, business performance may besignificantly affected, including the prevention of the creation of new drugs or achievement ofrevenue in the future as expected.

DigitalThe Group has incorporated the major theme of implementing a digital transformation in alltransformation

activities in the medium-term business plan “EWAY Future & Beyond,” with the aim of linking thethoughts and feelings of all stakeholders, accelerating problem solving, and executing solidmanagement efficiently based on data. One of our key challenges will be to cause a paradigm
shift in all aspects, from dramatically improving the speed of drug discovery and the probability ofsuccess through new technologies to providing people in the daily living and medical domains
with drugs and other solutions, and achieve a digital transformation by building collaborative
ecosystems (hhceco) that pool our special capabilities with those of other industries. The
Company will accelerate the Group-wide digital strategy, with Chief Ecosystem Officer taking thelead.
The changes in the business environment caused by the COVID-19 pandemic has made the needfor digital transformation clear. Any delays in efforts to achieve digital transformation or factorsthat hinder its achievement may have significant impact not only on the Group’s businessperformance, but also on the improvement of corporate value, including non-financial value.

57

(3) Pharmaceutical Research and Development, Production, and Sales Activities
New drug

The Group is developing a host of new drugs, including those in the neurology and oncology fields.

development

Drug development requires long periods of time and large investments of capital. Further, it ispossible that development of a drug candidate compound will be discontinued or interrupted fromthe perspective of efficacy or safety. For example, in 2022, a Phase III study verifying the efficacy
and safety of the combination treatment of Lenvima and pembrolizumab (co-developed by theGroup and Merck & Co., Inc., Rahway, NJ, USA) for the treatment of unresectable hepatocellular
carcinoma did not meet the pre-specified efficacy criteria for statistical significance.
Moreover, even if clinical trials yield expected results, it is possible that the new drug approval may
not be granted due to stringent regulatory processes of a country, or it may be delayed by requests
for additional data. Or, even if approval is granted, it could still be revoked later if safety and efficacy
cannot be verified in additional clinical trials requested as conditions for approval.
With the uncertainty inherent to this type of new drug development, it may not be possible to obtain
the anticipated future profit if the originally envisioned development plan is discontinued or delayed.

Side effects

Even when pharmaceuticals have been approved and sold, subsequent data and events may cause
the benefit and risk profiles of the pharmaceuticals to differ from those at the time when they wereapproved. Changes to product package inserts, suspension of sales, recall of products, or
implementation of other measures in response to the discovery and collection of serious side
effects, may significantly impact business performance.
The Company has established a Safety Executive Committee consisting of the safetyadministrators, etc., of all regions, and a Global Safety Board consisting of the persons responsible
for medical evaluation of safety for each product, etc., as a structure for scientific and medical
evaluation of information on all adverse events and safety related to products, and to report on suchto the regulatory authorities. The Group has established a global product safety monitoring structurewith these structures at the center, and are working to thoroughly ensure proper use of products.

58

Product quality

It is necessary to provide patients with high-quality pharmaceutical products in a stable manner.

and stable

However, if problems arise with product quality due to the raw materials used in products, thesupplymanufacturing process at the Group’s plants or a manufacturing subcontractor or other factors, orif plant operations cease or supply chain issues arise due to disturbances such as suspended supplyof those raw materials, technical problems in the manufacturing process, a pandemic, conflict
between countries and other geopolitical issues, serious disasters, or economic security problems,
not only it is possible that the health of patients may be adversely affected, but product recalls,
suspension of sales, or other events may also impact business performance. In addition, it ispossible that sudden, sharp fluctuations in demand due to some cause could impact the stablesupply of products. Compliance with the economic security legislation that the Japanese
government is currently pursuing could also impose legal obligations requiring reinforcements tothe stable supply systems of the Group’s products.
The Group is working to build a stable supply system and a quality assurance system that make itpossible to provide high-quality pharmaceuticals that can be used without concern, andimplementing manufacturing control and quality control that comply with the GMP global standards(related to manufacturing control and quality control). The Group also conducts activities with its
contract manufacturers, including confirmation of stable supply and quality assurance systems at
contract manufacturers, periodic GMP audits, and dispatch of technicians to check manufacturing
sites. In addition, the Group conducts sustainability assessments of its raw material suppliers andasks them to comply with the “Eisai’s Global Code of Conduct for Business Partners,” thereby
requiring the same respect for human rights and anti-corruption initiatives as our Group. The Groupis also working to ensure quality at the distribution stage. In addition, the Group has its own plants
in major regions around the world and supplies products from each plant in a stable manner.
Moreover, the Group is striving to maintain a structure that ensures stable supply even in the caseof a pandemic, serious disaster, conflict, or sudden, sharp fluctuation in demand by ensuring
adequate inventories of critical raw materials and finished products as stipulated in the business
continuity plan (BCP), as well as establishing a multiple-sourcing system for raw materials and amultiple-factory manufacturing system for products in consideration of geopolitical risks.

