A New Way of Life

Integrated Report 2023
NIPPON SHINYAKU Co., Ltd.

CONTENTS
 Editorial Policy
This report provides comprehensive coverage of non-financial information, including the

2 Business Philosophy

environment, society, and governance, in addition to financial information so that all of our

Nippon Shinyaku Today

stakeholders can understand the corporate value of the Nippon Shinyaku Group.

4 At a Glance
6 Message from the President

 Information Disclosure System

16 History of Nippon Shinyaku
18 Risks and Opportunities

Nippon Shinyaku Integrated Report
Sustainability/ESG information• Website page
“Sustainability”
https://www.nippon-shinyaku.
co.jp/english/sustainability/• Corporate Governance Basic Policy• Corporate Governance Report• ESG Data
• GRI Standard Content Table

Information for shareholders
and investors

Corporate Data

34 Pharmaceuticals Business

82 Eleven-Year Financial Data

34 R&D84 Non-Financial Data

41 Medical Affairs

86 Glossary of Terms

42 Resource Procurement, Production& Assurance

87 IR FAQ/Declaration ofAuthenticity

45 Sales88 Corporate Data and Investor
Information/Network

48 Functional Food Business

12 Global Expansion

Value Creation Process

Non-financial

Pursuing Originality

Comprehensiveness* Statutory disclosure/timely disclosure documents

ESG as the Foundation for Growth

20 Materiality

52 Human Resources Development

22 Value Creation Process

56 Diversity, Equity & Inclusion (DE&I)

Financial• Website page
“Investor Relations”
https://www.nippon-shinyaku.
co.jp/english/ir/• Annual Securities Report*• Financial Summary*• Management Policy and Plan
(Medium-term Management Plan)• Shareholder Communications

89 Recognition by External Parties

57 Human Rights Initiatives

A New Way of Life
24 Medium-term Management Plan (MTMP)
28 Financial/Capital Strategy
32 Financial and Non-Financial Highlights

58 Well-being Management
60 Co-creating Value with the Environment
66 Stakeholder Engagement
68 Coexistence with Local Communities
69 Message from the Chairman
70 Corporate Governance76 Compliance
77 Risk Management
78 Dialogue with Outside Directors

 Scope of Reporting

80 Management Team

Period covered: Fiscal 2022 (April 1, 2022 – March 31, 2023)* Some sections of the report discuss initiatives from April 2023 onwards.

Companies covered: N ippon Shinyaku Co., Ltd. and its Japanese and overseas group companies* However, some sections of the report only cover Nippon Shinyaku Co., Ltd.

 Guidelines Referenced• IntegratedReporting Framework, International Sustainability Standards Board (ISSB)•G RI Standards• ISO 26000/JIS Z 26000•G uidance for Collaborative Value Creation, Ministry of Economy, Trade and Industry

 Forward-Looking Statements
Statements contained in this report concerning plans, predictions, and strategies to improve future
performance (“forward-looking statements”) are based on information currently available to theCompany’s management, and inevitably involve a certain element of risk and uncertainty. Actual
results may therefore differ from those in the forward-looking statements.
* As figures presented in this report have been rounded, totals may not exactly equal the sum of their composite figures.
* Product names featured in the report are registered trademarks of Nippon Shinyaku or affiliated companies.
* All information in this report, including comments, has been obtained in an appropriate manner.

Integrated Report 2023

1

We will value dialogue in order
to co-create well-being foreach employee.P. 59Chihiro Katagiri
Well-being Promotion Section
Personnel Department

I feel that the day is approachingwhen an intractable disease,previously said to have notreatment, becomes treatable.
P. 35
Tamotsu Takeda

We will deliver our unique, highquality pharmaceuticals quickly andstably to patients around the world.
P. 43
Satoshi Asano

Representative Director
Japan Muscular Dystrophy Association

SC Management Section
Supply Chain Management Department

While studying abroad, I acquired
know-how related to cutting-edge
gene editing technology, and I now
apply the technology I learned topreparing proposals for new drug
discovery themes.P. 38A New Way of Life

Tatsuhiko Arakawa

The passion for creating original drugs of quality that has been transmitted from one generation of
Nippon Shinyaku personnel to the next since the company’s very beginning.
Nippon Shinyaku will continue contributing to the maintenance and enhancement of people’s health.

Proposal Strategy Section
Strategic Planning and Research Department

 Business Philosophy
Helping People Lead Healthier, Happier Lives

 Management Policy
Customers: Supply Unique and High-quality Products

We put an emphasis on conveying
the efficacy and safety of Viltepso
based on solid evidence.P. 13

I will continue to uplift as many
patients as possible by conveying
the importance of going throughtreatment and the value of Nippon
Shinyaku’s products.P. 47

Jonathan Cabral
NS Pharma, Inc.
Head of Patient Service

Erina Kouno
FerrCare Product Marketing Group
Primary Care Product Marketing Department
Sales and Marketing Planning Division
Sales and Marketing Division

We have been developing
applications, focusing on
generation-specific nutritional
issues as a priority task. P. 51

We will develop and supply pharmaceuticals that are safe and highly effective
relative to other drugs, and that in some way contribute to a better quality of life inpatients, first and foremost for patients who suffer from illnesses. We will develop
and supply high-quality functional food that meets the needs of customers.

I took advantage of Nippon
Shinyaku’s well developed
childcare leave system andbecame keenly aware of how
difficult it is caring for a childduring my month-long leave.
P. 55
Shunya Kaji

Society: Earn the Trust of Society

Hospital Team
Chuo Sales and Marketing BranchTokyo Business Office
Sales and Marketing Division

Employees: Develop Each Employee

We will achieve regulatory compliance and adherence to internal rules, and always
remember our corporate social responsibility and behave according to high ethicalstandards.

We will develop each employee through goal-setting and positive challenges in work.

 Guidelines for Action
Challenge: Meet Challenges

Tetsuro Yoshida

We will always take a positive approach in pursuing our goals, with a firm belief andsense of responsibility rooted in an ethical approach.

Product Development Section
Protein Business Department

Speed: Speedy Action
As we go global with our pharmaceutical
distribution, we will respond with quality
management in conformance with eachcountry’s regulations and requirements.
P. 44
Shohei Nakagawara
Quality Assurance Section
Quality Assurance Department
Regulatory Affairs, Pharmacovigilance andQuality Assurance Division

2

NIPPON SHINYAKU CO., LTD.

I began to think carefully about themeals I eat after the experience of
cooking three meals a day and aserious injury.P. 49Mika Shibata
Japan women’s volleyball team

We will always take speedy action to make certain to seize opportunities.

Investigation: Spirit of Investigation
We will carefully investigate and analyze information that we have broadly
gathered, and carefully plan to achieve our goals, and make certain to implement
plan-do-check-action (PDCA) cycles.

Smile: Keep on Smiling
We will always act with a smile to make certain of smooth communication.

Integrated Report 2023

3

Nippon Shinyaku Today
At a Glance

Pharmaceuticals

Revenue¥121.988 billion

84.6%

Nippon Shinyaku’s two businesses are Pharmaceuticals and Functional Food.
In the Pharmaceuticals business , the Company aims to deliver high-quality,
distinctive pharmaceuticals as quickly as possible to even one more patient.

Main Products

Strategy
In the Pharmaceuticals business, since Nippon Shinyaku
announced its intention in 2007 to “launch at least one producteach year,” it has been consistently achieving this goal by not
only undertaking in-house drug discovery based on the R&D
capabilities built up since the founding of the company in 1919
but also introducing in-licensed products and undertaking
PLCM*. The Sales and Marketing Division aims to deliver
medicines required by patients as quickly as possible by sharing
high-quality information and building a system to quickly
respond to the needs of medical professionals.
The Company also proactively takes on challenges in fields
that other companies avoid and moves forward with researchand development of original treatments to create distinctive
pharmaceuticals required by patients suffering from disease andtheir families and to be a company that is trusted by society.

Revenue¥22.187 billion
15.4%(FY2022)

Revenue

2. HematologyF or urinary disorder causedby benign prostatic
hypertrophy

ZalutiaFor erectile dysfunction (ED)







For pollakiuria

Bladderon

VidazaF or benign prostatic
hypertrophy

EviprostatF or relapsed or refractory
acute promyelocytic leukemia

AmnolakeF or solid tumor and acuteleukemiaF or CD20-positive follicularlymphoma or CD20-positivechronic lymphocytic leukemia
F or myelodysplastic
syndromes or acute myeloid
leukemiaF or pulmonary arterial
hypertension and chronic
thromboembolic pulmonary
hypertension



Cylocide NGazyvaFor prostate cancer

EstracytF or acute leukemia andmalignant lymphomaF or sinusoidal obstruction
syndrome

Defitelio

CialisUptravi

CylocideFor iron deficiency anemiaF or cancer-associated pain
and chronic pain

TramalGargleliquid containing
azulene id for maintaining alcoholA
abstinence

RegtectF or allergic rhinitis andconjunctivitis

LivostinFor vertigo

CephadolFor dysmenorrhea ry powder inhaler forDallergic rhinitis

Azunol Gargle Liquid

MonoVerViltepso

Controlled-release treatment
for cancer-associated pain
and chronic pain

Onetram

Erizas

4. Gynecology

5. OthersF or Duchenne muscular
dystrophy

For dysmenorrhea

Lunabell LD

Adcirca

FinteplaF or relapsed or refractory
acute promyelocytic leukemia

F or pulmonary arterial
hypertension

F or seizures associated with
Dravet syndromeOpsumit

3. Intractable andRare DiseasesF or pulmonary arterial
hypertension

Trisenox

Strategy

Lunabell ULD

billionIn the Functional Food business, Nippon Shinyaku seeks to leverage its
advanced technical expertise as a maker of pharmaceuticals to supply
high-value-added products that meet market needs, focusing on
supplements in addition to its bulk materials businesses in health foodingredients, preservatives, and protein preparations. The Company will
“Help People Lead Healthier, Happier Lives,” through approaches otherthan pharmaceuticals, including by taking on the challenge of dealing
with social issues, such as food loss, and contributing to better healththrough health food ingredients and supplements. It will show
meaningful existence and contribute to the extension of healthy life
expectancy for people by reinforcing its R&D capabilities andcontinually bringing to market highly original new products.

¥30.049

Fintepla

Defitelio

MonoVer

Erizas

OnetramMain Products

Operating profit

Increase of 4.9%
year on year

NIPPON SHINYAKU CO., LTD.



Zalutia

Functional Food4

1. Urology* PLCM (product life-cycle management) is a way to increase the value of products throughefforts such as pursuing new efficiency and adding new dosage forms for products on themarket and drug candidates still in development.

(FY2022)¥144.175

In the Functional Food business, it aims to continually provide high-value-added products that meet market
needs and help people lead happier lives.

billionDecrease of 8.8%
year on year

Bulk Materials Business
1. H ealth Food
Ingredients

2. PreservativesMangosteen Aqua

Hyaluronic Acid 3000



Garcinia Powder J
Bacopa Extract Powder

Profit attributable toowners of parent

Research anddevelopment expenses¥22.812¥24.135

billionDecrease of 8.7%
year on year

Supplements BusinessbillionIncrease of 5.6%
year on year

Mirai Ace Nu

3. Protein
Preparations

1. Sports SupplementsVinessyu Deli

Mikaku Fine SMikaku Fine BKMikaku Fine ZW heyco W8002 InstantLactocrystal plusPROGEL 800

Kiwami Select CollagenEnlacto HGKioku no Kobako

Fitness SMangostia

2. Aging Care Supplements

Supplements

EPS

ROE

¥338

12.1

Decrease of 8.7%
year on year

WINZONE series

Breakdown of revenue by region%

Decrease of
2.4 percentage points
year on year

Japan

Overseas¥49.145 billion 34.1

%

65.9%

¥95.029 billion(FY2022)

Integrated Report 2023

5

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Message from the President
Nippon Shinyaku provides high-quality, unique products through its Pharmaceuticals business and Functional
Food business. In the Pharmaceuticals business, we will create innovative new drugs for patients suffering from
illnesses, focusing mainly on disease areas with unmet treatment needs, and ensure that these drugs aredelivered to patients. In the Functional Food business, we will provide new value that will be recognized bysociety through high value-added products that meet market needs. To this end, we will promote global
expansion while pursuing even more originality, with the aim of becoming a company with a meaningful
existence in the global healthcare field.

FY2022 review
While various restrictions on activity due to the COVID-19
pandemic have eased and socioeconomic activities are

Where and how to develop
business in order to fulfill ourbusiness philosophy

showing signs returning to normal, the economic outlook
remains uncertain due to soaring prices of energy resources

In fulfilling Nippon Shinyaku’s business philosophy of Helping

and raw materials. Under these circumstances, consolidated

People Lead Healthier, Happier Lives, I focus on the “where” andrevenue for FY2022 totaled ¥144.1 billion, a record high for the“how” of our future business development and resolution of

13th consecutive year. On the other hand, both operatingsocial issues.

profit and profit attributable to owners of parent declined;

In the Pharmaceuticals business, “where” refers to disease

however, this was due to a one-time factor, namely, loss ofareas where other companies are not focusing their efforts andone-time revenue from the sale of the priority review voucher

where treatment needs have not yet been fully met. “How”

in the previous fiscal year, and we believe that we arerefers to the provision of new drugs and value by leveraging

essentially maintaining our growth trajectory. Total equity as of

new modalities such as gene therapy in addition to our uniquethe end of FY2022 was ¥195.9 billion, and the ratio of equity

fundamental technologies for drug discovery related to small

attributable to owners of parent to total assets was 82.4%,

molecule compounds and nucleic acid drugs.

maintaining a high degree of financial soundness.
In the Pharmaceuticals business, in Japan we launched

As a manufacturer of new drugs, one of our challenges is toobtain returns on major investments that are essential in

Fintepla for the treatment of epileptic seizures in patients withpromoting our business activities, such as R&D expenses. We

Dravet syndrome in November 2022, and MonoVer for the

believe that we can solve this problem by expanding ourtreatment of iron deficiency anemia in March 2023; andbusiness globally in order to deliver needed drugs to patientsobtained regulatory approval for a humanized anti-CD20

around the world who are suffering from diseases.

monoclonal antibody Gazyva for an additional indication of

We will continue to promote
global expansion to deliver
satisfaction to patients aroundthe world and all those who
support them.

In the Functional Food business, we leverage our advanced

chronic lymphocytic leukemia in December 2022. As fortechnical expertise as a pharmaceutical company to supply

Viltepso, a treatment for Duchenne muscular dystrophy (DMD)

highly original products in the bulk materials business foralready marketed in Japan and the U.S., we presented long-

health food ingredients, preservatives, and protein

Toru Nakai

term data (four years from the beginning of treatment) from apreparations, as well as in the supplements business. Going

clinical trial conducted in North America at the World Muscle

forward, we will promote global expansion, with a focus on

Representative Director, President

Society in October 2022, thus providing new information to

East Asia and Southeast Asia, where economic growth ismedical professionals.

remarkable.

In the Functional Food business, we launched a new

P. 22 Value Creation Process

product in our WINZONE series of sports supplements, as wellas the anti-aging care supplement Kiwami Select Collagen,which was designed to meet the diverse needs of customers interms of flavor, quality, and functionality.

6

NIPPON SHINYAKU CO., LTD.

Integrated Report 2023

7

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Message from the President

Revision of issues of materiality

cross-divisional project to examine which specific activities

is necessary to

promote patient centricity. In addition, we are fostering thecontinuously launch

In 2021, Nippon Shinyaku identified its issues of materiality asawareness of each and every employee to incorporate

new products tomatters deemed important for solving social issues andpatient feedback into our corporate activities. For example,

overcome this patentcreating value. In recent years, as social conditions and thethe industry is considering initiatives such as conducting

cliff, we are expanding

environment surrounding our Company have changed

clinical trials without the use of placebos, especially in Phase

our development

significantly and sustainability has become even more

III trials, for patients with serious diseases. Throughpipeline through threeimportant, we revised the issues of materiality in March 2023.

communication with patients, their families, and patient

R&D approaches:

In proceeding with the revision, we considered the future oforganizations, we are also considering clinical trial protocols

in-house drug

Nippon Shinyaku and thoroughly discussed what the issues

that take the patient’s perspective into account.

discovery, in-licensing,are, what needs to be addressed, and what we should do to

Currently, DMD patients in countries and regions otherand product life-cycle

solve these issues. Going forward, we will continue to revise

than Japan and the U.S. who wish to receive Viltepso must

management (PLCM).

our issues of materiality on an ongoing basis in order to“deepening your understanding of well-being,” and is working

participate in clinical trials, but their participation may be

respond flexibly to changes in the social environment and toto promote well-being internally through messages from therestricted due to age and other requirements. In 2021, in

discovered in-house,create sustainable value.

president and various events such as online courses. In

order to provide the drug continuously to patients who are

our new nucleic acidP. 20addition, we will continue to discuss with outside advisors

unable to participate in clinical trials or who have completed

drugs for DMD following Viltepso, NS-089/NCNP-02 andabout how we should promote well-being at Nippon Shinyaku.

clinical trials, we implemented the Viltepso Managed Access

NS-050/NCNP-03, have advanced to the clinical trial stage. In

P. 52

Program. In addition to aiming for early approval in countries

the area of small molecule compounds, NS-018 forand regions outside of Japan and the United States, we will

myelofibrosis, NS-580 for endometriosis and chronic prostatitis/

make Viltepso available to as many patients as possible

chronic pelvic pain syndrome are in Phase II trials; NS-229 foraround the world as soon as possible through this managed

eosinophilic granulomatosis with polyangiitis is in preparation

access program.

for Phase II trials; and NS-161 for inflammatory diseases andMateriality

Human resources to support
sustainable growth
Employees are a company’s most important asset. As a

Human Resources Development

Promoting patient-centeredbusiness activities

manufacturer of new drugs, we believe that developing diverse
human resources and realizing employee well-being is essential

In order to share our mission and values throughout thefor creating innovation and realizing sustainable growth, whichorganization, I make a point to use the term “patient centricity”

was established in the revision of issues of materiality.

in the hopes of promoting patient-centered activities.

To cite an example of human resource development, we

Building where IRP office is locatedNS-025 for urological diseases are in Phase I trials. In addition,
we have established a new overseas R&D center, Innovation

Three commitments to achieve
medium- and long-term growth

Therefore, when we revised our issues of materiality, we

Research Partnering (IRP), in Cambridge, Massachusetts. By
increasing our access to the world’s most advanced drug
discovery and other technologies, we expect to accelerate our
in-house drug discovery research and build a more diverse
R&D portfolio.

have launched the NS Academy, a new human resource

explicitly described the concept of patient centricity and the

In order to keep pace with the diversification of drug discovery

development program that values self-directed learning, inactivities that lead to it.

modalities, the globalization of the market, and thein-licensing and alliances for products on the market and drug

diversification of individual work styles and values, I set out ourcandidates still under development. For the cell therapy CAP-

order to provide an environment in which each individual can

Due to the highly specialized nature of the healthcare field,

We are also actively investing in licensing activities, including

learn autonomously with their own future in mind, as opposed

there are very large disparities in the amount of information

three commitments when I became president in 2021:

1002, for which Capricor Therapeutics, Inc. is currently

to the conventional method of putting all employees throughand knowledge between patients and medical professionals,

Continue to launch at least one unique product each year;

conducting Phase III trials in the U.S. for DMD, we entered into

the same training program. In addition, we are also recruiting

such as doctors. In the U.S., pharmaceutical companies cangenerate at least 50% of consolidated sales from overseas; and,an exclusive partnership for distribution in the U.S. in January

highly specialized mid-career hires, with a particular focus onadvertise prescription medicines to patients, and NS Pharma,target at least 100% gains in sales and operating profit.

2022, and for distribution in Japan in February 2023. As for

those who will promote global expansion.

our Group company in the U.S., provides information toprogress in Japan, in June 2023, we filed an application for theensuring safety in the workplace so that our employees can

In Japan, pharmaceutical companies are currently restricted

Continuously launch new products to increase
corporate value

lead happier and better lives, and in FY2022, we establishedfrom providing information on prescription medicines

For R&D-led new drug manufacturers, corporate value is largely

UCB S.A. filed an application for an additional indication of

the Well-being Promotion Section. The Well-Being Promotion

directly to patients, but the industry as a whole is beginning

determined by the development pipeline, which is the driver

Fintepla for Lennox-Gastaut syndrome.

Section is based on the three axes of “knowing your own well-to consider business activities that incorporate patients’for future growth. In a few years, the patent for Uptravi, which

In the area of PLCM, we are expanding the indications ofbeing,” “knowing the well-being of those around you,” andperspectives. At Nippon Shinyaku, we have launched a

has been driving Nippon Shinyaku’s growth, will expire. Since it

Uptravi (NS-304) for pediatric pulmonary arterial hypertension

Nippon Shinyaku also puts effort into promoting health and8

As for drugs

NIPPON SHINYAKU CO., LTD.

patients through events organized by patient organizations.

approval of NS-87 for the expected indication of high-risk acute
myeloid leukemia. In the same month, our partner company

Integrated Report 2023

9

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Message from the President

and arteriosclerosis obliterans, and Gazyva (GA101) for lupus

systems and drug pricing systems and aggressively developing

nephritis and pediatric nephrotic syndrome. We will continue

products in other countries and regions, including Europe andto actively develop additional indications and new dosage

China.

forms to meet the needs of patients and the medical practiceP. 12Global Expansion

field, and try to maximize the value of our products.
P. 34

Toward strengthening our foundation for mediumto long-term growth

Pharmaceuticals Business

Promote global expansion through our own
marketing and collaboration with partner companies

FY2023 is the final year of the 6th Medium-term Management

In Japan, the pharmaceutical market is experiencing sluggish

Management Plan. During the 6th Medium-term

growth due to a declining population and policies to curb

Management Plan period, revenue was affected by the

medical expenses, such as the annual price revision by MHLW.

COVID-19 pandemic, but we made the decision to invest for

However, Nippon Shinyaku aims to achieve sustainable growth

future growth without reducing R&D expenditures in order toby promoting global expansion and increasing the ratio of

promote global development of nucleic acid drugs and otheroverseas sales. In overseas markets, for disease areas where theproducts. We believe that the increase in the percentage of

estimated number of patients is above a certain level, we will

in-house developed products in our development pipeline isprioritize collaboration with partner companies that have athe result of our aggressive R&D efforts. In addition, we werebroad sales network. On the other hand, for disease areasable to build a foundation for global expansion by

where the number of patients is very small and the number of

establishing our own marketing system for Viltepso in the U.S.

medical facilities to which we provide information is relatively

and establishing Group companies in China for the purpose

limited, we are considering strategies that could include ourof building our own marketing system there. We believe that

promote company-wide digital transformation (DX). The Digitaland the DX Division, and those ideas that receive highown marketing. To give a specific example, Uptravi is currently

we have been able to firmly address what needed to beTransformation Promotion Committee, which I chair, wasevaluations are being implemented in our operations.

sold in more than 70 countries overseas by our partner

addressed, and that we have been able to build aestablished to visualize management and operational issues

company to which it is out-licensed. As for Viltepso, I myself

management foundation and identify issues for the next

and solve them through the use of digital technology and data.

* DIS: Abbreviation for “digital ideas for smiles,” a project to come up with DX ideas to bringsmiles to people.

was stationed in the U.S. and spent about two and a half years

medium-term management plan.

The committee is working on a top-down basis to determine

establishing our own marketing system for the product.

Strengthening the foundation for making profits not only inimportant DX themes that will serve management and to

Message to stakeholders

Although the launch of Viltepso in the U.S. market was slightly

the Japanese market but also in the global market willachieve them. Currently, there are 16 DX themes related todelayed due to the impact of the COVID-19 pandemic, ourcontinue to be a major theme for us. We hope to clearly draw

R&D, sales activities, production activities, etc. in progress. In

overseas sales ratio in FY2022 reached approximately 34%. We

up in our 7th Medium-term Management Plan the roadmap

the area of R&D, we are considering initiatives such as actively

I encourage all employees to step out of their comfort zone

will strive to achieve our overseas sales ratio target of 50% asthat will serve as the foundation for becoming a company withusing AI to search for new compounds and using wearable

and into their learning zone, to keep challenging themselves tosoon as possible by carefully analyzing regulatory approvalsales of ¥300 billion and, in the future, a company with sales ofdevices to confirm drug efficacy. For production, we havegrow for the sake of bringing smiles to patients. In a rapidly¥500 billion.

begun using AI in demand forecasting and are also moving

changing society, we must envision what lies ahead, create

P. 24

forward with a connected factory design that utilizes AI andnew challenges, and move forward along the path less

IoT. These efforts have only just begun, but we intend totraveled. People grow by stepping out of their current comfort

accelerate the transformation by focusing on training datazone and placing themselves in a learning zone. We will build

scientists and other human resources who will be responsible

an organization that encourages taking on challenges more

for promoting DX.

than ever before, including new personnel system reforms.

Sales and percentage of sales from overseas(billion yen)

120
80

84.2

98.8

101.4

121.9
114.7 116.6

40

137.5 144.1
31.4

34.1

30

26.0
17.9

40
0

Medium-term Management Plan

(%)

160

19.9

20

2016

2017

2018

2019

NIPPON SHINYAKU CO., LTD.

2020

2021

2022

(FY)

0

In addition, we have formed a DX Team consisting of

We will work to meet stakeholder expectations by engaging

members with high IT literacy, aiming to visualize and solvein active communication and dialogue about our efforts. I ask

business issues on-site in each department as a bottom-up

all stakeholders for their continued understanding and support

Nippon Shinyaku obtained the DX certification from theactivity. In FY2022, we planned the DIS* Challenge 2022 tofor Nippon Shinyaku.

Ministry of Economy, Trade and Industry of Japan in March

foster a company-wide culture of taking on challenges. The

2022 and established the DX Division in the following April toideas proposed in this project are reviewed by outside experts

10

5.5
2015

Aiming to solve management
issues by further promoting DX

19.0

14.8

 Sales (left axis)
 Percentage of sales from overseas (right axis)

10

Plan and also the formulation year of the 7th Medium-term

Integrated Report 2023

11

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Global Expansion
Viltepso, a treatment for Duchenne muscular dystrophy (DMD) which received accelerated approval from the U.S.
Food and Drug Administration (FDA) in August 2020, is the first product we marketed ourselves in the United States.
In order to further expand the global business, Nippon Shinyaku has worked in collaboration with NS Pharma, Inc.
(NSP), a Group company located in New Jersey in the United States, to strengthen research and development,
supply chain, medical affairs, and marketing structures. In building the research and development structure at NSP,
we actively employed human resources with experience in development related to rare diseases, as well as thosewith experience in handling regulatory affairs with the FDA. Moreover, in terms of the marketing structure, in
addition to the sales and marketing department familiar in Japan, we established the departments needed for
promoting sales in the United States, including the Market Access Department for direct negotiations withinsurance companies and the Patient Support Department that helps patients and their families with drug delivery.
P. 34
P. 42

both medical professionals and patients and their families. To

Overview of Marketing Activities

alleviate these burdens, NSP offers a comprehensive patient
support service called NS Support led by the Patient Support

NSP engages in detailing activities for health professionals to

Department. Through this service NSP provides medical

provide information on Viltepso. Detailing activities using

professionals, patients, and their families with guidance andonline interviews have become more widespread, partly due

support on insurance reimbursement procedures and help

to the impact of COVID-19, and face-to-face interviews are alsowith practical arrangements related to drugs and nurses for

conducted alongside detailing activities at the moment. We

in-home infusion treatments.

published the four-year, long-term administration data on

Pharmaceutical Business R&D
Pharmaceutical Business Resource Procurement, Production & Assurance

R&D and Business Development Activities in
the United States

United States, individual patients are enrolled in private and

NS Pharma

public insurance, and co-payment amounts also vary. There arealso a certain number of patients with no insurance.

Nippon Shinyaku is developing multiple products in global

Against this background, in the United States, pharmaceuticals

trials, including Viltepso and subsequent exon skipping drugs.

are not always prescribed in accordance with a physician’s

NSP serves the role of a global base for Nippon Shinyaku’s

treatment plan. If the insurer does not approve drug

clinical development and business development activities, andreimbursement, the patient covers the full cost of the drug

collaborates closely with Nippon Shinyaku on a daily basis in

out-of-pocket, which makes the process leading up to actual

managing clinical trials as well as licensing and allianceprescribing difficult. Therefore, pharmaceutical companies

activities. In addition to these roles, in January 2023, NSP

negotiate drug reimbursement with individual insurers, andopened the new Innovation Research Partnering (IRP) office in

the Market Access Department plays this role at NSP. The

Cambridge Innovation Center (CIC) located in Cambridge inMarket Access Department worked to establish favorable

the United States, said to be one of the biggest innovation

reimbursement policies (criteria for allowing insurance

transmission centers. The Boston area of the United States lies

reimbursement) for the reimbursement of Viltepso drug costsat the heart of an ecosystem in which diverse players, including

by negotiating mainly with the major private- and public-

government, universities, research organizations, private-sector

sector insurers.

Building where IRP office is locatedcompanies, and financial institutions, collaborate with eachother to create constant innovation. By locating our own drug

NS Support, a comprehensive patient support service

discovery seeds and technology search base here, we aim to

In order to receive insurance reimbursement for Viltepso,

accelerate our in-house drug discovery research and build apatients must attend a specialist medical institution forrichly diverse research and development portfolio bygenetic testing and motor function evaluations. Due to theincreasing our access to world-leading drug discovery

vast size of the United States, many patients find it difficult totechnologies and seeds and our opportunities for co-creation

attend such medical institutions regularly in addition towith world-class scientists leveraging open innovation.

frequent visits for the administration of the drug.

Voice

Helping patients and their families navigate many challenges
I have three main responsibilities. First, to manage NS Support; second, to manage the Patient Engagement
Leads (PELs*); and third, to collaborate and support the patient advocacy group.
The most challenging part of the job is to help patients and their families navigate the many challenges ofConsequently, many of these patients receive in-homegetting on and staying on Viltepso. These families have complex lives with many difficulties beyond Viltepso thatadministration of Viltepso. In these cases, making practicalMarketing Activities in the United States

take their time and attention. PELs speak directly with patients and their families, and they provide appropriatearrangements for drugs and coordination with hospitals is

information. Many stakeholders including parents of patients and patient advocacy groups have a strong desire

essential, but maintaining these arrangements for weekly

12

Drug cost reimbursement in the United Statesadministration is a major burden. As the actual insurance

Since Japan has a national health insurance system, patientsreimbursement procedures are all different depending on the

can receive medical services for a certain co-payment

insurer, it is necessary to look into the procedure first, and thewhichever medical institution they attend. However, in thework involved in making an application is a major burden for

NIPPON SHINYAKU CO., LTD.

to cure their child’s disease. NSP is committed to communicating the safety and efficacy of Viltepso based on

Jonathan Cabralsolid evidence.

NS Pharma, Inc.
Head of Patient Service* PEL (Patient Engagement Lead): Responsible for providing total information and support to patients, including daily lives.

Integrated Report 2023

13

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Global Expansion

Viltepso as an academic paper in May 2023, and, in addition toskipping drug binds to a specific exon in a precursor ofhuman body. At present, we believe that the main patientsneed it in China. In Europe, we are considering a range ofthe academic activities conducted by the Medical Affairs

messenger RNA (pre-mRNA), removing the specific exon

eligible for gene therapy will be DMD patients who are

options, including building our own marketing structure or a

Division so far, the Sales and Marketing Division has also started

during the splicing process (exon skipping). This allows

ambulatory and cannot be treated with exon skipping drugs.

strategic alliance with a partner company. With regard todetailing activities utilizing this data. The Market Accessproduction of a shortened, but still functional, dystrophin

CAP-1002 is a therapeutic drug that involves administeringsubmitting applications for approval in other regions, we are

Division and the Patient Support Division are also actively

protein. A variety of different genetic mutations are found incells that secrete exosomes (extracellular vesicles), which act toengaging in consultation and verification with the relevant

making use of the data to explain Viltepso’s long-term effects

DMD. Viltepso is an exon 53 skipping drug, and approximately

reduce oxidative stress, inflammation, and fibrosis and promoteauthorities in individual countries on approval requirements

and safety data to insurers, patients and their families.

8% of all DMD patients have a genetic mutation amenable toincrease in myocyte generation. Capricor Therapeutics isand other matters.

The Supply Chain Department maintains close

exon 53 skipping. Nippon Shinyaku is promoting research andcurrently conducting a Phase III trial of CAP-1002 for non-communication with 3PL providers*, medical facilities, specialty

development of other exon skipping drugs so that treatment

ambulatory DMD patients in the United States. Unlike exon

Supply program in countries where Viltepso is not yet

pharmacies, and companies that provide in-home drug

opportunities can be offered to DMD patients with different

skipping agents such as Viltepso, CAP-1002 can beapprovedadministration services to ensure patients receive Viltepso at

genetic mutations.

administered regardless of the type of genetic mutation, and is

Currently, Viltepso is marketed in Japan and the United States

expected to be widely used among DMD patients, primarily

only. When patients in other regions wish to receive Viltepso,

non-ambulatory patients.

one way to do so is by participating in clinical trials conducted

the required time and place, with a commitment to timely

At present, we are conducting clinical development indelivery and stable supply. The department is also seeking toJapan and the United States for exon 44 and exon 50 skipping

establish a function as a supply center for other countries anddrugs as nucleic acid drugs to follow Viltepso. Besides these,

regions besides the United States, in the future, such as Europe.

we are also promoting research into exon 51, exon 45, andtreatment lineup to ensure that more DMD patients canbut patients who can participate in clinical trials are limited by* 3PL provider (third party logistics provider): A company that is contracted to executecomprehensive logistics services, including the storage and delivery of productsexon 55 skipping drugs with the aim of clinical development.

receive the best treatment in accordance with their different

age restrictions and other enrollment requirements. In

If all these treatments are released in the future, it will be

genetic backgrounds and degrees of disease progression.

addition, even if patients are able to participate in clinicalpossible to offer therapeutic agents, including Viltepso, to

Making maximum use of our experience in global clinical

trials, there are concerns about no longer having thearound 40% of DMD patients.

development and our own marketing structure in the United

opportunity to receive Viltepso during the period from theDevelopment of DMD Therapeutic Agents toFollow Viltepso

Furthermore, to offer treatment opportunities to theStates in addition to Japan cultivated through the launch ofcompletion of drug administration as part of the trial until

Viltepso, we will continue to deliver treatments to as many

approval is received in their respective countries. Therefore, weacid drugs, we are promoting research into gene therapy, andDMD patients as possible, as quickly as possible.

launched the “Viltepso Managed Access Program” in 2021 in

we have entered into a partnership with Capricor Therapeutics

dystrophin gene mutations. This causes progressive muscle

for the commercialization and distribution of CAP-1002, a cellstrength deterioration leading to motor dysfunction and finallytherapy, in the United States and Japan.

development of nucleic acid drugs for many years. An exon

as to those who are unable to participate.

involves administering a viral vector containing theEfforts to obtain approval in more countries

microdystrophin (miniaturized dystrophin) gene into theViltepso received conditional accelerated approval in thePatients amenable to skipping

Research and development products for DMD

Nippon Shinyaku’s nucleic acid drugs
Research and development product lineup

Development
products

Exon skipping drugs and percentage of DMD patients
Percentage of all DMD patientsNon-ambulatory

Severe53 44 50 55
8% 6% 4% 2%
Main patients amenable
to Viltepso

Ambulatory(with gait impairment)

Main patientsamenable to exonskipping drugs

Severity

who have participated in and completed clinical trials, as well

Gene therapy for DMD is a method of treatment that

Nippon Shinyaku has been engaged in research and45
8%order to provide the drug on an ongoing basis for patients

Further Accelerating Global Expansion

decline in respiratory and cardiac functions.

