The Mochida Pharmaceutical Group’s “14-16 Medium Term Management Plan”
This material is an English translation of the press release issued on April 1, 2014 in Japanese, andthe Japanese release is given priority regarding content and interpretation.
April 1, 2014
Dear All,
Every year, the 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 2014 through 2016.
In order to increase the corporate value as a group of companies in the comprehensive healthcare
business during the coming three years which start in FY2014, we will continue to work hard topromote further structural reform in areas including the improvement of head office functions and theefficient management of the organization under the Medium-term Management Plan for establishinga stable earning basis directed at sustainable growth by responding to medical and healthcare needs
with concentration of the total power of the Group covering research and development,
manufacturing and marketing through stronger cooperation and bonds among group departments.
We will also maximize the productivity of our finite resources, including human resources, andactively seek collaboration with external resources at the same time. Aiming, in the long term, atspecialty pharmaceuticals that will be recognized for the value of their existence also on a global
scale, we are pursuing investment in business activities that will lead to future competitiveness inorder to, for example, create next-generation leading products.
Our core pharmaceutical business will focus its resources on the targeted areas of cardiovascular
medicine, obstetrics and gynecology, dermatology, emergency medicine and psychiatry so as tofurther promote strategic alliances which stress the importance of lifecycle management andpartnerships. Furthermore, we will introduce and develop high value-added products which meet theneeds of medical professionals as well as customers. We will also challenge new medical fields suchas the development of therapeutic drugs for intractable diseases and will embrace a commitment tobiosimilar (follow-on biologics) and further promote generic drug business, including the entry into
the field of generic anticancer drugs. We aim to increase the sales of Lexapro, an antidepressant, togain the largest share of antidepressants in the Japanese market. We make new attempts to tackle
intractable diseases through the launch of Treprost for the treatment of pulmonary arterial
hypertension (PAH).
We anticipate a difficult business environment for the next three years. We will be creating abusiness model which is unique to Mochida through challenging opportunities so as to meet theneeds of our customers.

Taking full advantage of the agility and responsiveness of a mid-sized firm, the Group will continue tostrive toward the following three key points, which remain unchanged under the new mid-term
management plan:
1. Establishing businesses and specialized fields where Mochida has a competitive advantage
2. Placing a high priority on partnerships
3. Thorough streamlining of resources
Management Target Values for 2016 (Consolidated):
Sales

110.0 billion yen

Operating income

16.0 billion yen

Research and development expenditures

16.0 billion yen

Productivity per worker

More than 60 million yen[Reference]
1. Business Strategies
1) Pharmaceuticals
The Group will seek:■To focus its resources on the targeted areas (cardiovascular medicine, obstetrics and gynecology,dermatology, emergency medicine and psychiatry), in order to become a specialty pharmaceuticalcompany;■To expand our products and development pipelines by maximizing the benefits of alliances;■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 aim at obtaining approval for an ulcerative colitis treatment drug MD-0901 (mesalazine) and theaddition of drug indications to include social anxiety disorder to Lexapro, an antidepressant, anduterine adenomyosis to Dinagest (a treatment for endometriosis) during the 14-16 Medium-termManagement Plan;
To promote the addition of drug indications to include common wart to Beselna (a treatment of

condyloma acuminatum/actinic keratosis);
To promote the addition of drug indications and dosage forms to the drugs under development andproducts on the market;
To enhance the strategies for the introduction of the products in development so as to expand thepipeline 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 advance the development of the biosimilar products;
To promote the development of a diagnostic for sepsis studied together with a treatment forsepsis.
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 accomplish the early expansion of sales of Lexapro, a new antidepressant which has alreadyreceived a highly favorable review and achieved considerable success in overseas markets, andstrive to gain the largest share of antidepressants in the Japanese market;
To reinforce the areas of obstetrics and gynecology and dermatology with Dinagest and Beselnathat have been reputed to be products offering new treatment options for medical professionals andcontribute to the QOL of their patients;
To establish the sales and supply structure in intractable diseases through the launch of Treprost
for the treatment of pulmonary arterial hypertension (PAH);
To further reinforce business in the areas of internal medicine/cardiovascular medicine withTramacet (an analgesic for chronic pain/tooth extraction pain) that has been sold by joint sales;
To add Atedio (valsartan / cilnidipine combination) to the product line and further expand total salesof Atelec (a long-acting Ca-channel antagonist) and Atedio;To aim at further increasing the prominence of Epadel in the cardiovascular area through themaximum utilization of the abundant EBM-information obtained from JELIS (the world’s firstlarge-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 10 billion yen for our generic drug business including the salesof biosimilar G-CSF and generic anticancer drugs;
To promote the self-medication business, and as a leader in the manufacture and sales of EPAdrugs, to work toward increasing the prominence of Epadel-OTC drug.
c) Pharmaceutical Research
The Group will seek:
To aim at licensing out three candidate drugs for development by fiscal 2016, through the discoveryof drugs that measure up to global standards;
To focus resources on two fields of “chronic pain” and “diabetes and obesity” through Selection andfocusing process.
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 which enjoys the top
market share, and the Collage series, a line of gentle basic skin products. Building upon its high rateof support and popularity among dermatologists, obstetricians and gynecologists, Mochida
Healthcare will seek to expand sales of the Collage line of products, such as the Furfur series, theWhitening series, and the B.K.AGE series, 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 enhance lean management style inorder to respond to more difficult changes 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 awareness ofthe business environment of each unit and operational efficiency. In addition, the Group 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 the viewpointof development and vitalization of human resources, in accordance with the restructuring of theGroup’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 weaim 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 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 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 to provide
medical advice.