59

Intellectual

Ordinarily, it is possible for generic manufacturers to launch generics upon the expiration of theproperty

patent and data protection period of the originator drug. However, if an acquired patent cannot beproperly protected due to dismissal of a patent application or as a result of an invalidation trial after
the patent has been issued, generics and biosimilar products may enter the market earlier than
expected, which could potentially lead to a decrease in revenue. For example, an invalidation trial
is currently being requested regarding Lenvima patents in China.
In addition, there are some countries such as the United States in which drug applications forgenerics and biosimilar products can be submitted even during the patent period. In such countries,
it is possible that there will be patent infringement lawsuits against companies that submit drug
applications for generics or biosimilar products. Depending on the results of such patent
infringement lawsuits, it is possible that generics or biosimilar products will be placed on the market
prior to the end of the patent period, thereby significantly and rapidly shrinking the Group’s share of
the market in that country. In addition, if a substance patent that protects the Group’s
pharmaceuticals is judged to be invalid, the product’s market value in that country may be lost,
resulting in a significant impact on the Group’s business performance.
Meanwhile, although the Group always uses caution to avoid infringing upon the intellectual
property rights of third parties, in the unlikely event that the Group’s business activities do violate
the intellectual property rights of a third party, it is possible that the third party will request terminationof those business activities or demand compensation for damage.

Litigations

In the ordinary course of the Group’s business activities, the Group is and may be, from time totime, involved in litigations, arbitrations or other legal, regulatory, or administrative proceedings inconnection with various matters, including product liability and other product-related matters (e.g.,
personal injury), consumer protection, regulation of trade, securities law, data protection, breach ofcontract, violation of laws and regulations and environmental regulation that arise through claims,
investigations, or other actions by third parties, including governments. Litigation and other legal
proceedings are inherently unpredictable. Although the Group believes that its defenses andcounterclaims in matters in which it is or may become a defendant are substantial, it could in the
future be the subject of judgments or enter into settlements, and such developments could have amaterial adverse effect on the Group’s business, financial condition, results of operations orreputation.
For example, with regard to the proton pump inhibitor Pariet/Aciphex, a product liability lawsuit ispending in the United States, along with other manufacturers of other types of proton pumpinhibitors.
In addition, a lawsuit alleging health hazards is pending in the United States for BELVIQ(unapproved and not yet marketed in Japan), an antiobesity agent.
It is not currently possible to estimate the potential liability in connection with claims concerning
Aciphex and BELVIQ.

60

Data reliability

One of the most critical concerns for a pharmaceutical company is ensuring the integrity(completeness, consistency, and accuracy) of its research data, production data, and data related
to post-marketing surveillance and drug safety monitoring, etc., which establishes a basis for thesafety and reliability of the company’s products. If the Company cannot guarantee the integrity of
those key data sets, it could find itself grappling with delays and suspensions in new drug
development, product recalls, suspensions of product sales, and other circumstances with thepotential to devastate business performance.
The Group has created a Data Integrity Promotion Committee and a Data Integrity Planning and
Coordination organization, and is setting up a systematic framework for the recording, verification,
approval, and storage of data. By also establishing, maintaining, and operating appropriate internal
controls, the Group is bolstering the integrity of its data that supports product quality, data on clinical
trials, and data related to post-marketing surveillance and other drug safety monitoring, in addition
to conducting ongoing training programs for employees who work with important data. In addition,
to ensure data integrity, the level of cyber security at potential new contractors is verified prior to
the start of transactions.

Trends toGovernments around the world are exploring and implementing a variety of measures to containcontain medical

drug costs in hopes of controlling rising medical expenses. In Japan, the government has taken

costs

steps to reduce prices of prescription drugs and promote the use of generic drugs. In China as well,significant price reductions accompanying placement on the National Reimbursement Drug List andthe use of inexpensive generics in the centralized procurement system are being encouraged. For
example, we lowered the sales price of Lenvima when it was placed on the National Reimbursement
Drug List. In addition, the peripheral neuropathy treatment Methycobal became subject to thegovernment’s centralized procurement, so we lowered the sales price. In Europe, a product thathas already obtained a new drug approval may not be eligible for health insurance reimbursement
at the expected price in some cases. The promotion of these types of policies and implementationof new measures may prevent the Group from earning the revenue that it originally anticipated.
While the Group continues to track changes in governmental systems and policy trends worldwide,
it is advancing efforts to conduct appropriate evaluation of innovation based on an assessment of
the societal value of drugs, such as alleviating nursing-care needs and addressing the severity oftarget diseases, in addition to ensuring their efficacy and safety.

