Business Report for the 20th Year

Nobelpharma Co., Ltd.
[From January 1, 2022 to December 31, 2022]

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Business Report[From January 1, 2022 to December 31, 2022]

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. Since 2020, the management policy, behavioral
standards, and request to line managers (Attachment) have been partially changed (underlined) to reflect
the fact that working from home is now routine.

Policies
1. General
1) Give priority to legal and ethical compliance in the course of business--never prioritize loyalty
to company over morals.
2) Share our Mission, Policies and Code of Conduct among all stakeholders (employees,
shareholders, officers)* They cannot be shared unless they can repeatedly be invoked on a regular basis.
3) Pursue evolution of the Company, yet becoming larger is not our main goal
4) Aim to be a company that lasts 100 years while protecting its mission5) Ensure transparency and disclosure6) 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* The “select few” are those who have knowledge and experience, think for themselves andact on their own, and are passionately devoted to working.
* The select few are recognized irrespective of gender, age, nationality, religion, or preference* Each member of the select few has an independent character and treats others with respect
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: not to exceed dividends
5) Invest asset only with a principal guarantee

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Code of Conduct
1. Principle:
When in doubt, the patient benefit takes priority
2. Our Challenges:
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) Without worrying about possible delays, set a challenging deadline (day, month, and year)
intuitively to begin with, and do not give up easily, but persist in attempting to realize andachieve it* Stay away from “approximately/around” and “early/late ~,” etc.
* Loose deadlines focused on immediate concerns are not the smart way. Decide on a concrete
goal in advance.
* “Wait-and-see” is a waste of time4) If problems or mistakes occur, prevent their expansion first before preventing reoccurrence5) Speedy decisions by managers who have authority over  million-yen projects* For the time being,  million = 10 million for Division Manager; 3 million for
Department/Branch Manager/PM/PL
4. Cost/Efficiency:
1) Never take or lead to wasteful actions
2) Zero overtime work, working from home, and using up accumulated leave are considered
optimal3) Consider patient needs, scientific rationality and laws/regulations when pursuing higher quality
in products/data
4) As a general rule, competitive quotes should be obtained from at least  companies for projects
valued at  million yen or more, and in certain cases, multiple purchases should be made* For the time being,  = 1, and  = 2 (for from 1 million yen to less than 3 million yen) or 3
(for 3 million yen or more)
5. Communications/Relationship:
1) Embrace inter-departmental advice and cooperation—hiding in silos is a symptom of “Big
Company” Disease2) Courageously state the opinion you think is correct, and do not choose your words while trying
to gauge your superior’s reaction3) Confidently entrust tasks to subordinates, but never leave them unmanaged4) Hear anyone out--never interrupt in the middle
5) Start with the conclusion/result when explaining/responding6) Greetings may seem small, but they are important
1.2. Noteworthy Points in 2022
1.2.1 From the calm inland sea to the raging open sea• We recognize that 2023 will be the year when our company leaves the calm inland sea behind to row out
into the raging open sea. In 2023, generic versions of our existing major products will enter the market.
We expect our extensive internal and external pipelines to generate new drug sales, but althoughpromising, this too is fraught with difficulty, and rough waves await us. Marketing overseas is no easy
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matter. Both internal and external executives and employees are prepared to pull together and “grin andbear it” as we strive to surmount these waves.
• In order to ride these rough waves, we will need to reduce baggage above the waterline and lower ourcenter of gravity. This is truly a case of YMWS (“Yatte Minakucha Wakaranai, shikashi Songiri wotamerauna” (“You never know how it will turn out unless you try, but do not hesitate to cut losses”) as
defined in our Code of Conduct.
1.2.2 Overseas development/overseas sales• In March 2022, we received approval for a new drug for the treatment of facial angiofibroma associatedwith tuberous sclerosis (RAPALIMUS® Gel) in the United States, and we released it to the market under
the trade name of HYFTORTM in August 2022. HYFTORTM is our first product to be approved overseas.
It was supported by the SAKIGAKE fast-track review system in Japan.
• We plan to obtain approval and launch the product in Europe in 2023. In China, we plan to obtainapproval in 2023 and launch the product in 2024.
• We are promoting and preparing development of TITANBRIDGE® (NPC-17) and RETYMPA® (NPC18) in Europe and the United States and NOBELZIN® (NPC-02) and MELATOBEL® (NPC-15) in
China as our product lineup to follow RAPALIMUS® Gel.
1.2.3 Production• Insufficient manufacturing capacity for MELATOBEL® Granules has continued to limit our shipment
volume, causing major problems for patients and medical institutions and a significant hurdle to doing
business. In addition, although NOBELZIN® Granules was listed in the NHI price list in May 2021, therelease was delayed until February 2023 for the same reason, leading to a similar situation. Elsewhere,
there were obstacles to arranging for investigational products. The main cause of these problems is
considered to be our business form as a company that outsources all manufacturing, but we do not plan
to change our policy of not possessing any manufacturing plants. With this as our premise, we will makefurther efforts to strengthen our production system.
• We have begun investing in seed discovery through Nobelpharma Financial Co., Ltd., our company’s
wholly owned subsidiary.
1.2.4 Human Resources• Work from home (WFH), which started in March 2020, has become routine.
• The average attendance rate was 12.7%, up from 5.4% in 2021 (both as of December). The average
overtime hours and rate of leave taking were favorable at 2.0 hours and 75.0%.
• The number of employees in Japan increased by 12 from 370 in 2021 to 382 in 2022 (both as of the endof December). The main changes were a decrease of 11 people mainly owing to the return of employees
who had been on loan to the Sales & Marketing Division, along with an increase of 12 people in the
Research & Development Division / Project Planning & Development Division, and an increase of 11
people in the Supply Chain & Manufacturing Division. If we consider the time lag between joining andleaving the company, total personnel expenses remained at almost the same level (3,575 million yen
compared to 3,552 million yen the preceding year, excluding 980 million yen allocated to the retroactive
portion of the Managing Director and CEO’s retirement benefit).
• The average age is 53.2 and the average length of service is 5.2 years.
• We are promoting optimization of the Sales & Marketing Division’s personnel.
• We now have 37 overseas employees in the United States, 12 in China, and 12 in Europe (as of December2022).
• Although we plan to maintain the Work from Home system, we are taking the following measures
because of concerns about lack of communication and weakening of the sense of belonging to thecompany.

