Business Report for the 19th Year
(Translation)

Nobelpharma Co., Ltd.
[From January 1, 2021 to December 31, 2021]

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Business Report(From January 1, 2021 to December 31, 2021)

1.

Nobelpharma

1.1.

Corporate Mission, Policies, Code of Conduct

Corporate Mission
The company conducts its business activities under its corporate mission, “to contribute to society byproviding critical but neglected pharmaceuticals and medical devices”. Although sales and profits areimportant management indices that should be pursued, the company considers them to be a means for
executing the corporate mission and the result of executing the corporate mission.
The policies and code of conduct are indicated below.
Policies
1. General
1) Give priority to legal and ethical compliance in the course of business--never prioritize loyalty tocompany over moral.
2) Share our Mission, Policies and Code of Conduct among all stakeholders (employees,
shareholders, officers)
3) Pursue evolution of the Company, yet becoming larger is not our main goal
4) Ensure transparency and disclosure5) Launch business overseas
2. Personnel
1) Value employees and families, and respect self-development
2) Employ the principle of “select few*,” and create an environment where they can enjoy working* “Select few” = experienced experts passionately devoted to working, irrespective ofgender, age, nationality, religion or preference
3) Value suggestions and opinions from employees
3. Products
1) Pursue high-quality products and data
2) Ensure post-marketing safety
3) Search for product seeds externally
4. Capital
1) Profits are a result of and means of achieving the Mission2) Focus on higher return on sales/profits per employee3) Keep in mind the disadvantages of failure--not the assumption of success--when making
investment decisions
4) Profits are distributed to shareholders (dividends*), employees, and internal reserves* dividends: 1/3 of profits after tax* employees: up to dividends
5) Invest asset only with a principal guarantee
Code of Conduct
1. Principle:
When in doubt, the patient benefit takes priority
2. Our Challenges:
2/201) YMWS: “Yatte Minakucha Wakaranai, shikashi Songiri wo tamerauna”= You never know how it will turn out unless you try, but do not hesitate to cut losses”
2) ZY: “Zenrei ga nainara Yattemiru”= Even if there is no precedent, be the first to try it
3. Speed:
1) Never forget patients are waiting
2) Be unafraid to buy time3) Set a specific deadline date at the beginning to pursue the goal without worrying about possible
delays* Stay away from “approximately/around” and “early/late ~,” etc.
4) If problems or mistakes occur, prevent their expansion first before preventing reoccurrence5) Speedy decisions by managers who have authority of million(s) yen projects** 3 million for Division Manager; 1 million for Department/Branch Manager/PM/PL
4. Cost/Efficiency:
1) Never take or lead to wasteful actions
2) No overtime is considered optimal3) Consider patient needs, scientific rationality and laws/regulations when pursuing higher quality
in products/data
4) Pursue cost reduction with the principle of multiple sources, while regarding providers as partners
5. Communications/Relationship:
1) Embrace inter-departmental advice and cooperation—hiding in silos is a symptom of “Big
Company” Disease2) Superiors to confidently entrust tasks to subordinates, but never leave unmanaged3) Hear anyone out--never interrupt in the middle
4) Start with the conclusion/result when explaining/responding5) Greetings may seem small, but they are important

1.2. Noteworthy Points in 2021
1.2.1. Sales exceeded 20 billion yen for the first time. NOBELZIN® Tablets and JEMINA® contributed
to this, with profits exceeding the plan.
 A total of about 22.73 million yen in interim bonuses was paid at the end of 2021. Eligible
employees were those who were highly evaluated in 2020.
1.2.2. Drug development has entered a new era. Globally, COVID-19 vaccines were developed at an
unexpectedly rapid rate and launched and supplied in units of 1 billion vials within 1 year after
the genetic information of the virus was decoded.
 In life cycle management (LCM) of existing drugs, approval was obtained for a new
granule formation of NOBELZIN® and for an additional indication of RAPALIMUS®
Tablets for refractory lymphatic diseases, and approval applications were submitted for
additional indications of UNITALC® for secondary intractable pneumothorax as well as
for additional indications of LUNABELL® and JEMINA® for adjusting the timing of
initiation of regulated ovarian stimulation in assisted reproductive technology. None ofthese are new active ingredients.
 A PIII trial of NPC-26 (GM-CSF, sargramostim) for the treatment of COVID-19 wasinitiated but ended in failure.
 NPC-SE36 (malaria vaccine) was wholly unable to match the speed of COVID-19 vaccine
development throughout the world. The bottlenecks were production and funding.
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1.2.3.

1.2.4.

1.2.5.

1.2.6.