61

(4) Other Risks
Succession

For over 30 years, the Group’s current Representative Corporate Officer and CEO has used his strong
leadership skills to help the Group develop its business activities and grow on a global scale.
In addition to the Representative Corporate Officer and CEO formulating a succession plan andgrooming a future successor, it will also be important to prepare as thoroughly as possible for any
disruptions that may occur and ensure that the Board of Directors selects the future Representative
Corporate Officer and CEO from an objective, fair perspective. Failure to do so may have a significant
impact on the management of the Group and the realization of the Group’s corporate concept.
For this reason, the Board of Directors has positioned the selection of the Representative Corporate
Officer and CEO as one of the most important decision-making matters of the Board of Directors, andhas established rules and procedures for the succession plan, and believes that the objectivity andfairness of the CEO selection process can be reasonably ensured through the involvement of
independent outside directors in the process, including the development of the future CEO. The hhc
Governance Committee shares information twice a year with all directors on the succession plan
proposed by the Representative Corporate Officer and CEO, and confirms the preparedness forunexpected situations.
If the Company is unable to appoint the most suitable talent as corporate officers and to key global
positions, it may have a significant impact on the management of the Group.
In addition to pursuing the initiatives for succession of the CEO, the Group also engages in succession
planning once a year to facilitate the transfer of leadership for corporate officer posts and otherimportant positions around the world by selecting candidates for positions, helping those potential
future leaders develop their skills, monitoring the progress of retention measures, and carrying out
other relevant tasks.

Acquiring and

The strength of the Company lies in its corporate concept being deeply instilled. With understanding

developing

and empathy for the corporate concept (hhc concept) as the core, the Company aims for all its

human

employees to succeed as autonomous professionals who take initiative in their work. The Company’s

resources

Articles of Incorporation also define employees as important stakeholders in the realization of the hhc
concept, and state that the Company will “ensure stable employment,” “respect human rights anddiversity,” “provide full opportunities for growth in support of self-fulfillment,” and “create an employeefriendly environment.” If the Company is unable to acquire diverse talent who share the hhc concept,
and if each employee is unable to demonstrate his or her individuality and strengths in a variety ofenvironments and work toward the realization of hhc over the medium- to long-term, the creation of
innovation and the realization of the corporate concept may be significantly impacted.
The basis of the Company’s talent development is to understand the true needs of patients throughsocialization, in which each employee spends time with patients, and this socialization motivates each
employee. The Company is strengthening its talent development by promoting the hhc concept
through sessions that include socialization with patients in various internal training programs, suchas the Global Leader Development Program. In addition, based on the concept of “Work Life Best”
for employees, the Company promotes employee health management, time management, andreduction of long working hours, and provides a working environment where diverse employees canwork productively, healthily, and in their own way even under various environments. The Company isintroducing various systems to support employee health and diverse work styles and improving theworkplace environment to become a more attractive company, thereby securing talent.

62

Information

While the use of IT and digital technology is advancing, cyber attacks are becoming moresecurity

sophisticated and devious year by year, increasing the possibility of shutdowns and otherdisruptions to business activities. As a result, the need for an even stronger information-security
framework is increasing.
Considering the personal information, undisclosed information, and other types of important
information in its possession, the Group could also see its credibility and competitive advantages
suffer if a data breach were to result in a leak of sensitive information. In recent years, the corporate
community is also dealing with the growing need to respond appropriately to global demands forthe protection of personal information. The Group is also fully aware that leaks of unreleased
structural formulas for projects in the drug discovery phase would have a negative impact on theprocesses for filing and acquiring patents. For the Group, a loss of credibility or competitive
advantage could have a major impact on business results.
Under the leadership of the Chief Information Security Officer, we are working to continuallyenhance governance related to global information security and implement related measures, withthe aim of preventing the interruption of important business operations and the leakage of personaland confidential information due to cyber attacks and other incidents. To this end, we haveestablished regulations and other guidelines related to information management, and provided
officers and employees with education on management of information in daily work and learning
opportunities such as training on cyber security, in addition to strengthening the security of systeminfrastructure.

COVID-19

Approximately 3 years have passed since the spread of COVID-19 infections, and the current riskof serious illness has been greatly reduced due to widespread vaccination, the introduction oftherapeutic drugs, and the weakening of the virus. However, outbreaks caused by the emergenceof new virus variants could likely impact the Group’s business activities. R&D, for example, may see
delays in the registration of patients for clinical trials and slower progress in actual testingprocesses. COVID-19 could also disrupt the Group’s production activities, as suspensions of plant
operations (both within the Group and at its suppliers), logistics delays, and other developments
have the potential to interfere with supply chains and thereby endanger stable product supplies.
Another area that stands to feel the effects of the pandemic is sales, as medical representatives
may find themselves unable to collect information from and provide information to health care
professionals in a timely, appropriate fashion.
The Company has established a response plan for the spread of COVID-19 infections at theheadquarters and at each region and business site, and will collect accurate information incooperation with subsidiaries in each country to ensure the safety of employees and to minimize
the impact on our business activities. The Group’s plants, which consistently stock the necessary
inventory levels for ensuring stable product supplies, are also adapting frameworks and operating
under the predetermined business continuity plans (BCP).

