The Mochida Pharmaceutical Group’s “21-23 Medium-Term Management Plan”
This material is an English translation of the press release issued on April 1, 2021 in Japanese,and the Japanese release is given priority regarding content and interpretation.
April 1, 2021
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 2021 through 2023
Medium-Term Management Plan Policy for the fiscal years 2021 through 2023
We will respond to medical and healthcare needs with concentration of the total power of theGroup covering research and development, manufacturing and marketing, pursue sustainablegrowth by promoting selection and focusing processes, and restructure the earnings structure torespond to further environmental changes.
The business environment over the three years from FY2021 to FY2023 is forecast to be evenmore challenging, given the National Health Insurance (NHI) price revision in October 2019 andApril 2020 followed by the first and unusual off-year revision in April 2021 in a situation where thegovernment has continued the policy of pharmaceutical cost reductions in the context of the needto secure stable financial resources for the social security system.
The Mochida Pharmaceutical Group will intensively focus on the following three key points so theGroup can deal with all types of changes in the environment:
1. Focusing on new drugs, etc.
2. Making continuous investments to create next-generation leading products
3. Redistributing resources strategically through the selection and focusing processes
As the top priority issue, we will concentrate our resources on the targeted areas ofcardiovascular medicine, obstetrics and gynecology, psychiatry, and gastroenterology, andfocus on new drugs to maximize profit in our core pharmaceutical business. In addition, we willfurther promote strategic alliances that stress the importance of partnerships.
We are pursuing investments in business activities that will lead to future competitiveness in order tocreate leading next-generation products. In pharmaceutical research, we are enhancing our development
pipelines by in-licensing candidate drugs for development at an early stage through the promotion ofopen innovation. In addition, we will work on the overseas expansion of our own products as well as
the bio material business.

1We will proceed with selection and concentration in company-wide organizational management,
continue to promote structural reform, and strengthen interdepartmental cooperation. We will also
strategically maximize the use of the Group’s finite human, material, and financial resources, while
actively seeking collaboration with external resources at the same time. We will aim to further
accelerate our efforts to create innovation and improve productivity, and to strengthen our profitgenerating system.
Mochida Pharmaceutical Group will continually grow as a distinctive and globally valued group ofcompanies in the life and healthcare business by responding to medical and healthcare needs,
taking full advantage of its strengths as a mid-sized firm, such as agility and responsiveness.
As mentioned above, the environment surrounding the pharmaceutical industry is expected to growincreasingly severe. We have decided not to prepare or announce management target values forthe final year of the Medium-Term Management Plan, which we have previously announced every
year, since it is extremely difficult to predict how much and how quickly the future reform of thedrug price system and other factors could affect the industry environment. Over the next threeyears, we will actively continue investing in areas such as R&D (including in-licensing), andpromote quality improvement and the acceleration of long-standing efforts in portfolio restructuring(shift to new drugs) and our implemented measures.
In this Medium-Term Management Plan, we announce the management targets for FY2021, thenearest fiscal year, instead of the final year.
※Management Target Values for 2021 (Consolidated):
Sales

100.0 billion yen

Operating income

7.0 billion yen

Research and development expenditures

13.0 billion yen

Note: The management targets for FY2021 are not forecasts; rather they are only intended toshow the directions of the goals we aim to achieve. Please refer to the financial results for thefiscal year ended March 2021, which is scheduled to be announced in May.

2

[Reference]
1. Business Strategies
1) Pharmaceuticals
The Group will seek:To focus its resources on the targeted areas (cardiovascular medicine, obstetrics andgynecology, psychiatry, and gastroenterology, etc.);

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 andcurrent 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 MND-2119, a
new highly purified EPA drug, MD-711, an inhaled form of a treatment drug for pulmonary
arterial hypertension (PAH), the pediatric indication of Lialda, an ulcerative colitis treatment
drug, ACT-541468, a treatment for insomnia, and MD-120, an antidepressant;To promote the development of pediatric indication of Lexapro, an antidepressant;To promote the development of MND-21, a treatment for hypertriglyceridemia, in China;
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 in-licensing of the products in development so as to expand
the pipeline in the fields in which we specialize;
To in-license and develop high value-added products which meet the needs of medical
professionals as well as customers;
To promote the in-licensing and development of biosimilars;