51
13%

by us and NSP. There are clinical trial sites around the world,

remaining 60% of patients using modalities other than nucleic

In DMD, dystrophin proteins are not produced due to

Exon

Going forward, we will continue working to expand our59%

NonclinicalTargets

PII

PIII

Loss of upper limb functions
Introduction of artificial respirator



Nippon Shinyaku and NSP to date and the Phase III global trial

launched in the United States in 2016, is now sold in over 70

currently underway.

countries through partner companies and has become awe developed our own marketing structure based on NSP,

the results of ongoing global Phase III trial. In September andand sales surpassed ¥10.0 billion in FY2022. As this shows, weNovember of 2021, we established Beijing Nippon Shinyaku

consider collaboration with partner companies or marketing

Co., Ltd. and Tianjin Nippon Shinyaku Co., Ltd., respectively, toproducts ourselves for each product and country to deliver

promote the expansion of our China business, including thethe drugs required by patients around the world in theapplication for approval. Going forward, through these two

optimum way.

Exon 55 skipping Exon 55 -

Uptravi, a product discovered and developed in-house andit was decided to submit applications for approval based on

PIII
Underway

NS-051/NCNP-04 Exon 51 Gene therapy

can live with smiles on their faces.

possible utilizing data from the Phase II trials conducted by

PI/PIIIn preparation

submit applications for approval in countries where it is

For Viltepso, which we launched in the United States in 2020,

a society in which patients and their families around the world

PII
In preparation

NS-089/NCNP-02 Exon 44 -with unmet treatment needs, Nippon Shinyaku aims to realize

to expedite approval in countries around the world, we will

blockbuster product with sales in excess of $1.0 billion a year.

CAP-1002

and the Phase II trial in North America. Going forward, in order

In terms of obtaining approvals in Europe and China, as aExon 45 skipping Exon 45 

Main patients amenable to cell therapy

LaunchBy developing and delivering treatments in areas and fields

result of discussions with the relevant regulatory authorities,

NS-065/NCNP-01
Exon 53 (viltolarsen)

NS-050/NCNP-03 Exon 50 

Main patients amenable to gene therapy

PI

United States based on the results of Phase I/II trials in Japangroup companies in China, we will put in place a system toprovide Viltepso to patients and medical institutions that(Conceptual diagram)

14

NIPPON SHINYAKU CO., LTD.

Integrated Report 2023

15

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

History of Nippon Shinyaku
Nippon Shinyaku, as an R&D-led new drug manufacturer, has continued to create unique new drugs that areneeded in every era to help people lead healthier and happier lives. The foundation of the Company’s success is
its venture spirit and pursuit of originality, which is reflected in the words of its founder, “Making Japanese
medicines with Japanese hands.”

ESG as the Foundation for Growth

Corporate Data

FY2017

FY2022¥101.448 billion¥144.175 billion

Surpassed ¥100 billion in sales

13th consecutive fiscal year of sales growth

FY2013¥76.517 billion
Surpassed ¥75 billion in sales

FY1992
FY1966¥5.164 billion

2014–Present¥50.534 billion

Aiming for global recognition

Surpassed ¥50 billion in sales

2000–2013as a manufacturer in the

Reinforcement of businesshealthcare fieldSurpassed ¥5 billion in sales

1970–1999
Founding period–1969

Venturing into global

Establishment of a businessbusiness development andfoundation focused on

drug discovery

prescription medicines

foundation to respond to
drastic changes in conditions

2016	Launch of Uptravi for pulmonary arterial hypertension (PAH)in the U.S.

2000	Establishment of Business Philosophy and Management Policy
Start of the 1st Medium-term Management Plan

1919	Founding
1940	Launch of Santonin, a vermicide for roundworms
manufactured in Japan

1961	Start of Functional Foods business1964	Completion of Odawara plant (now Odawara Central Factory)
1967	Completion of new premises at the Tokyo Business Office

1971	Launch of Cylocide for solid tumor and acute leukemia
1982	Completion of the Main Central Research Lab (now Building
No. 1 of Discovery Research Laboratories)

1991	Opening of Düsseldorf Office
1994	Completion of Building No. 2 of the West Discovery Research2007	Establishment of Guidelines for Action (Challenge, Speed,
Investigation)2020	Launch of Viltepso for Duchenne muscular dystrophy inJapan and the U.S.

2021	Establishment of Chinese subsidiaries Beijing Nippon
Shinyaku Co., Ltd. and Tianjin Nippon Shinyaku Co., Ltd.

2011	Launch of Vidaza for myelodysplastic syndromes2011	Opening of the Beijing Representative Office2023	Establishment of Innovation Research Partnering, a drug

Discovery Research Laboratories in Tsukuba

NS Pharma

discovery center in the U.S.

Laboratories (now Building No. 2 of Discovery ResearchLaboratories) at the head office

1997	Opening of New York Office (transformed into the local
subsidiary NS Pharma Inc. in 1999 and then moved to New
Jersey in 2002)

Odawara plant (now Odawara Central Factory)

16

Main Central Research Lab (now Discovery Research Laboratories Building No. 1)

Founding period–1969

1970–1999

2000–20132014–Present

In 1940, Nippon Shinyaku succeeded in manufacturing Santonin in
Japan, a vermicide for roundworms, which contributed greatly to the
reduction of Japan’s roundworm infection rate and to the growth of
Nippon Shinyaku’s business performance. In the 1960s, Nippon Shinyaku
diversified its prescription medicines-related activities by creating new
drugs through the expansion of its R&D system, including the completionof a new research laboratory, and by introducing products throughalliances with overseas companies. It also started its food business at thistime. The Company built its business foundation by completing
construction of the Odawara plant and building a network of sales bases.

Nippon Shinyaku strengthened its R&D structure by establishing the Main
Central Research Lab (now Building No. 1 of Discovery ResearchLaboratories) and other facilities that comply with GLP standards that
ensure the safety and appropriateness of non-clinical studies. In the 1990s,
the Company opened offices in Germany and the U.S. and promoted
internationalization through business expansion in Japan, the U.S., andEurope. It launched unique new products in the fields of gastroenterology,
cardiology, urology, and otorhinolaryngology, and concentrated businessresources into the cultivation of mainstay drugs. In the food business, theCompany began providing health food ingredients.

In addition to clearly stating its Business Philosophy and Management
Policy, Nippon Shinyaku formulated a medium-term management plan
to clarify its corporate vision. It invested business resources in focal
areas such as urology and hematology, and invested resources in
research on nucleic acid drugs at the Discovery Research Laboratories
in Tsukuba. By proactively searching for unmet medical needs, theCompany has continuously launched products in areas not often
handled by major companies, and some of these products have grown
to become business drivers.

Under the theme of “pursuit of originality” set forth in the management
strategy of the 5th and 6th Five-Year Medium-term Management Plans,
Nippon Shinyaku has worked to build a unique foundation bycontinuously launching new products. These include a small moleculecompound and a nucleic acid drug discovered in-house that haveachieved global expansion, and have led to the establishment anddevelopment of a new business model for the Company, such as
starting its own marketing by NS Pharma in the U.S. Nippon Shinyaku
will continue to further promote its global business and aim to becomea manufacturer that is globally recognized in the healthcare field.

NIPPON SHINYAKU CO., LTD.

Integrated Report 2023

17

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Risks and Opportunities
To grow sustainably, the Nippon Shinyaku Group identifies risks and opportunities by analyzing social
conditions, the market environment, and our internal condition. The identified issues are being addressed by
the relevant departments, and each department will formulate quantitative and qualitative targets andpromotion plans to achieve the targets in order to resolve material issues, enhancing effectiveness.
Major risks

Major opportunities

Process to determine issues of materialityL ower value of existing therapies from emerging treatments/ approaches
based on new technology1	Listing issues

We list issues taken from the risks andopportunities identified through ananalysis of international guidelines andstandards, social conditions, the market
environment, and our internal condition.

Scaling down Japan-focused business due to Japan’s declining populationMore intense natural disasters, more diverse business risksImpact of loss of end-user trust on business activities







Loss of personnelReduced motivation due to lack of psychological safety

Degree of impact on/priority forstakeholders

Very highIssues ofMateriality

 reation of novel therapeutic agents using newCtechnologies
 igher demand for health-related products asHfocus shifts from treatment to prevention
 iscovery of unmet needs based on a patientD
centric perspective







2	Assessing the importance of issues
The importance of listed issues isevaluated by mapping them on a twoaxis graph—one axis is the degree of
impact on/priority for stakeholders andthe other axis is the degree of impact on/priority for Nippon Shinyaku’s business
management.

ActionsL oss of business opportunities due to delays in addressing healthcare
disparities
L oss of trust, and impact on business due to the occurrence of human rights
issues aintenance of employee health, diversificationMof human resources and work styles, andpromotion of productivity and innovation by
developing human resourcesA desirable place where people enjoy working

 reation of new business opportunities byC
improving medical facilities through support ofpatients, and research in the medical andpharmaceutical fields
Increased credibility both inside and outside theCompany due to consideration of human rights
and environmental improvementsS takeholder trust generated by child-related
support initiatives ontributing to people’s healthCthrough the creation of products andservices with unique characteristics
 aintaining a safe and high-quality
M
supply of products
S trengthening patient support andadvocacy activities based on patient
centricity

Realizing a healthy futureby creating innovation

Promoting DX reating an environment where eachCperson can grow and play an active roleP romoting diversity, equity and inclusionAchieving well-being

Materialities

Developing diverse humanresources and realizing
employee well-being

 ontributing to the healthcare fieldCbeyond the provision of medicinesImproving medical accessRespecting human rights

Contributing to regions and culturesContributing to the future of children

Climate change countermeasuresPromoting resource circulation

Conserving biodiversity

Contributing to food waste reductionPromoting integrityStrengthening risk management

Appropriate information disclosure

Resolving social issues andcoexisting with thecommunity

Very
high
Degree of impact on/priority for
Nippon Shinyaku’s business management

3	Formulating promotion plansand execution

For each of the issues, the relevant
department formulates not only
quantitative and qualitative targets, butalso plans to achieve those targets. The
Sustainability Committee regularly
verifies progress in implementing theplans, and if necessary, improvements are
made to activities.

18

NIPPON SHINYAKU CO., LTD.







Climate change-related extreme weather and natural disasters
 eputational risk due to increased waste (improper disposal), increasedR
disposal costsE rosion of trust and brand value due to activities that lack consideration foranimal welfareIncreased international legal compliance. Corruption due to reduced
awareness of integrity and complianceE rosion of trust and brand value from cyberattacks, data leaks or otherinformation security issues
Decrease in credibility among stakeholders due to inappropriate responses educed CO2 emissions and facility operatingR
costs due to climate change actions

 reater trust in the Company due to cultivation ofG
compliance mindset and business ethics
T rust generated by appropriate disclosures tostakeholders

Strengthening efforts toprotect the global
environment

Strengthening governanceIntegrated Report 2023

19

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Materialities
In April 2021, we as the Nippon Shinyaku Group determined the mission we should fulfill in service of society and our
stakeholders and identified 19 issues of materiality we consider important to resolve social issues and create value.
In March 2023, as sustainability was taking on added significance globally, and because the environment

surrounding our businesses had significantly changed, we implemented a review of these issues of materiality.
Going forward, in order to respond flexibly to environmental changes, we aim to create sustainable value bycontinuously reviewing issues of materiality and proceeding with relevant initiatives.

Materialities (Issues of materiality)

Description of Activities

Contributing to people’s health through the creation of products and services
with unique characteristics

Realizing a healthy future by creating
innovation

Developing diverse human resources
and realizing employee well-being

Maintaining a safe and high-quality supply of products

Related SDGs Promoting drug discovery utilizing nucleic acid drugs, new modalities, and new targets and methods P. 35
 Promoting drug discovery research and clinical trials based on patient centricity P. 35
 Providing unique healthcare products and health food ingredients to promote health through food P. 49
 Establishing a global sales and supply system to provide pharmaceuticals and functional foods to the world P. 42
 Promoting treatment, diagnosis, medication guidance, and life improvement through the use of digital technologies P. 45
 Strengthening the stable supply system of products through risk management P. 42
 Establishing a mechanism for supplying safe and high-quality products, including new drugs such as nucleic acid drugs
P. 42

Strengthening patient support and advocacy activities based on patient
centricity

 Providing information to medical institutions and implementing disease awareness-raising activities for patients and their families
P. 41, 45

 Promoting social understanding of diseases

P. 41

Promoting DX Promoting our Digital Strategy towards the realization of our Digital Vision

Creating an environment where each person can grow and play an active role Fostering autonomous human resources and global leaders who are motivated to grow Building a flexible and resilient organization that can respond to change P. 52

Promoting diversity, equity and inclusion Fostering a culture that recognizes individuals regardless of factors such as age, gender, values, or disability

Achieving well-being Realizing a workplace that is comfortable and rewarding where psychological safety is ensured Promoting diverse work styles tailored to each individual P. 52
 Maintaining and improving employee health P. 58

P. 52

P. 56

P. 52

 Disseminating scientific findings through academic papers and conferences for the development of the scientific field

Contributing to the healthcare field beyond the provision of medicinesP. 35, 41

 Enhancing the public research grant system to support medical and scientific research

Resolving social issues and coexistingwith the community

P. 68

Improving medical access Implementing an unapproved drug delivery program and expanding the number of approved countries to support patientswith intractable and rare diseases P. 12

Respecting human rights Implementing due diligence to prevent and mitigate adverse impacts associated with business activities P. 57
 Implementing in-house education and awareness-raising activities to promote understanding of human rights P. 57

Contributing to regions and cultures Implementing social contribution activities rooted in each region, including preserving Kyoto cultureP. 68 Providing educational and mental well-being support for children through activities such as sports and reading opportunities

Contributing to the future of children

P. 68

 Conducting dietary education activities for children in order to foster an interest in foodStrengthening efforts to protect the
global environment

Strengthening governance

20

NIPPON SHINYAKU CO., LTD.

P. 49Climate change countermeasures Promoting greenhouse gas reductions

Promoting resource circulation Promoting recycling of resources (water, waste, etc.)

Conserving biodiversity Continuing activities to protect and cultivate endangered species at the Yamashina Botanical Research Institute Promoting animal welfare-friendly initiatives P. 35

Contributing to food waste reduction

P. 60
P. 60
P. 60 Developing high-quality stable preservatives that do not impair the taste of food, in order to extend shelf life and reduce waste
P. 49Promoting integrity Strengthening governance, including Group companies Enhancing compliance P. 76
 Promoting fair and transparent business P. 76

Strengthening risk management Understanding critical risks and strengthening the management and response system for each risk

Appropriate information disclosure Strengthening IR activities for investors P. 66
 Implementing information disclosure to stakeholders

P. 70

P. 77

P. 66Integrated Report 2023

21

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Value Creation Process
Business Philosophy

Helping People Lead Healthier, Happier Lives

Capital Supporting Nippon Shinyaku

Nippon Shinyaku (Pharmaceuticals Business) Business Model

Outputs

Outcomes* See P.48 for business model of the Functional Food business

Financial capital
Total consolidated equity ¥195,933 million(Equity attributable to owners of parent 82.4%)
Total consolidated assets ¥237,451 million

Human capital• Number of employees
2,186 (consolidated) 1,857 (parent company)• Total annual hours worked 1,841.69 hours• P ercent holding PhD or Master’s
degrees 36.2%• Total investment in human resource
development for regular employees¥140,646 thousand (parent company)• Investment in human resource development
per regular employee ¥83 thousand (parent
company)• Training hours by level
Total 18,296 hours 10.01 hours per person•H ours of self-development training
Total 18,835 hours 10.32 hours per person

Pursuing originality on a global scale
Providing the world with quality pharmaceuticals to
address diseases with unmet treatment needs

Pharmaceuticals Business
Segment revenue¥121.988 billion• Urology

P. 52In-house drug
discovery

In-licensing• Realizing work-life balance
Low turnover: 1.92%

Defitelio, for sinusoidal

disorder caused by benign
prostatic hypertrophy

obstruction syndrome(hepatic veno-occlusive
disease)• Improved employee engagement
Recognized as “White 500” firm
• Percentage of male employees taking childcare leave
69.3%
19.3 percentage point increase YoY• I ntractable andrare diseases

PLCM• Ratio of female executives 16.8%
0.7 percentage point increase YoY

Fundamental technologies
Vidaza, for myelodysplastic
syndromes or acute
myeloid leukemia

Fintepla, for seizures
Intellectual capital
ResearchP. 40associated with Dravet
syndrome• Gynecology

P. 34Development

Sales

P. 34

Medical affairs

P. 41

Supply chain & reliability assurance

P. 42, 68

SocietyValuecreation(local communities, business partners, etc.)• Increase of trust from local communities• Strengthening of relationships with local communities
and business partners, etc.

P. 45

P. 42Viltepso, for Duchenne

MonoVer, for ironmuscular dystrophy

deficiency anemia

P. 34, 41, 42, 48

Customers(patients, consumers, medical professionals)• Hosting online seminars about disease awareness6th Five-Year Medium-term Management Plan
Aiming for Sustainable Growth ~Pursuit of Further Originality~

Functional Food BusinessP. 24

Materialities

Realizing a healthy futureby creating innovation

P. 48Segment revenue¥22.187 billion
P. 20• Odawara Central Factory• Clinical trial API manufacturing facility
Developing diverse human resources
and realizing employee well-being

Resolving social issues andcoexisting with the community

Environmental capital

Health food ingredients
Preservatives
Protein preparations
Supplements

Strengthening efforts toprotect the global environment

Strengthening
governance2• Contributing to the future of medicine
Open recruitment research grants 10• Uptravi sold in about 70 countries• Opening of Innovation Research Partnering, a drug
discovery center in the U.S.
• New expertise in pharmaceutical research• Expanding the development pipeline throughstrengthening of licensing activities 2• Strengthening our global supply system

P. 60

Environment• Plants preserved

approximately 3,000 species• Greenhouse gas emissions (Scope 1, 2)
5.2% reduction from FY2021• Reduction of water consumption
6.1% reduction from FY2021

Reallocation of value to capital
NIPPON SHINYAKU CO., LTD.

12.1%

• Human resources that create competitiveness

Zalutia, for urinary

Manufacturing capital

22385.4%• ROE (FY2022)

Kyoto

Social and relationship capital• Energy consumption (electricity)
15,881 thousand kWh• Water consumption (tap water + well water)
155 thousand m3-11.4%• TSR (for the past 10 years, cumulatively)• Hematology

Small molecule drugs, nucleic acid drugs, new drug discovery modalities• Strong partnerships with medical professionals• Open innovation with academia• Provision of “Sherpa,” a support program forpatients with pulmonary hypertension• Increase of access to medicine
Implementation of Viltepso Managed Access
Program• TSR (for the past 5 years, cumulatively)

Employees

Intellectual capital• Pharmaceutical technologies (nucleic acid andsmall molecule)• R&D investment ¥24,135 million• Pipeline• Patents held 974 patents• Amount of digital content on owned website 153

P. 28

Shareholders

P. 34* See P.66 for stakeholder
engagement

Integrated Report 2023

23

A New Way of Life
Medium-term Management Plan (MTMP)
Since the start of the 4th Five-year Medium-term Management Plan in FY2009, Nippon Shinyaku has provided new andunique products to the market at a pace of over one product on average per year in accordance with “Supply Uniqueand High-quality Products,” which is one of the elements of our management policy. This has resulted in net sales ofapproximately double and an operating profit of approximately five times that of FY2009 in FY2022. Going forward, it
is conceivable that Nippon Shinyaku will face increasing operational uncertainty due to significant changes in the
5th Five-Year Medium-term Management Plan

6th Five-year Medium-term Management Plan

FY2014–2018

FY2019–2023“Innovation and Growth”“Aiming for New Growth–Pursuit of Originality–”“Aiming for Sustainable Growth –Pursuit of Further Originality–”

FY2018 results¥76.5 billion¥8.0 billion

Net sales
Operating income
Net income attributable toowners of the parent

FY2022 results¥114.7 billion¥20.6 billion

Net sales
Operating income
Net income attributable toowners of the parent¥5.7 billion¥16.3 billion
¥242
12.5%

EPS
ROE












Tasks forthe next
MTMPExpansion of pipelines for in-house drugs

I nvestment in detailing based on clear allocation of
resources in response to promotion of generics; steadyprogress with new productsExpansion of Functional Food business umulative cost-reduction target of about ¥2.0 billionCachieved for 5 years reation of CASA (CAreer Support Academy) forC
development support and trainingSocial contribution initiatives

E stablish clear differentiation with rivals by buildingbase of innovation to achieve sustained growth amid
shifts in external conditions such as healthcare
spending restrictions and falling birth rates

 ipeline enhancement through conclusion ofP
in-licensing agreements for six products

Functional Food
Operating income
Net income attributable to owners of
the parent

ROES ignificantly higher operating margin achieved in
Functional Food businessOutside specialist personnel recruited

Summary ursue technological innovation to create new value byP
supplementing the existing drug discovery base fortargeting small molecules and nucleic acid drugs withnew modalities and technologies

80

40

2011

2012

2013

2014

2015

2016

2017

2018

JGAAP

4th Five-year Medium-term Management Plan

24

NIPPON SHINYAKU CO., LTD.

¥144.1 billion¥121.9 billion¥22.1 billion¥30.0 billion¥150.0 billion¥133.0 billion¥17.0 billion¥40.0 billion

5.5%
5.8%
3.4%
14.2%

¥22.8 billion
¥338
12.1%

¥30.0 billion
¥445

13.0%
13.0%
10% over the period

5th Five-year Medium-term Management Plan

2019

2020

2021

2021

2022
IFRS

6th Five-year Medium-term Management Plan(FY)

4 Creation of organizational climate in which
every employee can flourish

5 Active use of AI and adoption of IT
6 Further strengthening of management baseL aunched Defitelio, a treatment for sinusoidal obstruction syndrome; nucleic acid drug Viltepso, a treatment for Duchenne
muscular dystrophy (DMD); Fintepla, a treatment for epileptic seizures associated with Dravet syndrome; and MonoVer, a treatment
for iron deficiency anemia Started marketing of Viltepso in the U.S., the first product marketed by Nippon Shinyaku itself in the U.S.
 Gained regulatory approval for the additional indication of acute myeloid leukemia for Vidaza, and chronic thromboembolic
pulmonary hypertension (CTEPH) for Uptravi
 Established Beijing Nippon Shinyaku Co., Ltd. and Tianjin Nippon Shinyaku Co., Ltd., as bases for the Chinese business Opened Innovation Research Partnering (IRP), a drug discovery center in the U.S.
 Started co-promotional activities for the prostate cancer treatments Erleada and Zytiga with Janssen pharmaceuticals K.K.
 Entered into an exclusive partnership for distribution in the U.S. and Japan of a cell therapy developed by Capricor Therapeutics,
Inc. for Duchenne muscular dystrophy (code no.: CAP-1002)
 Utilizing the metaverse, held online public seminars and get-together events on the theme of muscular dystrophy, as part of ouractivities to raise disease awareness Declared support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and began information disclosure Revised and disclosed the Nippon Shinyaku Group Sustainability Policy, Nippon Shinyaku Group Human Rights Policy, Nippon
Shinyaku Sustainable Procurement Policy, and Basic Environmental Policy Introduced flextime throughout the Company and continued to make use of telework
 Endorsed the “Challenge Initiatives for 30% of Executives to be Women by 2030” established by the Japan Business Federation inorder to promote DE&I
 Established a new Digital Transformation Division to strengthen digitalization, and established and announced a digital vision anddigital strategy Acquired “DX certification” from the Ministry of Economy, Trade and Industry Organized e-sports contests using an eye-controlled application for players with impaired bodily functions

Mainresults up
to FY2022

2010

CAGR

1 Creation of new value through R&D
2 Development of global business3 Increase in corporate value by strengthening
ESG management

 e-invest profits generated by Uptravi in NS-065/NCNPR
01 and successor nucleic acid drugs, NS-018, and otherdrugs, to support accelerated global development

120

2009

Targets

In the 6th Five-year Medium-term Management Plan for FY2019-2023, building on the management base laid in the
5th Medium-term Management Plan, Nippon Shinyaku has promoted six actions (see PP. 26-27) to solidify afoundation for sustainable growth.

 ajor contribution to growth from the launch of Uptravi
Min multiple overseas markets

160

0

FY2023 Quantitative Targets

Greater awareness of Nippon Shinyaku in PAH fieldFlextime system introduced for MRs (industry first in Japan)

Pharmaceuticals

EPS





 chieve targets through launches of new products andA
profitability improvements; link qualitative andfinancial targets

L aunch of seven products, including Uptravi forpulmonary arterial hypertension (PAH)

Revenue(billion yen)

Net salestrend

A company with ameaningful existence inthe healthcare field

FY2009–2013

FY2013 resultsMainresults

Nippon Shinyaku’s Vision

4th Five-Year Medium-term Management Plan
ScenarioBusiness
metrics

business environment, including fundamental reforms to the health care system
aimed at enhancing measures to curb medical expenses, technological innovation,and industry restructuring. The Company intends to adapt to the changing external
environment and continue to provide unique pharmaceutical products around theworld to more patients with unmet treatment needs than ever.

Integrated Report 2023

25

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Medium-term Management Plan (MTMP)

Six actions—FY2022 results and challenges

1Creating new value
through R&D

FY2022 Results
 CB JAPAN gained marketing approval
U
for ZX008 (a treatment for epileptic
seizures associated with Dravet
syndrome) in September 2022 andNippon Shinyaku began distribution in
November Launched MonoVer (iron deficiency
anemia treatment) Co-developer Chugai PharmaceuticalCo., Ltd. gained regulatory approval in
Japan for the additional indication ofchronic lymphocytic leukemia for
Gazyva in December 2022
 Entered into an exclusive partnershipfor distribution in Japan of a cell therapy
developed by Capricor Therapeutics,
Inc. for the expected indication of
Duchenne muscular dystrophy (DMD)(code no.: CAP-1002)

FY2022 Results romoted preparations to developP
Chinese business using local
subsidiaries in China as bases
 Strengthened medical and businessactivities to maximize the value ofViltepso in the U.S. market
 Opened Innovation ResearchPartnering, a drug discovery center in
the U.S.

3

Increase in corporate
value by strengthening
ESG management

FY2022 Results
 evised and disclosed the Nippon
R
Shinyaku Group Sustainability Policy Disclosed information based on the
TCFD recommendations
 Took part in the Japan Climate Initiative Became selected as a constituent of the
FTSE Blossom Japan Sector RelativeIndex Analyze changes in external andinternal environments as well as thedemands of society today to revise theCompany’s issues of materiality

4

Creation of an organizational
climate in which each
employee can flourish

FY2022 Results
Introduced a second job system withthe aim of promoting the acquisition ofdiverse knowledge and skills by
employees and to promote career
autonomy and independence Introduced an hourly-based paid leavesystem to promote diverse work styles
 Revised the parental leave system andintroduced a partial childcare leavesystem as part of realizing a supportive
workplace environment Promoted the development of humanresources to support global expansion
 Designated one of the FY2023 CertifiedHealth & Productivity Management
Outstanding Organizations “White 500”
under the large enterprise category

5

Active use of AI
and adoption of IT

FY2022 Results lanned and promoted DX initiativeP
themes for key departments centered on
the new Digital Transformation Division
established in April Received certification from the Ministryof Health, Labour and Welfare for theCompany’s business adaptation plan for
the DX Investment Promotion Tax
Incentive Promoted efficient business activities
through the use of digital technology,
increasing target doctors, gaining
awareness of candidate cases, andincreasing new prescription cases Promoted production optimization
through the utilization of digitaltechnology at the Odawara Central
Factory, including building anappearance defect sorting system forvials using automation and AI for someof the work involved in testing andinspection Promoted the digitalization of research
departments and established anenvironment for data-driven drug
discovery by introducing AI

6Further strengthening
the business foundation

FY2022 Results dopted International Financial
A
Reporting Standards (IFRS) starting withthe consolidated financial statement in
the securities report for the fiscal year
ended March 31, 2022 to increaseinternational comparability of financial
information Promoted managerial accounting withthe aim of efficient management byintroducing a new budget
management system













Tasks for FY2023

Tasks for FY2023

Tasks for FY2023

Tasks for FY2023

Tasks for FY2023

Tasks for FY2023

 romote drug discovery research andPexpand development pipeline Accelerate R&D

F ormulate policy for businessdevelopment outside of the U.S. andChina, countries with Nippon Shinyaku
bases





FY2023 initiatives

FY2023 initiatives

 romote R&D of various pipeline items ,Pin addition to nucleic acid drugs such as
NS-089, NS-050, NS-051
 Promote research of new modalities
centered on gene therapy Promote global in-licensing activity witha flexible and agile scouting system, tocontinuously create innovative products Revise R&D system and make effective
use of outside consultants to improve andaccelerate R&D activity and productivity


26

2

Development of
global business

NIPPON SHINYAKU CO., LTD.

E xamine business model for Europe andinvestigate and promote businessexpansion in other regions Increase visibility of Nippon Shinyaku in
the U.S.
 romote activities in line with theP
Sustainability Policy

FY2023 initiatives
 old an ESG briefing to increaseHunderstanding among stakeholders of
the Company’s efforts related tosustainability Aim to acquire SBTi validation topromote the 7th Nippon Shinyaku
Environmental Targets Plan
(FY2023-2025) Promote business activities in line with
the issues of materiality to realize
sustainable growth ecome a company in which peopleB
can grow, be supported in their work,and feel rewarded

FY2023 initiatives
Introduce job-based employment
Launch NS Mind, which demonstrates
the behavior, attitude and awarenessthat employees should aim for, NS
Academy, which supports employees’
self-directed career formation, and
HONKI Juku, which nurtures managers
for the next generation romote work reform using digitalP
technology

FY2023 initiatives romote the use of digital technologyP
to improve productivity, optimize costs,
and create new businesses
companywide romote management aimed at aPhighly profitable structure and efficientmanagement

FY2023 initiatives romote the formulation of the 7thP
Medium-term Management Plan

Integrated Report 2023

27

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Financial/Capital Strategy
6th Five-Year Medium-term Management Plan numerical targets for FY2023 (Consolidated)

Nippon Shinyaku will strategicallyinvest in the expansion of its
development pipeline and global
business development
Takanori Edamitsu
Director, Business Management & Sustainability

FY2018 results

FY2022 results

FY2023 forecast

6th Five-Year Medium-termManagement Plan targets

Net sales/Revenue¥114.7 billion¥144.1 billion¥145.0 billion¥150.0 billion

Pharmaceuticals¥100.2 billion¥121.9 billion¥123.5 billion¥133.0 billion

Functional Food

¥14.4 billion¥22.1 billion¥21.5 billion¥17.0 billion

Operating income / Operating profit¥20.6 billion¥30.0 billion¥32.0 billion¥40.0 billion

Net income attributable to owners of parent /Profit attributable to owners of parent¥16.3 billion¥22.8 billion¥25.0 billion¥30.0 billion

EPS

¥242

¥338

¥371

¥445

ROE

12.5%

12.1%

—

10% or more during term of
6th Planlaunch of Viltepso in the U.S. due to the impact of the COVID-

one guiding factor in investment decisions. We have also set

19 pandemic, the forecast for FY2023 falls short of these

ROE as an indicator for capital efficiency, and a medium-

quantitative targets.

term target of 10% or more ROE during the period of the

Although we must accept harsh evaluations for the fact that

We will achieve long-term growth by making strategic investments to maximize the value of our development
pipeline and product portfolio, thereby honoring the trust of our customers, society, and other stakeholders.

Progress and results of the 6th
Medium-term Management Plan

the development of some products, we believe that the R&D investments

establishment of our own marketing system in the U.S. and the

In R&D, we are making strategic investments to maximize theincrease in the pipeline of products developed in-house arevalue of our development pipeline and product portfolio incommendable achievements.

order to launch an average of at least one new product perbusiness, revenue increased 31.8% year on year due to growth inyear through R&D promotion of in-house products andsales of protein preparations and other products. On the otherin-licensing, as well as distribution partnerships. We are also

hand, regarding profit, operating profit decreased 8.8% year on
year and profit attributable to owners of parent decreased 8.7%

Management policy andinvestment Strategy

conducting R&D to help DMD patients with other types ofgenetic mutations that are hard to treat with Viltepso, which

In FY2022, although the impact of COVID-19 pandemic

year on year due to a reactionary decline following the lump-

gradually subsided, higher energy resource and raw material

sum revenue from the priority review voucher in the previous

prices due to the prolonged crisis in Ukraine, as well as the

fiscal year. However, we recognize that revenue and profit also

depreciated yen and price hikes, had a significant impact on

increased, excluding the reactionary decline following the lump-

Our Company’s management policy indicates that it willpriority on R&D investment, planning to invest ¥120 billion,

our corporate activities. In this external environment, despite

sum revenue recorded in the previous period.

“Supply Unique and High-quality Products” and “Earn thewhich is now expected to total approximately ¥110 billion over

the revision of drug prices by the MHLW and the reactionary* Priority review voucher: A system under which a pharmaceutical company that has obtained
approval for a new drug for an eligible rare disease is granted priority review rights (for threemonths) when applying for approval of its own new drug in another therapeutic area. The
rights can also be transferred (sold) to a third party.