63

Climate change

The Group recognizes that climate change is a crucial issue with a substantial impact on corporate
activities.
After declaring support for the recommendations made by the Task Force on Climate-Related
Financial Disclosures (TCFD) in June 2019, the Group conducted a scenario analysis asrecommended by the TCFD and disclosed the results in FY2020. In FY2022, the Group conducteda reassessment of the potential impact of climate change-related risks and opportunities on theGroup by conducting another analysis that considered multiple climate scenarios.
As a result, we reaffirmed that physical risks include the possibility of increased investments andcosts required to maintain and improve access to drugs due to the increased risk of infectious
diseases associated with climate change, as well as the possibility of natural disasters resulting inthe slowdown of production activities and damage to assets and employees. To address these risks,
the Company is striving to maintain and improve access to drugs by developing drugs against
tropical infectious diseases and supplying drugs to endemic areas. In addition, the Company istaking measures such as introducing backup systems for production sites, securing inventories of
products and raw materials, and identifying natural disaster risks and implementing preventive
measures at production sites and warehouses.
In terms of transition risks, the Company reaffirmed that if greenhouse gas emission reductions andtheir disclosure are inadequate, stakeholders will lose trust in the Company, and that there is a riskof higher energy and procurement costs due to higher carbon tax prices. The Company also
identified as a risk the possibility of incurring additional costs for additional capital investment to
reduce greenhouse gas emissions or for switching packaging and other materials to products withlower greenhouse gas emissions. To address these risks, in accordance with the Company’s
roadmap for achieving carbon neutrality, we are actively introducing renewable energy electricity
with a view to achieving our 2030 RE100 goal ahead of schedule, promoting investments to reducegreenhouse gas emissions through the introduction of internal carbon pricing, adopting bioplastics
for packaging for some of our products, and considering the introduction of low-environmentalimpact packaging materials for other products. The Company has also completed its application tochange the goal from the current SBT 2°C to SBT 1.5°C by the end of FY2022.
The financial impact of these risks on the Group and the status of countermeasures are posted on
the Company’s website.
(https://www.eisai.com/sustainability/environment/climate-countermeasure/tcfddisclosure/index.html)

Impairment of

The Group records goodwill and intangible assets obtained as a result of mergers and acquisitions

goodwill andand the licensing-in of products and pipelines. If the recoverable amount of these types of assets

intangible

fall below the corresponding carrying amounts due to deviations in plans and actual performance,

assetsmarket changes, or other factors, the Group needs to book impairment losses accordingly. Suchcircumstances may have a negative impact on the Group’s financial results and financial positions.
For example, the Group’s goodwill (¥208.8 billion as of the end of FY2022) is mainly allocated to
the Americas pharmaceutical business. Recoverable amounts are calculated using a variety ofassumptions such as projected cash flows and growth rates for the Americas pharmaceuticalbusiness, determined based on management-approved business plans. These assumptions areaffected by factors ranging from the possibility of future approvals and additional indications for new
drugs to the timing of those changes, as well as post-marketing drug prices, sales volumes,
competing products, and interest-rate fluctuations.

642) Overview of the Eisai GroupThe diagram below shows the principal operations and business flows within the Group.

[Japan][Overseas]<Pharmaceutical Business><Pharmaceutical Business>
North America(Pharmaceutical R&D)
◎ KAN Research Institute, Inc.

Research(Pharmaceutical R&D / Production / Sales)◎ EA Pharma Co., Ltd.
◎ Other – 1(Total 3 companies)(Americas Holding Company)◎ Eisai Corporation of North America

Research
API /Products

Products◎ Other – 2

China

I
S
A
I

(Chinese Headquarters / Holding Company)◎ Eisai China Holdings Ltd.
API /Products(Pharmaceutical Production / Sales)◎ Eisai China Inc.

Products(Pharmaceutical Sales)◎ Eisai (Suzhou) Trading Co., Ltd.
◎ Other – 1☆ Other – 1

CO
Research

L<Other Business>(Total 2 companies)

T
Business
SupportServices

D(Total 5 companies)

Europe.,◎ Other – 1(Total 4 companies)

Research /Products

E(Business Support Services)◎ Sunplanet Co., Ltd.

(Pharmaceutical R&D / Production / Sales)◎ Eisai Inc.

Research /API /Products
Products.