It is now time to question whether the policy of outsourcing 100% of production can be maintained.
 Owing to the influence of scandal, the contract manufacturer was not able to demonstrate
the expected mobility.
 Misreading of demand for MELATOBEL® granules, which became available for longterm administration in June 2021, led to inquiries about the possibility of increasing
production more than two-fold, but the contract manufacturer was unable to meet theincrease, and shipments were adjusted.
 The same contract manufacturer has been preparing for production of NOBELZIN®
Granules, which were included in the NHI price list in May 2021, but as of March 2022,
the timing of production and sale remains unclear.
 We have proceeded with the development of the granule formulation of RAPALIMUS® as
LCM, but the application will be delayed by 3 months due to failure in the development of
the formulation.
 As a result, we were unable to meet medical needs and caused tremendous inconvenienceto patients and medical institutions.
 Also, lost profits occurred. Total lost profits for the 3 drugs are estimated at 900 million
yen in 2021 and 1 billion yen in 2022.
 Many of the products that will be under development from now on are biologics, and ourability to accommodate them is insufficient.
 We will need to reconsider the production system for overseas supply.
 Our corporate mission includes not only pharmaceuticals but also medical devices. In fact,
we have obtained a license for TITANBRIDGE® and are selling it in Japan. However,when we look at overseas development, the need for a QMS system premised on the ability
to respond to overseas demand stands out clearly. This has an impact on the medical
devices under development, and the Supply Chain & Manufacturing, Overseas Business
Development, and PMS Regulatory Compliance & Assurance divisions are working
together to make preparations hurriedly.
We have shifted our sales methods from the conventional visits and face-to-face meetings to asystem that centers around digital transformation (DX). In addition, we expect to shift from thecurrent push-type products to pull-type products in 2024, and our sales organization andevaluation method have been changed to accommodate this.
With the strengthening of overseas expansion, the system and structure of PMS Regulatory
Compliance & Assurance have been improved to enable it to serve as the global head in adapting
to the pharmaceutical regulatory requirements in each country.
 In addition to its regular operations related to reexamination, safety management, postmarketing surveillance, and quality, PMS Regulatory Compliance & Assurance has also
been pressed to handle the fallout of scandals at contract manufacturers.
Work from home (WFH), which started in March 2020, has become routine.
 The average attendance rate was low at 5.4% (as of December 2021), and the average
overtime hours and the rate of leave taking were favorable at 1.6 hours and 63.9%,
respectively.
 The number of employees increased by 6.7% from the moving average of 329 in 2020 to
351 in 2021, and total personnel expenses increased by 4.3% from 3,427 million yen to3,574 million yen.
 The average age is 52.6 and the average length of service is 5.0 years.
 There may now be overstaffing in the Sales & Marketing, particularly at the head office.
 The number of employees who joined the company after the transition to regular WHF has
exceeded 100, and real interactions among employees have decreased. There are concerns
about lack of communication and weakening of the sense of belonging to the company.
As a countermeasure, we require managers to hold regular 1on1 meetings with theirsubordinates, and we recommend social gatherings within the group while providing
assistance. However, this may not always be sufficient.

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1.2.7.

In line with our management policy of “launching business overseas”, we began making efforts
at overseas expansion early on.
 We are making preparations to market new products ourselves overseas, beginning withsale of RAPALIMUS® Gel (NPC-12G), a drug designated for SAKIGAKE review, in the
US (application in February 2020), China (application in September 2019), and Europe(application in November 2021).
 We now have 19 overseas employees in the U.S., 8 in China, and 9 in Europe (as ofDecember 2021).
 Although review is on track in all of these regions, GMP on-site inspections by the US
FDA are significantly delayed owing to travel restrictions imposed by COVID-19,
resulting in significant delays in approvals.
 In order to strengthen our product lineup overseas, we are trying to advance overseas
development not only of RAPALIMUS® Gel but also RETYMPA® (NPC-18) and
TITANBRIDGE® (NPC-17), but we have not been able to fully accommodate this owing
to a lack of personnel.
 Development of MELATOBEL® in China is making progress, but application has been
delayed because of a scandal at the contract manufacturer.
1.2.8. We are trying to procure large-scale funding and are considering public listing to strengthen the
production system and accelerate development and overseas expansion.
 In connection with this, we have newly established a Vaccine Business Division andCommunications Depertment.
 In addition to financing from investors by listing our company, we are also trying to obtain
grants from overseas public institutions and the Japanese government.
1.2.9. With a view to strengthening our biologics business and vaccine business, we have acquired anequity stake in two companies (VLP Therapeutics and Evec Inc.)
1.2.10. We have also newly established a Compliance Division to strengthen legal compliance in Japanand overseas and handle company-wide risk management.

5/20

1.3.

Progress and Results of Operations

Sales
Cost of goods sold
Gross profit
SG&A expense* Personnel expenses* R&D expenses
Operating income
Non-operating income/expenses
Ordinary income
Extraordinary income/loss
Net income before tax
Income taxes
Net income

mil yen
2020
2021
16,92920,741
1,676
2,076
15,253
18,664
11,705
14,130
2,715
2,754
3,374
4,636
3,547
4,534
-80
212
3,466
4,747
-9
3,466
4,738
955
1,187
2,511
3,551

Net income per employee (’000 yen)

7,195

Year-on-year
(%)
122.5
123.9
122.4
120.7
101.4
137.4
127.8
308.5
136.9
136.7
124.2
141.4

% to total sales
2020
2021
100.0
100.0
9.9
10.0
90.1
90.0
69.1
68.1
16.0
13.3
19.9
22.4
21.0
21.9
1.0
20.5
22.9
20.5
22.8
5.6
5.7
14.8
17.1

10,204Retained earnings brought forward
Beginning balance
4,104
5,825
Dividend
789
508
Net income
2,511
3,551
Ending balance
5,825
8,868
* Personnel expenses and R&D expenses are major items included in SG&A expenses.
* Personnel expenses did not include those of R&D, and R&D expenses included personnel expenses of
R&D.

