The Mochida Pharmaceutical Group’s “19-21 Medium-Term Management Plan”
This material is an English translation of the press release issued on April 1, 2019 in Japanese, andthe Japanese release is given priority regarding content and interpretation.
April 1, 2019
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 2019 through 2021
Medium-Term Management Plan Policy for the fiscal years 2019 through 2021
We will respond to medical and healthcare needs with concentration of the total power of the Group
covering research and development, manufacturing and marketing, pursue sustainable growth bypromoting selection and focusing processes, and restructure the earnings structure to respond tofurther environmental changes.
The three years from FY2019 to FY2021 are forecast to be even more challenging, given thecontinuing government policy of pharmaceutical cost reductions 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 the impact of the drastic reformof the National Health Insurance (NHI) drug price 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 sales of new drugs, etc. by enhancing sales capabilities
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, dermatology, psychiatry, andgastroenterology, and focus on new drugs to maximize profit in our core pharmaceuticalbusiness. In addition, we will further promote strategic alliances that stress the importance ofpartnerships.
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.

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We will boost productivity by proceeding with selection and concentration in company-wideorganizational management, further promoting structural reform, and strengthening
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.
Aiming at specialty pharmaceuticals that will be valued globally, Mochida Pharmaceutical Group will
strive to continually increase its corporate value as a group of companies in the comprehensive
healthcare business by taking full advantage of the agility and responsiveness of a mid-sized firm.
As mentioned above, the environment surrounding the pharmaceutical industry is expected tocontinue to be severe. Against this backdrop, during the period of the 19-21 Medium-Term
Management Plan, our profitability will be on a recovery track in FY2019 for the following reasons:drug prices will be revised in FY2019, the first year of the Plan, in line with the consumption tax hike;our long-standing efforts for portfolio restructuring (shift to new drugs) have not yet been completed;
and investments in R&D (including in-licensing) are expected to be aggressive in future. We will aim
to regain profitability towards the final year (FY2021) and thereafter by taking advantage of theprogress of our implemented measures.
※Management Target Values for 2021(Consolidated):

Sales

108.0 billion yen

Operating income

11.0 billion yen

Research and development expenditures

12.0 billion yen

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1. Business Strategies
1) Pharmaceuticals
The Group will seek:To focus its resources on the targeted areas (cardiovascular medicine, obstetrics andgynecology, dermatology, psychiatry, and gastroenterology, 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 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 FYU-981,
a treatment drug for gout and hyperuricemia, the indication for dysmenorrhea for Dinagest(a treatment for endometriosis and adenomyosis), and MND-2119, a new highly purified EPA
drug;
To expand the indication of Lialda, an ulcerative colitis treatment drug, and Lexapro, anantidepressant, to children, and to promote the development of MD-711, an inhaled form of atreatment drug for pulmonary arterial hypertension (PAH), LBAL, a biosimilar of adalimumab,
which is a rheumatoid arthritis drug, and RGB-10, a biosimilar of teriparatide, which is anosteoporosis drug, and desvenlafaxine, an antidepressant, as a new pipeline;
To promote the development of MND-21, a highly purified EPA drug, 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, including internal medicine;
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 toenhance sales capabilities through, among others, the positive use of e-promotion;
To expand sales of Lialda, an ulcerative colitis treatment drug, aiming to be the No. 1
5-aminosalicylic acid (5-ASA) drug, and elevate the drug to a key product;
To immediately maximize the sales of Goofice and Movicol, chronic constipation treatment
drugs, benefiting from the cancellation of restrictions on prescription days;
To aim for Lexapro to reach the No. 1 position in the Japanese antidepressants market;
To maintain the position of Tramcet, an analgesic for chronic pain/tooth extraction pain, inorthopedics;
To continue to hold the top position in obstetrics and gynecology with Dinagest, atreatment drug for endometriosis and adenomyosis, and its authorized generic drug, as
well as 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 atimely manner based on the characteristics of the drug;
To aim to achieve future sales at the 20 billion yen level, mainly by Mochida Pharmaceutical
Sales Co., Ltd., for our generic drug business, including sales of the authorized generic drug ofDinagest, biosimilars and generic anticancer drugs;
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 an
early stage through the promotion of open innovation.
d) Overseas expansion
The Group will seek:
To promote the overseas expansion of a highly purified EPA drug in China, Thailand, the US, etc.
42) Bio material business
The Group will work on the bio material business, including the development of dMD-001, anarticular cartilage lesion restoration material.
3) 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.
4) 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 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.
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.

5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”. These
forward-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 fromregulatory 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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