(Europe Headquarters / Holding Company,
Pharmaceutical Sales)◎ Eisai Europe Ltd.
(Pharmaceutical R&D / Sales)◎ Eisai Ltd.
(Pharmaceutical R&D / Production)◎ Eisai Manufacturing Ltd.
(Pharmaceutical Sales)◎ Eisai GmbH◎ Eisai S.A.S.
◎ Eisai Farmacéutica S.A.
◎ Eisai S.r.l.
◎ Others – 9(Total 16 companies)

Asia and others(Asia Holding Company)◎ Eisai Asia Regional Services Pte. Ltd.
Symbols

Indicates sales flow◎：Consolidated subsidiary (47 companies)☆：Associated company accounted for using
the equity method (1 company)
API = Active Pharmaceutical Ingredients

Products
Research /API /Products
API /Products(Pharmaceutical Sales)◎ Eisai Taiwan Inc.
◎ Eisai (Thailand) Marketing Co., Ltd.
◎ Eisai Korea Inc.
(Pharmaceutical R&D / Production / Sales)◎ Eisai Pharmaceuticals India Pvt. Ltd.
◎ Others –13(Total 18 companies)

As of March 31, 2023

65

List of Group Companies(As of March 31, 2023)
Company Name

Location

Share Capital

Description of
Operations (*1)

VotingRights(*2)

Relationship

Note(Consolidated Subsidiaries)
Unit=million
KAN ResearchInstitute, Inc.

Kobe, Japan

70

JPY

Pharmaceutical R&D

100.00%Eisai R&D
Management Co.,Ltd.

Tokyo, Japan

16

JPY

Management ofpharmaceutical R&D

100.00%Sunplanet Co., Ltd.

Tokyo, Japan

455

JPY

Business support
services, etc.

100.00%EA Pharma Co.,Ltd.

Tokyo, Japan

9,145

JPY

Pharmaceutical R&D/ production / sales

60.00%

Arteryex Inc.

Tokyo, Japan

434

JPY

Software planningand development

64.42%

Eisai Corporation of
North America

New Jersey,
USA

Americas holding
company

100.00%

The Company
commissions
pharmaceutical R&D
The Company
commissions a part ofmanagement and otherfunctions related to R&D
The Company purchases
business support services,etc.
The Company
commissions
pharmaceutical R&D andproduction / purchases
pharmaceutical products
The Company
commissions systemdevelopment*3

Unit=thousand
1,766,700

USD

The Company
commissions
pharmaceutical R&D andproduction / sells
pharmaceutical products
and APIThe Company
commissions managementof investment in the U.S.
and Europe

151,600

USD

Pharmaceutical R&D/ production / sales

100.00%(100.00%)

Massachusetts,
USA

1

USD

Management ofpharmaceuticalinvestment

100.00%(100.00%)

Eisai Ltd.

Ontario, Canada

30,000CAD

Pharmaceutical sales

100.00%(100.00%)-

Eisai China
Holdings Ltd.

Jiangsu, China

664,465

RMB

Chineseheadquarters /holding company

100.00%(100.00%)-

Eisai China Inc.

Jiangsu, China

576,125

RMB

Pharmaceuticalproduction / sales

100.00%(100.00%)

Jiangsu, China

70,000

RMB

Pharmaceutical sales

100.00%(100.00%)

Liaoning, China

50,000

RMB

Pharmaceuticalproduction / sales

100.00%(100.00%)

100.00%Eisai Inc.

New Jersey,
USA

Eisai Innovation,
Inc.

Eisai (Suzhou)
Trading Co., Ltd.
Eisai (Liaoning)
PharmaceuticalCo., Ltd.
Eisai Europe Ltd.

Hertfordshire,UK

184,138

GBP

Europe headquarters/ holding company,
pharmaceutical sales

Eisai Ltd.

Hertfordshire,UK

46,009GBP

Pharmaceutical R&D/ sales100.00%(100.00%)

Eisai Manufacturing
Ltd.

Hertfordshire,UK

38,807

GBP

Pharmaceutical R&D/ production

100.00%(100.00%)

Eisai GmbH

Frankfurt,
Germany

7,669

EUR

Pharmaceutical sales

Eisai S.A.S.

Paris, France

19,500EUR

Pharmaceutical sales

Eisai B.V.

Amsterdam,
Netherlands

540

EUR

Pharmaceutical sales

Eisai Farmacéutica
S.A.

