May 12, 2016
Seikagaku Corporation(Securities Code: TSE 4548)

Seikagaku Announces a New Mid-termManagement Plan (Fiscal 2016 to Fiscal 2018)
Seikagaku Corporation (Tokyo) today announced that it has formulated a new mid-term
management plan for the period from fiscal year 2016 (ending March 31, 2017) to fiscalyear 2018 (ending March 31, 2019). A summary of the plan follows.
1. The Seikagaku Corporation Ten-Year Vision
The pharmaceutical industry is in a period of great transformation due to growing pricing
pressures on medical services, large-scale realignment of pharmaceutical companies
across national borders, and technological innovation in drug discovery researchaccompanied by more intense competition in new drug development.
Responding to this business environment, in March 2009 Seikagaku established theSeikagaku Corporation Ten-Year Vision with the aim of developing as a “Global CategoryPharma.”
The Seikagaku Corporation Ten-Year Vision
Launch new drugs (including medical devices) on a consistent basis and cultivate thecapability to open up a new market every three years that has the potential to become amainstay business.

Focus research and development on glycoscience and sustain steady growth as a“Global Category Pharma” that establishes global competitiveness.

2. Review of the previous mid-term management plan (Fiscal 2012 to Fiscal 2015)
Starting with a three-year Mid-term Management Plan in April 2009, Seikagaku undertook“Growing basic physical strength and building structure” as a first step toward achieving theTen-year vision and formulated a four-year Mid-term Management Plan in April 2012 as asecond step based on self-searching and results of first step. Setting goal of “Cultivatingnew leads to achieve the Ten-year vision” under this second Mid-term Management Plan,
Seikagaku made proactive investments in key strategic projects such as R&D, production
and sales, and are aiming to realize new leads.
During the period of the previous mid-term management plan, the market for joint
function improving agents in Japan was becoming increasingly severe due to accelerating
measures to control medical costs. Although the market share of ARTZ in Japan increased,
ARTZ sales decreased. On the other hand, overseas pharmaceuticals sales exceeded thetarget, partly because yen depreciation moved more than expected. In particular, sales ofsingle-injection joint function improving agent Gel-One, a strategically important product in
the U.S., steadily increased following a sluggish start attributable to the time required to1

develop the local sales structure. The LAL business is growing one of mainstay of businessfor the Company thanks to sales expansion at the U.S. subsidiary.
In the area of production, the start of operation of the No. 5 Production Building of theTakahagi Plant brought to a conclusion a round of major capital investments made during
the period of the management plan that resulted in a production structure that ensures astable supply of products over the medium to long term.
Seikagaku is developing a drug development structure that can cope with paralleldevelopment of multiple themes and has advanced projects in the pipeline to late-stage
development. SI-6603, treatment for lumbar disc herniation, yielded positive results in
Phase III clinical trials in Japan, and an application for new drug (NDA) was submitted inJanuary 2014 in Japan. A Phase III trial for SI-6603 underway in the U.S. is also
progressing steadily. However, the NDA examination in Japan is ongoing, and will takeadditional time to obtain approval.
Accordingly, while Seikagaku attained results that support the objective of “Cultivationof new leads for achieving the Ten-Year Vision,” some issues remain to be addressed.
Previous Mid-term Management Plan Numerical Targets and Results
Fiscal 2015 Target

Fiscal 2015 Result

Net sales¥31.5 billion¥30.9 billion

Operating income¥3.0 billion¥2.1 billion

3. Outline of the new mid-term management plan (Fiscal 2016 to Fiscal 2018)
In light of the accomplishments and the issues that remain under the previous management
plan, Seikagaku has formulated a new mid-term management plan covering the three-year
period beginning in April 2016 as the final step toward achieving the Ten-Year Vision. Under
the new plan, Seikagaku will undertake further sales expansion in the U.S., a key market,
and aim to launch in Japan and to obtain approval in the U.S. for SI-6603, treatment for
lumbar disc herniation, and to enter new markets for existing products. To support theseactions, Seikagaku will also strengthen production and quality control systems compliantwith global standards.
Furthermore, Seikagaku will establish core technologies to enhance the drug
discovery and drug cultivation pipeline that will lead to next-generation leap and will build apowerful research and development organization in preparation for further growth.
Key Concepts
 “ACT for the Vision” Achieving the Ten-Year Vision and Making a Further Leap Forward.

Active spirit, Creative mind, Takeoff
Overcome severe environment in the business, achieve the Ten-Year Vision, andsurvive as a “Global Category Pharma.”2

High-Priority Strategies(1) Steady progress with SI-6603, a treatment for lumbar disc herniation
1) Proceed with a launch in Japan and realize sales expansion in accordance withappropriate use.
2) Aim for commercialization in the U.S., which is potential big market.
(2) Powering up as a leader in the knee osteoarthritis market
1) Promote sales expansion in the U.S. and new market development for growth driver
Gel-One.
2) Maintain sales volumes of ARTZ in Japan through product improvements.
3) Proceed with development of SI-613, a joint function improving agent positioned as anext generation product.
(3) Enhancement of the development pipeline
1) Maintain basic technologies superior to those of competitors in the field ofglycoscience, accelerate exploratory research, and continuously originate and create
development themes.
2) Steadily advance the stages of projects in the pipeline by enhancing clinicaldevelopment capabilities.
(4) Pursuit of an optimal production system
1) Ensure a stable supply of products and realize cost reductions by implementing further
production efficiency improvements.
2) Strengthen production and quality control systems compliant with global standards andcapable of rapidly responding to regulatory trends.
Numerical Targets
Fiscal 2016 Forecast

Fiscal 2018 TargetNet sales¥29.5 billion¥32.0 billion

Operating income¥1.0 billion¥2.5 billion

Ordinary income¥3.3 billion¥4.5 billion*Key Assumptions of Numerical Targets
1) Overseas business expansion to compensate for a decrease in revenue due toNHI drug price reductions in Japan (overseas sales ratio: 45%)
2) A high level of R&D expenses (ratio of R&D expenses to net sales: 25% to 30%)
3) Various royalty incomes as non-operating income4) Exchange rate: ¥110 to the U.S. dollar

4. Change of Dividend Policy
Seikagaku regards improving shareholder value as an important management priority andaims to enhance shareholder returns and to realize sustained growth throughwell-balanced business investment in R&D, production system maintenance, and otherareas.
Seikagaku’s policy on shareholder returns is to aim for stable and continuous
3

dividends from a medium- to long-term perspective and to continue paying an annual
dividend of ¥26 per share. Seikagaku will also consider purchases of treasury stock, as
appropriate, taking into account future business development and the total return ratio.
*The plans and forecasts in this release have been prepared on the basis of current
assumptions about future economic conditions, market trends, and other factors. Actualresults may differ from the plans and forecasts due to various factors.
#######

4