The Mochida Pharmaceutical Group’s “17-19 Medium Term Management Plan”
This material is an English translation of the press release issued on April 3, 2017 in Japanese, andthe Japanese release is given priority regarding content and interpretation.
April 3, 2017
Dear All,
Every year, Mochida Pharmaceutical Group (Mochida Pharmaceutical Co., Ltd., TSE: 4534, 1stSection) establishes its rolling three-year plan. We are pleased to present an overview of theMedium-term Management Plan for the fiscal years 2017 through 2019
Medium-Term Management Plan Policy for the fiscal years 2017 through 2019
We will respond to medical and healthcare needs with concentration of the total power of the Group
covering research and development, manufacturing and marketing, and we will restructure theearnings structure directed at sustainable growth by promoting selection and focusing processes.
The three years from FY2017 to FY2019 are forecast to be even more challenging, given thecontinuing government policy of pharmaceutical cost reduction in the context of the need to securestable financial resources for the social security system, the further promotion of generic drugs withthe aim of raising the share of generic drug prescriptions to 80%, and movements in the drastic
reform of the National Health Insurance (NHI) drug price system.
In order to be capable of responding to any change in our environment, Mochida Pharmaceutical
Group strives specifically toward the following three key points:
1.Making continuous investments to create next-generation leading products
2.Redistributing resources strategically through the selection and focusing processes
3.Focusing on sales of new drugs, etc. by enhancing sales capabilities
As the top priority issue, we are pursuing investments in business activities that will lead to futurecompetitiveness in order to create next-generation leading products. In pharmaceutical research,
we are enhancing our development pipelines by introducing candidate drugs for development at an
early stage through the promotion of open innovation. We will boost productivity by proceeding withselection and concentration in company-wide organizational management, further promoting
structural reform, and strengthening interdepartmental cooperation. We will also strategicallymaximize the productivity of our finite human, material, and financial resources, and actively seek
collaboration with external resources at the same time.
Our core pharmaceutical business will focus its resources on the targeted areas of cardiovascular
medicine, obstetrics and gynecology, dermatology, emergency medicine and psychiatry, etc. so as tofurther promote strategic alliances which stress the importance of lifecycle management and partnerships.
To maximize profit, we are focusing on new drugs. We will enhance the gastroenterology area with Lialda,
an ulcerative colitis treatment drug, and AJG533, a chronic constipation treatment drug. We aim toincrease sales of Lexapro, an antidepressant, obtaining reinforcement of the approval for the additional
indication of social anxiety disorder, to become the No.1 antidepressant in the Japanese market. We havebeen taking on the challenge of new medical fields such as the development of a therapeutic drug for
pulmonary arterial hypertension (PAH), which is an intractable disease, and we will work on biosimilar
products and value-added products to further promote the generic drug business with high business andstrategic significance.

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Aiming at specialty pharmaceuticals that will be recognized for the value of their existence on aglobal scale as well, Mochida Pharmaceutical Group will strive to continually increase its corporate
value as a group of companies in the comprehensive healthcare business by taking full advantageof the agility and responsiveness of a mid-sized firm.
Until the 15-17 Medium-Term Management Plan, we announced the management target values ofthe final fiscal year in the Medium-Term Management Plan period. However, due to the continued
extreme difficulty in forecasting the impact of market environment changes, including thegovernment policy of promoting generic drugs and NHI drug price revision, we have also decided todefer the formulation and announcement of management target values for the final fiscal year.
In place of the management target values for the final fiscal year, we announce the managementtarget values for FY2017.
Management Target Values for 2017 (Consolidated):
Sales

107.0 billion yen

Operating income

10.0 billion yen

Research and development expenditures

12.0 billion yen2

[Reference]
1. Business Strategies
1) Pharmaceuticals
The Group will seek:To focus its resources on the targeted areas (cardiovascular medicine, obstetrics andgynecology, dermatology, emergency medicine and psychiatry, etc.) in order to become a
specialty pharmaceutical company;

To expand our products and development pipelines by maximizing the benefits ofalliances;

To build up our life cycle management to maximize values of development pipelines andcurrent products;
To promote customer-centered marketing and business strategies.