6/20

Total sales in 2021 were 20,741 million yen, up 22.5% year-on-year. NOBELZIN® and dysmenorrhea(LEP) family (LUNABELL® LD, LUNABELL® ULD, JEMINA® and Frewell®) posted sales of 12,633
million yen and 4,587 million yen, respectively, accounting for 62.2% and 22.6%, respectively, of total
product sales.
The cost of goods sold was 2,076 million yen, up 23.9% year-on-year, accounting for 10.0% of total
sales (2020: 9.9%). Selling, general and administrative expenses totaled 14,130 million yen, an increaseof 20.7% year-on-year, accounting for 68.1% (2020: 69.1%), mainly including personnel expenses of
2,754 million yen, up 1.4% year-on-year, and 13.3% (2020: 16.0%) of total sales, R&D expenses of 4,636
million yen, up 37.4% year-on-year, and 22.4% (2020: 19.9%) of total sales, sales promotion expenses of
3,363 million yen and outsourcing expenses of 1,433 million yen. Sales promotion expenses mainly
included 2,793 million yen of sales commission on NOBELZIN®, JEMINA® and MELATOBEL® to
MEDICEO CORPORATION, ASKA Pharmaceutical Co., Ltd. and SHIKOKU YAKUGYO Co., LTD.
Outsourcing expenses mainly included 274 million yen for business management services and indirect
department operations outsourcing to Hisanaga & Co. Ltd., 137 million yen for safety information
processing support operation by CMIC, 75 million yen for royalties on Medichat by Medipal Holdings
Corporation, and 67 million yen for call center operation by EP-PharmaLine.
As a result, operating income was 4,534 million yen, up 27.8% year-on-year, and it accounted for 21.9%(2020: 21.0%) of total sales.
Ordinary income was 4,747 million yen, up 36.9% year-on-year, accounting for 22.9% (2020: 20.5%)of total sales, after recording non-operating income of 272 million yen including subsidy income of 259
million yen, with non-operating expenses of 60 million yen including interest expenses of 34 million yen
and bond interest expenses of 11 million yen.
With income taxes of 1,187 million yen, net income was 3,551 million yen, up 41.4% year-on-year,
accounting for 17.1% (2020: 14.8%) of total sales, and net income per employee was 10 million yen (2020:
7 million yen).
Retained earnings brought forward as of December 31, 2021 were 8,868 million yen, with the beginningbalance of retained earnings brought forward of 5,825 million yen and a dividend payment of 508 million
yen.

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7/20

1.4.

Domestic sales
The table below shows sales by product in 2021 on a wholesale price (NHI price) basis.
Area

Obstetrics andGynecology
FamilyBrand Name

Launch

LUNABELL® LD
LUNABELL® ULD
JEMINA®

Jul 2008
Sep 2013
Oct 2018

FREWELL® LD
FREWELL® ULD

Dec 2018

Indication

Pediatric
FamilySubtotal
NOBELZIN®
FamilyDec 2008

INDACIN®

Jan 2013

COSMEGEN®

Jan 2013

Respia®

Dec 2014

Melatobel®

Jun 2021

NOBELZIN®

Apr 2008
Mar 2017

2021

Dysmenorrhea

3,104

2,983

96.1

Dysmenorrhea

2,326

3,258

140.0

Dysmenorrhea

3,525

4,190

118.9

8,955

10,431

116.5

Neonatal seizures,status epilepticus
Patent ductus arteriosus ofprematurity
Wilms’ tumor, choriocarcinoma,
pediatric solid malignant tumor, etc.

107

110

102.8

49

44

91.1

24

21

86.9

Apnea of prematurity
Sleep-onset difficulty associatedwith neurodevelopmental disorderin children

224

226

101.0

224

1,163

517.5

628

1,564

249.0

11,895

14,750124.0

11,895

14,750

124.0

945

933

98.7

849
297
2,091

781
313
2,027

92.0
105.4
96.9

Wilson’s disease,hypozincemia

Subtotal
Neurosurgery
FamilyFostoin®

Jan 2012

GLIADEL®

Jan 2013

Status epilepticus, prevention of
postoperative seizures, etc.
Malignant glioma

Alabel®

Sep 2013

Diagnosis of malignant glioma

Unitalc®

Dec 2013

Prevention of recurrent malignant
pleural effusion

71

74

104.2

RAPALIMUS®

Dec 2014

Lymphangioleiomyomatosis

TITANBRIDGE®

Jul 2018

Adductor spasmodic dysphonia

RETYMPA®

Dec 2019

Tympanic perforation

314
385
38
63
101

372
446
25
89
114

118.4
115.8
64.4
140.5
112.9

ZANOSAR®

Feb 2015

356

329

92.4

RAPALIMUS® Gel

Jun 2018

376

360

95.9

732
24,787689
30,021

94.1
121.1

Subtotal
Respiratory
FamilySubtotal
Otolaryngology
FamilySubtotal
Other Drug
Families

Year-on-year
(%)

2020

Subtotal
NOBELBAR®

Sales (on a wholesale
price (NHI price) basis)(Yen in millions)

Gastroenteropancreatic
neuroendocrine tumor
Skin lesions associated withtuberous sclerosis

Subtotal
Total

In fiscal 2021, we focused on our 3 main products (NOBELZIN®, JEMINA® and MELATOBEL®).
However, a supply problem with MELATOBEL® occurred in June, limiting our ability to propose
prescribing to physicians after lifting of the restriction on long-term prescriptions (June). Also, due to the
influence of COVID-19, MR activities have shifted further from real face-to-face meetings to online
meetings, and consequently, we are now in an era of rapid and efficient utilization of digital (DX)technologies. Even under this environment, sales amounted to 30 billion yen in FY 2021, up 21.1% yearon-year, compared with the sales target of 29.2 billion yen (on a wholesale price (NHI price) basis).
1.5. Research and Development (Japan and overseas)
The table below summarizes the development stage, expected NDA and market size classification inthree categories of A. New Drugs and Medical Devices, B. Life Cycle Management (LCM) and C.

8/20

Overseas Development as of March 1, 2022. Many are drugs based on new concepts that originated inJapan. Market size classification is as follows:
I:
II:

Potential primary sources of revenue (sales of over 3 billion yen)
Short term approval and marginal profit are expected; however, they are not likely to be a
primary source of revenue.
III: Projects originating in academia, such as business-university collaboration, where short term
approval is expected. Lower development cost with promising public subsidies. Difficult toestimate sales due to innovative concepts.
IV: Similar to III but relatively long time required for approval.
A. New Drugs and Medical Devices
Compound1

NPC-26
Sargramostim

2

NPC-09
Aceneuramic acid

3
4
5
6

7
8

NPC-25
NPC-21Anti-CMV
antibody
NPC-22
Scopolamin
NPC-27
Vaccinia virus
vaccineNPC-28
Cultured periosteal
cells
P092

Licensor

Development
stage

Estimated
approval

Classification

Partner
Therapeutics Inc.