Trust of Society.” In businesses that deal withthe five years after adjusting for the FY2023 outlook.

decline from the loss of sales revenue of the priority review
voucher* designated by the U.S. Food and Drug Administration
sales of Viltepso, a treatment for Duchenne muscular dystrophy(DMD) and Uptravi, a treatment for pulmonary arterial

from internal funds. During the period of the 6th Five-Year
Medium-term Management Plan, we placed the highest

pharmaceuticals and functional food, stable supply is
extremely important in gaining the trust of stakeholders Forecast for the Final Year of the 6th Five-Year

Medium-term Management Planorder to ensure a stable supply amidst the current

R&D investments(billion yen)

30

26.3

circumstances of a volatile external environment, our policy

hypertension and chronic thromboembolic pulmonary

Nippon Shinyaku has set quantitative targets for the final year

is to aggressively make necessary investments while

hypertension, royalty income from overseas sales of Uptravi, andof the 6th Medium-term Management Plan (FY2023) of ¥150

maintaining a solid working capital position. Since we havesales growth in the Functional Food business. In thebillion in sales, ¥40 billion in operating income, ¥445 in EPS,

no interest-bearing debt, i.e., enjoy a so-called a debt-free

Pharmaceuticals business, revenue increased 1.1% year on year

and 10% or more in ROE throughout the period of the plan.

status, we use our weighted average cost of capital (WACC)

due to growth in sales of Viltepso and Uptravi, as well as royalty

However, due to negative factors such as the impact of the off-

based on our own analysis of the yield expected byincome from overseas sales of Uptravi. In the Functional Food

year drug price revision by the MHLW and the delay in theshareholders from the Company as the hurdle rate, which is

NIPPON SHINYAKU CO., LTD.

was launched in 2020. The funds for R&D are being allocatedincluding medical professionals, patients, and society. In(FDA), revenue increased 4.9% year on year due to increased28

6th Five-Year Medium-term Management Plan.

we fell short of our targets and that we are behind schedule in

24.1

22.8
20

16.7

16.1

13.9

10

0

2018

2019

2020
JGAAP

2021

2022

2021

(FY)

IFRS

Integrated Report 2023

29

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Financial/Capital Strategy

Shareholders’ return policy Capital investment

Capital investments are made, with an awareness of cost of

Total Shareholders’ Return (TSR)   Nippon Shinyaku      TOPIX

800

capital and other factors, to expand and streamline production

700

facilities and to strengthen R&D capabilities, using our own

 Increasing shareholder value

funds. In December 2023, the ¥5.6-billion construction of a

The Nippon Shinyaku logic tree is a graphical representation of

nucleic acid drugs API purification plant at the Odawara Central

the connection between related indicators to show how the

Factory is scheduled to be completed. Capital investment over

Nippon Shinyaku Group’s management issues and strategies

the period covered by the 6th Five-Year Medium-term Businesswill lead to increased shareholder value, for the purpose of

300

Plan is expected to total approximately ¥23 billion.

increasing said value. From a financial perspective, some of the200

factors that increase shareholder value are dividend growth100 Human capital investment

and stock price rise, which are generally considered to be0

Nippon Shinyaku believes that human resources are theverifiable using long-term TSR. In addition, stock price isdriving force behind sustainable growth, and has adopted thesometimes calculated as a multiple of EPS, and EPS growth ismanagement policy of “Develop Each Employee.” Based on the

directly related to stock price growth.

600
500
400

2013/3

2014/3

2015/3

2016/32017/3

2018/3

2019/32020/32021/32022/32023/3

Stock price performance
Three years

One yearidea that unique products are the product of unique people,

Following its basic policy of maximizing corporate value,

we are committed to investing in human resources with a

Nippon Shinyaku will strengthen its R&D structure and expand

Nippon Shinyaku

respect for diversity. In FY2022, we invested ¥0.14 billion inits development pipeline. Furthermore, we will makeTOPIXhuman resource development, and we expect to invest ¥0.16

investments and return profits to shareholders in order to build

billion in FY2023. Although the results of our human resource

an organizational structure that can withstand intensifying

development efforts will not be immediately reflected in ourcompetition and adapt to global business development, whilebusiness performance, we believe that they will lead tobeing conscious of our capital structure and cost of capital.

Five years

Ten years

Cumulative

Annualized rate

Cumulative

Annualized rate

Cumulative

Annualized rate

-28.6%-27.4%-10.1%-11.4%

5.8%

53.4%

15.3%

31.8%

-2.4%

385.4%

17.1%

5.7%

142.1%

9.2%• Total shareholder’s return (TSR) is the total return on investment that takes into consideration capital gains and dividends.
• Nippon Shinyaku calculates TSR using cumulative dividends and change in stock price, and for the TOPIX, the dividend-included stock price index is used (calculated by Nippon Shinyaku using
Bloomberg data, etc.)• Figures in the graph assume the closing price on March 31, 2013, is 100, and the TSR-based market value is indexed to that (held through March 31, 2023).
• The return is the percent change of the initial investment generally used when calculating return on investment.

sustainable growth in the future.

Logic tree

6th Medium-termManagement Plan targets

Management issues

Growthpotential ddressing areas andA
diseases on which othercompanies are not focusingNet sales : ¥150 billion

Global expansion

Main reference indicatorsConsolidated revenue growthOverseas revenueR&D to sales ratioLicensing revenueOverseas sales ratioPipeline enhancement

EPS growthEarning
potential

Increase inshareholder
value



Dividend
growth +Stock priceincrease

Reasonable
shareholder
return policyP roviding new medicinesand value using
fundamental technologies

Operating income : ¥40 billion

Doubling sales and profitS table and sustainabledividend growth Sustainable dividend growth

FY2023, we plan to increase this by ¥6 to ¥120 per share. We

Over the past 10 years, Nippon Shinyaku’s TSR has

have increased dividends for 11 consecutive years sinceoutperformed the Tokyo Stock Price Index. We review our

FY2012, and we intend to achieve sustainable dividend

shareholder return policy each time we formulate our Medium-growth in the future.

term Management Plan, and we will work to grow EPS to
increase shareholder value over the medium to long term withfinancial perspective but also from a non-financial perspective,

TSR in mind to grow dividends and to increase the stock price.

we strive to gain the trust of the market and optimize our cost

We have set a dividend payout ratio of around 35% on aperiod of the 6th Five-Year Medium-term Management Plan,and in FY2022 we paid a dividend of ¥114 per share. InCash dividends: ¥120/share ontinuous dividendC
growthCost of capital managementEfficient investment

P romoting ESG
management

Market trust








30

NIPPON SHINYAKU CO., LTD.

Reducing business risks

ROE: 10% or morevolume, will expire. In the area of intractable and rare diseases,
the shift to generic drugs tends to be gradual, but is also

Payout ratioCapital investment

ROIC managementIn-licensing

Strengthening governanceOptimizing human capital



99

110

114

110

(%)

80

86

90

60

70
60

28.9

34.3

32.2

32.2

33.7

29.7

40

30

20

0

0

affected by price revisions by the MHLW. Therefore, we hope toovercome this patent cliff and achieve an increase in revenue
and profit by expanding the market for Viltepso andsequentially launching other products. We will consider asset
allocation in the discussions about the formulation of the 7th
Medium-term Management Plan and will indicate it at the timeof the announcement.

Board effectivenessI mproving employee
engagement

During the period of the next 7th Medium-termManagement Plan, the patent for Uptravi, which has large sales

Dividend per share / Payout ratio(yen)Optimalcapitalstructureof capital.

consolidated basis as a performance-linked dividend for the120

Optimizationof cost ofcapital

In addition, by promoting ESG management not only from a

2018

2019

2020
JGAAP

2021

2022

2021

(FY)

IFRS

Integrated Report 2023

31

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Financial and Non-Financial Highlights
Financial highlights

Nippon Shinyaku adopted the International Financial Reporting Standards (IFRS) in the fiscal year ended March 31, 2022 (FY 2021). Financial figures
up to the fiscal year ended March 31, 2022 (FY2021) are also presented in accordance with the previously applied Japanese GAAP (JGAAP).

Non-financial highlights
Entities covered: Non-consolidated Nippon Shinyaku

Net sales & Revenue / Operating income & Operating profit / Operating margin

CO2 emissions(billion yen)

150

137.5

120
90

13.1
63.3

13.7
70.4

10.5

10.7

10.2

6.9

8.0

8.5

8.5

2012

2013

2014

2015

11.6
58.3

9.9

30
0

79.9

13.6
66.3

69.9

60

76.5

84.2

98.7

101.4
13.4
85.3

14.0
87.4

15.5

16.8

15.2
2016

17.0
2017

15.4
106.4

14.9
101.6

14.4
100.2

2018

20.6
28.2

26.1

21.6

20.6

120.6

21.4

18.6

18.0

16.8

121.8

116.6

114.7

2019

2020

2021

22.1

16.8

121.9

120.6

24.0

15,00040

12,000

30

9,000

20

6,000

30.0

10

3,000

2022

2021

0

0

 Functional Food Business (left axis)  Operating profit (left axis)(FY)(billion yen)

30

200

26.3

24.1

22.8
20

16.7

150

16.1

13.9

100

10

0

145.7

135.1

2019

2020

2021

2022

2021

(FY)

82.4

Cash flows from operating activities /Cash flows from investing activities /Cash flows from financing activities

82.4

82.1

0

2018

2019

2020

2021

2022

2021

15.3

12.7

16.0

26.1

21.3

307.37

300

12.5

0.5

2018

-1.5
-6.1

-6.3 -6.8-10.0 -8.4

2019

2020

2021

2021

JGAAP

 Cash flows from operating activities Cash flows from financing activities

-9.6
-17.6

2022

(FY)

0

2018

IFRS

 Cash flows from investing activities

12,655

11,218

10,496

2013

2014

2015

2016

2017

2018

2019

2020

9,685

9,182

2021

2022

(FY)

342.14370.97

Waste substances generated

Number of employees (consolidated) / Employee turnover

(t)

600

522

13.5

12.0

2019

(%)

2,400

482

1,951

428

400

363

388

2,026

2,059

2,125

2,186

1,600

800

200

0

2018

2019

6

4

2020

2021

2022 (FY)

0

1.49

1.68

2018

2019

1.97

2020

1.66

2021

1.92

2022 (FY)

2

0

13.6

14.5

2020

2021

Nippon Shinyaku actively recruits new graduates and experienced mid-career
professionals to respond to business expansion, and the number of its employees isincreasing year by year. The Company has kept employee turnover due to personalreasons and early retirement low in the 1% range by ensuring that employees have a
deep understanding of its Business Philosophy and promoting the establishment of a
supportive working environment.

Ratio of female executives / Female managers

Uptake rate for childcare leave / Paid annual leave

(%)

40

20

30

15

20

10

10

5

0

0

12.1

2022

2021

(FY)

 Employee turnover (right axis)

The waste substances generated in 2022 increased by 25 tons year on year, mainly due
to the full-scale operation of the building for highly active solid formulations within the
Odawara Central Factory. Nippon Shinyaku will continue to promote waste reduction
efforts by reviewing its waste generation processes while promoting proper disposal ofwaste.

338.70250.42JGAAP EPS (left axis)

In order to achieve the target of a 42% reduction in CO2 emissions compared to FY2020 by 2030 set in the 7th Nippon Shinyaku Environmental Targets Plan, since 2021 Nippon Shinyaku
has been reducing CO2 emissions by switching to electricity derived from renewable energy sources. In order to obtain SBTi validation, it also started calculating emissions of Group
companies in Japan in FY2022.

 Number of employees (left axis)

100

Net cash provided by operating activities stood at ¥26,170 million. The main
components included profit before tax of ¥30,489 million in cash inflows and income
taxes paid of ¥7,169 million in cash outflows. Net cash used by investing activities stoodat ¥17,631 million, mainly due to purchase of property, plant, and equipment, andintangible assets. Net cash used in financing activities stood at ¥9,605 million, mainly
due to dividends paid. As a result, cash and cash equivalents at the end of the period
totaled ¥60,047 million.

NIPPON SHINYAKU CO., LTD.

0(%)

242.04-2.3-5.6

13,212

 Equity ratio (right axis)

200

-3.7

(FY)

Total equity amounted to ¥195,933 million, an increase of ¥15,047 million year on year.
Total assets stood at ¥237,451 million, and equity attributable to owners of parent
amounted to 82.4%.

400

21.3

12,941

IFRS

(yen)

40

12,782

100

EPS & Basic earnings per share / ROE & Return on
equity attributable to owners of parent(billion yen)

32

200

50

 Net assets (left axis)

-20

84.0

JGAAP

In FY2022, the amount of investment increased due to increases in expenses for the
manufacturing of nucleic acid drugs and contract research expenses, in line with theprogress of clinical trials. Nippon Shinyaku endeavored to expand the development
pipeline in its focus disease areas based on the R&D approaches of in-house drug
discovery, in-licensing, and product life cycle management (PLCM) with the aim oflaunching new drugs steadily and continuously.

0

(%)

195.9

180.8

150

83.1

80.0

IFRS

JGAAP

20

162.5

176.7

50

2018

12,839 Operating margin (right axis)

Net assets & Total equity / Equity ratio & Ratio of equity
attributable to owners of parent to total assets(billion yen)

13,136IFRSIn FY2022, revenue stood at ¥144,175 million, up 4.9% year on year. Operating profit was ¥30,049 million, down 8.8% year on year, due to reactionary decline from the loss of sales revenue
from the priority review voucher, and the operating margin was 20.8%. In the Pharmaceuticals business, sales of leading products such as Uptravi and Viltepso, as well as royalty revenue
from overseas sales of Uptravi, contributed to results. In the Functional Food business, sales of protein preparations and preservatives increased.

R&D expenses(t-CO2)

50

20.8

32.9

JGAAP

 Pharmaceuticals Business (left axis)

(%)

144.1

137.4

13.0
7.8

14.1
9.7

15.1
10.3

16.1

16.8
13.3

(%)

100

100

75

70.6

71.3

100

11.1

2019

2020

100

63.5

63.5

2021

100
69.6
69.3

50

50.0
20.28

25

2018

100

2022 (FY)

0

0
2018

9.72
2019

2020

2021

2022 (FY)IFRS ROE (right axis)

Profit attributable to owners of parent amounted to ¥22,812 million, down 8.7% year on
year, with EPS of ¥338.7. ROE stood at 12.1%. The Company is aiming for ROE of 10% ormore throughout the term of the 6th Five-Year Medium-term Management Plan, andexceeded the target again in FY2022.

 Ratio of female executives

 Ratio of female managers

Nippon Shinyaku has established “promoting diversity, equity & inclusion” as one of its
issues of materiality, and is working to develop a workplace environment in which eachand every employee can utilize their diverse individuality to thrive and succeed. It isreviewing its personnel system and making efforts to promote diverse work styles. The
Company will continue to further strengthen its efforts to draw on the perspectives ofdiverse human resources, including women, for Nippon Shinyaku’s sustainable growth.

 Uptake rate for childcare (Male)  Uptake rate for childcare (Female) Uptake rate for paid annual leave
Since April 2022, when the Act on Childcare Leave, Caregiver Leave, and Other Measures for
the Welfare of Workers Caring for Children or Other Family Members was revised, childcare
leave has been partially paid (up to a total of 14 days paid when taken for at least 5
consecutive working days). Nippon Shinyaku has been promoting the uptake of childcare
leave by male employees, and the male uptake rate reached 69.3% in FY2022. To continue
increasing the uptake rate, it will take such measures as enhancing the childcare leavesystem and sharing the experiences of employees who have taken childcare leave. The
Company has also established a number of periods during the year when it recommends
employees take consecutive days of paid annual leave to encourage uptake of leave.

Integrated Report 2023

33

Pursuing Originality
Pharmaceuticals BusinessNippon Shinyaku brings to market on average at least one new product a year by not only undertaking in-house drug
discovery based on our R&D capabilities built up since the founding of the Company in 1919 but also introducing
in-license products and undertaking PLCM. We also proactively take on challenges in fields that other companies
avoid and move forward with research and development of original treatments to create unique pharmaceuticals
required by patients suffering from disease and their families and to be a company that is trusted by society.

Feedback from a Patient

A future in which all patients have the freedom
to choose their own treatment
Tamotsu Takeda Representative Director Japan Muscular Dystrophy Association
I have no memory of ever being able to stand and walk on my own since I was an infant. Back then,there was no awareness of my intractable disease, and we did not know its cause or how to treat it.
Later, I was diagnosed with spinal muscular atrophy (SMA) by a muscular dystrophy specialist, but I
had become alienated from medical care and rehabilitation after learning that there was no known

R&D

cause or treatment for my disease.
SMA is a progressive, intractable disease that reduces the number of things one can do alone with each passing day, but I have recently
learned that there is a treatment. With the advancement of medicine, I feel that the day is close when intractable diseases, previously said to haveno treatment, become treatable. I believe that someday soon I will be able to keep doing tomorrow the things I can still do today, and even more
activities like eating ramen by myself, playing sports, and enjoying life.

Select the best modalities to treat diseases
and explore their potential

In order to make this future possible, it is important for all patients to have the freedom to choose their own treatments. I and everyone fromthe Japan Muscular Dystrophy Association hope that pharmaceutical companies, physicians, and patients will be able to share treatment
information with each other so that patients can choose the treatment that is right for them.
I hope that everyone at Nippon Shinyaku will continue to make further efforts in development and mutual collaboration to meet the needs ofpatients and deliver treatments, so that together we can envision a brighter future.

Kazuchika Takagaki
Director, Research & Development

Materiality

Realizing a healthy future by creating innovation

Main Activities

FY2022 Activities
E nhanced technologies related to small moleculesand nucleic acids and introduced data-driven drug
discovery Ventured into new drug discovery modalities,
including gene therapy Established a drug discovery center in Boston, theheart of the drug discovery ecosystem Strengthened human resource development
initiatives in each department
 romoting drug discovery utilizing
Pnucleic acid medicines, newmodalities, and new targets andmethods
 Promoting drug discovery researchand clinical trials based on PatientCentricity


The R&D Division is responsible for the creation of new value for pharmaceuticals, which is the most important part of an
R&D-oriented pharmaceutical company. With originality as our keyword, we are committed to working on themes andapproaches that other companies avoid, and this has led to the development of small molecule drugs for pulmonary
hypertension and the creation of nucleic acid drugs, an original modality. In order to fulfill our issue of materiality ofIssues and FY2023 Strategies
 iversifying in-house drug discovery by increasingD
access to the world’s most advanced drug discovery
innovations and increasing opportunities forpartnering Planning and implementing IP strategies that support
drug discovery utilizing a wider range of newmodalities

realizing a healthy future by creating innovation, we will work to expand the application of nucleic acid drugs, researchMateriality

new modalities, and search for new drug discovery targets and compounds by utilizing AI.

Main Activities

In selecting themes, we place importance on scientific validity and business potential in addition to originality. In thearea of intractable and rare diseases, one of our focal areas, patients are few and clinical trials must be conducted on a
global scale. Obtaining approval in the U.S. is not an easy task, as the approval review process changes depending on theStrengthening efforts to protect the global environment
FY2022 Activities
Implemented humane animal research andenvironmental maintenance with consideration ofanimal welfare Conducted introductory and continuing education toraise animal welfare awareness

R&D status of other companies and the circumstances surrounding the disease, and more stringent scientific backing is romoting animal welfare-friendlyP
initiatives

often required. However, as we believe the high safety and efficacy of the compounds we discover are important andIssues and FY2023 Strategies aintaining an animal research environment that isM
up-to-date and promoting humane animal researchbased on the 3Rs.

will lead to early approval, we will continue our uncompromising dedication to drug discovery.
The center of our concerns is always what we can do for patients. We will also achieve patient centricity in clinical trials

Materiality

by trying to make patient participation easier and pursuing what they most want to be addressed. I want to make

Main Activities

Nippon Shinyaku a pharmaceutical company that attracts attention for its science-based drug development. To achieve
this goal, we will select the best modalities to treat diseases and explore their potential so that we can contribute topeople’s health through original, world-class products.

34

NIPPON SHINYAKU CO., LTD.

Resolving social issues and coexisting with the community isseminating scientific findingsDthrough academic papers andconferences for the developmentof the scientific field

FY2022 Activities ontributed to the development of related scienceC
ﬁelds by presenting scientiﬁc findings throughacademic papers or conferences Protected and utilized scientific findings (inventions)through intellectual property
Issues and FY2023 Strategies
 ublishing scientific findings through academicP
papers and conferences Continuing to protect and utilize scientific findings(inventions) through intellectual property
Integrated Report 2023

35

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Pharmaceuticals Business

Delivering Our Unique Products Globally
Nippon Shinyaku has excellent R&D capabilities which haveproduced products such as the small molecule drug Uptravi

pulmonary arterial hypertension (PAH) treatment launched in

Pipeline (As of August 10, 2023)

2016, is in a Phase II trial for pediatric indications. In addition, aJapan

late-stage Phase II clinical trial is underway to add
arteriosclerosis obliterans to the indications for Uptravi.

and the nucleic acid drug Viltepso. We are also working on new

A global Phase III clinical trial is underway for Viltepso (codemodalities, including gene therapy, to increase the number ofno.: NS-065/NCNP-01, generic name: viltolarsen), a Duchenne

diseases that can be treated. We will continuously improve our

muscular dystrophy (DMD) treatment launched in Japan anddrug discovery capabilities by combining them with data-

the U.S. in 2020.

driven drug discovery, our current focus. This will promote theIn December 2022, Chugai Pharmaceutical Co., Ltd. obtained

creation of new research themes and promote in-house drug

approval for an additional indication of chronic lymphocytic

discovery, centered around our focal areas and fields.

leukemia for humanized anti-CD20 monoclonal antibody

Furthermore, in addition to PLCM to increase product value by

Gazyva (code no.: GA101, generic name: obinutuzumab), andexpanding the range of indications and developing new

in June 2022, we initiated a Phase III clinical trial for lupus

dosage forms for existing products and products undernephritis in collaboration with them. In addition, in March 2023

development, we are enriching our pipeline throughwe initiated a Phase III clinical trial for pediatric nephrotic

in-licensing of products from other companies and open

syndrome in collaboration with Chugai.

innovation activities.

In 2019, we entered into an exclusive distribution agreement

Through these R&D activities, based on the concept ofin Japan with UCB S.A. (formerly Zogenix, Inc.) for Fintepla Oralpatient centricity, we will continually deliver unique new drugs

Solution 2.2 mg/mL (code no.: ZX008, generic name:to patients in disease areas with unmet treatment needs. To

fenfluramine hydrochloride), a treatment for epileptic seizures

this end, we have developed an organizational structure that is

associated with Dravet syndrome. In September 2022, UCB S.A.

capable of conducting R&D on a global basis.

obtained approval for manufacturing and marketing, andNippon Shinyaku began distribution of the product inNovember 2022.

Progress of the Medium-term Management
Plan and FY2022 Overview

for inflammatory and urological diseases, respectively.

Expanding the pipeline in our focal areas

Promoting licensing activities

In March 2022, we obtained manufacturing and marketing

In February 2023, we entered into an exclusive partnership for

approval for MonoVer (code no.: NS-32, generic name: ferric

the Japan distribution of CAP-1002 for the expected indication

derisomaltose), an iron deficiency anemia treatmentof DMD with U.S. company Capricor Therapeutics Inc. Thisin-licensed from Pharmacosmos A/S in 2016, and it launched inagreement follows the exclusive partnership for U.S.

March 2023.

distribution we entered with them in January 2022. CAP-1002

Uptravi (code no.: NS-304, generic name: selexipag), a

NS-161 and NS-025 are now in Phase I clinical trials in Japanis comprised of human allogeneic cardiosphere-derived cells
and is expected to be effective in a wide range of DMD
Therapeutics Inc. is currently conducting a Phase III clinical trial(billion yen)

30in the U.S.

26.3

24.1

22.8
20

16.7

16.1

13.9

10

0

2018

2019

2020
JGAAP

36

NIPPON SHINYAKU CO., LTD.

2021

2022

2021
IFRS

WEB https://www.nippon-shinyaku.co.jp/english/ir/financial/develop.php
Phase

Code no. (generic name)

OriginDevelopment

Indications

I

I/II

I/II

In preparationII

II

In preparation

NDA
filingIII

NS-065/NCNP-01(Viltolarsen)

Co-development:
National Center of
Neurology and Psychiatry

Nippon Shinyaku

Duchenne muscular
dystrophy











 Underway 

NS-87(daunorubicin/cytarabine)

Licensed-in from:
Jazz Pharmaceuticals plc

Nippon Shinyaku

High-risk acute myeloid
leukemia















ZX008
(Fenfluramine hydrochloride)

Distribution partnership
UCB S.A.
(formerly Zogenix, Inc.)UCB S.A(formerly Zogenix, Inc.)

Lennox-Gastaut syndrome 













ZX008
(Fenfluramine hydrochloride)

Distribution partnership: UCB UCB S.A
S.A. (formerly Zogenix, Inc.)(formerly Zogenix, Inc.)

CDKL5 deficiency disorder 











GA101
(Obinutuzumab)

Licensed-in from: Chugai
Pharmaceutical Co., Ltd.

Co-development: Chugai
Pharmaceutical Co., Ltd.

Lupus nephritis













GA101
(Obinutuzumab)

Licensed-in from: Chugai
Pharmaceutical Co., Ltd.

Co-development: Chugai
Pharmaceutical Co., Ltd.

Pediatric nephrotic
syndrome













NS-304(Selexipag)

Nippon Shinyaku

Nippon Shinyaku

Arteriosclerosis obliterans











NS-304(Selexipag)

Nippon Shinyaku

Co-development: Janssen
Pharmaceutical K.K.

Pediatric pulmonary
arterial hypertension











NS-580

Nippon Shinyaku

Nippon Shinyaku

Endometriosis











NS-580

Nippon Shinyaku

Nippon Shinyaku

Chronic prostatitis /Chronic pelvic pain
syndrome











NS-089/NCNP-02(brogidirsen)

Co-development:
National Center of
Neurology and Psychiatry

Nippon Shinyaku

Duchenne muscular
dystrophy









NS-229Nippon Shinyaku

Nippon Shinyaku

Eosinophilic
granulomatosis withpolyangiitis









NS-401(tagraxofusp)

Licensed-in from:The Menarini Group

Nippon Shinyaku

Blastic plasmacytoid
dendritic cell neoplasm







NS-050/NCNP-03

Co-development:
National Center of
Neurology and Psychiatry

Nippon Shinyaku

Duchenne muscular
dystrophy

NS-917(radgocitabine)

Licensed-in from:
Delta-Fly Pharma, Inc.

Nippon Shinyaku

Relapsed/refractory acute
myeloid leukemia



NS-161

Nippon Shinyaku

Nippon Shinyaku

Inflammatory diseases

NS-025

Nippon Shinyaku

Nippon Shinyaku

Urological diseases

OriginDevelopment

Indications

LaunchOverseas
Phase
Code no. (generic name)patients, regardless of the type of genetic mutation. Capricor

Research and development expenses

Nippon Shinyaku’s latest pipeline

I

I/II

I/II

In preparationII

II

In preparation

III

NS-065/NCNP-01(Viltolarsen)

Co-development:
National Center of
Neurology and Psychiatry

Nippon Shinyaku

Duchenne muscular
dystrophy











 Underway 

CAP-1002

Partnership:
Capricor Therapeutics Inc.

Capricor Therapeutics Inc.

Duchenne muscular
dystrophy













NS-018(ilginatinib)

Nippon Shinyaku

Nippon Shinyaku

Myelofibrosis











NS-089/NCNP-02(brogidirsen)

Co-development:
National Center of
Neurology and Psychiatry

Nippon Shinyaku

Duchenne muscular
dystrophy









NS-229Nippon Shinyaku

Nippon Shinyaku

Eosinophilic
granulomatosis withpolyangiitis









NS-050/NCNP-03

Co-development:
National Center of
Neurology and Psychiatry

Nippon Shinyaku

Duchenne muscular
dystrophy





(FY)

NDA
filingLaunch

Integrated Report 2023

37

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Pharmaceuticals Business

FY2023 Initiatives and Strategy

Enriching the pipeline through in-licensing
In addition to in-house drug discovery, Nippon Shinyaku actively

In the area of intractable and rare diseases, in addition to theutilizes in-licensed products and development articles to enrich

DMD treatments to follow Viltepso (NS-089/NCNP-02, NS-050/

its pipeline. In the past, we have collaborated with many partner

NCNP-03, and NS-051/NCNP-04), we will develop NS-229 andcompanies in a wide range of fields, and we have been first to

NS-161 for inflammatory diseases.

meet the challenge of conducting research in areas where otherAs for Nippon Shinyaku’s focal areas and fields, incompanies are not involved. Through in-licensing, we will develop

hematologic malignancies, we will promote the development

and market products of new value in cooperation with ourof a treatment for high-risk acute myeloid leukemia (NS-87)

partners and, as with our pharmaceuticals discovered in-house,

and for myelofibrosis (NS-018). In gynecology, we will promote

Enriching the pipeline with in-house drug discovery, in-licensing, and PLCM

the development of a treatment for endometriosis (NS-580),

we will continue to provide unique new drugs in Japan andPromoting Research on Nucleic Acid Drugs

internationally in disease areas with unmet treatment needs.

and in urology, we are developing NS-025.
As for licensing activities, we will promote the introduction

mechanisms. In addition, we are accelerating R&D throughof unique products and developments that complement ourdata-driven drug discovery and promoting the strategic

R&D activities and expand our R&D pipeline.

creation of new drug discovery themes.

Human resource development in R&D
The R&D Division has defined the type of human resources it

Value Creation Initiatives

Promoting PLCM strategies

seeks in employees who are committed to successful drug

Due in part to depletion of drug discovery targets, the costdiscovery research, and is working on a training program toand duration of new drug development continues tocultivate them. Drug discovery is challenging and requires

In-house drug discovery initiatives

increase, adding to the difficulty of drug discovery each year.

numerous processes and a lot of time. Cross-divisional teamwork

In recent years, the use of new drug discovery modalities has

In addition, the external environment is changing dramaticallyis essential to steadily reach market launch and further speed up

increased in the field of drug discovery research. In addition to

as NHI drug prices are revised annually. Against this backdrop,

the process. Through the training program, we aim to create ansmall molecule drugs and nucleic acid drugs, Nippon Shinyaku

pharmaceutical companies are finding it ever more importantorganization that values cooperation and altruism, while

is also working on new modalities including gene therapies. To

to secure profitability via initiatives to maximize productdeveloping individuals and the R&D Division as a whole so thatassist in our endeavors, we have strengthened collaboration

value. Nippon Shinyaku works to maximize the value of

they lead us to a high rate of drug discovery success.

with academic institutions and other external parties. We will

existing products such as Uptravi by utilizing comprehensive

increase our access to the world’s most advanced drug

analysis technologies and large-scale data to proactively

for drug discovery and a sense of care for patients and theirdiscovery technologies not only in Japan but also through our

expand the range of indications and develop new dosage

families who are waiting for medicines in order to unrelentingly

overseas drug discovery centers, analyze the attributes andforms. We also engage in strategic PLCM planning for drug

follow through with the R&D of pharmaceuticals. Which is why

potential of various drug discovery modalities and select thecandidates still in development, based on these compounds’

the R&D Division has also initiated activities related to patient

modalities we consider optimal for specific diseases anddistinguishing features.

centricity, through which we will conduct R&D that

We believe that it is important to always maintain a passion

incorporates the perspectives of patients and their families,
leading to the type of drug discovery that patients truly want.

Voice

Unraveling new pathological mechanisms of rare hereditarydiseases during overseas study
Using Nippon Shinyaku’s support for overseas study, I studied at a lab in the U.S. for two and a half years, from
April 2019 to October 2021. The lab where I studied is working to unravel new pathological mechanisms of rare
hereditary diseases using cutting-edge genome editing technology, and the purpose of my overseas study was
to gain this expertise. Since returning to Japan, I am applying the techniques I learned to drafting new drug
discovery themes. In addition, as I was studying in the Texas Medical Center, one of the largest medical researchcomplexes in the U.S., I was able to build a network of contacts with many researchers there through joint

38

Tatsuhiko Arakawa

research and seminars, and learn about diverse values. I would like to make use of these connections andProposal Strategy Section
Strategic Planning andResearch Department

perspectives in my work in the future.

NIPPON SHINYAKU CO., LTD.

TopicsBasic approach to animal welfare
We have established internal regulations in accordance with
relevant laws and regulations, and established an Animal
Research Committee to examine if all animal research iscarried out with appropriate consideration based on theprinciples of the 3Rs (Replacement [with alternative
methods], Reduction [of the number of animals used], andRefinement [to reduce pain and discomfort suffered byanimals]). As for our animal research implementation
system, we periodically conduct self-inspections, and wehave also been accredited by a third-party organization. We
maintain an appropriate breeding environment for animals
used in our experiments in consideration of animal welfare.
In addition, as part of our efforts to protect the global
environment, for the preservation of biodiversity,
experiments using genetically modified animals are
conducted in compliance with the Cartagena Act.
Furthermore, waste generated by our animal research is
disposed of by contractors licensed by the government.

Holding of the R&D Conference

The R&D Conference is held every year to share the progress and results of R&D with all members of the R&D Division and link them to daily
R&D activities and activities for maximizing product value. In FY2023, we held the 11th R&D Conference in July. Due to the impact of the
COVID-19 pandemic, the last few conferences were held online, but this time, for the first time in four years, the meeting was held in a hybrid
format, with a face-to-face meeting in the auditorium of the head office in addition to the online meeting. Lively discussions took place withmany internal and external directors participating.
At the conference, business development activities in the U.S. at NS Pharma were presented in real time from the U.S. News, products underdevelopment and exploratory themes were reported, and the progress and results of items in each phase were shared. New andunprecedented initiatives in R&D were also presented, and all topics attracted a great deal of interest from the participants, and somediscussions had to be cut off prematurely in the hall due to the time constraints. Through discussions at the R&D Conference, we will pursue
the creation of new value and continuously bring new drugs to the market.

Integrated Report 2023

39

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Pharmaceuticals BusinessInitiatives Related to Intellectual Property

Understanding and analyzing intellectual property

Medical Affairs

With the basic attitude of respecting third-party IP rights, theNippon Shinyaku is committed to tackling the challenge of

Nippon Shinyaku Group regularly conducts ownershipnew modalities in drug discovery and globalization in orderinvestigations regarding its products. We also conduct patent

to realize our business philosophy of “Helping People Leadtrend analysis in specific technical fields and IP analysis ofHealthier, Happier Lives.” We recognize that intellectual

competitors. As a result, we manage IP risk at an early stage

property (IP) plays an important role in promoting theseand utilize the obtained analysis results in our R&D strategy andpurposes, and through the protection and utilization of IP, webusiness strategy.

will strengthen the superiority of our business andcontinuously improve our corporate value. We also respect

Building our reputation and brand based on trademarks

third-party IP rights, practicing thorough IP-related risk

The Nippon Shinyaku Group determines the appropriate

management including ownership investigations.

product names according to the medicines and functional

Materiality
Main Activities
 roviding information to medicalP
institutions and implementing
disease awareness-raising activities
for patients and their families Promoting social understanding of
diseases ulmonary hypertension: Held co-sponsoredP
seminars for medical professionals and public lectures
for patients and their families Muscular dystrophy: Held public lectures online andpatient networking events utilizing the metaverse

 isseminating scientific findingsDthrough academic papers andconferences for the developmentof the scientific field romoting patients’ understanding of their diseases
PPlanning events with a focus on patients Continuing to hold public lectures and events fordiseases such as pulmonary hypertension andmuscular dystrophyResolving social issues and coexisting with the community
FY2022 Activities

Issues and FY2023 StrategiesT ook initiatives that included non-clinical research,clinical research, database research, and registry researchas evidence generating activities in disease areas related
to the pharmaceuticals handled by the Group Published paper on research findings related toanemiaIssues and FY2023 Strategies

Main Activities

rights, we build the reputation and brand of our products.