3b) Marketing
The Group will seek:
To develop medical representatives (MRs) who can capably cover all targeted areas, and tooptimize information provision activities through, among others, the active use of e-promotion;
To maximize sales of Lialda, an ulcerative colitis treatment drug, aiming to be the No. 1 5aminosalicylic acid (5-ASA) drug.
To aim at maximizing sales of Goofice, a chronic constipation treatment drug, and work toimprove its position in the constipation market alongside Movicol;
To aim for Lexapro to reach the No. 1 position in the Japanese antidepressants market;
To focus on early maximization of sales of Urece, a treatment for hyperuricemia in gout;
To continue to hold the top position in obstetrics and gynecology with Dinagest, a treatment
drug for endometriosis, adenomyosis and dysmenorrhea, its authorized generic drug, Frewell,a treatment drug for dysmenorrhea, and Doxil, an anticancer drug;
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 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 a timely manner based on the characteristics of the drug;
To work on the generic drug business to focus on lines with strong business potential such as
the authorized generic drug of Dinagest and biosimilars (Filgrastim biosimilar, Etanercept
biosimilar and Teriparatide biosimilar) in cooperation with Mochida Pharmaceutical Sales Co.,
Ltd. and other business partners;
To work toward increasing the prominence of the Epadel-OTC drug as a leader in themanufacture and sales of a highly purified EPA drug;.
c) Pharmaceutical Research
The Group will seek:
To enhance our development pipelines by in-licensing candidate drugs for development at anearly stage through the promotion of open innovation.

4d) Overseas expansion
The Group will seek:
To promote the overseas expansion of a highly purified EPA drug in China, Thailand, Vietnam,
the US, etc.
2) Bio material business
The Group will promote and develop the bio material business based on sodium alginate. We will
aim to obtain approval for dMD-001, an articular cartilage lesion restoration material during thismedium-term management plan.
3) Start-up business
The Group will promote projects for regenerative medicine products and aim for an early launch.
4) 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 both stateof-the-art manufacturing facilities and leading-edge technologies that meet global standards. We
will continually work to maintain a stable operation, a stable supply of our products, and properquality.
5) Mochida Healthcare Co., Ltd.
Since 1970, Mochida Healthcare has conducted business activities as a pioneer in skin care forsensitive skin, with products such as Skina Babe, a baby bath oil that enjoys the top market share,
and the Collage series, a line of gentle basic skincare products. Building on its high rate of support
and popularity among dermatologists, obstetricians and gynecologists, Mochida Healthcare will
strengthen marketing and consolidate the brand image of the Collage series and Collage Furfur
series, while continuing to 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 Research and development, pharmaceuticals, pharmaceuticalmanufacturing and skincare products are managed under the self-support accounting system with
an awareness of the business environment of each unit and operational efficiency. In addition, theGroup enhances 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 and enhance its corporate value.

5b) Innovations toward boosting productivity
The Group will continue to review its personnel allocation, strategy, and utilization, from theviewpoint 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.

6Disclaimer
・ The management targets contained in the Medium-Term Management Plan in this document
are not forecasts; rather they are intended only to show the directions of the goals we aim toachieve.
・ 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 the general situation in the industry and markets, interest rates and currency
exchange rate fluctuations. The risks and uncertainties exist in forward-looking statements
relating to products in particular. These product-related risks and uncertainties include, but are
not limited to, technological advancements, granting of patents to our competitors, completionof clinical trials, claims or concerns relating to safety or efficacy of products, acquisition ofapproval 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 the Company’s business inside and outside Japan, and issues pertaining todevelopment of new products.
・ 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, anddemand 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
those which are being developed) is not intended to act as a promotion or advertisement, or toprovide medical advice.

7