Preparation
for filingSep 2023

II

In-house

PIII

Sep 2023

II

In-house

PIII

Jan 2024

I

CMV infection

Evec Inc.

PII

Dec 2027

I

Hypersalivation

Kitasato University

PI

Sep 2026

IV

Non-clinical

TBD

III

Non-clinical

TBD

III

Non-clinical

TBD

IV

Non-clinical

TBD

III

Non-clinical

TBD

III

Non-clinical

TBD

IV

Indication

Autoimmune
pulmonary alveolar
proteinosis
Progressive muscle
weakness in GNE
myopathy
hypozincemia

Coronavirus disease2019 (COVID-19)
Jawboneregeneration
Prion disease9

Next-generation Tcell therapy

TBD

10

GAIA-102

Neuroblastoma

11

Anti-S100A8/A9
antibody

Inflammatory
diseaseTokyo Metropolitan
Institute of Medical
Science
Niigata University
Kohjin Bio Co.,
Ltd.
Gifu University
Hiroshima
University
Repertoire Genesis
Inc.
Gaia BioMedicine
Inc.
Kyushu University
Okayama
University

B. Life Cycle Management (LCM)
CompoundIndication

Licensor

Development
stage

Estimated
approval

Classification

1

NPC-05
Unitalc®

Intractable pneumothorax(new indication)

National Hospital
Organization Nagoya
Medical Center

Application

Mar 2022

III2

IKH-01/NPC01
LUNABELL®
LD/ULD

Adjusting the timing of
initiation of regulated
ovarian stimulation inassisted reproductive
technology(new indication)

Janssen

Application

Mar 2022

II

9/20

3

NPC-16JEMINA®

4

NPC-12RAPALIMUS®

5

NPC-06
Fostoin®

6

NPC-12RAPALIMUS®

7

NPC-12RAPALIMUS®

8

NPC-12RAPALIMUS®

9

NPC-12RAPALIMUS®

10

NPC-12RAPALIMUS®

11

NPC-26
Sargramostim

Adjusting the timing of
initiation of regulated
ovarian stimulation inassisted reproductive
technology(new indication)

Intractable vasculartumor/vascularmalformation(new indication)
Pain associated withherpes zoster(new indication)
Fibrodysplasia ossificans
progressiva(new indication)
Pendred syndrome(new indication)
Epilepsy with focal
cortical dysplasia type II(new indication)
Idiopathic multicentric
Castleman’s disease(new indication)
Primaryimmunodeficiency
syndrome (newindication)
Pulmonary nontuberculous
mycobacteriosis (newindication)

In-house

Application

Mar 2022

II

Gifu University

PIII

Jan 2024

II

Pfizer Inc.

PII/IIIDec 2024

I

Kyoto University

PII/III

Plan tocancelIII

Keio University

PII

TBD

III

Showa University

PII

TBD

IV

Nagasaki
University

PII

TBD

IV

Tokyo Medical
and Dental
University

PII

TBD

IV

Niigata University,
Tokyo Medical
and Dental
University

PII

TBD

I

Development
stage

Estimated
approval

Classification

USA: Filed
China: Filed

Jul 2022
Jun 2022
Apr 2023

I

C. Overseas Development
CompoundIndication

Licensor

NPC-12G(RAPALIMUS®
Gel)

Angiofibroma-

NPC-17Thyroid cartilage
fixation device(TITANBRIDGE®)

Adductor spasmodic
dysphonia

3

NPC-18(RETYMPA®)

Tympanic perforation

4

NPC-19(NPC-SE36)
Malaria vaccine

Prevention of
falciparum malaria

5

NPC-15(MELATOBEL®)

Sleep-onset difficulty
associated withneurodevelopmental
disorder in children

6NPC-02(NOBELZIN®)

Wilson's disease

1

2

Europe: Filed
US: Clinical trial
in preparation

TBD

Europe: CE
marking in process

Dec 2022

PII

TBD

III

PIb

TBD

I

-

China:
Preparation forfilingSep 2023

I-

China:
Preparation forfilingDec 2023

II

-

MEEI/
Harvard/
NY University
Osaka
University
GHIT

10/20

III

1.6. Funding and Major Lenders
In 2021, the Company borrowed 2,500 million yen, and repaid and redeemed 995 million yen to financial
institutions.
As a result, as of the end of December 2021, the balance of loans payable and bonds was 7,587 million
yen, and the balance of cash and deposits was 7,048 million yen.
As of December 31, 2021, the status of borrowing is as follows:
Loans payable
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.
The Bank of Yokohama, Ltd.
The Shoko Chukin Bank, Ltd.
The Tokyo Shinkin BankJapan Finance Corporation
Total

2,400 million yen
550 million yen
1,300 million yen
100 million yen
508 million yen
250 million yen
78 million yen
5,186 million yen

Japan Agency for Medical Research and Development 551 million yen
Corporate bond2nd straight bond
6th straight bond
7th straight bond
8th straight bond
9th straight bondOsaka Soda Co., Ltd.
500 million yen (Maturity: Dec 2024)
Resona Bank, Ltd.
300 million yen (Maturity: Mar 2022)
Resona Bank, Ltd.
300 million yen (Maturity: May 2026)
Resona Bank, Ltd.
150 million yen (Maturity: Mar 2027)
Sumitomo Mitsui Banking Corporation
500 million yen (Maturity: Mar 2027)
10th straight bond Resona Bank, Ltd.
100 million yen (Maturity: Mar 2028)
Total
1,850 million yen

1.7. Financial Results, Assets, 2022 Forecast, and Development Schedule
The Company’s financial results, assets and next year forecasts are as follows:
In the coming fiscal year, we plan to increase sales, with the driving force provided by newly marketed
products as well as our existing major products, but because we expect to continue to make substantial
R&D investments and overseas investments, as we did last year, we anticipate increased revenue but
decreased profits.