At Nippon Shinyaku, the Intellectual Property Department

 esponding to changes in the environmentRsurrounding research Presenting research findings at academic conferencesand disseminating information through papers
 Fulfilling unmet medical needs through new researchcollaborates with the R&D Division from the early stages ofPatent application trends

research. By doing this, we can protect pharmaceuticals andOur number of patent applications for pharmaceuticals andfunctional foods produced in-house in a multifaceted andtheir uses has been increasing since 2019. This is especiallystrategic way, using not only substance patents, but also use

clear in the field of nucleic acids, and we will protect the futurepatents, process patents, formulation patents, dosage andbusiness of Nippon Shinyaku in terms of intellectual property

administration patents and so on. In addition, we are

by ensuring that we protect the rights to the results of ourconsidering building and utilizing a patent portfolio toefforts in our focal fields through patents. In addition, as

strengthen our global R&D strategy in an internal committee

research findings that can be patented stably emerge, mainly

consisting of multiple department managers.

in our focal areas, we will continue to file patent applications

The mission of Medical Affairs is to engage in medical andDuchenne muscular dystrophy, and anemia. In regard to its

for them in a timely manner, and acquire and utilize patentscientific exchanges with key external experts using advanced,

patient support activities, it plans to continue with its publicrights to protect our future business.

cutting-edge scientific knowledge to identify unmet medical

lectures and networking events on pulmonary hypertension

needs*, generate scientific evidence to fulfill them, andand muscular dystrophy. Nippon Shinyaku will act to makedisseminate information to medical professionals and patients

contributions to the healthcare field beyond the provision ofin order to deliver the optimal medical care for all patients. At

pharmaceuticals in cooperation with medical science liaisons

Medical Affairs, the goal is to optimize the value of the(MSLs)* who are responsible for medical affairs activities inpharmaceuticals handled by the Group and contribute to

medical institutions.

increasing benefits for patients.

* Medical Science Liaison (MSL): Refers to employees belonging to an organization which is
independent of the Sales and Marketing Division whose main role is to engage in exchanges
with key external experts in the fields of medicine and science.

Application trends by International Patent Classification (IPC) (Top 5 classifications) Invalid  Valid Pending review

 PCT international phase (within the expiration date)

IPC classification

A61K (Pharmaceuticals)

Increasing Benefits for Patients byDisseminating Information

C07D (Organic compounds)

Progress of the Medium-term Management
Plan and FY2022 Overview

In recent years, the environment around healthcare has beenchanging significantly due to rapid advances in digitaltechnologies. Nippon Shinyaku will also consider making use

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Invalid: A patent that has already expired or has been abandoned, or an application that has not been granted (e.g., rejected during review, abandoned by the applicant, etc.)
Valid: A patent that has been registered 2013
and the rights2014
have been validly
2015accrued 2016
2017
2018
2019
2020
2021
2022
Pending review: A patent application that is under review in the patent office of the respective country
In the PCT international phase: A patent application that has been filed under the Patent Cooperation Treaty (PCT) but has not yet been reviewed by the national patent offices.

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

In FY2022, in its evidence generating activities, Nipponof these technologies to solve medical issues and generate

Shinyaku worked on initiatives in non-clinical research, clinicalevidence that bring benefits for patients. For example, theresearch, database research, and registry research, andCompany would like to take on the challenge of contributing

published a paper on its findings in database research. In term

to better healthcare with a focus on digital healthcare usingof patient support activities, it held online public lectures on

the latest technologies, including wearable devices and

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

pulmonary hypertension, and online public lectures andapplications, artificial intelligence (AI), and big data analysis to

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

patient networking events on muscular dystrophy. In FY2023,

improve the effectiveness of medical and healthcare.

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

* Data analysis and compilation was conducted independently by Nippon Shinyaku using PatSnap Analytics.

NIPPON SHINYAKU CO., LTD.

is pushing ahead with preparations for new research on

Value Creation Initiatives and Strategy

C12N (Nucleic acids)

Filing datewith respect to its evidence generating activities, the Company
hematological malignancies, pulmonary hypertension,* Unmet medical needs (UMNs): Refers to medical needs that are not adequately satisfied for
medical professionals and patients. Examples include needs for diseases for which noeffective treatments have yet been found and needs for new therapeutic drugs or treatment
methods.

A61P (Therapeutic use)

A23L (Foods)

40

FY2022 Activities

Materiality

foods produced in-house. By protecting them with trademark
R&D activities and intellectual property

Realizing a healthy future by creating innovation

Integrated Report 2023

41

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Pharmaceuticals BusinessResource Procurement, Production & Assurance

Aiming for Stable Product Supply and theConstruction of a Global Supply System

Value Creation Initiatives and Strategy
In FY2023, we will continue to enhance our supply systems for the

Stably delivering Nippon Shinyaku’s
highly original pharmaceuticals to
those who need them

We are working to manufacture pharmaceuticals under newUnited States and Chinese markets and, with an eye towardmodalities to provide medicines and new treatments for diseases

expansion into new territories, work to gather necessary

for which there are no therapeutic agents yet, such as nucleic

information and build required systems. In addition, in accordanceacid drugs in addition to conventional pharmaceuticals. In orderwith completion of construction on the nucleic acid API

to deliver these to patients not only in Japan but around thepurification plant at the Odawara Central Factory, we will begin

world, it will be necessary to build a global supply system able tomanufacturing pharmaceuticals that belong to new modalities.

comply with each location’s regulations, environment, andHitomi Kimura
Director, Resource Procurement, Production & Assurance

We will further enhance the reliability assurance systems wecustoms. Amid an uncertain social landscape, the environment

have built, continue to provide appropriate information toaround pharmaceuticals is turning more challenging. However,society and patients, and work to secure even further reliability.

by implementing solid quality assurance and stable productsupply under all conditions, and by providing appropriate safety
and other product information, we will deliver peace of mind
and confidence to patients and all of our stakeholders.

The tasks of the Resource Procurement, Production & Assurance Division are wide-ranging. We single-handedly manage
defensive operations spanning everything from raw material procurement to production planning, manufacturing, delivery,
product and data quality assurance, safety information collection and assessment, and approval application and maintenance. A
single misstep on our part at any point would prohibit us from fulfilling our most important duty—stable product supply.
Accordingly, each day I am keenly aware of the importance of complying with laws and regulations, assessing risk, controllinginventory, and managing our suppliers. In addition to implementing the expected credit checks and due diligence, we also
place importance on interpersonal communication in management. We hold weekly online meetings with the Odawara Central
Factory and other relevant divisions. We also share information and engage in technical cooperation with affiliated companies.
Through these means, we build better relationships. We in the Resource Procurement, Production & Assurance Division are
frequently aided by such excellent relationships. For example, at the start of the COVID-19 pandemic when there was a shortageof sterile filters for injection production, the Raw Materials Procurement Department was able to successfully procure such filtersfrom the United States through affiliated companies.
As Nippon Shinyaku seeks greater expansion globally, building a global supply system is a massive challenge. Issues such asenvironmental considerations as well as differences in regulations and business practices in supply destination countries require
the prior gathering of sufficient information. In addition, even with raw materials that are within legal limits, there can be slightdifferences in quality between lots. We are thus also launching initiatives to promote the digitalization of information, avoid
human error, and enhance stable product supply, such as integrating and analyzing data on quality and manufacturability.

Building a Supply Chain that Can Support
Stable Product Supply
A pharmaceutical supply chain which involves suppliers from

Progress of the Medium-term Management
Plan and FY2022 Overview

multiple countries and regions faces the risks of natural disasters,
infectious diseases, and geopolitical strife, the challenges involvedin providing a stable supply of generics increased further in FY2022.

In FY2022, we leveraged our experience building a

Believing that avoiding the various supply chain risks andpharmaceutical supply system for the United States to further

maintaining a stable product supply is our greatest challenge, thethe creation of a supply chain and reliability assurance system for

Nippon Shinyaku Group is promoting the following three strategies

the Chinese market. In addition, in order to respond to thein order to increase its pharmaceutical supply chain capabilities.

increase in demand for nucleic acid drugs that will accompany
further global expansion, we worked to enhance our supply
system. For example, we began construction of a plant to handle

1. Constructing a nucleic acid API purification plant at the
Odawara Central Factory

a portion (the purification) of the nucleic acid manufacturing

We aim to complete this new nucleic acid purification plant inprocess at our Odawara Central Factory. We also added second

December 2023. We are positioning this facility as ansuppliers for nucleic acid APIs, formulations, and raw materials.

investment to further build up our manufacturing technologies
and to establish a strong global supply system.

Materiality

Realizing a healthy future by creating innovation

Main Activities
Supply chain Establishing a global sales andsupply system to provide
pharmaceuticals and functional
foods to the world Strengthening the stable supply
system of products through risk
management
Reliability assurance Establishing a mechanism for
supplying safe and high-quality
products, including new drugs suchas nucleic acid medicine

42

NIPPON SHINYAKU CO., LTD.

FY2022 ActivitiesS urveyed suppliers on supply chain and CSR matterswith the aim of sustainable and stable procurement Achieved a 100% risk assessment implementation
rate regarding Nippon Shinyaku products, APIs,
formulations, and important raw materials (149/149
items)
 Began construction of a nucleic acid API purification
plant at the Odawara Central FactoryImplemented thorough plant management
regarding products and built a reliability assurance
system for marketing in China

Voice
Issues and FY2023 Strategies

Realizing Stable Product Supply for Patients Around the WorldS haring the Nippon Shinyaku Sustainable
Procurement Policy throughout the Group and withbusiness partners
 Enhancing stable product supply by increasing
demand forecasting precision using AI and otherdigital technologies Completing construction of the nucleic acid API
purification plant at the Odawara Central Factory andmaking preparations for its operation
Implementing integrated safety information
management from the development stage andthorough plant management regarding products

Viltepso, released as Japan’s first antisense oligonucleotide, is also the first product that Nippon Shinyaku has
marketed itself in the United States. Unlike with the domestic products with which Nippon Shinyaku has
accumulated an abundance of data and knowhow, we have had almost no experience marketing products
ourselves overseas. The demand for such products cannot be accurately perceived or predicted based on what wehave learned through our products in Japan alone. We engage in periodic meetings with the supply chain divisionof NS Pharma, a local Group company, to share detailed information on topics such as the state of sales domesticallyand overseas, future prospects, and production and shipping schedules, and in turn develop plans that enable theSatoshi AsanoSC Management Section
Supply Chain Management
Department

stable provision of Viltepso both in Japan and internationally. Going forward, Nippon Shinyaku will strive to build aglobal supply chain that is even stronger and more optimized so that we may deliver our unique, high-quality
pharmaceuticals quickly and stably to patients not just in Japan or the United States but around the world.
Integrated Report 2023

43

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Pharmaceuticals Business

2. Building a risk management system to dynamicallymanage potential supply chain risks

entire pharmaceutical life cycle, from the R&D stage through to
product launch and beyond. Taking charge of product quality

Having a detailed grasp of our supply chain will help Nippon

assurance, data reliability maintenance, safety information

Shinyaku to manage risks. We are striving to maintain an

management, pharmaceutical applications, and post-

accurate awareness of the stable supply and BCP* initiatives

manufacture and marketing surveys and medicine

our suppliers engage in by conducting written surveys of

consultations, we strive to ensure the effectiveness and safety

suppliers involved in all APIs and formulations. Through a risk-of pharmaceuticals.

based approach rooted in the results of these surveys as well as

Sales

Aiming to be a trusted treatment
partner with high-quality informationand integrity

In addition, through solid coordination between the various

quality information and business records, we are taking

reliability assurance divisions under the general marketing

thorough steps to reduce risks.

supervisor, QA manager, and safety manager, we ensure* BCP: An abbreviation of “business continuity plan.”compliance with the terms of approvals; maintain and manage

3. Promoting the DX of our supply chain

pharmaceutical manufacturing and marketing licenses; andShouzou SanoAt the Odawara Central Factory, we are moving forward with

implement compliance with the GQP* , GVP* , and GPSP*Managing Director, Sales and Marketing

preparations to create a connected factory by creating a vial

ministerial ordinances. Through these means, we aim to further

inspection system utilizing AI image recognition andenhance our manufacturing and marketing systems to ensure

connecting manufacturing facilities via IoT for improved quality

product quality, effectiveness, and safety.

and preventative maintenance. We are also investigating

1

2

3

Additionally, in accordance with the global supply of

predictive modeling utilizing AI to detect environmental

products, we continuously revise our structure and procedureschanges and other threats which could impact stable productto ensure compliance with the regulations of new countries

supply and aid in highly accurate demand prediction.

whose markets we are entering. In FY2022, we worked with a

The primary mission of our Sales and Marketing Division is to “deliver our unique products to as many patients sufferingfrom illness as possible, as quickly as possible.” To this end, we aim to become a treatment partner trusted by doctors andpatients through providing high-quality information based on the spirit of patient centricity.
The Sales and Marketing Division also bears a great deal of responsibility in fulfilling President Nakai’s threecommitments. To achieve the continued launch of at least one unique product each year on average, it is essential tointroduce in-licensed products and undertake PLCM. Demonstrating Nippon Shinyaku’s relevance in our focal areas andfields and proving the strength of our marketing will lead to successful in-licensing.
Another role of medical representatives (MRs) is to grasp the needs of medical professionals and patients from their
daily activities to obtain leads for PLCM. Concentrating on intractable and rare diseases, one of our focal areas, we help
patients access early diagnosis and appropriate treatment by providing up-to-date information through ongoing
communication, and collaborating with medical professionals in hospitals and clinics.
We are sometimes recognized by people outside the Company for the high integrity of our employees. Our work in
Sales and Marketing is based on integrity, and without that integrity, and without knowledge, we cannot achieve results.
Through the introduction of an in-house certification exam program and a team system for MR activities, we are striving
to build a highly cohesive organization where we can grow through friendly internal rivalry. We must further hone ourexpertise and improve our marketing capabilities toward the critical goal of global expansion. Each Sales and Marketing
team member will keep the spirit of patient centricity in mind and continue to fulfill our roles and responsibilities.

local subsidiary to build a reliability assurance system in China.
Through these three strategies, we will reduce pharmaceutical

In FY2023, we will be working steadily on operations to ensure

supply risks and at the same time increase our competitiveness,

product reliability in the United States and China. We will also

propelling us further in our transition to a resilient supply chain.

be further developing our systems with an eye on future moves.

Reliability Assurance Initiatives
The Production & Assurance Division handles compliance with
relevant laws and ordinances as well as tasks spanning the*1 GQP: An abbreviation of Good Quality Practice. A standard for the quality management of,among others, pharmaceuticals, quasi-drugs, cosmetics, and regenerative medicine
products. Conformity to this standard is one of the requirements of pharmaceuticalmanufacturing and marketing licenses.
*2 GVP: An abbreviation of Good Vigilance Practice. A standard for post-manufacture andmarketing safety management of pharmaceuticals, quasi-drugs, cosmetics, medical devices,in vitro diagnostic products, and regenerative medicine products. Conformity to this standard
is one of the requirements of pharmaceutical manufacturing and marketing licenses.
*3 GPSP: An abbreviation of Good Post-marketing Study Practice. A standard for postmanufacture and marketing surveys and testing.

Voice

Globalizing the Work of Quality Assurance in Line with EachCountry’s Regulations and Requirements

Materiality
Main Activities

When we engage in quality assurance, we strive to ensure that customers can take our products with peace of mind,
focusing on appropriately maintaining and managing quality so that pharmaceuticals have the expected safety andwork effectively. We have built a pharmaceutical quality system based on our quality policy. Under this system, we
appropriately manage and supervise manufacturing facilities, assess product quality, and also engage in communication
with regulatory authorities. As we globalize our pharmaceutical distribution, we need quality management which is inconformance with each country’s regulations and requirements. Accordingly, we are gathering information about these44

Shohei Nakagawara

so that we may respond swiftly even in the event of a quality issue at a factory, and so that we can ensure a stable

Quality Assurance Section
Quality Assurance Department
Regulatory Affairs, Pharmacovigilance
and Quality Assurance Division

product supply. Among our efforts in this area, our experience building our own marketing system in the United States

NIPPON SHINYAKU CO., LTD.

for Viltepso was of great use when we created a reliability assurance system in China. Going forward, we will continue to
strive to deliver our high-quality, unique pharmaceuticals to patients around the world.

Realizing a healthy future by creating innovation
FY2022 Activities
 romoted medication guidance through “Sherpa,” aPsupport program for patients with pulmonary arterial
hypertension and chronic thromboembolic
pulmonary hypertension Provided information by combining MR activities withdigital services (our owned site and third-party
services) according to the following sequence ofphases: disease recognition  diagnosis  treatment
 continued medication Provided information on our disease awareness andproduct information websites created for patients romoting treatment, diagnosis,
P
medication guidance, and life
improvement through the use ofdigital technologies Providing information to medical
institutions and implementing
disease awareness-raising activities
for patients and their families
Issues and FY2023 StrategiesF amiliarizing physicians with the value of “Sherpa”(high patient satisfaction) Providing information using digital technology Combining MR and digital activities Providing information digitally using customer
journey maps Considering and implementing marketing
automation
Integrated Report 2023

45

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Pharmaceuticals Business

Earn the Trust of Physicians by Providing
High-Quality Information

years and has been eagerly awaited by many patients. In Marchenhanced to meet challenges and objectives, ranging from2023, in the area of gynecology, we launched MonoVer for the

disease awareness for the purpose of market expansion, totreatment of iron deficiency anemia. Many patients withevidence supporting the selection of Nippon Shinyaku’s

The Sales and Marketing Division is committed to its mission toanemia suffer in silence as they believe that their illness ispharmaceutical products, and measures to prevent side effects

deliver our unique products to as many patients as possible, as

common. Left with no treatment option, they choose to simply

ensuring proper use of drugs. By analyzing the delivery data

quickly as possible based on the concept of patient centricity,

accept the disease. Since both drugs meet the needs ofand implementing the PDCA cycle, we will promote the use ofwhere the patient is at the center of thoughts and actions inpatients and have a significant role to play in fulfilling our social

digital content so that medical professionals can obtain the

medical care. To achieve this mission, we will establish a system

mission, we will achieve early market penetration in FY2023.

information they need, when they need it.

that enables us to accurately provide medical professionals

In the area of pulmonary hypertension, we launched theWe have also established a system that allows MRs to use

involved in patient care with the information they need when

patient support program “Sherpa” in April 2022. “Sherpa”

iPads equipped with all our digital content to deliver

they need it. We aim to become a treatment partner trusted byprovides regular support by telephone to patients by nurses

information, and we are working on a system that enables

medical professionals by training MR as well as digital human

who have received specialized training in the program. We

high-quality information provision by combining MR activities

resources and providing high-quality information through ahave received comments such as, “It is such a relief to havewith digital content.

combination of MR and digital activities.

someone who understands my situation listen to me talk

Implementing high-quality information sharing activities

MRs to exchange information face-to-face with medical
professionals and strengthening information provision activities,
we are focusing on providing information through digital media

about my problems and anxieties,” and “I’m very grateful to beable to get accurate answers for the questions I have between

Progress of the Medium-term Management
Plan and FY2022 Overview

Disease Awareness Initiatives

such as websites. We will approach patients in need of treatment
through disease awareness efforts to ensure that necessary

appointments about the disease and the medications.” We willcontinue to provide the program for patients in FY2023.

Among Nippon Shinyaku’s focal areas, intractable and rarediseases present a particular need for providing information to

In FY2022, we focused our activities on our most important
strategic products, Uptravi in the area of pulmonary
hypertension and Viltepso in the area of pediatric neurology,

Developing human resources to strengthen
information provision activities

In addition, the area-specific aPM personnel assigned to

medical professionals and patients, as there is often insufficienteach branch office work with MRs to promote disease

information about patients, symptoms to watch out for, andawareness initiatives suited to regional characteristics andtreatment methods. In addition to enhancing digital content forconditions. We believe that providing medical professionals

both of which were discovered and developed in-house. Sincewith specialized information in their areas of expertise,providing information to specialists alone is not enough to

MR human resourcesdeliver drugs to potential patients, we also conducted disease

In order to implement high-quality information provisionawareness and medical coordination activities geared toward

activities by MRs, we have continued training in problem-

non-specialists to ensure that patients receive optimaltreatment as soon as possible.

Amount of digital content on Nippon Shinyaku’s owned websites

accurately identifying problems that patients face based on
information collected on a case-by-case basis, and promoting

FY2022 results

FY2023 target

solution based detailing since FY2021, in which MRs

Page content

63

73

communicate the benefits that our products bring to physicians

Brochure content

1057

a united Sales and Marketing Division team and taking the80

82

correct approach to the problems faced by medical

153

212

professionals and patients.

and patients based on an understanding of each patient’s

Video content

neurology, we launched Fintepla for the treatment of epileptic

background, values, and treatment issues. In FY2023, we will

Total

seizures in patients with Dravet syndrome, a diseasepromote further improvement of problem-solution based

designated as intractable by the Japanese government. This isdetailing by focusing on training for sales office managers, who

the first new drug for the treatment of Dravet syndrome in ten

are the main actors in OJT, and role-playing drills.

As for new products, in 2022, in the area of pediatric

medications reach those who need them as soon as possible.

In addition, each branch office has an area productinitiatives to solve these problems will lead to patient centricity.
We aim to become a trusted presence by working together as

Voicemarketing (aPM) personnel who serves as the main area
marketing contact. aPM personnel are focused on specialty

Uplifting as many patients needing treatment as possible

products, while MRs oversee all products, so that a synergistic

In my work in the Product Marketing Department, I try to deliver the right information to patients. I have beeneffect can be achieved by accompanying MRs and aPMs.

involved in planning and managing a support program for patients taking medications. The anxiety patients feel
during treatment can cause them to give up taking their medications, so we set up a program that can support
them in continuing their treatment.

Digital human resources

Sometimes patients tell me that they are grateful for this program for helping them through their loneliness

In FY2023, we established the Digital Solutions Department toand anxiety regarding their treatment. Moments like these make me newly aware of my mission, and I will

expand and further strengthen our digital operations. This
department will, in collaboration with the Product Marketing
Department at the head office, produce and distribute digital
MRs and aPMs Focused on Specialty Products Collaborate

46

NIPPON SHINYAKU CO., LTD.

content to strengthen information provision activities utilizing
digital technology. Digital content will be expanded andcontinue to uplift as many patients as possible by conveying the importance of going through treatment andErina Kouno

the value of Nippon Shinyaku’s products.

FerrCare Product Marketing Group,
Primary Care Product Marketing
Department
Sales and Marketing Planning Division
Sales and Marketing Division
Integrated Report 2023

47

Nippon Shinyaku Today

Functional Food Business
The Functional Food Division engages in business activities based on its vision which is “Operating within apharmaceutical company, the Functional Food Division proposes solutions to social challenges, including
promoting health and ensuring food safety and security, thereby contributing to building a sustainable society.”
To realize this vision, Nippon Shinyaku pursues product development and awareness raising activities toprovide value that helps people continue to lead healthier and happier lives, and contributes to solving issues
faced by society, such as improving health through food and nutritional problems.

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Feedback from an Athlete

A feeling of confidence supported my physical healthduring a grueling schedule
Mika Shibata Japan women’s volleyball team
The most difficult thing for me about playing in the French professional league was the three daily
meals. I had to think seriously about the meals I ate as I was cooking the three meals myself and had
experienced a serious Achilles tendon rupture in the past.
In France, there is a game nearly every week during the season, and we travel around a big country in an eight-seater minibus. One of thefactors that got me through the season without getting sick in this grueling environment is WINZONE Whey Protein and the sports supplement
WINZONE Energy Series.
I found I was less likely to still be tired the next day if I took WINZONE Whey Protein during training and before going to bed. Also, some games

Developing products that contribute tolast more than two hours, but using WINZONE Energy Series stopped me running out of stamina. Nippon Shinyaku’s products are made in Japansolving social issues from the uniqueand have received anti-doping certification*, so they can be used with safely.

perspective of a pharmaceutical company

don’t know how much to use for their sport or when.

In the future, I think that if the required intake and timing for each sport was indicated, the products would be easier to use for people who
I hope you will continue to provide support for athletes.
* Anti-doping certification: A global standard anti-doping certification program for sports supplements with a system for checking whether supplements are contaminated by substances whose use isprohibited by the World Anti-Doping Agency (WADA) using advanced analysis technologies and manufacturing plant audits

Hitoshi Ishizawa
Director, Functional Food

Mika Shibata
Born in 1994 in Kyoto City, Kyoto Prefecture. She played for JT Marvelous in Japan’s V. League before joining Vandoeuvre Nancy Volley Ball (VNVB) in the French
women’s A league for the 2022-2023 season. In 2022, she represented Japan in the AVC Cup, contributing to the team winning the competition, and also receiving the
MVP prize. She plays as setter.

Materiality
The Functional Food Division operates the B2B bulk materials business in health food ingredients, preservatives,and protein preparations, and the Supplements business, which is mainly B2C. Food is a daily necessity, but at theRealizing a healthy future by creating innovation

Main Activities

same time, food loss has become a social problem. Therefore, there is high demand for preservatives, which havebeen achieving annual growth of around ¥100 million as a product that helps to extend the shelf life of food.
Nippon Shinyaku has started using AI at the research and development stage and has developed a system that can roviding unique healthcarePproducts and health foodingredients to promote healththrough foodFY2022 ActivitiesL aunched WINZONE Soy Protein and Kiwami SelectCollagen as new healthcare products Foods with Function Claims accepted for products
containing the Company’s health food ingredients,
such as garcinia extract: 16
Issues and FY2023 Strategies
E nhancing healthcare product lineup Further increasing number of Food with Function
Claims accepted Providing new value through PLCM activities for existingproducts


identify putrid bacteria formed in food to verify the effectiveness of preservatives in a day, a process which used totake over a fortnight. In the future, the Company will aim to further contribute to food waste reduction by

Materiality

responding rapidly to the requests of food manufacturers.
WINZONE Whey Protein, a B2C product, has strong support among casual users as well as athletes due to its

Strengthening efforts to protect the global environment

Main Activities

great taste, in addition to the fact it is easy to drink and nutritionally balanced, which differentiates it from rival
products. In Japan, there is data indicating that protein intake among the elderly and children is inadequate.
Nippon Shinyaku approaches these groups through food education activities and promotes initiatives to solve the eveloping high-quality stableD
preservatives that do not impair
the taste of food, in order to extend
shelf life and reduce waste

FY2022 Activities
Isolated and genetically analyzed bacteria that cause
food spoilage from commercially-available lunchboxes, processed foods and other food products

Issues and FY2023 Strategies
Investigating additives that are effective against low
temperature growth and acid resistance of isolated
bacteria that cause food spoilage

social issue of extending healthy life expectancy. It is also looking to expanding into East and Southeast Asia,

Materiality

where economic growth is striking.
Researchers in the Functional Food business incorporate different perspectives into their research by gaining new

Main Activities

inspiration through exchanges with researchers from the Pharmaceuticals business. The Company will continue
aiming to develop products that live up to the high level of trust users them have in pharmaceutical companies.

48

NIPPON SHINYAKU CO., LTD.

Resolving social issues and coexisting with the community
FY2022 Activities reated booklets for the lower grades of elementaryC
school to raise awareness about the importance ofprotein intake and reducing food loss anddistributed them in public facilities in Kyoto Provided on-site classes at several elementary
schools and other facilities in Kyoto onducting dietary educationC
activities for children in order tofoster an interest in foodIssues and FY2023 StrategiesL aunching WINZONE Junior Protein, the first productrelated to food education activities Promoting activities centered on WINZONE Junior
Protein for junior high school students to raiseawareness about eating breakfast, such as on-site classes
and sponsoring events organized by local governments
Integrated Report 2023

49

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Functional Food Business

Functional Food Division Business Modelcontaining carefully selected beauty and health ingredients tofulfill a wide variety of customer needs. In February 2023, with

Focus Areas
Bulk Materials Business
Health foodingredients

Supplements Business
Proteinpreparations

Preservatives

Sportssupplements

Aging care
supplements

the launch of SOY PROTEIN PERFECT CHOICE Kinako Chocolate
Flavor, a sports supplement, Nippon Shinyaku added a productmade from soybeans to the series, which had up to then usedmilk-derived whey. In FY2023, the Company will actively expand
its presence at sports events and engage in direct

Fundamental Research and In-house

In-licensing

PLCM

With our R&D Division and Production & Assurance Division, we use our high level of technical expertise as a pharmaceutical company to develop
and provide high-quality and original products. Therefore, we are working with the following three pillars: promotion of fundamental researchand development of in-house products, in-licensing of products that meet user needs, and product life cycle management (PLCM).
Fundamental Researchcommunication to increase product recognition and strengthen
relationships, thereby providing new value.
New initiatives to resolve social issues and expand businesses
As part of the food education-related activities launched in
FY2021, Nippon Shinyaku prepared on-site classes andDevelopment & In-licensing

Salesbooklets on food education, developed protein and otherproducts for children and the elderly, and investigated theInitiatives to improve customer experience through thedevelopment of an application for collecting and utilizing

use of DX and the promotion of originality

health information. In its first initiative in overseas expansion,

In the preservative field, Nippon Shinyaku aims to improve

the Company will promote the development of sports

customer experience by strengthening interactive

Progress of the Medium-term Management
Plan and FY2022 Overview

supplements in Taiwan.

communication through the construction of an original systemand obtains evidence for ingredients traditionally assumed to

Bulk Materials business

FY2023 Initiatives and Strategy

questions and requests for technical reviews.

be good for the body, with the priority on the safety andIn the health food ingredients field, Nippon Shinyaku isquality that Nippon Shinyaku has built up as a pharmaceuticalpromoting the development of ingredients with health-Cooperation with Local Governments to Spread Food Education

Investigating unique human resources development

company. The Company works to improve the quality of life of

promoting benefits likely to be accepted as Foods with Function

WINZONE Junior Protein, developed through our educational

program for the Functional Food Division

all people and solve social issues by developing and providing

Claims by the Consumer Affairs Agency. Going forward, theactivities, enables the easy absorption of protein at breakfast by

Based on the feedback on SPIRITS, the unique, next-generation

products that are highly nutritious and cost-conscious toCompany will continue providing products that contribute tochildren who tend to lack this nutrient while they grow up.

leader development program for the Functional Food Division

ensure affordability for all. These products include protein-

improving health by searching for original ingredients that can

fortified foods to improve health and extend healthy

precede the needs of the health food industry and engaging incollaborated with local governments in the organization ofdevelopment program, Nippon Shinyaku will establish a new

expectancy and products suited for the complete andjoint development with major health food manufacturers based

various events aiming to spread food education and promote ahuman resources development program to be implemented

balanced nutrition field such as concentrated liquid foods usedon those ingredients. In the preservative field, Nippon Shinyaku

balanced nutritional intake and regular eating habits.

in FY2024.

in medical institutions and care facilities for the elderly.

is aggressively promoting consulting services for processed foodApplying the high-level technology built up in the

manufacturers on extending best before dates as an approach

Manufacturing
Supply Chain & Quality Assurance

Helping to Solve Social Issues Related to Foodusing DX, allowing the Company to both deliver the

The Functional Food Division engages in fundamental research

information needed by customers and timely receive theirpharmaceutical field to microbial control, Nippon Shinyaku

aimed at solving the social issues of food waste. In the protein

also pursues initiatives for food safety and security to help solve

preparation field, it is introducing high-function proteins andlong-standing social issues with the aim of realizing aother preparations to meet social needs and working to breaksustainable society, such as reducing food waste by extending

away from price competition resulting from commoditization, inthe best before dates for food. In addition, by developing

addition to promoting joint development with major foodawareness-raising activities for food education and developing

manufacturers, both for healthcare and everyday foods.

In popularizing this product, Nippon Shinyaku has

to food for all generations. These food-related issues include

Supplements businessthe problem of younger people not eating breakfast and frailty,

In November 2022, Nippon Shinyaku launched Kiwami Selectsarcopenia among the elderly and extreme weight loss among

Collagen, an aging care supplement. This is a high-quality

women caused by low nutrition. The Company isproduct manufactured in Japan which has minimized theimplementing initiatives with local governments, educational

distinctive odor and taste of ordinary collagen. In FY2023, theinstitutions, and other organizations to foster interest in foodCompany will conduct campaigns to increase productand promote healthy eating habits.

recognition, and launch additional products in the series

NIPPON SHINYAKU CO., LTD.

implemented in FY2022, and the digital human resources

Voice

Supporting the healthy growth of children with our products
We are involved in development of sports supplement brand WINZONE. So far, we have brought to market 16
high-quality, safe and reliable products that top athletes want to get hold of in the three areas of endurance, joint

products, it will continue helping to solve social issues related

50

Developing products with higher nutritional value with safety andquality as the priority

care, and protein. Since last fiscal year, in a new initiative, we have been focusing on generation-specific nutritional
issues as a priority task and we are developing applications that will help people to consume various proteins
better. As the first step, we launched WINZONE Junior Protein this spring to solve the issue of inadequate
consumption of protein at breakfast time by elementary and junior high school students. We believe it issignificant for Nippon Shinyaku to supply this product that safely provides growing children with the nutrients

Tetsuro Yoshida
Product Development Section
Protein Business Department

they tend to lack. We will support the healthy growth of children through sales promotion campaigns and foodeducation activities in collaboration with local governments, educational institutions, and other organizations.

Integrated Report 2023

51

ESG as the Foundation for Growth
Human Resources Development

The NS Mind demonstrates the conduct,
attitude, and awareness employees
should set as a goal

realizing a highly psychologically safe organization; andrealizing flexible work styles. Accordingly, we will beestablishing systems and an environment which enable all
employees to flourish regardless of gender, nationality, age, orGiving our all to solve social

In order to deliver our unique products as quickly as possible toother personal characteristics. Additionally, in securing humanchallenges brings both company

as many people as possible, it is necessary for each and every

resources, we engage in systematic mid-career recruitment,

and employee growth

employee to experience even greater growth and leverageand the 4% of our employees who are mid-career hires provide

their unique individuality and strengths in their work with each

us with their high levels of expertise. Going forward, we will beother. It is also essential for the entire company to comeincreasing our numbers of global human resources throughtogether as one team to maximize performance. For thisboth new graduate and mid-career recruitment.

purpose, we created the NS Mind, a list of principles which

Takashi Takaya

demonstrates the conduct, attitude, and awareness all

Director, Personnel, General Affairs, Risk Management,
Compliance & Digital Transformation

aim for the growth of both employees and our Company toemployees should set as a goal. Through the NS Mind, we will
create an even better organization together.