a) Development
The Group will seek:
To optimize organizational structuring and to allocate resources for accelerating drug
development and improving accuracy, in close cooperation with our partners;
To obtain approval during the period of this Medium-Term Management Plan for the addition ofdrug indications to include dysmenorrhea for Dinagest (a treatment for endometriosis),
LBEC0101, a biosimilar of etanercept, which is a rheumatoid arthritis drug, AJG533, a chronic
constipation treatment drug, LBAL, a biosimilar of adalimumab, which is a rheumatoid arthritis
drug, and RGB-10, a biosimilar of teriparatide, which is an osteoporosis drug;
To promote the development of FYU-981, a treatment drug for gout and hyperuricemia, and an
inhaled form of treprostinil, a treatment drug for pulmonary arterial hypertension (PAH), whichhave been newly added to our pipeline;
To promote the addition of drug indications and dosage forms to the drugs under development
and products on the market;
To enhance the strategies for the introduction of the products in development so as to expand
the pipeline in the fields in which we specialize, including internal medicine;
To introduce and develop high value-added products which meet the needs of medical
professionals as well as customers;
To promote the development of biosimilars to follow filgrastim;
To promote the development of dMD-001, an articular cartilage lesion restoration material
created through industry-academia collaboration.
3b) Marketing
The Group will seek:
To develop medical representatives (MRs) who can capably cover all targeted areas(cardiovascular medicine, obstetrics and gynecology, dermatology, emergency medicine andpsychiatry), and to maintain and continue with the complement of 750 MRs;To enhance sales capabilities through, among others, the positive use of e-promotion;
With the aim of enhancing the gastroenterology area, we will promptly expand sales of Lialda,
an ulcerative colitis treatment drug, and elevate the drug to a key product;
To further increase sales of Lexapro, an antidepressant that has already received highly
favorable reviews and achieved considerable success in overseas markets, obtaining
reinforcement of the approval for the additional indication of social anxiety disorder to strive tobecome the No. 1 antidepressant in the Japanese market;
To reinforce the area of obstetrics and gynecology with Dinagest, a treatment drug forendometriosis, which has been reputed to contribute to patients’ QOL, its authorized
generic drug, and Frewell, a treatment drug for dysmenorrhea and the area ofdermatology with Beselna, a treatment drug for condyloma acuminatum and actinic
keratosis;
To further reinforce business in the area of internal medicine/cardiovascular medicine withTramcet (an analgesic for chronic pain/tooth extraction pain) for which the framework for joint
sales was changed in January this year;
To promote the appropriate use of Treprost for the treatment of pulmonary arterial hypertension(PAH), an intractable disease, by providing medical professionals with accurate information in atimely manner based on the characteristics of the drug;
To focus on Atedio (valsartan / cilnidipine combination) to maintain the presence of Atelec (along-acting Ca-channel antagonist);
To aim at securely maintaining the prominence of Epadel, a drug for the treatment ofhyperlipidemia, in the cardiovascular area through the maximum utilization of the abundantEBM-information obtained from JELIS (the world’s first large-scale clinical trial of a highly
purified EPA drug), etc. as well as any new EBM-information;
To introduce products in which we specialize and create efficiency in sales activities;
To aim to achieve sales of more than 20 billion yen, mainly by Mochida Pharmaceutical Sales
Co., Ltd., for our generic drug business including the sales of biosimilar filgrastim and generic4

anticancer drugs;
To work toward increasing the prominence of the Epadel-OTC drug as a leader in themanufacture and sales of EPA drugs.
c) Pharmaceutical Research
The Group will seek:
Research Center, which was founded in January this year, aims to enhance our development
pipelines by introducing candidate drugs for development at an early stage through thepromotion of open innovation.
2) Mochida Pharmaceutical Plant Co., Ltd.
Mochida Pharmaceutical Plant will promote contract manufacturing business of medical productswith high reliability and efficiency in response to diverse needs of our customers, using bothstate-of-the-art manufacturing facilities and leading-edge technologies that meet global standards.
We will strengthen our commitment to maintain a stable supply of our products.
3) Mochida Healthcare Co., Ltd.
Since 1970, our skincare products business has promoted itself as an expert in basic skin careproducts for sensitive skin. Our success includes Skina Babe, a baby bath oil that enjoys the top
market share, and the Collage series, a line of gentle basic skincare products. Building upon its highrate of support and popularity among dermatologists, obstetricians and gynecologists, Mochida
Healthcare will seek to expand sales of the Collage Furfur series (antimicrobial care products that
contain an antimycotic agent), etc. and consolidate their brand image through strengthened
marketing, and to further develop our market.
2. Promotion of restructuring and better awarenessMochida Pharmaceutical Group promotes structural improvement of the entire group and betterawareness by all employees of the group companies so as to eliminate every type of waste andinefficiency, and further enhance lean management style in order to respond to more difficultchanges in the business environment and to ensure continued profitable growth.
a) Innovations toward independent and collaborative business units
Business units such as pharmaceuticals, pharmaceutical research, pharmaceutical manufacturing
and skincare products are managed under the self-support accounting system with an awarenessof the business environment of each unit and operational efficiency. In addition, the Groupenhances the liaison among the units. Headquarters will also seek to further strengthen its functions
as one of the Group’s business units so as to improve the efficiency in organizational operation andenhance its corporate value.
b) Innovations toward boosting productivity
The Group will continue to review its personnel allocation, strategy, and utilization, from the5viewpoint of development and vitalization of human resources, in accordance with the restructuringof the Group’s management system.
The Group will promote better awareness among employees and continue to assist them in theirefforts to develop competencies so as to enhance their performance. We will enhanceinterdepartmental cooperation in order to meet our target of increasing productivity by 10% throughoperational restructuring.

Disclaimer
・ The target values contained in the Medium-term Management Plan and presented in thisdocument are not forecasts; rather they are only intended to show the directions of the goals
we aim to achieve.
・ The information provided in this document contains some “forward-looking statements”. Theseforward-looking statements are based on the judgments of the Company derived from theinformation available to us at this time, and include known and unknown risks and uncertain
elements. Accordingly, the actual results may differ materially from these statements due to avariety of factors.
・ These risks and uncertainties include general economic conditions in Japan and worldwide,such as general conditions in the industry and markets, interest rates and currency exchange
rate fluctuations. The risks and uncertainties exist in forward-looking statements relating toproducts in particular. These product-related risks and uncertainties include, but are not limited
to, technological advancements, granting of patents to our competitors, completion of clinical
trials, claims or concerns relating to safety or efficacy of products, acquisition of approval from
regulatory authorities, reform of health insurance systems inside and outside Japan, trends
toward the containment of health care cost, government law and regulations that affect theCompany’s business inside and outside Japan, and issues pertaining to development of newproducts.
・ Approved products contain risks relating to manufacturing and marketing which include, but not
are limited to, situations in which the Company may face deficiencies in manufacturing capacity
needed to meet demand, difficulties in securing the supplies of raw materials, and demand not
created in markets.
・ We do not intend to, and assume no obligation to, update or modify any forward-looking
statements even if such updating or modification is desirable due to the emergence of new
information, future events or other reasons.
・ The information contained in this document regarding pharmaceutical products (including thosewhich are being developed) is not intended to act as a promotion or advertisement, or toprovide medical advice.

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