Mil yen except for *Sales
Ordinary income
Net income* Net income per share

Total assets
Net assets* Equity ratio* Net assets per share

2018(Actual results)
16th year

2019(Actual results)
17th year

2020(Actual results)
18th year

2021(Actual results)
19th year2022(Forecasts)
20th year

10,5681,960
1,437
111,000 yen
12,2043,319
27.2%
245,000 yen

13,4032,951
2,370
175,000 yen
14,1385,330
37.7%
394,000 yen

16,9293,466
2,511
185,000 yen
18,574
7,052
38.0%
521,000 yen

20,741
4,747
3,551
262,000 yen
23,008
10,09443.9%
746,000 yen

24,8433,672
2,401
177,000 yen
24,371
11,47047.1%
848,000 yen

11/20

A. Domestic Development Schedule
Item

2022

2021

2023

NPC-05
Unitalc®

(Intractable pneumothorax)

IKH-01/NPC-01
LUNABELL® LD/ULD(Adjusting the timing of initiation of regulated ovarian stimulation in assisted reproductive technology)

NPC-16JEMINA®

(Adjusting the timing of initiation of regulated ovarian stimulation in assisted reproductive technology)

2024

(3)
(3)

(3)

(1)
Application(Autoimmune pulmonary
alveolar proteinosis)(9)
Approval

POC study (investigator-initiated, nontuberculous mycobacteriosis)

Phase III study (progressive muscle weakness in GNE myopathy)(11)
Application

Phase III study (investigator-initiated, refractory vasculartumor/vascular malformation)(9)
Approval(4)(1)

Application

Approval

Specified clinical research (investigator-initiated, refractory vascular tumor/vascular malformation)(12)
Application

Phase III study (neurology)

Phase III

Phase II Japan-US global study (CMV infection)

Phase III study

Phase I/II study (extension)

B. Overseas Development Schedule
Item

Year
Month
UnitedStates2022

2021

EuropeUnitedStatesEuropeUnitedStatesOverseas
China(7)
Approval(Angiofibroma)

China(Angiofibroma)(11)
Application

2024

2023

(6)
Approval(4)
Approval(Angiofibroma)(7)
IDE application

Phase III study (adductor spasmodic dysphonia)

CE Marking Review
Phase II study (investigator-initiated, tympanic perforation)(8)
Manufacturing of new drug productPhase I/II study(9)
Application

China(Sleep-onset difficulty associated withneurodevelopmental disorder in children)(12)
Application(Wilson's disease)(9)
Approval(12)
Approval

1.8. Status of Compliance
We are advancing the construction of a compliance system for our company.
First, the Code of Conduct in our corporate philosophy was revised to show everyone inside and outside
the Company that legal and regulatory compliance is our top priority as the starting point for our Code of
Conduct. In addition, we established compliance rules, formulated a basic philosophical approach tocompliance efforts at our company, and prepared a “Compliance Manual” for employees, which has been
distributed to all employees and discussed in explanatory meetings to make certain that everyone in the
Company is aware of the compliance system.
We have established the role of executive officer in charge of compliance, to be filled by the generalmanager of the Compliance Division. The Compliance Division was established in July and consists of

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two departments, the Compliance Promotion Department and the Clinical Quality Assurance Department.
Sales Information Activity Supervision Group has been established within the Compliance Promotion
Department (promoted to department in February 2022) and a GCP QA Group and PV&CS QA Group
within the Clinical Quality Assurance Department. We have appointed persons in charge of compliance ineach division and each branch office of Sales & Marketing, and they play a central role in compliancebased on the characteristics of each division. A meeting of persons in charge of compliance is held every
three months to communicate our compliance policy, disseminate information on the training plan, andpromote cooperation among persons in charge of compliance. In addition, to deliberate important mattersrelated to compliance, a Compliance Committee has been established with the president and executive
officers as members of its Management Committee.
We have established a whistle-blowing system to ensure that all whistle-blowing cases are channeled to
the Compliance Promotion Department. An in-house whistle-blowing contact has now been established at
Cybozu, Inc., joining the existing external whistle-blowing contact (Labor Data Bank). We have also
provided training on the internal reporting system to all employees to promote familiarity with the system.
We are striving to make the system as accessible to employees as possible by giving the highest priority
to protection of the whistle-blower in the handling of whistle-blowing cases.
Our goal is to prevent legal and regulatory violations from occurring, and in the unlikely event that one
does occur, prevent it from expanding in scope. To this end, the department conducts the following
activities: (a) monitoring and audits, (b) information collection through the in-house whistle-blowing
system, (c) investigation of whistle-blowing cases and planning of corrective action, (d) training on laws
and regulations, etc., and (e) interpretation of laws and regulations, and consultation on whether situations
constitute violations of laws or regulations.
We are also making efforts to manage risk company wide. First, we will identify business risks that may
have a significant impact on business continuity. Then, we will determine the causes of the identified
business risks and develop and implement countermeasures. Lastly, we will establish a procedure forhandling business risks and develop a Business Continuity Plan (BCP).
In order to further accommodate the concept of risk-based quality assurance that has been required by
ICH E6 (R2) in recent years, the Clinical Quality Assurance Department is considering and promoting
more efficient and effective auditing methods. The system for PV audits will be improved to comply with
global PV regulations, and related education and training of staff will be enhanced to ensure
implementation and promotion of PV audits based on the global auditing plan. Use of external PV auditors
will also be considered, as necessary. In addition, we will establish auditing functions and procedures toensure the quality of computer systems (CS) related to GCP and PV functions.