Based on the idea that unique products are the product of unique people, Nippon Shinyaku respects the diversity of its
employees and seeks to provide opportunities so that each and every one may take on challenges with a positive attitude andgrow. The key message of our recruitment website is as follows: “Can you give your all for individuals?” Our employees believe
and take pride in this message, and through action which embodies it, we are living up to the expectations of society.
The desire to give one’s all is what leads to action. The desire to give one’s all is the most powerful management resource. In
accordance with this belief, in April 2023 we put a name on the desire to give one’s all, calling it the “NS Mind.” The NS Mind
consists of three “alls,” principles that all employees, from the management team to the newest employee, should put into
practice daily: “Give your all for yourself,” “give your all for others,” and “give your all for society.”
Nippon Shinyaku Academy (NS Academy) is a support system for autonomous career development. We also offer a variety of
programs, providing support for developing expertise, MBA acquisition, PhD acquisition and studies abroad as complementary
programs. Our HONKI Juku program for fostering the next generation of management leaders focuses on the management of
tomorrow through dialogue with our management team. Employees can also make use of other systems, including those forsecond jobs, volunteering, and secondments, which provide opportunities to further cultivate sensibilities and diversity.
It is by no means easy to learn on one’s own initiative and build a career. We employ a variety of measures to increase thesubjective happiness of employees on an individual level. We also constantly check on the health of individuals andorganizational units through engagement and well-being surveys. Happy, unique, and individual human resources giving their
all to solve social issues will promote sound company growth.

Materiality

Developing diverse human resources andrealizing employee well-being

Main Activities

FY2022 Activities

F ostering autonomous humanresources and global leaders who
are motivated to grow Building a flexible and resilientorganization that can respond tochange Promoting diverse work styles
tailored to each individual Realizing a workplace that is
comfortable and rewarding where
psychological safety is ensured

52

NIPPON SHINYAKU CO., LTD.

Instilled the NS Mind
Created the NS Mind Looked into the NS Academy system Revised the Next-Generation Leader Challenge
Program into HONKI Juku Established new programs to foster practical businessskills and a global mindset Created new job descriptions
 Evaluated the expertise needed for work tasks andexpanded the professional system to provide
appropriate employee treatment
 Introduced a second job system Promoted 1-on-1 meetings Made a portion of childcare leave paid

The NS Mind: Three “alls” and seven actions

Increasing the number of NS Academy participants
Promoting the human resources who have taken partin the Next-Generation Leader Challenge Programand HONKI Juku to middle management, executive,
department manager, and other leadership positions Increasing the number of PROGOS English speaking
test-takers
 Increasing the number of participants in the global
mindset training Increasing the number of human resources able toflourish in global fields
 Implementing cross-departmental discussions on
psychological safety Introducing engagement surveys
 Expanding the number of departments utilizing the
flextime system









Realizing self-directed
career development
and the placing of theright employee in theright position

Realizing a highly
psychologically safeorganization• Job descriptions• Competency• 1-on-1 meetingssurveys• Reforming wage
• Engagement
system• NS Academy
surveys• Reducing number • Expanding the• Internal praiseof years for
professional system application
promotions• Work experience in • Leadership• Revising evaluation other departments assessments
systems• Second job system

Realizing flexible work
styles• Telecommuting• Flextime• Staggered working
hours• Supporting worklife balance<Give your all for yourself>
1. Think and act as if it affects you personally
Act with a sense of ownership toward any and all challenges.
2. Be better than you were yesterday
Aspire each day to improve yourself as you engage in your workand self-development.
<Give your all for others>
3. Take the initiative and demonstrate leadership
Be willing to speak up and get others involved.
4. Turn consideration into action
Be considerate and create a highly psychologically safe
environment.

 Realizing employee treatment in line with roles,

duties, and accomplishments
We have carefully considered our job descriptions establishingwork content, authority, areas of responsibility, necessary skills
and experience, objectives, and evaluation methods. Our goal
is to make it easier for employees aiming for a specific position
to create a self-development plan by clarifying the roles, duties,
experience, and skills needed for positions, realizing employee

5. When in doubt, share
Share ideas, opinions, questions, knowledge, and experience tostimulate and inspire those around you.

treatment in line with roles and duties, and openly disclosing<Give your all for society>challenges in their work. We are also working on reducing the

6. Think about the future of the Company and society
Create a future that promotes the well-being of people.

Issues and FY2023 Strategies

Realizing employee
treatment in line withroles, duties, andaccomplishments

7. Challenge yourself as a pioneer
Have a dream for what you want to do as a member of Nippon
Shinyaku and never give up on achieving it.

the required experience and skills. In addition, we have revised
our evaluation systems to reflect employees taking on
number of years required for promotions and reforming our
wage system, which were previously based on age andexperience.
 Realizing self-directed career development and the

Human resources development policy

placing of the right employee in the right position
Nippon Shinyaku has introduced competency surveys for its
managerial positions so employees can get an objective

In order for Nippon Shinyaku to continue to grow sustainably,

analysis on the gap between where they are now and the role

it needs to be a company employees choose, a company

they should aim for. In addition, we looked into the NS

where employees feel self-fulfilled and that they are growing, aAcademy, a human resources development program whose

company where they want to continue to work. To that end,

goal is the success of diverse personnel and which supports

Nippon Shinyaku will be tackling four themes: Realizing

employees’ autonomous career development. Nippon

employee treatment in line with roles, duties, andShinyaku has established three types of human resources

accomplishments; realizing self-directed career development

essential for its sustainable growth: those who promote

and the placing of the right employee in the right position;“Change,” those who are “Global,” and those who are
Integrated Report 2023

53

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Human Resources Development“Professional.” The Company has further established programs

personal connections but also to support life in other countries

expanding include our internal open recruitment system and Realizing flexible work styles

for each type spanning four categories: “Career,” “Basic,” “Skill up,”and cultures, foster global human resources, and increase

work experiences in other departments to promote career

With the aim of enabling flexible work styles, increasingand “Challenge.”

employee drive to take on new challenges. In addition to aplanning and inter-departmental exchange. Through theseproductivity, and creating work-life balance, Nippon Shinyaku

system supporting study abroad at an institution of themeans, we will be supporting diverse work styles at Nippon

has introduced flextime, telecommuting, and staggeredF ostering future managers

employee’s choice, we also offer a system which recruits

Shinyaku. In August 2022, we introduced a second job system

working hour systems. Our flextime system, already introduced

We have revised our Next-Generation Leader Challengeinterested persons to study abroad at an institution thatfor working outside Nippon Shinyaku. This system supports thein some departments, is scheduled to be expanded toProgram, operated since 2007, into a program called HONKI

Nippon Shinyaku has selected.

autonomous growth of employees and helps them gain aadditional departments in the future.

Juku (Change/Challenge). By taking self-development

diverse background as well as knowledge and skills they could
Fostering human resources for DX

our management team, the aim of HONKI Juku is to give

Nippon Shinyaku is focusing on creating an organization suitedemployees the knowledge, skills, and attitude needed by theto the digital age and fostering human resources who will

 Realizing a highly psychologically safe organization

all who desired could make use of such leave with peace ofnext generation of management. In addition to providing self-

promote DX. Our efforts are supported by the two following

Nippon Shinyaku is aiming to cultivate a work environment

mind. In addition, Nippon Shinyaku now provides paid leave

development programs, we have expanded opportunities topillars: “measures to enhance the IT and DX literacy of allthat promotes employee well-being. In addition to promoting

for a portion of childcare leave (up to 14 days total paid leave

engage in dialogue with the management team.

employees,” and “selective DX specialist training,” in which there

1-on-1 meetings to enhance communication between

when taking childcare leave for five consecutive business days

have been a total of 1,493 participants.

superiors and subordinates, we have also introduced an

or more). As a result, the childcare leave uptake rate was 76.1%

F ostering global human resources

not acquire internally, promoting employee growth.

in April 2022, Nippon Shinyaku’s president released an internal
message encouraging the utilization of childcare leave so thatinternal praise application for use between colleagues. Further,in FY2022. In addition to a 100% uptake rate among eligible

In accordance with our global expansion, we have also

employees (Professional/Skill up) include support for obtaining

we implement leadership assessments which collate thewomen, the uptake rate among eligible men rose to 69.3%, up

enhanced our training and support in order to foster global

Di-Lite* -compliant certifications, internal DX webinars

results of anonymous answers by subordinates on the words

from 50% in FY2021.

human resources. Through global mindset training (Global/

provided by both in-house and external instructors, and theand actions of superiors, providing feedback on strengths,

Basic) and other training, we offer programs that cultivate theintroductory “Manan-DEGITA-ru” course for improving IT skills

weaknesses, and the degree to which a superior has been able

other and can take childcare leave with peace of mind is akind of mindset to face global challenges constructively anddirectly related to employee work. Our selective DX specialist

to demonstrate their skills.

workplace that is comfortable not only for employees raisingon a level footing. In FY2023, 68 new employees and 81

training (Professional/Challenge) is divided into foundational

Nippon Shinyaku has focused on health and productivity

employees who have received a promotion have undergone

and applied courses for three skill categories: data science,

management since 2018. In addition to annual stress checks,

circumstances necessitating leave-taking. In order to realize

such training, which is also mandatory for new employees. Our

business, and data engineering. Each training session issince 2003 we have also implemented programs to support

such a workplace, Nippon Shinyaku will create a culture offoreign language support program (Global/Skill up) supports

implemented for half a year.

employee engagement. Stress checks, however, are only one

mutual acceptance of each other’s situations and

Our measures to enhance the IT and DX literacy of all
1

employees’ self-directed study of English and other foreign

A workplace where employees trust and understand eachchildren but all employees who may have personal

component of proper self-care, and it has been difficult

circumstances, and of helping each other.

languages. In order to promote actual English usage abilities

F ostering human resources who will produce competitivenessintegrating them into improving workplace engagement. In the

beyond mere study, we have introduced the PROGOS English

Nippon Shinyaku provides a system which supports employees

spring of 2023, we introduced a new engagement survey*2 withspeaking test (Global/Skill up), and to date 349 employees havein technical and research positions who wish to obtain a PhD

the aim of resolving organizational challenges at a deeper leveltaken this test.

with the aim of improving the Company’s research andand promoting the well-being of each individual employee. We

engineering capabilities. We also foster human resources aiming

are working to achieve a positive response rate*3 of at least 75%

systems (Global/Challenge) to provide opportunities to thefor middle management and executive positions with a support

for each of the three engagement items*4 in the survey.

*1 Di-Lite: The scope of digital literacy all businesspersons should have as defined by the Digital
Literacy Council of Japan.
*2 Nippon Shinyaku uses a survey provided by Qualtrics for its engagement surveys.
*3 The three engagement items in the survey are as follows:• This company motivates me to contribute more than is normally required to complete my work.
• My work gives me a feeling of personal accomplishment.
• I would recommend this company to people I know as a great place to work.
*4 Positive response rate: The rate of those who answered “agree” or “strongly agree” on a fivepoint scale.

next generation of employees who will lead the Company tosystem, open to a few employees each year, for obtaining an

study at international universities and research institutions,

MBA with the aim of strengthening our organization as a whole.

gain an understanding of global business, and expand their

Nippon Shinyaku has around 50 MBA-holders, and 36.2% ofknowledge. The aims of these systems are not only theemployees have a PhD or master’s degree.

In addition, we have also established study abroad support

Voice

acquisition of specialized knowledge and the building ofWe provide career development training (Career) for

Making full use of childcare leave with the support of my teammembers and a robust internal leave system

employees aged 30, 40, 50, and 55. This program, provided to

As a medical representative, I primarily work with university hospitals in Tokyo. When my first child was born, IF ostering human resources who determine their own careers

all employees when they reach critical ages, provides them

ProfeProfessionalssional

NSNS
Mind
Mind

GlobalGlobalNS Academy

NIPPON SHINYAKU CO., LTD.

didn’t take off work, but after seeing how difficult childcare was, I felt like I should take childcare leave when mywith the opportunity to think about the work style that best fits

next child would be born. Later, my own brother took childcare leave, and I also learned about Nippon

them, how they can contribute to Nippon Shinyaku, and the

Shinyaku’s own robust leave system, strengthening my decision to take leave when the time came. I was quick

future of their career.

to tell the members of my team about my intention, and thanks to the cheerful support they gave me, I wasable to use the childcare leave system smoothly and with peace of mind.

We will also be expanding our professional system forevaluating not just management capabilities but also the54

With the revisions to the Childcare and Caregiver Leave Act

programs and tackling management challenges provided byexpertise needed for one’s position. Other programs we will be

Shunya Kaji
Hospital Team
Chuo Sales and Marketing BranchTokyo Business Office
Sales and Marketing Department

I was on leave for around a month, and I experienced firsthand the difficulty of raising children all day. This
experience strengthened the bonds of my family and improved both my private and work life.

Integrated Report 2023

55

Nippon Shinyaku TodayDiversity, Equity & Inclusion (DE&I)

Main Activities

FY2022 Activities

F ostering a culture that recognizes
individuals regardless of factors
such as age, gender, values, ordisability

 onducted project activities by the Personnel
C
Department and employees recruited fromthroughout the Company with the goal of employing
people with disabilities and expanding their job
opportunities In order to instill DE&I throughout the Company-H eld panel discussions with employees withdisabilities and the Collaboration Department- S imulated experience of people with
developmental disabilities using VR-C onducted Universal Manners (Level 3) training Conducted training on unconscious bias

Basic Approach to DE&I

Materiality
Issues and FY2023 StrategiesIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Human Rights Initiatives

Developing diverse human resources and realizing
employee well-being

Materiality

A New Way of Life

 romoting awareness of the importance of DE&I toPhuman resources who have little experiencecollaborating in their own jobs or workplaces- Publicizing the Collaboration Department- Increasing the number of participants in Universal
Manners training

Resolving social issues and coexisting with the community

Main Activities
I mplementing in-house education
and awareness-raising activities topromote understanding of humanrights

FY2022 Activities


Issues and FY2023 Strategies

 onducted human rights risk survey for managers
CConducted human rights due diligence training for all
employees

Human Rights Initiatives

E stablishing a system for human rights due diligence
initiatives
 Raising awareness of human rights Having dialogue with third parties
to the Board of Directors. The director in charge of business
management & sustainability is responsible for human rights,

The Nippon Shinyaku Group has established the Nippon

and the Corporate Sustainability Department promotes

Shinyaku Group Human Rights Policy to fulfill its corporate

initiatives to resolve issues.

number rose to 16.8%, indicating that the number of female

respect for human rights based on the Code of Conduct for

executives and female managers is growing every year. Having

Nippon Shinyaku Group, which is a practical standard ofunder the Sustainability Committee to further promote full-

Based on the idea that unique products are the product ofagreed to the Japan Business Federation (Keidanren)’s #Here

conduct that all executives and employees should take in theirscale human rights due diligence, with the heads of related

unique people, Nippon Shinyaku respects diversity in terms of

We Go 203030 initiative—having females account for at leastbusiness activities to meet the expectations of society and earndivisions as members. The subcommittee will hold discussions

sex, age, nationality, and beliefs, and provides opportunities for

30% of directors by 2030—we are aiming to create a workplace

its trust.

to identify internal and external human rights issues andindividuals to take on challenges and grow in a positiveenvironment and organization that makes it possible formanner. In order to create innovation and achieve sustainablevarious types of human resources, including females, to Basic Approach to Human Rights

growth, we are working to promote well-being and create an

improve their career.

As a signatory to the United Nations Global Compact, weboth internally and externally in order to build a human rights

organizational climate in which employees with diverse values
can thrive.

In 2023, we established a Human Rights Subcommittee

promote human rights initiatives.
Going forward, we will assess and identify human rights risks

As for employing people with disabilities, in FY2007, Nippon

support the ten principles in the four areas of responsibility. We

due diligence mechanism in accordance with the United

Shinyaku introduced the Dual System, which makes it possible

also understand the human rights expressed in the Universal

Nations Guiding Principles on Business and Human Rights.

for participants to learn while working, under the concept ofDeclaration of Human Rights and the principles related toAlso, we will evaluate our efforts to address the identified risks

S upporting the advancement of diverse human resources

diversity, equity, and inclusion. We are also working to expand

fundamental rights set forth in the International Labour

and their effectiveness, and disclose information appropriately.

Since FY2019, Nippon Shinyaku has touted the goal of having

employment and job opportunities in collaboration with work-

Organization (ILO) Declaration on Fundamental Principles and

15% or more of female executives as part of its “Generaltransition support providers, government agencies, and local

Rights at Work as minimum standards. In our business activities, Human rights risk assessment

Employer Action Plan based on the Act on Promotion ofcompanies. We have not established any special-purpose

we respect the human rights and personalities of individuals in

In 2022, the Nippon Shinyaku Group conducted a human

Women’s Participation and Advancement in the Workplace.”subsidiaries, but we have set up collaborative departments toaccordance with the Guiding Principles on Business andrights risk survey and other surveys targeting managers. We

That goal was met in FY2020, when female employees

work with multiple people with disabilities and actively provide

Human Rights. In terms of pharmaceutical R&D, we will act

will continue to conduct surveys on a regular basis and expand

accounted for 15.1% of executive positions. In FY2022, that

opportunities for them to grow together.

with high ethical standards in accordance with the Declaration

the scope of the survey in order to identify human rights risks

of Helsinki and build a relationship of trust with society.

and take appropriate measures.

	
WEB Click here for the full text of our Human Rights Policy

Ratio of female executives and female managers
(%)

(%)

20

15
10

https://www.nippon-shinyaku.co.jp/english/sustainability/esg/social/humanrights.php

Disabled employee ratio

13.0
7.8

14.1
9.7

15.1
10.3

16.1

16.8
13.3

11.1

2.6
2.5

2.51

The Nippon Shinyaku Group provides training on human rights
to all employees. In addition to annual training on harassment,

2.49
 Organizational structure

training on human rights due diligence was conducted as part

The Sustainability Committee, chaired by the president,

of departmental compliance training in 2022. We also inform

2.1

deliberates and reports twice a year on initiatives concerning

our business partners about our human rights policy, seeking

2.0

respect for human rights, and important matters are reported

their understanding and promoting their efforts.

2.37

2.4

2.35
2.23

2.3
2.2

5

 Training and awareness

1.9
0

2018

2019

 Ratio of female executives

56

NIPPON SHINYAKU CO., LTD.

2020

2021

2022 (FY)

1.8

2018

2019

2020

2021

2022 (FY) Ratio of female managers

Integrated Report 2023

57

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Well-being Management

Main Activities

FY2022 ActivitiesR ealizing a workplace that is
comfortable and rewarding where
psychological safety is ensured Maintaining and improving
employee health eld health seminars (seven times, total of 3,400
H
participants)
 Held company-wide online lecture

Well-being refers to being in a positive state, physically, mentally,and socially. Nippon Shinyaku aims to be a company where
employees can find happiness in their work. In other words, weseek to create a psychologically safe workplace where employees
can be themselves. We believe well-being management is whatenables each and every employee to find happiness in their workand realize our Business Philosophy, based on improvement of
the working environment and promotion of health andproductivity management. Nippon Shinyaku emphasizes six
perspectives in promoting well-being management.
 Six perspectives of well-being management

l

ta

e
Fl

58

ew

ork

NIPPON SHINYAKU CO., LTD.

st yl

es



 aintaining well-being promotion activities
MExpanding measures to enable co-workers to increase
their sense of unity

Moreover, we will continue to help each and every employee tofind job satisfaction by fostering a culture of taking on challenges
and supporting the growth of human resources through thepromotion of NS Mind and NS Academy within the Company.

Improving the Working Environment Basic Policy on Occupational Safety and Health

We will efficiently and effectively promote both basic safety
and health activities and health and productivity management
measures to maintain and enhance the health of employees.
By doing so, we aim to protect the safety, security, and physicaland mental health of all workers, create rewarding work
environments, and continuously enhance the well-being of ouremployees.

en
dm
n
a
h
i c al h e alt
P hys

Nippon Shinyaku implemented such measures as ensuring thethorough maintenance of basic infection controls, rules onmask wearing in line with government instructions, staggered
working hours utilizing telecommuting and flextime, andurging self checks of the working environment during
telecommuting. Going forward, as we do with regular
influenza, we will continue to respond in line with the in-houseprocedures in the case of contraction of an infectious disease.

Promoting Health and Productivity
Management
After the 2018 Nippon Shinyaku Health Declaration and 2020
Health Declaration, Nippon Shinyaku issued its Well-being
Declaration 2021 in October 2021. In order to pursue wellbeing for employees and their families, the Health andProductivity Management Working Group (composed of the
Well-being Promotion Section of the Personnel Department ,the health insurance association, and the labor unions) has
focused efforts on health seminars aimed at increasing healthliteracy and anti-smoking measures. In addition, we haveassigned well-being supporters at our business sites to raiseawareness of health and productivity management and collectopinions, and we promote health and productivity
management in cooperation with them.

an advisor. In April 2022, we changed the name of thedepartment with responsibility for the project from the Health
Promotion Office, Personnel Department to the Well-being
Promotion Section, Personnel Department. In the area ofinternal awareness, we have accelerated full-scale well-being
promotion activities with the aim of co-creating well-being
based on three axes.
To mark the first anniversary after we issued Well-being
Declaration 2021, we created an original sticker, which can also
be described as the symbol of the activities. In addition, at acompany-wide online lecture, after listening to Professor Yukiko
Uchida’s lecture, we had all employees declare what they would
like to try doing for themselves and the people around them toenjoy working, creating an opportunity for employees to think
about well-being as something that involves them personally.
Through the well-being promotion project, we will explore
what it means to be in a positive state and implement
measures to nurture connections between people and a spiritof altruism, which have a significant impact on well-being.
Three axes of well-being

Knowing your own
well-being(Initiatives)
Monthly happiness diagnosis Health and Safety Management Structure

The Company-wide Occupational Health and Safety (OH&S)
Committee meets twice a year to decide on the policy for the
fiscal year and evaluate and report on activities. We also
promote company-wide health and safety activities, including
the transmission of information from the Company-wide office
to the OH&S Committee of each business location where
meetings are held monthly.

(Cases)Aiming to Implement Well-being
Management
In 2021, we launched a project to promote well-being in the
Personnel Department, with Professor Yukiko Uchida of theInstitute for the Future of Human Society at Kyoto University as

Deepeningunderstanding ofwell-being

Knowing thewell-being of thosearound you(Initiatives)
Company-wide online lectures
Round-table discussions
Panel discussions(Initiatives)Photo sharing project
Project to create a happy
workplace

Voice
3

Contributing to well-being for each and every employee throughdialogue

24
19

19

20

1.25
10

10

0

Co-creatingwell-being

(%)

30

Positivean relationshipshum

Well-beingblChanges in number of occupational accidents andoccupational accident frequency rate

human Supp
reso ort
urc fo
es r
g

h
wt
ro

on of diverognitisity
RecC

Maintaining the physical and mental health of employees isessential for well-being management. To achieve this, we
engage actively in occupational health and safety activities,
including prevention of workplace accidents and measures toaddress mental health to maintain a comfortable and safe
working environment. We will also realize flexible workstyles
through enhancement of systems such as flextime and telework.
In addition, by fostering a culture that recognizes diversity, weare building positive human relationships through connections
between diverse people, and we will put in place well-being
management to create an environment that is easy to work in.
king
f ta ese o llengrtu aul n choIssues and FY2023 Strategies



Approach to Well-being Managementxi FY2022 measures to prevent the spread of COVID-19

Developing diverse human resources and realizing
employee well-being

Materiality

2018

0.00

0.00

2019

2020

2

13
0.29
2021

We launched the Well-being Promotion Project based on the desire for each and every employee to achieve
0.56

1

well-being through their work and have been engaging in activities since 2021. Well-being is created by theCompany and all the employees working together. Through activities to promote well-being internally, I found2022 (FY)0that dialogue is important. Sharing well-being time at company scale through the participation of many
employees, which included creating the sticker and the well-being photo sharing project, brought me great Number of occupational accidents (Left axis)
 Occupational accident frequency rate (Right axis)* Occupational accident frequency rate = Number of fatalities and injuries from occupational
accidents / Total number of actual working hours × 1,000,000* Number of fatalities and injuries from occupational accidents: Number of fatalities andinjuries from occupational accidents due to occupational injuries resulting in one or moredays of absence from work and partial or total loss of body functions.

happiness. In the future, I will continue to value dialogue in order to co-create well-being for each and every

Chihiro Katagiri

employee.

Well-being Promotion Section
Personnel Department
Integrated Report 2023

59

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Co-creating Value with the Environment

Materiality

Strengthening efforts to protect the global environment

The 7th Nippon Shinyaku Environmental Targets Plan (FY2023-2025)
Item

Description of Main Activities

FY2022 Activities

Issues and FY2023 Strategies

 eceived third-party verification of CO2 emissions andRenergy consumption Installed a solar power generator (Discovery ResearchLaboratories in Tsukuba) Began the switch to hydroelectric power (Odawara
Central Factory) romoting greenhouse gas
P
reductions
 Promoting recycling of resources(water, waste, etc.)F utaba aoi dedications: Aimed to be the number one
company in the number of dedications of futaba aoi(Asarum caulescens) to Kamigamo Shrine. Also began
examining methods of propagation by suckering in FY2022.
 Conservation of Chrysanthemum seticuspe: Exhibitedat the Green-Water Promenade of Kyoto Station andat the Kan-in no Miya Residence in the Imperial
Palace. Provided seedlings and participated inreplanting activities.
 Conducted an initial survey of vegetation on themountain and forests around Daigoji Temple.
 ontinuing activities to protect andCcultivate endangered species at the
Yamashina Botanical ResearchInstituteEnvironmental Management

 romoting the switch to renewable energy (HeadP
Office area) Expanding installations of solar power generators(Head Office area and Odawara Central Factory) Strengthening water resource management
initiativesF utaba aoi dedications: Continued cultivating suckers
from Kamigamo Shrine and experimenting withpropagation using suckers.
 Preservation of Chrysanthemum seticuspe: Conducting
plant education activities through the propagationand exhibition of Chrysanthemum seticuspe.
 Continuing to survey the mountain and forests
around Daigoji Temple.
Targets

Climate change
alleviation

Greenhouse gas emissions (Scope 1, 2) by FY2030 by 42% from the FY2020 benchmark
Greenhouse gas emissions (Scope 1, 2) by FY2025 by 21% from the FY2020 benchmark

Water resourcesmanagement

Reduce water use intensity by 10% from the FY2021 level by FY2025

Waste management

Reduce the final amount of landfilled waste by 75% from the FY2005 level by FY2025
Set the target waste plastic recycling rate for FY2025 at 65% or above
Set the target waste recycling rate for FY2025 at 60% or above

Chemical substancemanagement

Promote appropriate management of chemical substances, including those designated in the Pollutant Release and Transfer Register(PRTR) system provided for by the Act on the Assessment of Releases of Specified Chemical Substances in the Environment and thePromotion of Management Improvement, and constantly reduce releases of such substances in the environment

Environmental
management

Continue the certification of the environmental management systems (ISO 14001 and KES Step 2) so as to effectively improve
environmental performance

Biodiversity

Promote biodiversity conservation activities

Disclosure Based on the TCFD
Recommendations

 Environmental Targets Plan

Committee. The results of the Environment Committee andSustainability Committee’s investigations are reported at least

The Environmental Targets Plan sets specific voluntary targets

In December 2021, Nippon Shinyaku declared its support for

Nippon Shinyaku is aware of its responsibility toward thefor the Company to carry out to comply with its Basic

the recommendations of the Task Force on Climate-related

environment and has established a Basic Environmental Policy toEnvironmental Policy. We succeeded in reaching all of the

Financial Disclosures (TCFD)*. In addition to working to address Scenario analysis

reduce its environmental impact in all areas of its businesstargets of our 6th Nippon Shinyaku Environmental Targets Planalready identified risks from the perspective of risk

Recognizing the enormous impact climate-related risks andactivities. The Environment Committee, chaired by the Director infrom FY2020 to 2022. In FY2023, we established the 7th

management, we conducted a scenario analysis of climate-opportunities will yield on the company’s business strategies,

charge of Business Management & Sustainability, was establishedNippon Shinyaku Environmental Targets Plan (FY2023–2025),

related risks and opportunities in line with the framework of

Nippon Shinyaku has identified the risks and opportunities of

to put this policy into practice and determines the direction andand we aim to enhance corporate value through ESG

the TCFD recommendations.

climate change and evaluated their importance according totargets of our environmental preservation activities.

management and create a sustainable society by putting thethe following process. This analysis and evaluation into climate

	
WEB About environmental initiatives at Nippon Shinyaku

SDGs into practice by working toward these targets.

change-related risks and opportunities was conducted utilizing

https://www.nippon-shinyaku.co.jp/english/sustainability/esg/
environment/

At Nippon Shinyaku, our mission is to help people lead healthier, happier lives. When we seek growth, it should be growth in harmony with thenatural environment. That is why we strive to protect, sustain, and improve the environment through eco-considerate business activities.
1. Environmental commitment
We will effectively operate a Company-wide organization responsible for environmental issues and establish clear targets for our collective pursuit of environmental
conservation initiatives.

2. Environmental preservation
We will accurately judge the impacts of our business activities on the environment (including global warming, resource depletion, and environmental pollution) andcontinuously improve our environmental preservation activities (conserving energy and reducing greenhouse gas [GHG] emissions, water usage, and waste) in order toenable sustainable and efficient use of resources and prevent pollution (by appropriately managing and reducing wastewater and gaseous emissions).

3. Conservation of biodiversity
We will pay due consideration to the conservation of biodiversity in our business activities.

4. Legal compliance
We will comply with the environmental laws and regulations of each country or region where we operate, our internal environmental rules and all other applicable rules
to fulfill our social responsibility.

5. Education and training
We will educate and train all directors and employees so that they can recognize the importance of environmental conservation and act in a responsible manner.

6. Disclosure
We will proactively disclose information about our environmental preservation activities and communicate with our local communities and other stakeholders to build
relationships of trust with them.

NIPPON SHINYAKU CO., LTD.

once a year to the Board of Directors.

a 1.5° C warming scenario and a 4° C warming scenario. First,* TCFD: Abbreviation of Task Force on Climate-related Financial Disclosures. Established in 2015
by the Financial Stability Board (FSB) to develop recommendations for more effective climaterelated disclosures to be made by companies to investors, lenders, and insurance underwriters.

climate-related risks and opportunities were comprehensively
sampled. Next, the sampled climate risks and opportunities
were sorted according to their relationship to the company’s

Nippon Shinyaku’s Basic Environmental Policy

60

the relevant activities are reviewed by the Sustainability Governancepharmaceuticals and functional food businesses. Finally, their

The Director in charge of Business Management &importance was evaluated based on two criteria: degree of

Sustainability serves as Officer in charge of response to climate

impact on the company, and probability of occurrence.

issues. This Director chairs the Environment Committee, whichmeets four times a year to ensure the implementation of Strategy

Nippon Shinyaku’s Basic Environmental Policy, which was

Nippon Shinyaku is continually working to improve its

formulated by the Board of Directors. The committee

environmental conservation activities (conserving energy andformulates other environmental policies, promotes

reducing CO2 emissions) based on its Basic Environmental

environmental preservation and other initiatives, and checks

Policy in order to achieve carbon neutrality by 2050. The

the results of environmental preservation activities, including

company’s long-term goal is to realize net-zero CO₂ emissions

the annual CO2 emissions reduction.

by FY2050. In addition, Nippon Shinyaku is also monitoring

The same Director is also a member of the President-chaired

climate-related risks across its entire supply chain. Nippon

Sustainability Committee, which meets twice a year, so that

Shinyaku views the transition to a low-carbon economy as anGroup-wide sustainability activities will be further enhanced.

opportunity, and recognizes the reduction of costs through

The Nippon Shinyaku Group has identified tackling climate

energy conservation and recycling, and the development ofchange as one of its material issues. The details and progress of

relevant products as means to increase its competitiveness.
Integrated Report 2023

61

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Co-creating Value with the Environment

Identified Risk/Opportunities and Measures Risk management

which is expected to reduce CO2 emissions by 50% in the Head

Short- Mid- Longterm term term

Rules, with the Director who is the Head of Personnel, General Affairs,

Office area. In November 2022, the Odawara Central Factory

2026 2031 - 2025
2030

Risk Management, Compliance & Digital Transformation acting as thebegan switching to hydroelectric power, which is expected to

Risk Management Officer, and a department dedicated to overseeing

reduce their CO2 emissions by 6% in the current fiscal year. In

risk management. We have identified various possible risks, including

addition, in April 2022, a solar power generator was installed atclimate change-related ones. Each department has devised measures

the Discovery Research Laboratories in Tsukuba, which isto prevent the actualization of those risks and to respond to any

expected to reduce the CO2 emissions of the entire premises byrealized risk. Further, every year, action plans are formulated to address

12%. We will continue to consider switching to and expanding

the risks selected as highly serious for the entire Group or eachour renewable energy sources, including solar power generators.

PeriodCategory

Transition risks

Policies
and laws

Impact on Nippon Shinyaku

Risk of energy costs and procured goods prices increasing
due to carbon taxes and strengthened energy
conservation laws

Delay in response to global environmental regulations

Markets

Increases in market prices of procured goods due toincreases in demand for raw materials (pharmaceuticals)
Risk of decreases in demand due to increases in productprices in accordance with increased market prices ofprocured goods (functional foods)

Measures• Introduction of an internal carbon pricing system in orderto promote investment in reducing greenhouse gas
emissions• Proactive deployment of energy conservation andrenewable energy measures• Inter-Group education and momentum-fostering
initiatives• Implementation of monitoring of environmental
regulation trends by the Environment Committee• Implementation of preliminary investigations of and early
response to regulation trends by the Environment
Committee• Proactive support for suppliers’ carbon neutral activities
to deal with risk of increased procurement costs

department and enhance measures to prevent their actualization. The

Risks

Evaluation

Acute risks
Physical risks

Chronic
risks• Promotion of investment concerning disaster prevention
and response

Depletion of water resources and water intake limits due
to changes in rainfall patterns (reduction in profits due toreduced production capacity)• Evaluation of risks regarding existing site water supply
security and water shortages as well as abnormal weather

Insufficient raw material procurement due to climatechangeOpportunities

Resource
efficiency/
energyResilience62

encouraging employees to use public transportation systems
while in urban centers, we are promoting measures to better
respond to climate change and raising employee awareness.
replaced by hybrid cars over a four-year period starting from

Nippon Shinyaku has established a greenhouse gas reduction targetof reducing its greenhouse gas emissions (Scope 1 and 2) by FY2030
by 42% from the FY2020 benchmark. As a climate-related
opportunity the Company has also established the ratio of hybrid

vehicles for our sales activities as a key performance indicator. Further,
we will be striving to assess our capital outlays and allocation by using
as indicators investments in environmentally conscious facilities andSupply chain emissions (FY2022 results)
Upstream

The Nippon Shinyaku Group

Downstream

Scope3

Scope1

Scope3

Products and services
purchased

Fuel combustion

Waste generated inoperations

188,834 tons

4,471 tons

208 tons

facilities which contribute to reduced greenhouse gas emissions.