Madrid, Spain

4,000

EUR

Pharmaceutical sales

66

100.00%(100.00%)
100.00%(100.00%)
100.00%(100.00%)
100.00%(100.00%)

The Company sells
pharmaceutical products
and APIThe Company sells
pharmaceutical products

*3

*3
*5
*7

*3

*3
*3

The Company
commissions management
and administration ofpharmaceutical business
The Company
commissions
pharmaceutical R&D
The Company sells
pharmaceutical products
and API / is commissioned
pharmaceutical R&D
-

*3

*3

*3

Company Name

Location

Description of
Operations (*1)

Share Capital

VotingRights(*2)

Relationship

Note

Unit= thousand
Eisai S.r.l.
Eisai Pharma AG
Eisai AB
Eisai Farmacêutica,
Unipessoal Lda.
Eisai SA/NV

Milan, Italy
Zurich,Switzerland
Stockholm,
SwedenLisbon,Portugal
Brussels,
Belgium

3,500

EUR

Pharmaceutical sales

3,000

CHF

Pharmaceutical sales

10,000SEK

Pharmaceutical sales

1,250

EUR

Pharmaceutical sales

2,001

EUR

Pharmaceutical sales

100.00%(100.00%)
100.00%(100.00%)
100.00%(100.00%)
100.00%(100.00%)
100.00%(100.00%)
100.00%(100.00%)
100.00%(100.00%)-

Eisai GesmbH

Vienna, Austria

2,000

EUR

Pharmaceutical sales

Limited Liability
Company Eisai
Eisai Asia Regional
Services Pte. Ltd.
Eisai (Singapore)
Pte. Ltd.
Eisai ClinicalResearch
Singapore Pte. Ltd.

Moscow,
Russia

4,000

RUB

Pharmaceutical sales

Singapore

34,469

SGD

Asia holding company

100.00%-Singapore

300

SGD

Pharmaceutical sales

100.00%(100.00%)

Singapore

10

SGD

Pharmaceutical R&D

100.00%(100.00%)

Eisai Taiwan Inc.

Taipei, Taiwan

270,000

TWD

Pharmaceutical sales

100.00%Eisai (Thailand)Marketing Co., Ltd.

Bangkok,Thailand

103,000

THB

Pharmaceutical sales

100.00%(100.00%)

PT Eisai Indonesia

Jakarta,Indonesia

1,630,000

IDR

Pharmaceuticalproduction / sales

100.00%470

MYR

Pharmaceutical sales

122,000

PHP

Pharmaceutical sales

Hong Kong

500

HKD

Pharmaceutical sales

Eisai Korea Inc.

Seoul,South Korea

3,512,000

KRW

Pharmaceutical sales

100.00%

Eisai
Pharmaceuticals
India Pvt. Ltd.

AndhraPradesh,India

2,708,324

INR

Pharmaceutical R&D /production / sales

100.00%(11.08%)The Company sells
pharmaceutical products
The Company
commissions
pharmaceutical R&D
The Company sells
pharmaceutical products
The Company sells
pharmaceutical products
The Company sells
pharmaceutical products
and APIThe Company sells
pharmaceutical products
The Company sells
pharmaceutical products
The Company sells
pharmaceutical products
The Company sells
pharmaceutical products
The Company
commissions
pharmaceutical R&D andproduction / sells
pharmaceutical products
and API / purchases
pharmaceutical products
and API

Eisai Australia Pty.
Ltd.
Eisai Laboratórios
Ltda.
Eisai Laboratorios
S. de R.L. de C.V.
Eisai New ZealandLtd.
Eisai Vietnam Co.,Ltd.

Sydney,Australia
São Paulo,
BrazilMexico City,
MexicoAuckland,
New ZealandHo Chi Minh,
Viet Nam

4,000

AUD

Pharmaceutical sales

100.00%87,899BRL

Pharmaceutical sales

3

MXN

Pharmaceutical sales

2,050

NZD

Pharmaceutical sales

20,781,000

VND

Pharmaceutical sales

100.00%-Eisai Israel Ltd.

Tel Aviv, Israel

5,000

ILS

Pharmaceutical sales

100.00%(100.00%)-

Johannesburg,
South Africa

24,000ZAR

Pharmaceuticalbusiness

100.00%

-

-

-

-

Provision of medical
services

49.00%(49.00%)-Eisai (Malaysia)
Sdn. Bhd.
HI-Eisai
Pharmaceutical Inc.
Eisai (Hong Kong)
Co., Ltd.

Eisai
Pharmaceuticals
Africa (Pty) Ltd
Other – 2
companies

Petaling Jaya,
Malaysia
Manila,Philippines

-

-

-

100.00%(5.74%)
50.00%(1.45%)
100.00%(10.00%)100.00%(100.00%)
100.00%(100.00%)
100.00%(100.00%)--

Unit=million
Shanghai,
China

30

RMB

67

*3

-

(Associated Companies Accounted for Using the Equity Method)
Unlimit Health
Limited*4*6Notes:*1. "Description of Operations" indicates the segment applicable to the respective entity.
*2. Voting rights (%): Figures in parentheses show percentage indirectly owned by the Company.
*3. Significant subsidiaries.
*4. HI-Eisai Pharmaceutical Inc. is considered to be a consolidated subsidiary as the Company holds effective control
over its operation even though the Company's voting rights do not exceed 50%.
*5. Eisai Inc. is the only subsidiary whose revenue to external customers exceeds 10% of consolidated revenue reported
in the consolidated financial statements for the fiscal year ended March 31, 2023. Key financial results (in Japaneseyen) of Eisai Inc. are as follows:
Revenue
Operating Profit
Profit for the year
Total Equity
Total Assets
*6.
*7.
*8.
*9.