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 Corporate executive meetings will be held as in-person meetings. Executive Officers andGeneral Managers must be physically present at the meetings (mandatory).
 An all-employees meeting will be held at least once a year, and everyone must be physicallypresent (mandatory).
 All-employees meetings will be held at the division unit level at least once a year, and everyone
must be physically present (mandatory).
 The Board of Directors meetings and shareholders’ meetings will be held as in-person meetings.
 1on1 meetings will continue to be held, and it is recommended that they sometimes be held in
person.
 Evaluation interviews will be held in person (mandatory).
 In recruitment, at least the final interview will be held in person, and the initial recruitment
interview will be held in person if possible.
 Training for new employees will be conducted in person (mandatory).
 If there are new employees, in-person lunch meetings should be held at the division anddepartment levels, etc. (mandatory).
 The head office will hold a buffet-style home party once a month.
 Quarterly explanatory meetings will continue to be held online.
 We will introduce a system that allows employees to build relationships with other employees
freely, outside of work, through a mixture of online and in-person involvement in hobbies, sports,
and interests. Financial support to cover the cost of activities will be considered.

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1.3. Progress and Results of Operations
mil yen% to total sales
2021
2022

Year-onyear (%)

2021

2022

Sales *

20,741

21,204-100.0%

100.0%

Cost of goods sold

2,076

2,698

129.9%

10.0%

12.7%

Gross profit

18,66418,506

99.1%

90.0%

87.3%

SG&A expense *14,13014,706

-

68.1%

69.4%

Personnel expenses *

2,754

3,634

132.0%

13.3%

17.1%

R&D expenses *

4,636

5,892

127.1%

22.4%

27.8%

Operating income

4,534

3,799

83.8%

21.9%

17.9%

212

149

70.1%

1.0%

0.7%

4,747

3,948

83.2%

22.9%

18.6%

-9

-30

-

-

-

Net income before tax

4,738

3,918

82.7%

22.8%

18.5%

Income taxes

1,187

1,217

102.5%

5.7%

5.7%

Net income

3,551

2,701

76.1%

17.1%

12.7%

Net income per employee (‘000 yen)

9,597

7,070

5,825

8,868

Dividend

508

590

Net income

3,551

2,701

Ending balance

8,868

10,979Non-operating income/expenses
Ordinary income
Extraordinary income/loss

Retained earnings brought forward
Beginning balance* 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.
Foreign subsidiaries (reference)mil yenResults in FY 2022

Current income (*)

Nobelpharma
America LLC

Plusultra
pharma GmbH

-1,798-296

Jiangsu NobelpharmaCo., Ltd.
-187* Current income of foreign subsidiaries is obtained by converting the local currency, using the exchange
rate as of the end of 2022.