Scope 1 and 2 emissions volume (FY2022 results)(t-CO2)

15,0009,435

10,0009,181

5,236 4,711

5,000

2,725 2,705 2,509


0

Optimization of production and logistics processes

Maintenance of cost competitiveness throughintroduction of renewable energies to reduce carbon tax
burden• Promotion of further development of energy-saving
technologies



Minimizing the damage of physical risks throughimplementation of systematic measures• Implementation of measures such as seismic
reinforcement• Preparing for long-term infrastructure disruptions such asenhancing stockpile capabilities

Contribution to increasing corporate value through thecompany’s climate initiatives, including gaining customer
trust, retaining employees, improving evaluation in
recruitment, and improving evaluation from ESG investors• Promotion of initiatives and information disclosure in linewith the TCFD recommendations• Acquiring SBTi validation, promotion of CDP reporting

Fuel-and energy-related
activities not included in
Scope 1 or Scope 2

Business travel

2013

2017

2018

1,942 tons

1,783 1,315 1,414 1,337
2019

2020

2021

Emissions by business location

20,043 tons

The generation ofelectricity used

2022—* tons

Scope3233 tons

End-of-life treatment ofsold products

140 tons

2021 2022 (FY)
Emissions by scope Main business locations: Head Office area, Odawara Central Factory,
Discovery Research Laboratories in Tsukuba
 Sales offices, etc.
 Scope 1: Direct GHG emissions from owned or controlled sources
 Scope 2: Indirect emissions from the generation of purchased electricity and heatTransportation anddistribution (upstream)

Employeecommuting

Leased assets(downstream)

658 tons

287 tons

628 tons

Initiatives to Reduce CO2 Emissions

Scope1
Scope2



4,711 tons

Transportation anddistribution (downstream)

8,271 7,845 4,449 4,471



Scope2
Capital goods

10,412 10,609 10,129• Investigation into the use of raw materials which pose alow logistics load

NIPPON SHINYAKU CO., LTD.

	WEB FY2023 activity themes and risk management goals Indicators and targets

• Maintenance of diverse suppliers

Reduction in production costs through a variety of• Energy-saving production and process development
improvements to resource efficiency, including energy
through IoT utilization and the promotion of energy
conservation, reduced water utilization, and waste disposal optimization in plants

By introducing hybrid vehicles for our sales activities and also

Nippon Shinyaku’s company-owned vehicles will be entirely• Process automation• Maintenance of diverse suppliers• Strengthening cooperation with suppliers
Increased risk of disruptions to supply chain, including raw• Enhancing plant production and quality control systems
material procurement and product shipping logistics, due
and in turn reducing product risks through means suchto increases in regional torrential rains and large-scale
as inspections of manufacturing contractors’ plants,
typhoons
organization of all information concerning materials andproducts, and revising product standards and testingprocedures

Risk of need to move plants and other sites due to impactof rising sea levels

year so that activities in subsequent years will be improved.

• Promotion of initiatives and information disclosure in linewith the TCFD recommendations• Improvement of corporate value through ESG evaluation• Increased frequency of damage to facilities and increased
repair costs due to abnormal weather and weatherrelated disasters• Formulation of concrete guidelines for action in the event• Suspension of business activities due to damage toof a disasterassociated facilities, including those of the company aswell as collaboration research companies

Committee and then to the Board of Directors at the end of each fiscal

2. Introducing hybrid company-owned vehicles forrepresentatives

results of these activities are reported to the Risk & Compliancehttps://www.nippon-shinyaku.co.jp/english/sustainability/esg/
environment/tcfd.php#anchor04

Stoppage of plant operation and business activities due to • Maintenance of diverse suppliers
depletion of raw materials and other resources• E nhancement of stockpile capabilities
Negative impact on stock prices and fundraising due todelay in tackling climate change

In April 2021, we began the switch to renewable energy,

The Nippon Shinyaku Group has in place Basic Risk Management

1. Switching to renewable energy
Nippon Shinyaku aims to reduce CO2 emissions to zero by
FY2050, with a target of 6,088 t-CO2 in FY2030 (a 42% reduction
from the FY2020 benchmark).

Scope3

Direct emissions from owned or controlled sources(in-house use of fuel and industrial processes)
Indirect emissions from the generation of purchased
electricity and heatIndirect emissions, other than Scope 1 and Scope 2
emissions, from the supply chain* Emissions in FY2022 have not yet been calculated due to a partial lack of data disclosure fromrelevant pharmaceutical wholesalers at the time of calculation.

Integrated Report 2023

63

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Co-creating Value with the Environment

FY2020, except in heavy snowfall areas. In FY2022, hybrid cars

service (ASP service) capable of appropriate and continuous support

company’s policy in this regard so that chemicals are managed

already accounted for 80% of the company’s fleet of sales vehicles.

to waste management. This enables us to confirm responsible waste

correctly by all departments. Thanks to our IT system that

As in the previous fiscal year, we continue to reduce energy

treatment and disposal by our service providers. Furthermore, in theenables a comprehensive and exhaustive inspection of theconsumption through equipment improvement, promote

Head Office area, we disclose information regarding waste materials

status of legal and regulatory compliance concerning chemicalenergy conservation following the guidelines for electricity

from time to time on the in-house intranet based on the KES*

substances, we maintain a responsible management mechanism

conservation and saving energy, and educate employees onenvironmental management system standard.

concerning all chemicals handled in-house in conformity with

the importance and necessity of environmental preservation*1 Law concerning waste disposal and public cleansing*2 City of Kyoto’s ordinances on reduction and proper treatment of waste*3 Abbreviation for Kyoto Environmental Management System Standard, enforced by the
specified non-profit corporation KES Environmental System since 1999. The number ofregistered companies exceed 5,000.

the latest applicable laws and regulations. Furthermore, wethrough in-house educational programs.
 Received third-party verification

3

regularly assess workplace risks, including those related tochemical substances, from the perspective of occupational

Ex situ conservation of rare plants at the Yamashina Botanical Research Institutehealth and safety to realize the highest level of workplace safety.

To improve the reliability of our environmental information, we PRTR method-based management

received verification from a third party, SGS Japan Inc., based

2. Water consumption and risk assessment

on verification standards (ISO 14064-3:2019 and SGS Japan’s

Water consumption in FY2022 was 155 thousand m and Nippon

Business operators that handle one ton or more of any designatedverification procedures). The verification covers Scope 1 andShinyaku was not involved in any cases of finable violations

Type 1 chemical substances per year under the Pollutant Release

Scope 2 and energy consumption.

against laws or regulations on drawing or discharging water.

and Transfer Register (PRTR) method defined under the Act on

In the assessment of water stress at the three main businessSpecific Chemical Substances are required to file notices of theselocations using WRI AQUEDUCT (3.0)* , the Odawara Central Factory

chemicals. We report that we are appropriately managing them.

	Independent
Third-Party Verification Statement
WEB
https://www.nippon-shinyaku.co.jp/english/sustainability/esg/
environment/climatechange.php#anchor05

34Promoting the Recycling of Resources Basic attitudes and targets*4 WRI AQUEDUCT(3.0): A set of water risk assessment tools developed and presented by theWorld Resources Institute (WRI)

Nippon Shinyaku are constantly striving to reduce the amounts ofresources we use, adopting various methods, including reuse andtraditional Kyoto culture, such as futaba aoi (Asarum caulescens)
general incorporated foundation, we have dedicated 140 pots

(thousand m3)

containment structure. In this structure, highly active chemicals

of futaba aoi to Kamigamo Shrine and provided seedlings toare contained first by equipment, second by air current andKyoto City’s Kikutani Forest of Flowering Chrysanthemums.

200

204

182

161

165

150

50

activities is recycled or reused. We are working to reduce the quantities

0

155chamber pressure, and third by building, thereby preventing
leakage into the external environment and taking maximum
care for safety, quality, and environmental protection.

 Survey of plants in the mountain and forests around

Daigoji Temple, a World Cultural Heritage site
In June 2021, the G7 Nature Compact committed to the “30 by 30”

2018

2019

2020

2021

2022 (FY)* Main business locations: Head office area, Odawara Central Factory, Discovery ResearchLaboratories in Tsukuba

In addition, as in the previous fiscal year, we continue toConservation of Biodiversity

initiative, whereby national governments designate more than 30%of land and sea areas as protected areas by 2030. As a result,attention is focusing on temple and shrine forests as areas other than

The Yamashina Botanical Research Institute conservesprotected areas that can contribute to biodiversity conservation.

at production sites, in compliance with applicable laws andpromote the reduction of package waste and office paper, andapproximately 3,000 varieties of plants, including 160 species

Focusing on the Daigoji Temple forest in the southern part of Kyoto

regulations so that water sources will be safeguarded from pollution.

have joined the Plastic Smart campaign launched by thethat are the botanical origins of herbal medicines recorded in

City, Nippon Shinyaku has conducted eight surveys since April 2022

Ministry of the Environment of Japan.

the Japanese Pharmacopoeia, 480 rare plant species, including

and identified 157 species of higher plants in 78 families.

We have set and promote a long-term target of increasing thepercentage of recycled waste plastic to 65% (in conformity withthe goals set in the Voluntary Action Plan on the Environment –Creating a Sound Material-Cycle Society adopted by the Federationof Pharmaceutical Manufacturers’ Associations of Japan) by FY2030.

0.7% of the plants regulated by CITES, such as Welwitschia

Appropriate Management of Chemical
Substances

mirabilis and aloes, 12% of the plants on the Japanese Red List of
the Ministry of the Environment, and 5% of the plants in the Red Ex situ conservation of the Japan-designated Natural

Monument, ayumodoki

Data Book of Kyoto Prefecture. Nippon Shinyaku is committed to

The ayumodoki (Parabotia curtus) is a freshwater fish endemic tothese ex situ conservation efforts as a materiality issue.

Japan that has been drastically reduced due to environmental Initiatives for resource recycling Basic attitude and goals

1. Appropriate treatment and utilization of waste materials

For a pharmaceutical company that handles a variety of Botany education activities

Kameoka Basin and Okayama Prefecture. Yamashina Botanical

We recycle metals and collect and sort out plastic waste inchemical substances, their appropriate management is a vital

The Yamashina Botanical Research Institute routinely holds tours by

Research Institute collaborated with the Ministry of thecompliance with the Waste Disposal and Public Cleansing Act*1

social responsibility. At Nippon Shinyaku, we ensure responsible

appointment, tours for university students studying pharmacology andEnvironment’s conservation and propagation project andand applicable Kyoto City ordinances.*management of all chemicals, and a dedicated committee,

agriculture and pharmacists, indigo dyeing workshops for elementary

succeeded in raising ayumodoki naturally in artificial ponds

established in compliance with the company’s Basic Regulations

school students, public holiday tours, and other events designed towithin its park grounds. We will continue to help conserveon the Management of Chemical Substances, clarifies theraise awareness of conserving the diversity of useful plants.

valuable wildlife as part of our biodiversity conservation activities.

2

In the Head Office area and at the Discovery Research Laboratories
in Tsukuba, we have adopted an integrated waste management64

We conserve and propagate plants that have a place inand Chrysanthemum seticuspe. Through the Aoi Project, arecycled raw materials to ensure that the waste resulting from our

the quality of used water for discharge, including cooling water used

Odawara Central Factory
the Odawara Central Factory is equipped with the latest triple

common use. We are also focusing our effort on the active use of

indicators for the abovementioned efforts. We appropriately manage Management of Highly Active Substances at

The manufacturing plant for highly active solid formulations at

100

of waste generation and waste disposal in landfills, which are general Conservation activities for plants that have a place inWater consumption (main business locations*)
250

Recognizing the limits of resources derived from natural capital, we at

Plant survey in the mountain andforests around Daigoji Temple

traditional Kyoto culture

and the Discovery Research Laboratories in Tsukuba fell into a medium
water risk area, and no business locations fell into a high water risk area.

Late autumn tour of Yamashina
Botanical Research Institute

NIPPON SHINYAKU CO., LTD.

changes in its habitat and is now distributed only in the

Integrated Report 2023

65

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Stakeholder Engagement

Materiality

Dialogue with Shareholders

Strengthening governance

Main Activities

FY2022 Activities

S trengthening IR activities forinvestors Implementing information
disclosure to stakeholders

Issues and FY2023 Strategies

 eld R&D briefings and implemented overseas IR
H
activities Published the integrated report and news releases ina timely manner







Enhancing integrated report and website disclosure

In FY2022, in addition to financial results briefings and conference calls, Nippon
Shinyaku held a two-part R&D briefing for shareholders and investors. In the first part, a
medical specialist explained the treatment of Dravet syndrome and future prospects inrelation to Fintepla, a treatment for seizures associated with Dravet syndrome that was
launched in Japan in November 2022. In the second part, presentations were made on
the progress of the nucleic acid drug pipeline, as well as initiatives for new modalitiesof next-generation antisense nucleic acids, gene therapy, and cell therapy, which are

Communication with Stakeholders

attracting a great deal of attention. In addition, President Nakai has been attending

Nippon Shinyaku’s Stakeholders

financial results briefings, shareholder and investor meetings, overseas IR events andlarge meetings, and will continue to regularly interact with shareholders and investors

Nippon Shinyaku’s business is supported by a variety ofCustomers

to explain the Company’s growth strategies in the short, medium, and long term.

stakeholders. Therefore, the Company believes it is important tolisten to and engage in dialogue with stakeholders, including
shareholders, employees, society (local communities, business
partners, etc.), customers (patients, consumers, medical
professionals), and the environment. By reflecting the requests

Employees

	Other
Briefings
WEB

https://www.nippon-shinyaku.co.jp/english/ir/
ir_library/other_presentation/

Shareholders

NipponShinyaku

Dialogue with Society

and opinions obtained through such dialogue in its businessactivities, Nippon Shinyaku will grow as a company and create

Environment

Societyand provide new value to society.

In order to interact with the local community and society and provide opportunities
for children to read, the Company regularly exhibits the Nippon Shinyaku Sparkling
Future Mobile Library at events and children’s centers in Kyoto. It also brought the

Shareholders

Employees

Society

Customers

Environment

66

Stakeholder Relations

Dialogue and Means, Frequency

Nippon Shinyaku will strive to pay a return to shareholders
by securing appropriate profits through management thatis conscious of the cost of capital. The Group is intent on
meeting the expectations of shareholders and investors bypromoting constructive communication through fairmanagement that emphasizes timely and honest
disclosure of corporate information and proactive dialogue.

• Number of dialogues with institutional investors and analysts: approx. 180• Participation in events sponsored by securities corporations: 9• Financial results briefings (May, November)• Financial results conference calls (August, February)• General Meeting of Shareholders (June)• R&D briefing (December)• Overseas IR events and large meetings (September)

Based on its Management Policy, “Employees: Develop
Each Employee,” Nippon Shinyaku has established an
education and training system aimed at developing thekind of human resources it seeks: people who think andact on their own initiative. It believes that each employee
thinking, acting, and proactively taking on challenges on
their own initiative leads to personal growth, which in turnleads to the growth of the Company.

• Training for employees, opportunities for dialogue with directors• Employee stress check, engagement survey• Internal Compliance Reporting System (whistleblowing hotlines)

As a corporate citizen, Nippon Shinyaku will maintain close
communication and exchange with society and actively
engage in social contribution activities. It will maintainmutual trust and sound and proper relationships withbusiness partners and aim to grow together with them.

• On-site classes on food education• Yamashina Botanical Research Institute: 130 tours, 1,335 visitors•N ippon Shinyaku Sparkling Future Mobile Library: participated in 27 events;
lent out 5,140 picture books• Conducted surveys of suppliers (CSR, stable supply, sustainability
procurement policy)

In the Pharmaceuticals business, Nippon Shinyaku places
the highest priority on patients who suffer from illnesses
and makes efforts to provide information to ensure thatpatients are properly medicated by medical professionals.
In the Functional Food business, the Company seeks toleverage its advanced technical expertise as a maker ofpharmaceuticals to supply high-value-added productsthat meet customer needs.

• Number of inquiries about pharmaceuticals
Total 10,730 (8,732 from medical professionals, 783 from wholesalers, 1,093
from general consumers, 122 from others)• Disease awareness via the Company’s website• Online seminars available to the public (pulmonary hypertension, muscular
dystrophy)• Patient exchange events• Booths at marathons in Japan, etc.

Nippon Shinyaku always strives to protect, sustain, andimprove the environment through eco-consideratebusiness activities, and aims for growth in harmony withthe environment.

• Events designed to educate about botany at the Yamashina BotanicalResearch Institute• Preservation activities for plants related to Kyoto’s culture

NIPPON SHINYAKU CO., LTD.

Mobile Library to Purple Day, an epilepsy awareness event held in Osaka on March
26. Purple Day is a campaign to support epilepsy patients and promote
understanding of the disease by wearing purple, the color of awareness for epilepsy.
On the day of the event, staff members also wore purple while lending out picture
books. Nippon Shinyaku also has a volunteer program available for employees tofreely participate in social contribution activities, which it will continue
implementing going forward.

	
WEB Nippon Shinyaku Sparkling Future
Mobile Library (in Japanese)
https://kodomo-bungaku.jp/miraigo/

Dialogue with Customers
The Pharmaceutical Consultation Office receives more than 10,000 inquiries a year,
mainly by phone and the inquiry form on its website. Nippon Shinyaku strives topromote the proper use of pharmaceuticals by responding to these inquiries on a daily
basis, making full use of information technology, such as the latest AI-based telephoneanswering system. In addition, information and opinions received here are promptly
conveyed to the relevant departments and utilized to improve quality and safety.
In recent years, the Company has been enhancing its website so that customers
can actively obtain a variety of information. Nippon Shinyaku will continue to placeutmost priority on responding promptly and accurately to gain the trust of a wide
range of stakeholders, including patients and their families, physicians, pharmacists,and other medical professionals.

	
WEB Feedback & Inquiries

https://www.nippon-shinyaku.co.jp/english/
inquiry/input.php

Integrated Report 2023

67

Nippon Shinyaku Today

Coexistence with Local Communities

MaterialityE nhancing the public research
grant system to support medical
and scientific research Implementing social contribution
activities rooted in each region,
including preserving Kyoto culture Providing educational and mental
well-being support for children
through activities such as sports
and reading opportunities

In Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Message from the Chairman

Resolving social issues and coexisting with the community

Main Activities


A New Way of LifeFY2022 ActivitiesF Y2022 public research grants: 10 Publications of quarterly PR magazine “Kyo”: 4,calendar: 1
 The Nippon Shinyaku Sparkling Future Mobile Library:
participated in 22 events

Contributing to Medical and Scientific Researchand Development of Local Communities

As Chairman,
I work to further
enhance governance.

Issues and FY2023 Strategies aising awareness of and increasing participation inRpublic research grants and social contribution
activities

junior high, and high school students. In recent years, theCompany has been holding sports clinics for preschool children
in the vicinity of Kyoto to experience the joy of exercise. In

Nippon Shinyaku thinks that it should play two roles —the first

November 2022, Nippon Shinyaku visited Kyoto Seibo Gakuin

is providing outstanding drugs to the world as a pharmaceutical

Nursery School in Fushimi Ward, Kyoto, and conducted sports

company, and the other is contributing to the development ofclinics, including tee-ball classes. At the Nippon Shinyaku

Shigenobu Maekawa

general society and local communities as a member of each.

Children’s Challenge Cup, held at Wakasa Stadium Kyoto in

Representative Director, Chairman

December 2022, the Company conducted athletic performance Public research grant systemmeasurements—something most preschool children never get

As part of its centenary celebrations, and to contribute to theto experience—nutrition education activities, and other activities.

advancement of science in the fields of medicine andIn addition, besides our hardball baseball activities, we

pharmacology, Nippon Shinyaku has launched a publicorganized e-sports contests accessible online and on site forresearch grant system. Under the system, it aims to support

children with disabilities with the use of an eye-tracking

young researchers by offering grants to successful applicants.

application in August 2022. Going forward, we will carry on
with these initiatives and contribute to the development of Preservation and maintenance of Kyoto culture

local communities through social contribution activities.

For more than half a century, Nippon Shinyaku has created an annual
calendar using works of art created with dyes using a traditional
Kyoto technique called stencil dyeing, and through this, introduced
various aspects of Kyoto, including its scenery and landscapes in the Supporting children by providing

opportunities for reading andother activities

various seasons and historical events. The Company also publishes a

The Nippon Shinyaku Children’squarterly PR magazine titled “Kyo,” also using works of art created

Literary Awards, with the support ofwith dyes for the cover, that showcases the huge appeal of Kyoto—

the Japan Juvenile Writers Association, call for entries in thefrom the city’s many shrines, temples, and other cultural assets to its

two categories of stories and artworks, and make copies of

cuisine, traditional techniques, and local products.

selected top works in each category. The produced picture
books are then donated to medical institutions, such as

Providing support for children through activities
such as sports and reading opportunities

children’s hospitals, and public facilities, which makes it
possible for many children to read the books.
Moreover, the Company started the Nippon Shinyaku
Sparkling Future Mobile Library in 2019 as part of its centenary
celebrations to bring exciting library experiences to children.

68 Educational support through sports

The library van carries around 1,000 physical and digital books,

Working with municipal governments and baseball associations,

including the Nippon Shinyaku Children’s Literary Award-

for many years the Nippon Shinyaku baseball team has organizedwinning titles. Along with employee volunteers, the library

baseball clinics for players of various ages, including elementary,

visits elementary schools and special needs schools.

NIPPON SHINYAKU CO., LTD.

Nippon Shinyaku’s corporate activities revolve around its business philosophy of “Helping People Lead Healthier, Happier Lives.”
In order to grow into our vision of company with a meaningful existence in the healthcare field, we are working to further
enhance our corporate value by enhancing sustainability initiatives. To make a sustainable society a reality, we must contribute tosolving a variety of social issues and be trusted by society. I believe that dealing with issues of materiality is essential to acompany, and that it is the foundation of corporate management. In March 2023, we revised our issues of materiality based on
the changing business environment.
People who think and act by themselves and actively take on challenges are indispensable to the sustainable growth of
Nippon Shinyaku, and we are developing an environment where they can grow and flourish, aiming to build a flexible, resilientorganization that can adapt to change. Turning to environmental efforts, under the Nippon Shinyaku Basic Environmental Policy,
we are introducing and expanding the use of solar power facilities and other renewable energy sources to reduce CO2 emissions.
Further, through activities to conserve rare species, we are also actively contributing to the preservation of biodiversity.
In promoting these initiatives, I believe that securing management transparency and being accountable to all our stakeholders
is one of our most important management issues, and as Chairman, I will continue working to further enhance our corporate
governance system. Through Board of Directors meetings as well as the Management Policy Review Group, training anddebriefing conferences, and a variety of other opportunities, Nippon Shinyaku’s directors engage in the healthy exchange of
opinions. In FY2022, we engaged in numerous discussions on R&D, capital investment, the revision of our personnel system, andother matters which will contribute to Nippon Shinyaku’s sustainable growth. Of particular note, Nippon Shinyaku’s external
directors actively ask questions and provide answers to our executive directors based on their personal experience and expertise.
They also engage in discussions with a medium- to long-term business perspective. Accordingly, I judge that the effectiveness of
our Board of Directors is secured.
Going forward, I will continue striving to strengthen Nippon Shinyaku’s corporate governance, and to secure furthertransparency and reliability through proactive disclosure and dialogue with all our stakeholders. I hope that you will extend
Nippon Shinyaku your continued support and understanding.

Integrated Report 2023

69

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Corporate GovernanceMateriality

Corporate Governance System

Strengthening governance

Main Activities

objectivity of management. Furthermore, the Audit &FY2022 Activities

Issues and FY2023 Strategies

E nhanced items disclosed in the Corporate
Governance Report Implemented company-wide activities to raiseawareness about complianceF urther strengthening governance Further ensuring complianceS trengthening governanceincluding at Group companies

Basic ApproachNippon Shinyaku has adopted the structure of a Company with

Supervisory Board Members attend all Board of Directors’

an Audit & Supervisory Board as its corporate governance system.

meetings and other important meetings on business to

The Board of Directors is composed of twelve Directors, four ofaccomplish the management oversight function of the Audit &whom are Outside Directors, and the Audit & Supervisory Board

Supervisory Board.

is composed of four Members, two of whom are Outside Members.

the Board of Directors and the Audit & Supervisory Board by

optimal management system in response to changes in thesending materials on the respective agenda items and mattersbusiness environment in a flexible manner, the term of office of

to be reported to the Outside Directors and Outside Audit &Governance Code as well as the disclosure of Reasons for Non-the Directors is one year. By having four Outside Directors, theSupervisory Board Members in advance of meetings.

compliance with the Principles of the Corporate Governance

Company further strengthens oversight of the Directors’

Code. Nippon Shinyaku will continue striving to strengthen

management transparency and fulfilling accountability to all

corporate governance in order to achieve the sustainable

stakeholders is one of management’s most important tasks inenhancement of corporate value.

order to raise corporate value through social contributions. The	WEB Corporate Governance Basic Policy
Corporate Governance Report

Organization for corporate governance (as of June 29, 2023)
Headed by the Company’s Chairman and consisting of 12 members including four Outside Directors, the Board of Directors holds a meeting once a month in principle andresolves and reports on material business matters.

https://www.nippon-shinyaku.co.jp/english/ir/esg_management/
governance.php

the realization of material issues, which include strengthening
governance. Based on the Business Philosophy, Management

General Meeting of Shareholders

3

Policy, and Guidelines for Action, Nippon Shinyaku promotes

Initiatives for Strengthening
Governanceinitiatives to further enhance the corporate governancesystem, including improving management transparency andNippon Shinyaku enhances the effectiveness of meetings of

To clarify management responsibility and establish the

The Nippon Shinyaku Group recognizes that ensuring

effective functioning of corporate governance is essential for

execution of duties and further enhances the transparency andNominating
Committee
Remuneration
Committee

Inquires/
Delegation

Appointment/dismissal

Appointment/dismissal

1

AuditsBoard of Directors

Reports/
Resolution

2

Audit & Supervisory Board

12 Directors

fairness and implementing prompt decision making, with theaim of achieving sustainable growth and enhancement of

Nippon Shinyaku takes steps to enhance governance,social value as well as corporate value over the medium toincluding at Group companies, by ensuring compliance. Goinglong term.

forward, the Company will constantly examine the status ofFurthermore, in 2015, the Company formulated its basic

initiatives and make improvements in light of amendments toapproach and basic policy governing corporate governance aslaws and regulations, revisions of the Corporate Governance

the Corporate Governance Basic Policy, which it has reviewed

Code, social conditions, and other factors, in order to further

regularly. In June 2023, the Corporate Governance Reportincrease the effectiveness of corporate governance.

Steps taken to strengthen corporate governance(Business execusion structure)

Representative Director, Chairman
Representative Director, President

Independent Internal Audit
Department

Executive Director

Business divisions and sections

Executive Director

1 Board of Directors

2 Audit & Supervisory Board

All Directors and Audit & Supervisory Board
Members

All Audit & Supervisory Board
Members

12

8

4

0

2
2
2

2
2
2

2
2
2

2
2
2

7

7

7

7

2013

2014

2015

2016

FY2013• Introduced Outside Directors

2
2

2
2

2
2

2
2

4

4

4

4

4

8

8

8

8

3

3

8
4

1

1

1

2018

2019

2020

2021

2022

2
2

3

3

7

7

1
2017

FY2017• Appointed female Director
FY2016• Created Nominating Committee• Created Remuneration Committee

70

NIPPON SHINYAKU CO., LTD.

FY2019• Ratio of Outside

Miyuki Sakurai (Outside Director)

Directors rose to
above 33.3%.

Yoshinao Wada (Outside Director)

Role

•P
 erforming the oversight function for
management in general and ensuring fairness
and transparency of management•D etermining policies governing theappointment and dismissal of Directors andAudit & Supervisory Board Members• E valuating serious risks and formulating
countermeasures•M aking decisions, such as the execution ofimportant business operations•P laying a role in corporate oversightin coordination with the Board of
Directors• S upervising the execution of duties
by the Board of Directors andworking to establish the corporate
governance system•A ctively expressing opinions basedon their own specialized knowledge
and vast experience

2023 (FY)FY2021• I ncreased thenumber of female
Directors to three

FY2023• Increased thenumber of female
Directors to four

(increased ratio of
women on the Board of
Directors)(increased ratio of
women on the Boardof Directors)

Compliance Department
Risk Management Department
Internal Control Department
Committees

Shigenobu Maekawa(Representative Director, Chairman)

 Female Directors

2
2

2
2

Cooperation

3 Nominating Committee and Remuneration Committee

Attendees

 Inside Directors    Outside Directors    Standing Audit & Supervisory Board Members    Outside Audit & Supervisory Board Members   

AuditsAudits(number of officers is as of conclusion of each year’s Annual General Meeting of Shareholders)
16

Accounting Auditor

Cooperation
Delegationof authority

Executive Director

included Disclosure Based on the Principles of the Corporate

Cooperation

4 Members

Appointment/oversightAppointment/
oversight

Appointment/dismissal

Meetings
held in
FY202215
18(12 regular meetings, 3 extraordinary meetings)

Inside Directors

Outside Directors

Standing Audit & Supervisory Board Members

Nominating Committee•D eliberating on matters related to the appointment and dismissalof Directors and Audit & Supervisory Board Members andreporting to the Board of Directors
Remuneration Committee•D eliberating on proposals for the General Meeting of
Shareholders related to remuneration of Directors and Audit &Supervisory Board Members and basic policies governing
remuneration for Directors, and reporting to the Board of Directors•D eliberating and making decisions on the details of remuneration
for individual Directors based on the responsibility delegated by
the Board of Directors
3(Nominating Committee: 1; Remuneration Committee: 2)

Outside Audit & Supervisory Board Members

 Chairperson
Integrated Report 2023

71

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Corporate Governance

Meetings held in FY2022

Method for evaluating effectiveness

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Board ofDirectors

Board ofDirectors

Board ofDirectors

Board ofDirectors

Board ofDirectors

Board ofDirectors

Board ofDirectors

Board ofDirectors

Board ofDirectors

Board ofDirectors

Board ofDirectors

Board ofDirectors

Audit &
Supervisory
Board
Audit &
Supervisory
Board

Board ofDirectors

Audit &
Supervisory
Board
Audit &
Supervisory
Board

Audit &
Supervisory
Board

Audit &
Supervisory
Board

Audit &
Supervisory
Board

Board ofDirectors

Audit &
Supervisory
Board

Audit &
Supervisory
Board

Audit &
Supervisory
Board

Audit &
Supervisory
Board

Audit &
Supervisory
Board
Audit &
Supervisory
Board
Audit &
Supervisory
Board

Remuneration
Committee

Audit &
Supervisory
Board
Audit &
Supervisory
Board
Audit &
Supervisory
Board

Board ofDirectors
Audit &
Supervisory
Board

Remuneration
Committee Planning the

Mid-Aprilsurvey, etc.

Example of deliberations

In addition to the resolutions provided for by laws and Conclusion of distribution partnership agreement with
Capricor Therapeutics, Inc.

Board of Directors, meetings of the Board of Directors also
focus on strategic discussions of basic management policies.
In FY2022, the Board of Directors held lively discussions aimed atachieving the sustainable growth of the Company, with a focus on
matters relating to important business, matters relating to financial
results, and matters relating to organization and personnel. For
matters relating to important business, the Board of Directors mainly
held discussions on whether to proceed to clinical trials for products
developed in house and in-licensed products and whether to

Executive Directors proposed an agenda item on the conclusion of apartnership agreement for distribution in Japan of CAP-1002, a celltherapy for Duchenne muscular dystrophy under development in the
United States by Capricor Therapeutics.
Lively discussions took place in response to the proposal, as
members of the Board of Directors, including Outside Directors andAudit & Supervisory Board Members, gave their opinions on productcharacteristics, U.S. non-clinical and clinical trial data, patent information,
the competitive situation, business value, and contract terms from awide range of perspectives based on their respective areas of expertise.
After these discussions, the Chairman placed the matter before theBoard, and the proposal was approved following deliberation.

conclude agreements on in-licensed and out-licensed products. For
matters relating to financial results, the Board of Directors set aside
time on the agenda for deliberating and discussing, in addition to
explaining, the quarterly financial reports, which are important for

Evaluation of Effectiveness of the Boardof Directors

implementing management strategy, to deepen the overall
understanding of Directors. For matters relating to organization andFromlate-April

management issues will be enhanced in addition to short-term
management issues with high importance and priority.
2. Proceedings will be reviewed in order to facilitate positive Aggregating theresults of the survey

comments that contribute to discussions.

 Directors’ report Sharing information on future issues and policies

The survey consists of 17 questions related to the six broad categories which arecomposition of the Board of Directors, agenda items, etc. for Board meetings,
operation of the Board of Directors, individual evaluation, status of improvements,and overall evaluation conducted as a self-evaluation on a scale of 1 (Notestablished/Dissatisfied) to 5 (Established/Satisfied). The overall evaluation in
FY2022 was 4.8, which was an increase of 0.1 from the previous fiscal year.

Officers’ Remuneration System
The Remuneration Committee considers remuneration for
Directors so as to ensure its appropriateness, fairness andproper balance in an effort to further increase Directors’
motivation to seek the sustainable growth of the Company andIn FY2022, the following initiatives were taken to address theenhancement of social and corporate value.

issues raised in the FY2021 survey.
 Basic policy

1. E
 nhancing the content of materials and priorexplanations for Board meetings

Our basic policy regarding the remuneration of Directors is that it shalleffectively serve as an incentive for Directors to seek the sustainable

The Board of Directors worked to further enhance the content

enhancement of corporate value, that the details surrounding it shallof materials for Board meetings, which has been an issue since

be fair and rational enough for the Company to fulfill its accountability

FY2020. In addition, for items on the agenda related to theto shareholders and employees, and that the level of each individual

research and development pipeline which require specialized

Director’s remuneration shall be adequately determined by taking

knowledge, the Board provided prior information that

into account the responsibilities of their positions.

mechanism of action or the target disease.

Directors

abolition of important organizations, the Board of Directors held

1. By selecting matters submitted to the Board of Directors

contributed to deliberations, such as information on a drug’s Initiatives to enhance effectiveness of the Board of

personnel, in addition to the establishment, modification, andFuture issues
more carefully, discussions on medium- to long-term

March

Mid-May

Status of Operations of the Board of Directors

facilitates lively discussions as in face-to-face meetings.