1.9. Status of Administrative Departments
Management Planning: We will proceed to establish a management system suitable for expansion ofbusiness operations and overseas bases. In addition, we will promote paperless operations and enhance
document control.
Accounting and Finance: We will further promote the establishment and strengthening of internal
control in line with the expansion of the scale of business and overseas expansion. In addition, we will
upgrade our methods of assessing and managing revenue and financial conditions at overseas bases.
Human Resources and General Affairs: We will strive to improve the rate of paid leave taking bypromoting special incentive leaves and suggesting dates for taking paid leave. We are experimenting withvarious ways of preventing WFH from resulting in insufficient communication and an attenuated sense of
belonging to the company. We will continue to hire specialized human resources for R&D, the production
departments, and the bio business that will be our main focus, regardless of where they live, and we willcontinue to recruit postdocs. In employee education, in addition to utilizing e-learning, we will continue
to conduct our internal business school. In addition, we will promote the in-house recruitment system,
secondment to government, and use of temporary workers.
DX Promotion: While supporting business expansion from the IT side, we will promote business reform
through the application of digital technology. We will also improve the IT environment of our overseas

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bases and strengthen their cooperation with Japan. In addition, security enhancement measures are being
implemented to prepare for various risks such as cyber attacks.
Intellectual Property: Introduction of academia-initiated drug discovery stage projects is increasing, andwe will build a strategic portfolio in cooperation with academic personnel in charge of intellectual property.
In addition, we are striving to create a good intellectual property portfolio by ensuring that a Freedom toOperate (FTO) infringement search is conducted for each project. We also place importance on theenhancement of intellectual property education and are working to raise levels of understanding ofintellectual property throughout the company through e-learning and invitation of external lecturers.
Public Relations: The Public Relations Department was established in July 2021 to promote the“provision of necessary but neglected drugs and medical devices” by conducting activities to acquainthealthcare professionals (physicians, pharmacists, nurses, etc., and relevant government offices andagencies) with our company. The Department disseminates information on our company philosophy andperformance in satisfying unmet medical needs.
We set the targets for the mid-long term future vision of sales and profit as an immovable high goal
named North Star. In 2019, the numerical targets in 2023 as North Star in the 2019-23 mid-term businessplan were sales of 50 billion yen and ordinary income of 10 billion yen. In 2022, we will unfortunately
fail to reach the numerical target for 2023 set as the North Star in the 2022-26 mid-term business plan, but
we will continue to aim for the North Star.
North Star (2023)
Sales
Ordinary income

2.

Target50 billion yen
10 billion yen

Current Status of the Company

2.1. Shares (as of December 31, 2021)(1) Number of shares authorized(2) Number of shares issued

50,000 shares
Ordinary share
13,525 shares
Number of shareholders
3(3) Status of Major Shareholders
Hisanaga & Co., Ltd. (ordinary shares)
Medipal Holdings Corporation (ordinary shares)
Inabata & Co., Ltd. (ordinary shares)

10,000 shares (73.9%)
2,705 shares (20.0%)820 shares (6.1%)

2.2. Share Warrant
2.2.1. Share warrant that is issued to and held by the Company’s executive officers as
consideration for execution of their duties
Not applicable
2.2.2.

Share warrant that is issued to and held by the Company’s employees as consideration for
execution of their duties
Not applicable

2.2.3. Share warrant in issue
Not applicable
2.3. Corporate Executives
2.3.1 Management Reshuffle(1) Directors and Company Auditors
As of March 30, 2022, the status of full-time and part-time directors is as follows:
Managing Director & CEO: Jin Shiomura

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Director (part-time):

Isamu Sojyo

Director (part-time):
Director (part-time):

Nobukuni Taneya
Takahisa Iizuka

Director (part-time):

Koichi Noda

Director (part-time):

Toshio Miyata

Director (part-time):

Georg Hollander(former Executive Managing Director of JapanIntellectual Property Association)(Part-time company auditor of Arara Inc.)(Deputy General Manager, Business Development
Division, Medipal Holdings Corporation)(General Manager, Financial Management Office,Inabata & Co., Ltd.)(Mih Clinic, President, MD, Ph.D, Professor,
Waseda University)(Professor, Department of Developmental
Medicine, University of Oxford)

Audit & Supervisory Board Member (part-time):
Yoshitaka Kishi(Former full-time company auditor, Dia Rix Co.,Ltd.)
Audit & Supervisory Board Member (part-time):
Tomoyasu Toyoda(Company auditor, Medipal Holdings
Corporation)(2) Executive Officers
As of April 1, 2022, the status of executive officers and directors is as follows:
Vice President & Chief Operating Officer
Shigeki Shimasaki(Head of Research & Development / PMSRegulatory Compliance & Assurance)
Chief Operating Officer Arata Tabata(Head of Bio Business / External Relations)Chief Operating Officer Tetsuo Hayase(Head of Supply Chain & Manufacturing)
Chief Operating Officer Hitoshi Yokoyama(Head of Sales & Marketing)Executive Officer
Kenji Shimizu(Deputy Head of Research and Development,
General Manager of Clinical Research 2)
Executive Officer
Yoshiki Yagi
(Head of Project Planning & Development,
Deputy Head of Bio Business)
Executive Officer
Toshiaki Okamura(Head of Regulatory Affairs, General Manager ofExternal Relations)Executive Officer
Kozo Hayase(Head of Administrative Affairs & Corporate
Planning, Deputy Head of Bio Business, General
Manager of Intellectual Property)
Executive Officer
Yoshihide Yamamoto (Head of President Office)Executive Officer
Hitoshi Hasegawa(Head of PMS Regulatory Compliance &Assurance / General Marketing Compliance
Officer)
Executive Officer
Masanori Osakabe(Deputy Head of Research & Development,
General Manager of Overseas Development)
Executive Officer
Yoshiki Kida
(President & CEO, Nobelpharma America, LLC)
Executive Officer
Makoto Shiragami(Head of Compliance Division, General Manager
of Compliance Promotion)
Executive Officer
Yukio Urasaki(Head of Business Development)
Executive Director
Masato Iwamoto(General Manager of Supply Chain Management,
Supply Chain & Manufacturing)
Executive Director
Atsunori Iwao
(General Manager of Quality Assurance, Quality
Assurance Officer)
Executive Director
Takako Aburada(General Manager of CMC Development, Supply
Chain & Manufacturing)