¥327,720 mil.
¥16,963 mil.
¥17,819 mil.
¥330,051 mil.
¥489,960 mil.

In May 2022, the Company established Eisai Pharmaceuticals Africa (Pty) Ltd.
In December 2022, H3 Biomedicine Inc. was integrated into Eisai Inc.
In March 2023, the Company transferred all shares (100.0% of the number of shares issued) of Eisai Distribution
Co., Ltd. to Yasuda Logistics Corporation (Tokyo).
In March 2023, the Company transferred all shares (49.0% of the number of shares issued) of Bracco-Eisai Co., Ltd.
to Bracco Imaging S.p.A. (Italy).

683) Proposed Changes in Directors and Corporate Officers (effective June 21, 2023)(1) Changes in Representative Corporate Officers
None(2) Changes in Directors / Corporate Officersa) Nominees for New Director
Toru Moriyama(Outside Director)
Yuko Yasuda(Outside Director)b) Retiring Director

currently, Senior Partner, Board Advisors Japan, Inc.

Yasuhiko Katoh(Honorary Advisor, MITSUI E&S Co., Ltd.)(Outside Director
and Chair)
Shuzo Kaihori(Outside Director, HOYA Corporation)(Outside Director)c) Nominees for New Corporate Officers
Noned) Corporate Officers Scheduled for Promotion
Executive
Terushige Iike
Vice President
SeniorKeisuke Naito
Vice Presidente) Retiring Corporate Officers
Vice President
Vice President

Yosuke Akita
Eriko Naito

currently, Senior Vice President
President, Eisai Japan
currently, Vice President
Chief Ecosystem Officer
To be appointed as Senior Group Officer
To be appointed as Senior Group Officer(3) Nominees for Directors
Haruo Naito
Hideyo Uchiyama

Hideki Hayashi
Yumiko Miwa
Fumihiko Ike(Chair)Yoshiteru Kato
Ryota Miura
Hiroyuki Kato
Richard Thornley
Toru Moriyama
Yuko Yasuda

currently, Director
Representative Corporate Officer and CEO
currently, Outside Director,
Certified Public Accountant and Executive Advisor, ASAHITax Corporation
currently, Director
currently, Outside Director,
Professor, School of Commerce, Meiji University
currently, Outside Director,
Outside Director, NTT DATA
currently, Director
currently, Outside Director,
Partner, Miura & Partners Profession Corporation
currently, Director
currently, Outside Director,
Chief Executive Officer, Thornley International
currently, Senior Partner, Board Advisors Japan, Inc.

69

NOTE: Hideyo Uchiyama, Yumiko Miwa, Fumihiko Ike, Ryota Miura, Richard Thornley,
Toru Moriyama and Yuko Yasuda are nominees who meet the requirements of an
Outside Director set forth in Article 2, Paragraph 3, Item 7 of the Ordinance for
Enforcement of the Companies Act of Japan.
(4) Selected Candidates for Appointment as Members of Committeesa) Nomination Committee
Chair:
Members:

Toru Moriyama
Richard Thornley
Yuko Yasudab) Audit Committee
Chair:
Members:

Hideyo Uchiyama
Hideki Hayashi
Yumiko Miwa
Yoshiteru Kato
Ryota Miurac) Compensation Committee
Chair:
Members:

Richard Thornley
Toru Moriyama
Yuko Yasuda

hhc Governance Committee is composed of all Outside Directors.
(5) Career Summary of Nominees for New Director
Name:

Toru Moriyama

Date of Birth: August 9, 1954 (Age: 68)
Career Summary:
Apr. 1977

Joined Mitsubishi Corporation

Apr. 2001

Unit Manager, Marine Products Unit, Foods (Products) Division,
Mitsubishi Corporation

Apr. 2004

General Manager, Living Essentials Group of Chubu Branch,
Mitsubishi Corporation

Sep. 2005

Executive Officer, Lawson, Inc.

May 2006

Director, Senior Executive Vice President, Lawson, Inc.

Apr. 2008

Senior Vice President, Mitsubishi Corporation

Apr. 2009

Senior Vice President, Senior Assistant to Group CEO, Living
Essentials Group (Next Generation Business Development Charge),
Mitsubishi Corporation

Apr. 2010

Executive Vice President, Group COO, Living Essentials Group,
Mitsubishi Corporation

Apr. 2011

Executive Vice President, Group CEO, Living Essentials Group,
Mitsubishi Corporation

Jun. 2011

Outside Director, Mitsubishi Shokuhin Co., Ltd.