Audit & Supervisory Board Members

Nomination
Committee

regulations, the Articles of Incorporation, and the Rules of the Structure of remuneration

Remuneration of Directors (excluding Outside Directors)

discussions on the development of the internal control system andOnce each year, Nippon Shinyaku evaluates the Board of Directors

2. E nhancing discussions at Board meetingsother important matters related to organizations and personnel.

at a Board of Directors meeting in an effort to bring about

Since deepening the members’ understanding of the content ofeach Director and adding the amount to a fixed amount corresponding

improvements that will enhance its effectiveness. In order to analyze

proposals and reports is important for exercising the oversightto their position. Such fixed amount corresponding to their positionand evaluate the overall effectiveness of the Board of Directors, infunction of the Board of Directors, in addition to ensuring distribution

has been pre-determined by considering a comprehensive range ofFY2022 the Company implemented a self-evaluation survey for allof materials in advance of meetings, the Board of Directors provided

information, including survey data from external institutions andDirectors. As a result, it was able to confirm that within the Board oftraining and other activities for Board members outside of meetingslevels of remuneration for their counterparts at competitors.

Directors, each executive Director and Outside Director continued

to deepen their knowledge as a prerequisite for discussion. The

Bonuses: Cash remuneration reflecting performance indicators is

Main themes of deliberation
Category72

of all members were shown, creating an environment that

 Sending the survey to the Directors andNumber of
discussions

Monthly remuneration: Determined by evaluating the performance ofMatters relating to the General Meeting of Shareholders

1

Matters relating to the directors

5

Matters relating to the Nominating Committee1

to actively make remarks, that open-minded and constructive

Board also ensured more time for discussion by enhancing thepaid to raise awareness toward improving business performance for

Matters relating to the Remuneration Committee

4

discussions were pursued from a wide perspective, and that

content of materials and prior explanations, and simplifying

each period. Bonus amounts are determined by considering the

Matters relating to financial results

14

Matters relating to shares

3

appropriate judgment was being performed by the management,

explanations on the day of meetings to stimulate discussions.

performance evaluation for each Director and calculating the

Matters relating to corporate governance2

Matters relating to organizations and personnel

11

Matters relating to important business(research and development, capital investment, management, etc.)

42

Matters relating to subsidiaries

3

Other matters

4

NIPPON SHINYAKU CO., LTD.

amount based on the consolidated operating profit for each period.

and therefore determined that the overall effectiveness of the Boardof Directors was properly maintained. Based on the results of this

3. Reviewing the management of the Board

analysis and evaluation, the Board of Directors will focus on further

As a rule, the Board of Directors meetings are held with all the

Remuneration of Outside Directors and Audit &invigorating and enhancing the discussions at the meetings of the

Directors assembled. However, the Board also introduced aSupervisory Board Members

Board of Directors, and continue to ensure and improve thehybrid format using face-to-face and online meetings. In doing

Remuneration of Outside Directors and Audit & Supervisory

effectiveness of the Board of Directors moving forward.

this, the Board took measures to ensure that the facial expressions

Board Members comprises fixed remuneration only.
Integrated Report 2023

73

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Corporate Governance Remuneration-related governance Training for Officers

leading management in the global expansion of business. In

considered necessary for promoting and achieving the “sixRemuneration for individual Directors is determined through

Nippon Shinyaku holds training and debriefing sessions

addition, based on consistency with the Company’s

actions” under the 6th Five-Year Medium-term Management

deliberations by the Remuneration Committee as entrusted byattended by all Directors, in order to convey information that is

management strategy, Nippon Shinyaku has identified the skills

Plan, which it has set out as disclosure items in the skill matrix.

the Board of Directors within the limit of the amount ofessential for Directors on legal responsibilities, corporate

executive remuneration approved by resolution of the General

governance, etc., and to share information on the important

Meeting of Shareholders.

operations performed by each division. Audit & Supervisory

Remuneration system for Directors (excluding Outside Directors)
Fixed monthly remuneration: bonuses (performance-linked remuneration) =roughly 1:1 (based on business performance)
Total remuneration
Fixed remuneration

Variable remuneration¥255 million¥223 million

Total remuneration for each officer category
Subtotals for each type of remuneration and numbers of recipients

Officers category

Total
remuneration(millions of yen)

Directors(incl. Outside Directors)

478
(40)

Audit & Supervisory
Board Members(incl. Outside Audit &Supervisory Board
Members)53(19)

Outside Officers

60

Subtotals for each type of
remuneration(millions of yen)

PerformanceFixedlinkedremuneration
remuneration

255
(40)
53
(19)

Number ofrecipients

223
(—)
—

Board Members can also attend these sessions. New Directors
and new Audit & Supervisory Board Members receive new

4
(2)

—

6

 Succession Plan

Nippon Shinyaku recognizes that it is important to train

Name

Skills and Experience
Globalbusiness

Finance/
Accounting

Legal affairs/
Riskmanagement

Shigenobu Maekawa

15/15







Toru Nakai

15/15







training opportunities for Directors and Audit & Supervisory

Shouzou Sano

15/15

Board Members, covering any expenses incurred.

Takashi Takaya

15/15



Takanori Edamitsu

15/15



Kazuchika Takagaki

15/15

Hitoshi Ishizawa

15/15

Hitomi Kimura

15/15

Miyuki Sakurai

15/15

Yoshinao Wada

15/15

Yukari Kobayashi

15/15

Mayumi Nishi–

Inside Directors

Internal Control System
Pursuant to the Japanese Companies Act, we have resolved a basic
policy on the establishment of an internal control system throughproper execution of business by ensuring regulatory complianceand raising business effectiveness and efficiency. Moreover, we
comply with the internal control reporting requirements applied
from fiscal 2008 under the Financial Instruments and Exchange

OutsideDirectors

Research &Development

Sales/
Marketing

Production/
Quality

Personnel/HRdevelopment

ESG/
Socialcontribution

IT/
Information
management














































Standing Audit Kenji Kuwabara& Supervisory
Board Members Hirotsugu Ito

15/15
–

–

Outside Audit & Tsuyoshi Kondo
Supervisory
Board Members Hiroharu Hara

15/15

18/18

–

–

18/18











* The above list does not represent all the expertise and experience of the Directors and Audit & Supervisory Board Members

proper financial reporting, and, through the Internal Audit
Department positioned directly under the Chairman, evaluate theSuccession Plan

Attendance at meetings
Corporateof Board of Directors/
Audit & Supervisory Board management/
Management(shown in right column)
strategy

office. In this manner, Nippon Shinyaku provides the necessary

Act, operate under a framework we have developed for ensuring
60

Category

officer training offered internally upon their assumption of

our Board of Directors, establishing a framework to ensure the12(4)

Skills Matrix of Directors and Audit & Supervisory Board Members

state of internal controls for financial reporting.

Composition of Board of Directors
Outside Directors

Director and Audit & Supervisory Board
Member Skills Matrix

4
Inside Directors
8

33.3%

Female Officers
Male Officers
124Outside Officers
6

Inside Officers
10

25%

37.5%

successors from various perspectives based on the future
vision of the Company. We run HONKI Juku selective training

Nippon Shinyaku requires the Directors to possess qualities

programs which are classified into Leader, Management, andthat include experience and knowledge in a wide range of

Executive according to the position and number of years at theareas, excellent character, high ethical standards, and extensive

Company of trainees.

business-related experience and knowledge suitable for

The Leader program targets the younger group from age 25
to 35 to quickly uncover and pick out leader candidates. The

Six actions under the 6th Five-Year
Medium-term Management Plan

Management program provides lectures on management

Creation of new value through R&D

basics and middle management for executives from age 36 toDevelopment of global business

45 to acquire the perspective of a department manager. The
management knowledge to train the next generation of

Increase in corporate value by
strengthening ESG management
Creation of organizational climate inwhich every employee can flourish

management candidates. Through these efforts, we constantly

Executive program aims for acquisition of practicalsecure motivated and outstanding human resources, striving
to develop and acquire the human resources to lead theCompany in the future.

74

NIPPON SHINYAKU CO., LTD.

Related risks

Cross-shareholding Status
The Board of Directors will inspect and confirm the rationality

Status of cross-shareholdings

and economic significance of the purpose of holding each(millions of yen)

individual cross-shareholding, taking into consideration the

R&D

capital requirements, the market environment, etc., and the

Global businessCompany will in turn proceed to reduce cross-shareholdings in

ESG/Social contribution

which the significance of retention is immaterial. Regarding theexercise of voting rights pertaining to cross-shareholdings, we

Personnel/HR development

will judge the situation based on whether or not it contributes

Active use of AI and adoption of IT

IT/information management

to improving the corporate value of the Company or the

Further strengthening of management
base

Management strategy
R&D
Sales/Marketing
Production/Quality

issuing company, and will respond appropriately. In FY2022,(stocks)

30,000120

22,91620,00010,000018,315

20,52019,014

19,120

55

52

48

47

45

2018

2019

2020

2021

2022

 Total amount recorded on balance sheet (left axis)

80

40

(FY)

0

 Number of stocks (right axis)

the Company reduced cross-shareholdings in two listed stocks(sales amount: ¥743 million).
Integrated Report 2023

75

Nippon Shinyaku Today

Compliance

Strengthening governance

Main Activities


Materiality

FY2022 Activities

Enhancing complianceP romoting fair and transparent
businessIssues and FY2023 Strategies

Implemented compliance training and awarenessraising initiatives for all employees



Framework for ComplianceContinuing
compliance training and awarenessraising initiatives for all employees

surrounding the Group. In addition to providing training on the

The Nippon Shinyaku Group has Compliance Operating Rules

Company, we also conduct compliance training and e-learningand has established a Compliance Management Department

training programs for all employees throughout the year.

Understanding critical risks andstrengthening the management andresponse system for each risk

Council was established to support and provide counsel on

Main training and awareness-raising activities (FY2022)

enhancing our approach to compliance. In each department, theTraining andawareness-raisingFor
Details
Frequency
activity
Transmission ofAll
Transmission of messages from the President
Twicemessages from
employees requesting more thorough complianceannually
top management

Director who serves as its head is responsible for its complianceinitiatives, which are carried out by the managers therein.
Compliance Framework Chart

Compliancetraining for the
management
team

Board of Directors

Risk & Compliance Committee
Compliance Officer
Director, Head of AdministrationCounselCompliance Council

Departmental Compliance Directors
Supervising Directors

Department Managers
All Nippon Shinyaku Group Employees

Compliance promotion andawareness-raising initiatives

Implementation of training to the
management team on compliance-related
topicsAnnually

Departmental
compliancetraining

Departmental training on company-wideAllcommon themes and department-specificemployees
themesMonthly

Compliancebulletins

All
Transmission of compliance-related timely
employees information via the intranet

Every othermonth

E-learning

Training for new
recruitsAll
officers

Provided to all employees as a means toAllreview their learning from the departmental As needed
employees
training and intranet communication
Training centered on the Code of Conduct
for Nippon Shinyaku Group conducted on
New hires the importance of compliance, including the As needed
concept of compliance and matters to beobserved

Newly
Training implemented for new managers toTraining for
newly appointed appointed learn the roles of managers and knowledge
managers related to compliancemanagers

Twiceannually

FY2022 Activities

Issues and FY2023 Strategies

Identified critical risks and countermeasures
Requested the departments responsible for each risk
to prepare an action plan, and compiled them 
Conducted risk management self-checks andtraining Studied risk management operation methods basedon risk management under the new risk classification
 
Established and operated a zero trust network 
Strengthened information security literacy of
employees Enhanced NS-CSIRT* activities through information
sharing, drills, etc.








Smoothly transitioning to and stably operating risk
management activities based on the new risk
classification
 Continuously formulating action plans for critical
risks
 
Strengthening information security education forGroup companies 
Enhancing IT-BCP

Basic Approach to andInitiatives related to Risk

temporary crisis management office will be established toprevent the situation from worsening and respond in atimely manner. Once the incident is dealt with, measures are

Along with strengthening our risk management framework,

devised to prevent recurrence and are implemented by the

we aim to achieve solid growth for the Nippon Shinyaku

relevant departments. In addition, we conduct annual self-

Group and enhance corporate value through our ongoingchecks for all employees to raise awareness.

risk management activities. We have in place Basic Risk

WEB

Management Rules for identifying underlying risks andaiding the departments responsible for each risk in

About risk management at Nippon Shinyaku
https://www.nippon-shinyaku.co.jp/english/sustainability/esg/
governance/compliance.php

formulating preventive policies as well as measures forresponding when such situations arise. Each year we
identify highly critical risks and set action plans for the year,

Enhancing Information Security

strengthening preventative measures. The results of these
efforts, along with critical risks for the next fiscal year are

Nippon Shinyaku has established a policy and basic rules

reported to and deliberated on by the Risk & Compliancethat indicate its approach to information security. The Establishing hotlines

Committee. The Board of Directors receives reports on the

ISMS*1 Committee, established based on the basic rules,

The Compliance Management Department plans and drafts

The Nippon Shinyaku Group has established and operates thecontents and supervises the implementation andreviews various rules in response to changes in the social

compliance promotion and awareness-raising activities with

Hotline for employees of the Group and Directors andeffectiveness of risk management.

environment and advances in information technology inthe aim of instilling and raising compliance awareness among

employees of business partners, which allows anonymous

When an incident does occur, the Director in charge oforder to protect the Nippon Shinyaku Group’s information

all employees. In addition, a compliance awareness survey isreporting and consultation. We have also set up an online

risk management determines the effect the incident willassets from various risks. Specifically, in addition to an SOC*2

conducted annually for all Group employees, and the results

contact point to receive questions and comments from various

exert on business operations and decides how to respondthat conducts 24/7 surveillance and operation of theare disclosed within the Group. Specific training is provided to

stakeholders, including those related to human rights andaccording to its level of importance. If it is deemed that theGroup’s networks and computers, we enhanced network

departments with relatively low scores to prevent theharassment. We implement thorough measures toincident will have a serious effect on business operations, asecurity in FY2022 based on the zero trust security concept.

occurrence of compliance incidents.

appropriately protect whistleblowers in line with theWhistleblower System Operating Rules, which clearly provide Implementing training based on the Code of Conduct

for Nippon Shinyaku GroupThe Code of Conduct for Nippon Shinyaku Group clearlystipulates respect for human rights, compliance with laws,
regulations, and internal rules, and the practice of fair, transparent,
and free competition, and is updated as necessary to reflectchanges in laws, regulations, and the business environment

76

Corporate Data

* NS-CSIRT: NS-Computer Security Incident Response Teamheaded by the Director in charge of compliance. Our Compliance

Compliance Management Department

ESG as the Foundation for Growth

Strengthening governance

Main Activities

Code of Conduct to all global employees when they join the

President

In Pursuit of Originality

Risk Management

Materiality

A New Way of LifeNIPPON SHINYAKU CO., LTD.

for confidentiality and other necessary measures and the

As countermeasures against information security risk related
FY2022 Group critical risks: activity themes

to human factors, we conduct training to ensure that
employees are aware of the importance of information
security, and regularly conduct drills against targeted e-mailprohibition of treating them disadvantageously. The reporting

Leaks of confidential information (information mismanagement)

and consultation results for FY2022 are as follows.

Breaches of labor laws

attacks.

Harassment (sexual harassment, power harassment, etc.)*1 Information Security Management System*2 Security Operation Center

Law and Company Rules
Personnel (Treatment and Systems)
Work Environment
Other
Total

9 cases
3 cases
7 cases
5 cases
24 cases

Earthquakes, volcanic eruptions, tsunamis, storm and flood damage,lightning strikes
Falsification or leaks of electronic data from cyber attacks

Integrated Report 2023

77

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Dialogue with Outside Directors
With a view to achieving sustainable growth on a global scale, the Outside Directors shared with us their candid
views on topics such as ideal leaders, the kind of human resources needed by Nippon Shinyaku, and the issues
the Company should address going forward.
Strategically developing “human resources with an edge”
for taking on global expansion
Sakurai: The Nominating Committee and Remuneration
Committee has discussed the drafts presented, received
reasonable and convincing explanations, and reported that it
has no objections. However, the method of selecting
candidates and the policy for determining their remuneration
will remain fuzzy until the committee considers the kind of
person sought in the human resources who will take on
management of the Company and the policy for theirdevelopment—not as
isolated points ofconsideration but as a
strategically drawn line. I
made this point at the lastNominating Committee
meeting.
Kobayashi: I also believe that there needs to be a company
strategy for decisions about human resources and theirremuneration. The Company’s overall position on humanresources is being discussed in preparation for the formulationof the 7th Medium-term Management Plan. There should be
strategic discussions suited to its position. For example, there
will be more risk than ever before in achieving the global
expansion that Nippon Shinyaku has in view. It would be
difficult for one top executive to address all of this risk solitarily.
A wide breadth of knowledge is essential. The contribution of
the Board of Directors will improve dramatically once all
Directors can see and discuss business from the same
perspective as management.
Sakurai: The top management of a company must have themanagement knowledge to steer the company’s responses tochanges in the external environment, the strong leadershipskills to respond flexibly and quickly, and the charisma to getothers involved. For the Board of Directors to support this, it isfirst necessary to discuss the skills matrix. I feel that the skills
required of Nippon Shinyaku’s Directors should be examined
and itemized, and that the Directors in charge of each division
should take a bird’s eye view of the entire Company, not justthe division they are in charge of, and have candid discussions
from both of these perspectives.
Wada: If that can be achieved, it will lead to a group leadershipsystem where the top executives are not the only ones
thinking about management. Today, there are many
companies where people with scientific backgrounds study
management and serve as presidents. In the future, Nippon
Shinyaku might also have top executives who experienced

78

NIPPON SHINYAKU CO., LTD.

technological evolution firsthand. However, even if we
promote in-house development of top management, they will
not necessarily always be coming from inside the Company
forever. I hope that the Company will look 10 to 30 years into
the future from various perspectives and decide on guidelines
and strategies concerning human resources in a highly
transparent manner.
Kobayashi: No topic at Board meetings is more timeconsuming than the topic of human resources strategy.
Nippon Shinyaku employees are highly praised as “goodpeople” both internally and externally. While retaining thosegood qualities, I believe that they need to adapt to changes inthe environment and become versatile human resources.
Sakurai: There has been a lot of talk at recent Board meetings
about the need for “human resources with an edge,” or in otherwords, “human resources of a different nature.” Even in the
Company, a radical reform of the personnel system isunderway, and I sense that employees are expected to breakout of the “good people” box and grow more as individuals.
Wada: I expect that many
employees will be inspiredby the process of midcareer hiring that is now
being actively promoted,
bringing in different waysof thinking and awillingness to change. Job-based employment is also being
introduced as part of the personnel system reform. I agree with
President Nakai that it is important to write a job descriptionthat leads to employees’ growth. I believe that job-based
employment may lead to “human resources with an edge”
because, in accomplishing your assignments, you must havethe ability to see for yourself which parts of the job should takepriority and which parts you should let slide depending on thesituation.
Kobayashi: Alternatively, it can also be a clue for employees tostart thinking about their own careers. The Company mustclarify what kind of human resources it needs, develop asystem that allows for fair evaluation, and promote the trainingof human resources. Employees have the right to choose theirown careers, and they have the option to choose theenvironment that suits them best.
Sakurai: In terms of evaluation, the current remuneration
system for Directors may also need to be examined. I hope thatsuch discussions will be had when formulating the 7th
Medium-term Management Plan, including the possibility ofincorporating shareholder compensation for performancelinkage over the medium to long term.

Aiming to be an essential company,
a turning point for further growthWada: In formulating the 7th Medium-term Management Plan,
we must consider how to proceed with the urgent issues of
R&D, expansion of pipelines, and ensuring compliance on a
global scale. In terms of global operations, we have only justbegun to put the necessary systems in place, and I believe
there are risks in this regard.
Kobayashi: In expanding
business globally, we needto understand that values,
business practices, andattitudes toward security
vary from country tocountry and region toregion, and the Board of Directors also needs to focus evenmore on risk management. I feel that another issue is that it isdifficult for people outside the Company to see into internal
discussions. For example, it is easier to make constructive
suggestions when you share information, including histories,
on the strategic discussions and prioritization at the time of theMedium-term Management Plan drafting. Since many of thesesuggestions have already been implemented, I feel that they
are being taken seriously and we are headed toward
improvement. Moreover, we are having heated discussions
about how quickly we can reconfigure our business andimprove our competitiveness in response to changes in themarket. As Outside Directors, we would like to help make that
happen as soon as possible.
Sakurai: The three commitments made by President Nakai
after 10 consecutive years of growth (P. 6 Message from the
President) indicate that Nippon Shinyaku is at a turning point
toward further growth. We hope that stakeholders will trust in
the appeal of this Company, which aims to bring healthbeyond borders to as many patients as possible, as quickly as
possible, and to enable each and every employee to grow withsatisfaction in their jobs.
Wada: Nippon Shinyaku aims to be a company with ameaningful existence in the healthcare field and an essential
company for patients and medical professionals. We are now at
the stage of taking the next step toward achieving this goal,
which we believe will lead to the growth of the Company.

Miyuki Sakurai Outside Director
Registered as an attorney-at-law in 1992. Has served in positions that include
Joint Owner at the Hanamizuki Law Office and auditor at Osaka University, andhas been an Outside Director at Nippon Shinyaku since 2017.

Yoshinao Wada Outside Director
Has served for many years in diagnosis and treatment as a doctor, has served inpositions that include Director of the Research Institute at the Osaka Medical
Center for Maternal and Child Health and Guest Professor at the Graduate
School of Osaka University, and has been an Outside Director at Nippon
Shinyaku since 2019.

Yukari Kobayashi Outside Director
Has served in positions including Corporate Officer at Microsoft Japan Co., Ltd.
and Representative Partner at Amanda Life Consulting LLC., and has been an
Outside Director at Nippon Shinyaku since 2021.

Message from the Newly Appointed Outside Director
My name is Mayumi Nishi, and I have just assumed the position of Director. I am very humbled to be able
to take on this important responsibility. After graduating from pharmacy school, I worked at a cancer
research institute, but my desire to study medicine grew stronger, so I re-entered medical school. After
graduating from medical school, I spent several years in clinical practice, and then went on to do basic
research in neuroendocrinology. I spent over 30 years researching and teaching anatomy at Kyoto
Prefectural University of Medicine and Nara Medical University.
I believe that my involvement in research and development for drug discovery, based on myexperience in pharmacy and medical school, is desirable with regards to the governance of Nippon

Mayumi Nishi

Shinyaku. I have been involved in neuroscience research in a broad sense. There are many intractable

Outside Director

and rare diseases of the nervous system for which there are still no effective treatments, and I hope that

Obtained pharmacist license in1980 and medical license in 1991.
After working at Aichi Cancer
Center Research Institute, Kyoto
Prefectural University of Medicine,and obtaining a Doctor of
Medicine from the same university,
has served as a professor at Nara
Medical University in 2009, andhas been a professor emeritus atNara Medical University since April
2023 (current position). Appointed
as an Outside Director of Nippon
Shinyaku in June 2023.

Nippon Shinyaku will further promote drug discovery in this field by utilizing its past research anddevelopment achievements. I believe that pharmaceutical companies are now at a major turning point,
particularly in AI-based drug discovery. I also believe that Nippon Shinyaku is faced with the need tofurther strengthen its collaboration with universities and research institutions to promote highly original
drug discovery. I think that the network of researchers I have cultivated could be utilized in this regard.
I would like to express my gratitude to all of our stakeholders for their continued support andcooperation as I strive to further develop Nippon Shinyaku by leveraging my perspectives as a
researcher and physician, as well as the personal networks I have built through academic conferences
and other activities.

Integrated Report 2023

79

Nippon Shinyaku Today

A New Way of LifeManagement Team
Inside Directors

Representative Director,
Chairman
Number of shares of the Company
held53,200 Shares

Apr. 1995	Joined the Company
Apr. 2016	Department Manager, Business Planning
Department
Apr. 2018	Acting General Manager, Corporate Planning (NSPharma, Inc.)
Apr. 2019	General Manager, Global Business Division,
Attached to Global Business Division (NS Pharma,
Inc.)
Jun. 2019	Director
Jun. 2019	General Manager, Global Business; Head of Global
Business DivisionJun. 2021	Representative Director, President (current position)

600 Shares

Apr. 1984	Joined the Company
Apr. 2005	Department Manager, Marketing Department,
Sales and Marketing
Apr. 2009	Department Manager, Marketing Department,
Sales and Marketing Planning Division, Sales andMarketingApr. 2010	Department Manager, Marketing and Planning
Department, Sales and Marketing Planning
Division, Sales and Marketing
Apr. 2011	Head of Sales and Marketing Planning Division,
Sales and Marketing
Apr. 2012	Corporate Officer; Head of Sales and Marketing
Planning Division, Sales and Marketing
Jun. 2018	Director (current position)
Jun. 2018	General Manager, Administration
Apr. 2022	General Manager, Personnel, General Affairs, Risk
Management, Compliance & Digital Transformation(current position)

Apr. 1986	Joined the Company
Jun. 2014	Department Manager, Discovery ResearchLaboratories in Tsukuba, Discovery Research Labs.,
Research & Development
Jun. 2016	Department Manager, Discovery Research Labs.,
Research & Development
Apr. 2017	Corporate Officer; Department Manager, Discovery
Research Labs., Research & Development
Jun. 2021	Director (current position)
Jun. 2021	General Manager, Research & Development; Headof Research & Development Division (current
position)

Apr. 1989	Joined the Company
Aug. 2011	Department Manager, Corporate Planning
Department
Apr. 2013	Corporate Officer; Department Manager, Corporate
Planning Department
Jun. 2018	Director (current position)
Jun. 2018	General Manager, Business Management
Apr. 2022	General Manager, Business Management &Sustainability (current position)

Takanori Edamitsu

Kazuchika Takagaki

Director, Business Management& Sustainability

Director, Research & Development

Yukari Kobayashi
Outside Director
Number of shares of theCompany held

100 Shares

Kenji Kuwabara
Number of shares of theCompany held

200 Shares

Apr. 1987	Joined IBM Japan, Ltd.
Jul. 2002	Senior Manager, Overall Management of System Products
Marketing, IBM Japan, Ltd.
Jan. 2007	Director in charge of Public Sector, Global Business Service, IBM
Japan, Ltd.
Jan. 2007	Executive Officer, IBM Business Consulting Services KK
Mar. 2016	Growth Leader for Mercer Far East Zone; Chief of staff, Mercer
Japan Ltd.
Jan. 2018	Director, Mercer Investment Solutions Ltd.
Feb. 2018	COO, Mercer Japan Ltd.
Sep. 2018	Corporate Officer; Corporate Strategy Management Lead, Area
Transformation Lead, and Chief of Staff, Microsoft Japan Co., Ltd.
Mar. 2020	Representative Partner, Amanda Life Consulting LLC. (current
position)
Jun. 2021	Director, the Company (current position)
Apr. 2022	Outside Director, Panasonic Connect Co., Ltd. (current position)
Mar. 2023	Outside Director, Bridgestone Corporation (current position)<Significant concurrent positions>Representative Partner, Amanda Life Consulting LLC.
Outside Director, Panasonic Connect Co., Ltd.
Outside Director, Bridgestone Corporation
CEO, JC1 LLC (Scheduled)

Apr. 1985	Joined the Company
Apr. 2013	Department Manager, Kita-Kanto Branch Office,Northern Japan Division, Sales and Marketing
Apr. 2014	Department Manager, Chugoku Branch Office,Western Japan Division, Sales and Marketing
Apr. 2015	Department Manager, Tokyo Branch Office, EasternJapan Division, Sales and Marketing
Apr. 2017	Department Manager, Osaka Branch Office, Sales
and Marketing
Apr. 2018	Corporate Officer; Department Manager, Osaka
Branch Office, Sales and Marketing
Apr. 2021	Corporate Officer; Department Manager, Kansai
Branch Office, Sales and Marketing
Jun. 2021	Director (current position)
Jun. 2021	General Manager, Functional Food; Head of
Functional Food Division (current position)

Apr. 1984	Joined the Company
Apr. 2015	Department Manager, Regulatory Affairs
Department, Regulatory Affairs, Safety
Management and Quality Assurance Division
Apr. 2020	Head of Regulatory Affairs, Safety Management
and Quality Assurance Division (Marketing
Supervisor-General)
Apr. 2021	Corporate Officer; Head of Regulatory Affairs, Safety
Management and Quality Assurance Division(Marketing Supervisor-General)
Jun. 2021	Director (current position)
Jun. 2021	General Manager, Resource Procurement,
Production & Assurance (current position)

Hitomi Kimura
Director, General Manager,
Resource Procurement,
Production & Assurance
Number of shares of the Company
held

1,700 Shares

Apr. 1983	Joined the Company
Oct. 2004	Department Manager, Biological Research Department,
Discovery Research Labs., Research & Development
Apr. 2008	Department Manager, Nucleic Acid Business Promotion
Department, Nucleic Acid Business Division, Research &Development
Jan. 2010	Department Manager, Discovery Research Laboratories in
Tsukuba, Discovery Research Labs., Research & Development
Apr. 2012	Department Manager, Alliance & Business Planning
Department, Business Development Division, Research &Development
Apr. 2016	General Manager, Beijing Representative Office
Apr. 2019	General Manager, Beijing Representative Office, Global Business
Division
Jun. 2019	General Manager, Beijing Representative Office, Global Business
Apr. 2020	Deputy Head, Global Business
Jun. 2020	Standing Audit & Supervisory Board Member (current position)

6,800 Shares

3,500 Shares

4,400 Shares

NIPPON SHINYAKU CO., LTD.

Number of shares of theCompany held

Mayumi Nishi
Outside Director
Number of shares of theCompany held

0 Shares

Audit & Supervisory Board Members

Standing Audit &Supervisory Board Member

Number of shares of the Company
held

Number of shares of the Company
held

80

Outside Director

Number of shares of the Company
held

4,900 Shares

4,700 Shares

Yoshinao Wada

10,500 Shares

Director, Personnel,
General Affairs, Risk Management,
Compliance & Digital
Transformation

Number of shares of the Company
heldApr. 1992	Completed training program at Legal Training and ResearchInstitute of Japan
Apr. 1992	Registered with Osaka Bar Association
Apr. 1992	Joined Nishimura Law and Accounting Office
May 2003	Joint Owner, Hanamizuki Law Office (current position)
Mar. 2015	Auditor, Nissay Life Foundation (current position)
Apr. 2016	Auditor, Osaka University (current position)
Jun. 2017	Director, the Company (current position)
Jun. 2020	Member of the Board, NIPPON SHOKUBAI CO., LTD. (current
position)
Jun. 2022	Outside Auditor, MBS MEDIA HOLDINGS, INC.
<Significant concurrent positions>
Joint Owner, Hanamizuki Law OfficeMember of the Board, NIPPON SHOKUBAI CO., LTD.
Outside Auditor, MBS MEDIA HOLDINGS, INC.

Number of shares of the Company
held

Takashi Takaya

6,900 Shares

Number of shares of theCompany held

Representative Director,
President

Managing Director,
Sales and Marketing
Number of shares of the Company
held

Miyuki Sakurai
Outside Director

Toru Nakai

Shouzou Sano

Director, Functional Food

Corporate Data

Outside Directors
Apr. 1976	Joined the Company
Mar. 1992	Transfer to Japan Federation of Employers’
Associations
Apr. 2002	Department Manager, Corporate Planning
Department, Corporate Strategy Office
Apr. 2004	Corporate Officer
Jun. 2005	Director
Jun. 2005	Corporate Planning, Finance & Accounting, andInformation system, and Department Manager,
Corporate Planning Department
Jun. 2006	Managing Director
Apr. 2007	General Manager, Corporate Planning, Finance &Accounting, and Information system
Jun. 2007	Representative Director, President
Jun. 2021	Representative Director, Chairman (current
position)
Jun. 2023	Outside Director of KYOCERA Corporation (current
position)<Significant concurrent positions>
Chairman, Kyoto Employers’ Association
Outside Director, KYOCERA Corporation (Scheduled)

Apr. 1984	Joined the Company
Apr. 2008	Department Manager, Saitama Branch Office, Sales
and Marketing
Apr. 2010	Corporate Officer; Department Manager, Osaka
Branch Office, Sales Promotion Division, Sales andMarketingApr. 2013	Corporate Officer; Head of Tokyo Area Division,
Sales and Marketing
Apr. 2015	Corporate Officer; Head of Sales and Marketing
Jun. 2015	Director
Jun. 2015	General Manager, Sales and Marketing; Head of
Sales and Marketing Division (current position)
Jun. 2019	Managing Director (current position)

Hitoshi Ishizawa

ESG as the Foundation for Growth* For the reasons for the appointment of Directors and Audit & Supervisory Board Members, please visit the following website:
https://www.nippon-shinyaku.co.jp/english/company_profile/profile/executive_officer/index.php(Current as of June 29, 2023)

Shigenobu Maekawa

In Pursuit of Originality

Tsuyoshi Kondo
Outside Audit & Supervisory
Board Member

Hirotsugu ItoJul. 1975	Joined Osaka University Hospital
Nov. 1981	Department of Maternal Medicine, Osaka Medical Center for
Maternal and Child HealthOct. 1989	Obtained the degree of Doctor of Medicine (Osaka University)
Apr. 1991	Department Manager, Department of Molecular Medicine, ResearchInstitute, Osaka Medical Center for Maternal and Child Health
Apr. 1998	Director, Research Institute, Osaka Medical Center for Maternaland Child Health
Apr. 2011	Department Manager, Department of Maternal Medicine;
Director, Research Institute; Osaka Medical Center for Maternaland Child Health
Apr. 2014	Chief Department Manager, Department of Maternal Medicine;
Director, Research Institute; Osaka Medical Center for Maternaland Child Health
Apr. 2016	Part-time physician, Department of Maternal Medicine, Osaka
Medical Center for Maternal and Child Health
Apr. 2017	Part-time physician, Department of Maternal Medicine, Osaka
Women’s and Children’s Hospital (current position)
Apr. 2018	Visiting Professor, Yokohama City University
Jun. 2019	Director, the Company (current position)<Significant concurrent positions>Part-time physician, Department of Maternal Medicine, Osaka Women’sand Children’s Hospital
Apr. 1980	Joined Department of Biology, Aichi Cancer Center Research InstituteApr. 1980	Obtained pharmacist license
Apr. 1991	Joined Department of Anesthesiology, Kyoto Prefectural
University of Medicine
May 1991	Obtained medical license
Mar. 1997	Obtained the degree of Doctor of Medicine (Kyoto Prefectural
University of Medicine)Apr. 1997	Teaching Associate, Department of Anatomy I, Kyoto Prefectural
University of Medicine
Jun. 1998	Lecturer, Department of Anatomy I, Kyoto Prefectural Universityof Medicine
Apr. 2003	Lecturer, Graduate School of Medical Science, Kyoto Prefectural
University of Medicine
Apr. 2005	Assistant Professor, Department of Anatomy and Neurobiology,
Graduate School of Medical Science, Kyoto Prefectural
University of Medicine
Apr. 2007	Associate Professor, Department of Anatomy and Neurobiology,
Graduate School of Medical Science, Kyoto Prefectural
University of Medicine
Aug.2009	Professor, Department of Anatomy and Cell Biology, Nara
Medical University
Apr. 2010	Visiting Professor, Graduate School of Medical Science, Kyoto
Prefectural University of Medicine
Apr. 2023	Professor Emeritus, Nara Medical University (current position)
Jun. 2023	Director, the Company (current position)<Significant concurrent positions>
None

Apr. 1986	Joined the Company
Apr. 2015	Department Manager, Keiji Hokuriku Branch Office, WesternJapan Division, Sales and Marketing
Apr. 2017	Department Manager, Kyushu Branch Office, Sales andMarketingApr. 2019	Department Manager, Chushikoku Branch Office, Sales andMarketingApr. 2021	Department Manager, Nagoya Branch Office, Sales andMarketingApr. 2022	Department Manager, Information Service Supervisory
Department
Jun. 2023	Standing Audit & Supervisory Board Member (current position)

Standing Audit &Supervisory Board Member
Number of shares of theCompany held

2,100 Shares
Apr. 1993	Completed legal training at The Legal Training and ResearchInstitute of Japan
Apr. 1993	Qualified as a lawyer
Apr. 1993	Worked for Kondo Chiaki & Tsuyoshi Law Office
Apr. 2001	President of Kondo Law Office (current position)
Apr. 2003	Registered as a patent attorney
Apr. 2010	Specially appointed professor, Graduate School of Law, Kansai
University (current position)
Jun. 2016	Outside Audit & Supervisory Board Member (current position)
Jan. 2018	Outside Director, Senshu Electric Co., Ltd. (current position)<Significant concurrent positions>
President of Kondo Law OfficeOutside Director, Senshu Electric Co., Ltd.