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Executive Director

Shigeru Doseki

Executive Director

Katsuhiro Kimura

Executive Director

Masatomi Nemoto

Executive Director

Yasuo Suga

Executive Director

Tsutomu Iwasa

Executive Director

Makoto Matsuda

Executive Director
Executive Director
Executive Director

Yasuo Satake
Takahiro Yamasaki
Weidong Chen

Executive Director

Yumi Imai

Executive Director

Nobuyuki Sato

Executive Director

Eijiro Akatsu

Executive Director

Toru Yokoyama(Deputy Head of Sales & Marketing, General
Manager of Product Marketing Department 5 /Product Marketing Departments 4 and 5)(General Manager of Metropolitan Area, Sales &Marketing)(General Manager of Pharmacovigilance / Safety
Management Officer)(Deputy Head of Sales & Marketing / ProductMarketing Departments 1–3)
(General Manager of Western Japan, Sales &Marketing)(Deputy Head of Sales & Marketing / Special
Assignments)(General Manager of HR & General Affairs)(President & CEO, Plusultra pharma GmbH)(General Manager, Jiangsu Nobelpharma Co.,
Ltd.)
(General Manager of PMS Regulatory Compliance& Assurance)(General Manager of Digital Transformation,
Administrative Affairs & Corporate Planning)(Head of Administrative Affairs & Corporate
Planning, General Manager of Corporate
Finance )(General Manager of Chubu & Eastern Japan,
Sales & Marketing)(Note: Since the scope of operations includes not only vaccines but also antibody drugs, etc., the nameof the division will be changed from Vaccine Business to Bio Business on April 1 to reflect the actual
situation.)(3) Resigning Director (as of March 31, 2022)
Motomichi Kono
(Senior Fellow, Project Planning & Development)
2.3.2.

Remuneration paid to directors and company auditors
Classification
Headcount
Amount paid
Directors
7
12,100,000 yen
Company auditor
2
4,800,000 yen
Total
916,900,000 yen

2.4. Matters related to accounting auditor
2.4.1Name of accounting auditor
Deloitte Touche Tohmatsu LLC
2.4.2Amount of remuneration, etc. for accounting auditor
Amount of remuneration, etc. for accounting auditor in the current business year: 15 million yen(Note) This is remuneration, etc. for business stipulated by Article 2, Paragraph 1 of the Certified
Public Accountants Act (Law No. 103 of 1948) and compensation for audit certification under theCompanies Act.
2.4.3Reasons that company auditor approves remuneration, etc. for the accounting auditor

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The company auditor obtained necessary documents and received reports from the relevant departmentof the Company and the accounting auditor, and confirmed and verified the details of the accounting
auditor’s audit plan, the status of the execution of duties by the accounting auditor and calculation basisof estimated remuneration. As a result, the company auditor determined that the amount of remuneration,etc. for the accounting auditor was appropriate and approved it in accordance with Article 399, Paragraph
1 of the Companies Act.
2.4.4Policy on decision to dismiss or not to reappoint accounting auditor
When the accounting auditor meets any of the items of Article 340, Paragraph 1 of the Companies Act,and when it is deemed to be difficult to carry out an adequate audit due to events that damage theaccounting auditor’s quality and independence, the company auditor may determine the details of a
proposal on dismissal or refusal of reappointment of an accounting auditor to be submitted to a general
meeting of shareholders.

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Attachment
September 1, 2019 Postscript (commentary)
July 16, 2019
Managing Director and CEO