Mar. 2013

Resigned from Outside Director, Mitsubishi Shokuhin Co., Ltd.
70

Apr. 2013

Executive Vice President, Regional CEO, Asia & Oceania,
Mitsubishi Corporation

Apr. 2016

President and Chief Executive Officer, Mitsubishi Shokuhin Co., Ltd.

Jun. 2016

Representative Director, President and Chief Executive Officer,
Mitsubishi Shokuhin Co., Ltd.

Jun. 2021

Senior Adviser, Mitsubishi Shokuhin Co., Ltd.
(resigned in June 2022)

Name:

Yuko Yasuda

Date of Birth: September 16, 1961 (Age:61)
Career Summary:
Apr. 1985

Joined IBM Japan Ltd

Sep. 1991

Joined Booz Allen Hamilton Inc.

Sep. 1993

Joined Russell Reynolds Associates Japan Inc.

Jun. 1996

Managing Director, Russell Reynolds Associates Japan Inc.

Apr. 2003

Country Manager, Japan, Russell Reynolds Associates Japan Inc.
Executive Committee Member, Russell Reynolds Associates Inc.

Apr. 2013

Executive Committee Member, Russell Reynolds Associates Inc.

Jun. 2015

Outside Director, SCSK Corporation

Jun. 2016

Outside Director and Audit and Supervisory Committee Member,
SCSK Corporation

Mar. 2017

Outside Director, Showa Shell Sekiyu K.K. (currently Idemitsu
Kosan Co., Ltd.)

Jun. 2018

Outside Director and Audit and Supervisory Committee Member,
Murata Manufacturing Co., Ltd.

Apr. 2019

Outside Director, Idemitsu Kosan Co., Ltd.

Jun. 2020

Outside Director, Nippon Suisan Kaisha, Ltd. (currently Nissui
Corporation) (current)

Jun. 2020

Outside Director, Murata Manufacturing Co., Ltd. (current)

Jul. 2020

Senior Partner, Board Advisors Japan, Inc. (current)(6) Nominees for Corporate Officers
Representative Haruo Naito
Corporate
Officer andCEO
Representative Yasushi Okada
Corporate
Officer andCOOcurrently, Representative Corporate Officer
and CEO

currently, Representative Corporate Officer
and COO
Industry Affairs
China Business
Data Integrity
71

Executive
Vice President

Kenta Takahashi

Executive
Vice President
SeniorVice President

Terushige Iike

SeniorVice President

Ivan Cheung

SeniorVice President

Tatsuyuki Yasuno

SeniorVice President

Yanhui Feng

SeniorVice President

Masatomi Akana

SeniorVice President

Takashi Owa

Senior Vice
President
Vice President

Keisuke Naito

Vice President

Sayoko Sasaki

Vice President

Shohei Kanazawa

Vice President

Akiko Nakahama

Vice President

Kazuhiko Tamura

Vice President

Teruyuki Masaka

currently, Executive Vice President
General Counsel
Intellectual Property
Internal Audit
currently, Senior Vice President
President, Eisai Japan
currently, Senior Vice President
President, EMEA Region
Chairman & CEO, Eisai Europe Ltd.
currently, Senior Vice President
Global Alzheimer's Disease Officer
President, Americas Region
Chairman & CEO, Eisai Inc.
currently, Senior Vice President
Chief Financial Officer
Chief IR Officer
currently, Senior Vice President
President, Eisai China Holdings Ltd.
President, Eisai China Inc.
currently, Senior Vice President
Chief Government Relations Officer
Global Value & Access
General Affairs, Environmental and Safety
Affairs
Japan Subsidiaries
currently, Senior Vice President
Chief Scientific Officer
Japan and Asia Medical
Safetycurrently, Vice President
Chief Ecosystem Officer
currently, Vice President
Chief Clinical Officer, Alzheimer's Disease
and Brain Healthcurrently, Vice President
Corporate Communications
ESG
currently, Vice President
President, Asia and Latin America Region
API Solutions
currently, Vice President
Chief Portfolio Officer
AD Filing and Registration Japan / Asia Lead
Quality
currently, Vice President
President, Eisai Demand Chain Systems
currently, Vice President
Chief HR Officer

Gary Hendler

Lynn Kramer

72

Vice President

Mitsuo Kosaka

currently, Vice President
Chief Strategy Officer
Global Alliance
Vice President Shin Ujiie
currently, Vice President
Chief Planning Officer
NOTE 1: Representative Corporate Officer and CEO Haruo Naito will also serve
concurrently as a Director.
NOTE 2: There will be no changes in the corporate compliance and internal control
structure and the Consumer hhc Business structure along with the retirement of Yosuke
Akita and Eriko Naito as Corporate Officer.

73