Number of shares of theCompany held

Hiroharu Hara
Outside Audit & Supervisory
Board Member
Number of shares of theCompany held

1,000 Shares

100 Shares

Apr. 1983	Joined Osaka Regional Taxation Bureau
Jul. 2012	District Director, Shingu Tax Office, Osaka Regional Taxation
BureauJul. 2015	Director, Second International Information Div., First
Examination Dept., Osaka Regional Taxation Bureau
Jul. 2016	District Director, Nishi Tax Office, Osaka Regional Taxation
BureauJul. 2017	Director, Research Management Div., First Examination Dept.,
Osaka Regional Taxation Bureau
Jul. 2019	Deputy Assistant Regional Commissioner, Second Examination
Dept., Osaka Regional Taxation Bureau
Jul. 2020	District Director, Kita Tax Office, Osaka Regional Taxation Bureau
Jul. 2021	Retired from Kita Tax Office, Osaka Regional Taxation Bureau
Aug.2021	Registered as Licensed Tax Accountant
Aug.2021	President, Hiroharu Hara Tax Accountant office (current position)
Jun. 2023	Outside Audit & Supervisory Board Member (current position)<Significant concurrent positions>
President, Hiroharu Hara Tax Accountant office

Corporate Officers
Koji Honma

Hayato Wada

Masaya Toda

Kazuyuki Yamate

Masafumi Taira

Mitsuharu Koizumi

Yoshizumi Tanaka

Keiichi Kuwano

Katsumi Noda

Hiroji Hayashi

Toru Yamaguchi

Kazuyuki Iwata

Department Manager, Personnel
Department
Head of Regulatory Affairs
Supervision and Assurance Division

Department Manager, Kansai
Business Office
Department Manager, Discovery
Research Labs.

Head of Licensing & Alliance
Division
Department Manager, Tokyo
Business Office

Head of Digital Transformation
Division
Department Manager, Corporate
Planning Department

Head of Global Business Division

Department Manager, Odawara
Central Factory

Head of Sales and Marketing
Planning Division

Department Manager, Nagoya
Business OfficeIntegrated Report 2023

81

Corporate Data

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Eleven-Year Financial Data
Nippon Shinyaku Co., Ltd. and Consolidated Subsidiaries
JGAAP

IFRS

(FY)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

For the year

(Millions of yen)

(FY)

2021

2022

For the year

Net sales

69,941

76,517

79,991

84,20998,781

101,448

114,716

116,637

121,885

137,547

Revenue

137,484

144,175  Pharmaceuticals

58,31863,34566,34070,48985,31587,416100,223

101,643

106,478

120,650  Pharmaceuticals

120,650

121,988  Functional Food

11,622

13,172

13,651

13,72013,466

14,031

14,492

14,994

15,406

16,897  Functional Food

16,834

22,187

Cost of sales

34,77639,033

41,22644,01644,83546,92950,95253,15549,95450,657

Cost of sales

50,191

55,980Gross profit

35,16537,48338,76440,192

53,94654,51963,764

63,481

71,93186,890Gross profit

87,29388,195

Total selling, general and administrative expenses

28,26329,44530,202

31,64338,66637,43943,11941,81345,79658,591   Selling, general and administrative expenses

19,214

19,914

21,233

21,90423,762

24,217

26,41827,81929,69232,204

Selling, general and administrative expenses

32,17334,812  R&D expenses

9,049

9,530

8,968

9,739

14,903

13,221

16,701

13,994

16,104

26,386R&D expenses

22,86324,135

Operating income

6,901

8,038

8,562

8,549

15,28017,07920,644

21,66826,13428,299Operating profit

32,94830,049Net income attributable to owners of the parent

4,647

5,750

5,882

6,340

11,74912,953

16,302

16,866

20,702

23,044

Profit attributable to owners of parent

24,986

22,812

Depreciation and amortization

2,759

2,704

2,665

2,452

2,648

2,773

3,418

3,468

3,550

2,933

Depreciation and amortization

4,588

5,041

Capital investment

1,332

1,072

1,239

3,554

3,949

2,811

1,242

2,500

2,583

4,264

Capital expenditures(Including investment in intangible assets)

10,744

13,034

Cash flows from operating activities

3,767

6,015

6,113

8,915

18,916

6,719

15,31012,737

21,38816,018Cash flows from operating activities

21,316

26,170Cash flows from investing activities(2,026)(3,357)(3,718)(3,978)(5,750)(11,342)511(2,339)(1,564)(6,359)Cash flows from investing activities(10,037)(17,631)

Cash flows from financing activities(1,413)(1,606)(1,773)(1,907)(2,193)(3,787)(3,708)(5,660)(6,199)(6,801)

Cash flows from financing activities(8,407)(9,605)219,943

237,451

2,713

2,665

180,886

195,933

End of the year
Total assets
Interest-bearing debt
Net assets

End of the year
113,730

118,188

129,757

135,370

150,905

155,887

168,763

175,017

197,028

210,052

35

—

—

—

—

—

—

—

—

—

89,52993,186

101,207

102,762

114,316

125,689

135,190

145,760

162,543

176,767

Financial information per share (yen)Total assets
Interest-bearing debt (Including lease liabilities)
Total equity

Financial information per share (yen)
68.87

85.25

87.26

94.10

174.42

192.31242.04250.42307.37342.14

Basic earnings per share (EPS)

370.97338.70Net assets per share

1,323.87

1,378.93

1,498.88

1,522.33

1,693.81

1,862.54

2,003.39

2,160.11

2,409.01

2,620.02

Equity attributable to owners of parent per
share

2,681.18

2,904.49

Dividend per share

21

23

25

28

48

52

70

86

99

110

110

114

Earnings per share (EPS)

Major financial indicators regarding
profitability and valuation

Dividends

Major financial indicators regarding
profitability and valuation

Operating income to net sales (%)

9.9

10.5

10.7

10.2

15.5

16.8

18.0

18.6

21.4

20.6

Operating profit to revenue (%)

24.0

20.8

R&D expenses to net sales (%)

12.9

12.5

11.2

11.6

15.1

13.0

14.6

12.0

13.2

19.2

R&D expenses to revenue (%)

16.6

16.7

Equity ratio (%)

78.5

78.7

77.8

75.8

75.6

80.5

80.0

83.1

82.4

84.0

Ratio of equity attributable to owners of parent
to total assets (%)

82.1

82.4

Return on assets (ROA) (%)

6.3

6.9

7.0

6.5

10.8

11.2

12.7

12.6

14.0

13.9

Profit before tax to total assets (ROA) (%)

15.7

13.3

Return on equity (ROE) (%)

5.4

6.3

6.1

6.2

10.8

10.8

12.5

12.0

13.5

13.6

Return on equity attributable to owners ofparent (ROE) (%)

14.5

12.1

Price book value ratio (PBR) (times)

1.0

1.4

2.9

2.9

3.3

3.8

4.0

3.9

3.4

3.2

Price book value ratio (PBR) (times)

3.1

2.0

Price earnings ratio (PER) (times)

19.4

23.0

50.1

46.8

32.5

37.0

33.3

33.9

26.8

24.4

Price earnings ratio (PER) (times)

22.5

17.2

Payout ratio (%)

Payout ratio (%)
Number of outstanding shares (shares)
Market capitalization (millions of yen)

30.5

27.0

28.7

29.8

27.5

27.0

28.9

34.3

32.2

32.2

29.7

33.7

70,251,484

70,251,484

70,251,484

70,251,484

70,251,484

70,251,484

70,251,484

70,251,484

70,251,484

70,251,484

Number of outstanding shares (shares)

70,251,484

70,251,484

93,856

137,482

307,350

309,107398,326

500,191

566,227595,733

578,170

585,195

Market capitalization (millions of yen)

585,195

409,566* IFRS adopted from the fiscal year ended March 31, 2022.

82

NIPPON SHINYAKU CO., LTD.

Integrated Report 2023

83

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

ESG as the Foundation for Growth

Corporate Data

Non-Financial Data
Environment

Environment

Material Flow Data
INPUT

FY2018Classiﬁcation
Materials
EnergyWater consumption
OUTPUT

Products
Gas & Water emissions
Waste substances
Container and package recycling*3
Class I Designated Chemical Substances
handled*4

Raw materials (t)Packaging materials (t)Electricity (1,000 kWh)Heavy oil (kL)
Kerosene (kL)City gas (1,000 m3)
LPG (m3)
Gasoline (kL)
Diesel (kL)Tap water (1,000 m3)
Well water (1,000 m3)
Shipped products (t)Transported products (10,000 t-km)
CO2 emissions*1 (Scope1,2)(t-CO2)
Wastewater (1,000 m3)
Amount generated (t)Final amount of landﬁlled waste (t)Waste containers and packages (Amountcontracted out as post-consumer recovered
waste) (t)Acetonitrile (kg)
Dichloromethane (kg)N-hexane (kg)
Toluene (kg)FY2020225
232
15,251
0
4
1,549
1
389
2
59
101
461
13
10,496
161
428
3.9
195

FY2021244
302
15,350
0
1
1,523
9
428
3
58
107
483
10
9,686
165
363
4.7*2
170

FY2022288
245
15,881
0
0
1,562
6
398
3
54
101
479
13
9,182
155
388
2.3
172

5,557
2,075
2,697
—

6,633
2,483
2,729
1,346

5,558
1,349
2,575
203

*1 Although electricity consumption increased slightly, CO2 emissions decreased year on year due to the introduction of renewable energy in part of the Head Office area power grid.
*2 The figure includes approximately 0.9t of unused equipment and other landfilled waste arising from the dismantling of buildings on the site of Odawara Central Factory in addition to normal business activities.
*3 Waste containers and packaging (FY2020 entrusted amount for recycling)*4 Lists Class I Designated Chemical Substances based on the Pollutant Release and Transfer Register (PRTR) system under the Act on Confirmation, etc. of Release Amounts of Specific Chemical Substancesin the Environment and Promotion of Improvements to the Management thereof with a handling amount of 1,000kg or more.

CO2 emissions (t-CO2)

FY2019FY2020

FY2021

FY2022

10,129
2,509

9,435
1,783

9,181
1,315

8,271
1,414

7,845
1,337

Scope 1: Direct greenhouse gas (GHG) emissions from owned or controlled sources
Scope 2: Indirect emissions that occur through the use of purchased electricity,
steam, and heat

—
—

5,063
6,155

4,396
6,101

4,449
5,236

4,471
4,711

Scope 3: Purchased goods and services
Scope 3: Capital goods
Scope 3: Fuel- and energy-related activities not included in Scope 1 or Scope 2
Scope 3: Transportation and delivery (upstream)
Scope 3: Waste generated in operations
Scope 3: Business travel
Scope 3: Employee commuting
Scope 3: Transportation and delivery (downstream)
Scope 3: End-of-life treatment of sold products
Scope 3: Leased assets (downstream)

—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—

163,905
13,385
1,924
678
223
233
231
1,813
99
628

171,906
14,639
1,938
721
225
235
270
1,977
139
628

188,834
20,043
1,942
658
208
233
287
—*13
140
628

212
40

211
30

210
23

209
24

216
23

14,180878

14,109878

14,305946

14,400950

14,916
965

1,639
2

1,627
2

1,546
2

1,521
2

1,560
2

204

182

161

165

155

185
315
22

177
282
23

198
213
18

185
150
28

155
209
24

Main business locations*12
Sales ofﬁces, etc.

Supply chain emissions by scope (t-CO2)

Total energy consumption (Thousands of GJ)

Main business locations*12
Sales ofﬁces, etc.
Electricity (1,000 kWh)
Main business locations*12
Sales ofﬁces, etc.
City gas (1,000 m3)
Main business locations*12
Sales ofﬁces, etc.
Water (1,000 m3)
Main business locations*12

Waste substances generated (t)Head Ofﬁce area
Odawara Central Factory
Discovery Research Laboratories in Tsukuba*12 Main business locations: Head Ofﬁce area, Odawara Central Factory, Discovery Research Laboratories in Tsukuba.
*13 The calculation of emissions in FY2022 is incomplete as a portion of the data of the relevant pharmaceutical wholesalers is undisclosed at calculation time.

Putting Environmental Management System Certiﬁcation into Action
Ofﬁce nameAcquired certiﬁcations

Date of certiﬁcation acquisition

Last 3rd-party review

Odawara Central Factory

ISO14001

August 2004

February 2023 (Regular review)

Head Ofﬁce areabusiness ofﬁce

KES Step2

June 2012

June 2023 (Review for renewal)
FY2018

Employee Numbers and the Promotion of Women in the
Workplace (persons)Environmental Accounting
Environmental
conservation costs*5(excluding our salesofﬁces)Environmental
conservation beneﬁts

Social

Costs
Costs within our business areas (Thousands of yen)
• Pollution prevention costs*6 (Thousands of yen)
• Global environmental conservation costs*7(Thousands of yen)
• Resource recycling costs*8 (Thousands of yen)
Upstream & downstream costs*9 (Thousands of yen)Management activity costs*10 (Thousands of yen)
R&D costs (Thousands of yen)Social activity costs*11 (Thousands of yen)
Environmental remediation costs (Thousands of yen)
Total (Thousands of yen)
Beneﬁt veriﬁcation
CO2 emissions (t-CO2)• Electricity usage (1,000 kWh)• Heavy oil & kerosene usage (kL)• City gas & LPG usage (1,000 m3)• Gasoline & diesel usage (kL)
Water consumption (main business locations)(1,000 m3)
Waste substances generated(main business locations) (t)Final amount of landﬁlled waste(main business locations) (t)FY2022

FY2021
Investments
222,0122,156
219,856

Expenses
323,720
18,383244,715

Investments
197,014130,743
66,270

Expenses
304,493
55,918
198,527

0
0
1,070
0
0
0
223,082

60,622
6,653
72,9110809
0404,093

0
0
0
0
0
0
197,01450,047
5,499
73,905034,3840418,281

FY2021
9,685
15,350
1
1,532
431
165

FY2022
9,182
15,881
0
1,562
401
155

Year on year change
-503
531
-1
30
-30
-10

Year on year rate
-5.2%
3.5%
-100.0%
2.0%
-7.0%
-6.1%

363

389

26

7.2%

5.0

2.3

-2.7

-54.0%*5 Costs aimed at reducing the environmental impact caused by business activities. We compiled them based on “Environmental Accounting Guidelines 2005” published by the Ministry of the Environment.
*6 Costs related to environmental damage prevention due to pollution such as water pollution, soil pollution, air pollution, etc.
*7 Costs related to global warming prevention, energy-saving activities, etc.
*8 Costs related to proper disposal of waste, recycling etc.
*9 Consignment fee for recycling of containers and packaging (costs for collection and recycling of packaging containers for pharmaceuticals, etc. in Nippon Shinyaku), etc.
*10 Costs related to maintenance and operation of EMS (Environmental Management System) and environmental education of employees.
*11 Costs related to offering classes to elementary schools in Kyoto city, greening in the workplace, regional cleanup activities, etc.

Number of employees (parent company)
Number of female employees
Ratio of female employees (%)
Number of executives
Number of female executives
Ratio of female executives (%)
Number of managers
Number of female managers
Ratio of female managers (%)
Number of recruits
Number of female recruits
Ratio of female recruits (%)
Average number of years of service
Average number of years of service of female employees (years)
Average number of years of service of male employees (years)
Number of employees taking parental leave for childcare (Male)
Rate of uptake of parental leave for childcare (Male %)Number of employees taking parental leave for childcare (Female)
Rate of uptake of parental leave for childcare (Female %)Paid annual leave acquisition rate (%)
Total annual working hours (hours)
Employee turnover (%)

NIPPON SHINYAKU CO., LTD.

1,793
516
28.8
554
78
14.1
329
32
9.7
79
28
35.4
17.8
18.1
17.7
7
9.7
22
100
71.3
1791.6
1.68

FY2020

FY2021

FY2022

1,806
529
29.3
555
84
15.1
331
34
10.3
76
33
43.4
17.3
16.7
17.6
14
20.3
19
100
63.5
1821.96
1.97

1,827
552
30.2
571
92
16.1
343
38
11.1
57
28
49.1
17.4
16.5
17.8
30
50.0
19
100
63.5
1819.89
1.66

1,857
565
30.4
596
100
16.8
301
40
13.3
62
20
32.3
17.5
16.6
17.8
61
69.3
25
100
69.6
1841.69
1.92

7.23
10.73
79

10.01
10.32
83

Human Resources Development (hours)

Training hours by level per employee
Hours of self-development training per employee
Education and research expenses per employee (Thousands of yen)Governance
FY2018FY2019FY2020

FY2021

FY2022

Number of directors (persons)

12
4
1
8

12
4
1
8

12
4
1
8

12
4
3
25

12
4
3
25

Number of audit & supervisory board members (persons)

4
2
50

4
2
50

4
2
50

4
2
50

4
2
50

Number of outside directors
Number of female directors
Ratio of female directors (%)

Number of outside audit & supervisory board members
Ratio of outside audit & supervisory board members (%)

84

1,761
494
28.1
555
72
13.0
321
25
7.8
72
25
34.7
17.5
17.3
17.5
0
0.0
18
100
70.6
1804.22
1.49

FY2019Integrated Report 2023

85

Nippon Shinyaku Today

Glossary of Terms
A disorder marked by an abnormal proliferation of immature myeloid cells. Normal hematopoietic
function is impaired by unlimitedly proliferation of leukemia cells in the bone marrow, causing avariety of symptoms that include infectious disease and bleeding.

Chronic Thromboembolic
Pulmonary Hypertension(CTEPH)A disorder whereby organized thrombi cause a occlusion in the artery leading from the heart to thelungs (pulmonary artery), leading to abnormally high blood pressure in the pulmonary artery.
Clinical symptoms include shortness of breath during exertion.

Dravet Syndrome

A rare, devastating and life-long form of epilepsy that generally begins in infancy or early childhood
and is marked by frequent, treatment-resistant seizures, frequent resulting hospitalizations andmedical emergencies, significant developmental and motor and behavioral impairments. Dravet
Syndrome has been designated as an intractable disease by the Ministry of Health, Labour andWelfare, and there are estimated to be about 3,000 patients living with this disease in Japan.
A hereditary muscular disorder whereby dystrophin gene abnormalities cause a loss of dystrophin
proteins, which protect muscle cell membranes. It is the most frequently occurring type ofmuscular dystrophy, occurring in one of every 3,500 newborn boys. It is identified by symptoms
such as a tendency to fall and inability to walk quickly in children aged 2 to 5, with muscularatrophy and muscle strength deterioration following. Patients become unable to walk on their own
before their early teens, require the use of a wheelchair, and generally die in their 20s or 30s from
respiratory failure or heart failure.

We aim to achieve further growth for the Company through threecommitments: 1. Continue to launch at least one unique product eachyear on average, 2. Generate at least 50% of consolidated sales fromoverseas, and 3. Target at least 100% gains in sales and operating profit
compared to FY2020.

To provide drugs to as many DMD patients as possible, we are working
to develop nuclear acid drugs beyond Viltepso. In addition, we areproceeding with research on peptide-conjugated nucleic acids,
stereocontrolled nucleic acids, and novel sequence nucleic acids as
next-generation antisense nucleic acids. In addition to DMD, we arealso working on the development of NS-035 for patients with
Fukuyama congenital muscular dystrophy.

Q2 How does the Company plan to generate at least 50% ofconsolidated sales from overseas?

Viltepso, a therapy for Duchenne muscular dystrophy (DMD), waslaunched in Japan and the U.S. in FY2020. To bring the drug to moreplaces around the world, we are now taking steps aimed at gaining
early approval in China, Europe, and other regions. Going forward, we
will develop a pipeline for exon-skipping drugs that follow Viltepso andother globally developed drugs, and plan to increase the percentage ofsales from overseas operations to at least 50% by 2030.

Q3 What are the factors that caused your forecast for FY2023
to fall short of the numerical targets of the 6th Five-Year
Medium-term Management Plan?

Iron Deficiency Anemia

Modality

A drug discovery method for therapies such as low-molecular weight compounds, peptide(medium molecule weight) drugs, and nuclear acid drugs.

Q4 Please tell us about how you will overcome Uptravi’s

Restoring the open reading frame of amino acids via medications that use antisense
oligonucleotides to remove (skip) certain parts of the mRNA region (exon) that are translated into
proteins. This has the effect of generating functional proteins.

Myelodysplastic Syndromes(MDS)

Intractable diseases that carry a poor prognosis and very often lead to leukemia. The main
symptoms are general fatigue caused by anemia, an increased susceptibility to infections due to adecrease in white blood cells, and bleeding tendency as a result of a decrease in platelet count.

Nucleic Acid Drugs

Drugs that consist of nucleic acids, which make up genes, and target genes that cause of disease.
These nucleic drugs work by either stopping or regulating the production of proteins from thosegenes. Referred to by many as next-generation drugs, they show promise for treating diseases thatare difficult to treat with traditional low-molecular drugs.

Pulmonary Arterial
Hypertension(PAH)

A life-threatening disorder characterized by abnormally high blood pressure in the artery leadingfrom the heart to the lungs. PAH has a variety of symptoms that begin with minor shortness ofbreath and fatigue during everyday activity, then restricted physical activities, eventually leading todeath due to right ventricular failure.

Drug Price

The price of a pharmaceutical paid to an insurance pharmacy or medical institution providing
services covered by health insurance. What category a pharmaceutical can be used for as part of
medical care, as well as prices, are determined by the Health, Labor and Welfare Minister.

Patient Centricity

This is a concept which involves always putting the patient at the center, providing responses thatare focused on the patient, and ultimately respecting the individual judgement of the patient to the
maximum extent.

PLCM

An abbreviation of Product Life Cycle Management. With new pharmaceutical development having
become increasingly challenging, this is a means of improving the value of existing products byadding additional indications and dosage forms.

Priority Review Voucher

A voucher issued by the FDA in the U.S. to incentivize new drug development for rare conditions
affecting children (including tropical diseases), priority review vouchers grant the right to have a
new drug designated for priority review at the time of application approval. These rights can also be
traded.

PRTR System

An abbreviation of Pollutant Release and Transfer Register. A PRTR is a system for tracking,aggregating, and publishing data about the extent to which various toxic chemical substances are
released into the environment and are transferred off-site as part of waste, as well as the origin of
these substances.

NIPPON SHINYAKU CO., LTD.

Corporate Data

Q5 How do you plan to roll out nucleic acid drugs?

Anemia caused by iron deficiency and reduction of hemoglobin synthesis associated with excessive
menstruation, post-partum hemorrhage in women, gastrointestinal bleeding, and poor absorptionof iron through the intestinal tract and other relevant diseases. In addition to symptoms such as
palpitations, shortness of breath, and easy fatigue due to anemia and spoon nails due to irondeficiency are also observed.

Other

ESG as the Foundation for Growth

Q1 Please explain President Nakai’s three commitments in detail.

The main reasons why the forecast for FY2023 fell short of thenumerical targets of the 6th Five-Year Medium-term Management Plan
are that the launch of Viltepso in the U.S. was delayed due to COVID-19
and that product sales in Japan decreased due to the introduction of
off-year price revisions by MHLW.
On the other hand, we believe that long-term growth is possible
through the development of new modalities, such as gene therapy,
and pipeline items outside the DMD field, in addition to the nucleic
acid drug group and cell therapy drug currently under development.

Healthcare
Exon Skipping
andMedicines

86

In Pursuit of Originality

IR FAQ

Acute Myeloid Leukemia(AML)

Duchenne Muscular Dystrophy(DMD)

A New Way of Lifepatent cliff.

The patent for Uptravi is expected to expire in October 2026 in the U.S.
and April 2027 in the rest of the world. The patent expiration is
expected to reduce both sales of Uptravi in Japan and overseas royalty
income, but sales and profit growth are considered possible due toViltepso’s growth, nucleic acid drugs for DMD in development, CAP1002, a DMD cell therapy, and the global launch of in-house developed
products such as NS-580 and NS-018.

Q6 What pipeline items are you focusing on going forward?
In the area of DMD, we are working on the development of nucleic aciddrugs NS-089, NS-050, NS-051, exon 45 and exon 55 skipping drugs asfollow-ons to Viltepso, and we believe that together these nucleic aciddrugs will be able to treat about 40% of all DMD patients. In addition, thecell therapy drug CAP-1002, for which we entered into a distributionagreement with Capricor Therapeutics in the U.S. in January 2022, and inJapan in February 2023, is expected to enable us to treat DMD patients
who have difficulty walking, which represents approximately half of them.
In addition, we are developing NS-018, a treatment for myelofibrosis,
NS-580, a treatment for endometriosis, and NS-025, a treatment for
urological diseases and other in-house products. We plan to carry out
development of in-house products on a global basis.

Q7 What are your plans regarding corporate mergers andacquisitions (M&A)?

We will be constantly gathering and analyzing information aboutcompanies and venture firms in Japan and overseas, and will bethinking about possibilities for strategic partnerships (business andcapital alliances) and M&A.

Q8 What steps are you taking with regard to sustainability?
To further promote sustainability within the Nippon Shinyaku Group, the“basic CSR policy” was revised to and became the “Nippon Shinyaku
sustainability policy.” Based on our business philosophy, we clearly state that
we view addressing social issues as an important business issue and aim torealize a sustainable society. In addition, the Sustainability Committee,
which is chaired by the President, reviews progress made toward
establishing sustainability plans and achieving materiality targets, as well as
progress made in carrying out initiatives involving issues of materiality, andreports and makes suggestions to the Board of Directors. The Board of
Directors deliberates on and makes decisions about important matters.

Declaration of Authenticity

Takanori Edamitsu
Director, Business Management& Sustainability

Nippon Shinyaku has released integrated reports since 2012, with Integrated Report 2023 being the12th release. The Company recently established “Helping People Lead Healthier, Happier Lives” as
the foundation of its business, and along the way to achieving sustainable growth, has developed
innovative new drugs and functional foods that provide new value.
In our Integrated Report 2023, we redefined our stakeholders in terms of our business model andthe value creation process based on it, looking to make it easier to understand who they are andNippon Shinyaku’s strengths. In addition, by linking issues of materiality to our business, we have
tried to clearly show the path to solving these issues.
As the Director in charge of overseeing the production of this report, I attest to the legitimacy of
the report production process and the accuracy of the information contained herein.
I hope that this Integrated Report 2023 will help you better understand our company. We willcontinue to refine this report and strive to make it a valuable resource for communication with our
stakeholders.
August 2023

Integrated Report 2023

87

Nippon Shinyaku Today

A New Way of LifeIn Pursuit of Originality

Corporate Data and Investor Information (As of March 31, 2023)

Recognition by External Parties

Corporate Data

Inclusion in ESG indices

Corporate Name

Nippon Shinyaku Co., Ltd.

FoundedNovember 20, 1911

Representative
Directors
Independent andCertified Public
Accountants

Date of Incorporation October 1, 1919
Head Office

14, Nishinosho-Monguchi-cho, Kisshoin,
Minami-ku, Kyoto 601-8550, Japan
Phone: +81-75-321-1111
Facsimile: +81-75-321-0678
https://www.nippon-shinyaku.co.jp/english/

Paid-in Capital¥5.2 billion(Tokyo Stock Exchange Prime Market since April
4, 2022)

Shigenobu Maekawa, Chairman
Toru Nakai, President
Deloitte Touche Tohmatsu LLC
Shijokarasuma FT Square 20, Naginataboko-cho,Karasuma-higashiiru, Shijo-dori Shimogyo-ku,
Kyoto 600-8008, Japan
70,251,484

Issued andOutstanding Numberof Shares
Number of
7,599
Shareholders
Share Registrar
Mitsubishi UFJ Trust and Banking Corporation
6-3, Fushimimachi 3-chome, Chuo-ku, Osaka
541-0044, JapanThe Master Trust Bank of Japan, Ltd. (Trust account)

Individuals and Others

Meiji Yasuda Life Insurance Company

Financial Institutions

12.54%

Custody Bank of Japan (Trust account)

45.77%The Bank of Kyoto, Ltd.
MUFG Bank, Ltd.

Foreign Investors

STATE STREET BANK AND TRUST COMPANY 505001

32.25%

Total

70,251(Thousandsof shares)

Nippon Life Insurance Company
STATE STREET BANK WEST CLIENT - TREATY 505234
Tokio Marine & Nichido Fire Insurance Co., Ltd.

Other Corporations

GOVERNMENT OF NORWAY

6.68%

Securities Corporations

Persons

2019/347.27

2020/345.65

2021/3

0.34
0.66

50.39

2022/3

1.09

45.77
0

10

20

8.21
0.82

50.71

2023/3

9.49

2.76
30

40

12.45

4,673

33.67

11.81

5,025

12.23

6,252

28.77

7.18

29.49

6.68
50

30.45

7.79

32.25
60

70

80

CDP

The FTSE Blossom Japan Index is one of
the ESG indices of Japanese stocks
adopted by the Government Pension
Investment Fund (GPIF), and isconstructed by FTSE Russell, asubsidiary of the London Stock
Exchange Group. It consists of Japaneseequities that have excellent ESG
practices.

CDP is one of the world’s mostimportant indicators of corporate value,
demanded by institutional investors
globally, that requires companies todisclose their environmental strategies
and greenhouse gas measures.
Companies are scored on 13 generalcategories, including governance, risks
and opportunities, business strategy,
and targets and performance. Nippon
Shinyaku has received a “B” rating.

The FTSE Blossom Japan Sector RelativeIndex relatively reflects theperformance of Japanese companies
demonstrating strong environmental,social, and governance (ESG) practices
in each sector. To facilitate thetransition to a low-carbon economy,
companies with particularly highgreenhouse gas emissions are includedin the index if their improvement
efforts are acknowledged by the TPIManagement Quality Score.

2.76%

Shareholder composition over the past five years

90

11.53

5,223

12.54

7,599

 Financial Institutions
 Securities Corporations
 Other Corporations
 Foreign Investors
 Individuals and Others

100 (%)

Corporate Data

FTSE Blossom Japan Index

FTSE Blossom Japan Sector
Relative Index

Distribution of Shares Issued

Major Shareholders

ESG as the Foundation for Growth

S&P/JPX Carbon Efficient
Index
The S&P/JPX Carbon Efficient Index is
an ESG index jointly developed by S&P
Dow Jones Indices LLC and Japan
Exchange Group, Inc. which measures
the performance of constituent
companies of the Tokyo Stock Price
Index (TOPIX) based on their level ofcarbon efficiency (carbon emissions
per unit of revenue) and environmental
information disclosure.

“White 500” Health &Productivity Management
Outstanding Organization
The Ministry of Economy, Trade andIndustry (METI) and the Nippon Kenko
Kaigi have designated Nippon Shinyaku
as one of the “White 500” Health &Productivity Management Outstanding
Organizations 2023 (large enterprise
category), a system that recognizes
corporations that practice particularly
excellent health management.

JPX Nikkei Index 400
Nippon Shinyaku has been selected asa constituent of the JPX Nikkei Index
400, a stock index jointly managed by
the Japan Exchange Group (JPX), Nikkei
Inc., and Tokyo Stock Exchange.

Nikkei Smart WorkManagement Survey
This annual survey has been conductedby Nikkei Inc. since 2017. Nippon
Shinyaku received 3.5 stars (out of five)in the sixth Nikkei Smart WorkManagement Survey.

Nikkei SDGs Management
SurveyNetwork (As of July 1, 2023)
Main Offices
Business Offices  Sapporo, Tohoku, Kanetsu, Tokyo, Chiba/Saitama, Yokohama, Nagoya, Kansai, Keiji/Hokuriku, Chushikoku, Kyushu
Tokyo Office
Discovery Research Laboratories, Discovery Research Laboratories in Tsukuba, Food Science Laboratories, Yamashina Botanical Research Institute, Odawara Central
Factory, East Logistic Center, West Logistic Center

Domestic Subsidiaries
Sioe Pharmaceutical Co., Ltd., Tajima Shokuhin Kogyo Co., Ltd., Nippon Shinyaku Advance Co., Ltd.

Overseas Offices and Subsidiary
London office, NS Pharma, Inc., Beijing Nippon Shinyaku Co., Ltd., Tianjin Nippon Shinyaku Co., Ltd.

88

NIPPON SHINYAKU CO., LTD.

MSCI Japan Empowering
Women Index (WIN)The MSCI Japan Empowering Women
Index (WIN) is an ESG index developedby the U.S.-based MSCI, which selects
outstanding companies in terms of
employment and promotion of womenand information disclosure on gender
diversity, such as diversity initiatives.
THE INCLUSION OF NIPPON SHINYAKU CO., LTD. IN ANY MSCI INDEX, AND THE USE OF
MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF NIPPON SHINYAKU
CO., LTD. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVEPROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE
TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Initiated in 2019, this survey conductedby Nikkei Inc. evaluates companies
based on the fit between the SDGs andoperational management. It uses afive-star rating evaluation based onfour factors: “economic value,” “social
value,” “environmental value,” and“governance.” Nippon Shinyaku
received three stars in the latest survey.

Digital Transformation
Certification
Nippon Shinyaku was recognized as acompany ready to promote digitaltransformation based on the Act on
Partial Revision of the Act on
Facilitation of Information Processing.
Integrated Report 2023

89