Request to Line Managers
Commentary We have many employees who have joined us mid-career and those with management
experience have been appointed as line managers; accordingly, manager education has not been adequately
provided. In 2019, as the company is evolving into a new stage, I thought it would be a good idea to offersome kind of guidelines as to what line managers should be mindful of.
Just let me clarify that these guidelines are not meant to make an alibi or an excuse after something
wrong happens, as is often the case in organizations these days. In order for a company of a certain size tooperate functionally, it is necessary to maintain good human relationships, and for this reason we havecreated this. In addition, it is also a commandment to myself. In any case, we are not necessarily sayingthat you have no qualification as line manager just because you cannot carry out on these guidelines. My
intention is to encourage you to be conscious of and work towards these guidelines.
1. Review the Corporate Mission, Management Policies, and Code of Conduct periodically, tounderstand and take them deeply to heart.
Commentary The Corporate Mission is the meaning of our company to exist in society, or the life of thecompany, if you will. Talk about it from time to time with valued customers, contractors, business partners,
personal friends, and your family.
2. Be aware that your behavior is always being observed. The most unacceptable behaviors are thosethat appear to mix work and private matters.
Commentary The point is the “appearance” of mixing work with private matters. Even if you have nointention of mixing work with private affairs, the behavior is not acceptable as long as any member of thecompany perceives it as such. Keep in mind that even the littlest things tend to be taken as mixing.
3. It is when a job is tough (such as apologizing to a customer) that the manager should take the lead.
Staff members respect courageous managers.
Commentary It is not just apologies to customers; making important decisions is also tough. Everyone
has something they are not good at. It may be hard but showing your staff that you will not run away fromany tough jobs is also an important duty of a line manager.
4. Do not create an impression of favoritism, such as having lunch/going out for drinks with a specificstaff member (or even a group of staff members).
Commentary The point is creating “wrong impression.” Even if there is no intention, some staff members
may take it as an act of favoritism. This is not to say that lunches with staff members are absolutely out of
the question. They are OK as long as they do not give the impression of favoritism. On the other hand, letme point out to staff members that it is a common sense, in my opinion, to accept friendly gathering
invitations from line managers “once in a while.”
5. Inviting a staff member of the opposite gender out for one-on-one lunch/drinks is not acceptable.
Staff find it difficult to refuse, so it could be construed as harassment.
Commentary Such invitations are unacceptable. As staff are in the weaker position, they might be smilingoutside and angry inside.
“Don’t straighten your cap under a plum tree (Don’t do anything that could be misconstrued, because when
you raise your hand it might look as if you are trying to steal the plums.).” Of course, as long as it is not
one-on-one, such invitations should be fine every now and then.

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6. Do not hesitate to make amends for your wrongs (Analects of Confucius).
Commentary What this means is that everyone makes mistakes and acknowledging one’s own mistakes
can be hard, yet, we should have the courage to do just that. Words of Confucius from more than 2,000
years ago are convincing. The Analects of Confucius contain universal wisdom.
7. Do not point out other’s mistakes, nor boast of your own achievements (Nakane Tori).
Commentary Criticizing others and boasting about yourself can make you feel good. That is why we tend
to do so without thinking. However, if we take these words to heart, it will curb such behavior. If you are
not conscious of it, you will become mediocre person who has lost sight of the purpose of life. Staff will
not respect someone like that.
Nakane Tori was a scholar from Japanese Edo Period who turned his back on fame and fortune to pursue
a life of seclusion.
If you are interested, visit the link below to find about Nakane Tori (Japanese only).
https://www.sanogaku.jp/course/012/
8. Managers should greet out loud when you come into or leave the office. Also, if the manager is quickwith harmless jokes, the workplace becomes brighter. Puns are just fine.
Commentary Workplaces that have smile and laughter will raise efficiency and lower stress. I would ask
line managers to take the lead in this regard. Greetings are something that shows “I have no hostility
toward you.” Conversely, without greetings, the other person may feel bitterness in you.
9. Have one-on-one communication with your staff regularly and repeatedly under no influence ofalcohol. The purpose of such talks is to listen to what your staff want to say.
Commentary It may be difficult, but the “regularly and repeatedly” is the important point. Talks overdrinks are not very effective. In these one-on-one communications, if your staff member does 60% of thetalking, it is successful. Be careful not to make it your one-man show.
10. Do it in private when giving lectures or in public when giving compliments.
Commentary This is advice that we all remember hearing at some point. Yet we tend to do just the
opposite. Try to keep this in mind all the time.
11. There is nothing good to result by a heavy-handed order. The harsher the message, the more carefully
you should express it.
Commentary In the pre-war Japanese army, high-handed orders and obedience through violence werecommonplace. It is clear what the results have been.
12. Never reject a staff member’s proposal on the spot. Listen first, then if necessary, leave a day or two
before saying no.
Commentary It takes courage for staff to bring proposals to their managers. More often than not, theycome forward with it after giving serious thoughts. Having more knowledge and experience than staff, line
managers may think the proposals from staff are not so good. Even so, if you reject them on the spot, they
will lose motivation. Conversely, if their proposals are given even a little praise, your staff will try evenharder and come up with better proposals. It is also often the case that proposals that seem insignificant at
first glance turn out to have some good points upon reflection.
13. There are times when you must give your staff instructions that are against their intent. At such times,
strive to gain their understanding by carefully explaining the background and objective of your instructions.
However, if they are still not convinced even after you have carefully explained three times, you may carrythrough with the instructions.
Commentary This relates to No. 11. People who understand and are convinced will show better
performance. You may find it onerous, but if you make the effort to convince them, it will be more efficient

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in the end. If they still do not understand after explaining three times, you should direct them to do as you
ask. That is not being high-handed.
14. If a staff member does not improve even after giving guidance five times, there is a strong chancethat such member is not suited to that work. Making such staff understand this and recommending totransfer may be a thoughtful thing to do.
Commentary There is no guarantee that the current work is the best for the staff. Nor is there any
guarantee that their current manager is the best for them. Even the company may not be the best fit forthem. They might demonstrate their strengths better somewhere else. You should not give up easily, but if
you have guide them carefully five times and they still have not improved, recommendation for a change
will also be a kind consideration for them. However, the key point here is “having that staff understand,”and you must not transfer them blindly.
15. Do not buy or sell the shares of related parties, either listed or unlisted.
Commentary This is an extra point. More than 3,600 companies in Japan have their shares listed on thestock exchange, so if you want to invest in shares, you should do so in companies that are not related toyour work, either directly or indirectly. Even just being suspected of conducting insider trading can betroublesome. If you already own shares that are related to your work and want to sell them, it would besafer to consult with the Administration Division before you do so. Unlisted shares can be complicated, so
it would be wiser not to deal with them in the first place. This is another of those “don’t tie your shoelaces
in a watermelon patch (lest you be thought of as a watermelon thief)” lessons.
END OF DOCUMENT

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