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Total sales in 2022 were 21,204 million yen, up ____% year-on-year. NOBELZIN® and dysmenorrhea(LEP) family (LUNABELL® LD, LUNABELL® ULD, JEMINA® and FREWELL®) posted sales of
10,939 million yen and 5,479 million yen, respectively, accounting for 53.7% and 26.9%, respectively, of
total product sales.
The cost of goods sold was 2,698 million yen, up 29.9% year-on-year, accounting for 12.7% of total
sales. Selling, general and administrative expenses totaled 14,706 million yen, an increase of ____% yearon-year, accounting for 69.4% of total sales, mainly including personnel expenses of 3,634 million yen,up 32.0% year-on-year and accounting for 17.1% of total sales, R&D expenses of 5,892 million yen, up
27.1% year-on-year and accounting for 27.8% of total sales, sales promotion expenses of 1,641 million
yen (up ____% year-on-year), and outsourcing expenses of 1,743 million yen (up 21.6% year-on-year).
Sales promotion expenses mainly included 903 million yen of sales commission, etc. on NOBELZIN®
and JEMINA® to ASKA Pharmaceutical Co., Ltd., etc.
Note that sales commissions to MEDICEO CORPORATION and SHIKOKU YAKUGYO Co., Ltd. for
NOBELZIN®, JEMINA®, and MELATOBEL® (2,334 million yen this year), which had been recorded
as sales promotion commissions until the previous fiscal year, are deducted from the sales because the“Revenue Recognition Accounting Standards” were applied, starting this fiscal year.
Outsourcing expenses mainly included 295 million yen for business management services and indirect
department operations outsourcing to Hisanaga & Co. Ltd., 216 million yen for safety information
processing support operation, etc. by CMIC, 115 million yen for royalties on Medichat, etc. by Medipal
Holdings Corporation, and 70 million yen for initial establishment of EDC, etc. to Fujitsu Japan. The
direction for continuation of Medichat use is under consideration.
As a result, operating income was 3,799 million yen, up 83.8% year-on-year, and it accounted for 17.9%of total sales.
Ordinary income was 3,948 million yen, up 83.2% year-on-year, accounting for 18.6% of total sales,
after recording non-operating income of 266 million yen including subsidy income of 248 million yen,with non-operating expenses of 117 million yen including currency exchange losses of 61 million yen,
payment interest of 39 million yen, and bond interest expenses of 8 million yen.
With income taxes of 1,217 million yen, net income was 2,701 million yen, up 76.1% year-on-year,
accounting for 12.7% of total sales, and net income per employee was 7 million yen (2021: 9 million yen).
Retained earnings brought forward as of December 31, 2022 were 10,979 million yen, with the
beginning balance of retained earnings brought forward of 8,868 million yen and a dividend payment of
590 million yen.
* The “Revenue Recognition Accounting Standards” (Corporate Accounting Standards No. 29, March 31,2020), etc. have been applied from the beginning of the current fiscal year, and the major management
indices, etc. for the current fiscal year reflect application of these accounting standards, etc.
For this reason, the ratio to the previous year is not described for the above selling, general andadministrative expenses.

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1.4. Domestic sales
The table below shows sales by product in 2022 on a wholesale price (NHI price) basis.
Area

Obstetrics andGynecology
FamilyBrand Name

LaunchIndication

LUNABELL® LD
LUNABELL® ULD
JEMINA®

Jul 2008
Sep 2013
Oct 2018

Dysmenorrhea

FREWELL® LD
FREWELL® ULD

Dec 2018

Dysmenorrhea

NOBELBAR®

Dec 2008

INDACIN®

Jan 2013

COSMEGEN®

Jan 2013

Respia®

Dec 2014

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

Melatobel®

Jun 2021

Sleep-onset difficulty associatedwith neurodevelopmental disorderin children

NOBELZIN®

Apr 2008
Mar 2017

Wilson’s disease,hypozincemia

Fostoin®

Jan 2012

GLIADEL®

January 2013

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

Alabel®

September 2013

Diagnosis of malignant glioma

Unitalc®

Dec 2013

Prevention of recurrent malignant
pleural effusion
Secondary intractable
pneumothorax that is difficult totreat with surgery
Lymphangioleiomyomatosis
Refractory lymphatic disease(lymphatic malformation,
lymphangiomatosis, Gorham’s
disease, lymphangiectasia)

Dysmenorrhea

Subtotal

Pediatric Family

Subtotal
NOBELZIN®
FamilySubtotal
Neurosurgery
FamilySubtotal

Mar 2022
Respiratory
FamilyRAPALIMUS®

Dec 2014
September 2021

TITANBRIDGE®

Jul 2018

Adductor spasmodic dysphonia

RETYMPA®

Dec 2019

Tympanic perforation

ZANOSAR®

Feb 2015

RAPALIMUS® Gel

Jun 2018

Gastroenteropancreatic
neuroendocrine tumor
Skin lesions associated withtuberous sclerosis

Subtotal
Otolaryngology
FamilySubtotal
Other Drug
Families
Subtotal
Total

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

2021
2,983

2022
2,721

3,259
4,190

3,880
4,835

119.1
115.4

10,432
110

11,436
119

109.6
107.6

45

44

98.0

21

26

120.6

226
1,163

215
1,939

95.3
166.7

1,566
14,751

2,342
15,358

149.6
104.1

14,751933

15,358
914

104.1
97.9

782
314
2,029
74

627
295
1,836
79

80.3
94.0
90.5
107.6

372

576

154.7

446
25
89
114
329

656
7
100
107
256

146.9
29.1
112.4
94.4
77.9

361

377

104.4

690
30,027633
32,36891.8
107.8

The fiscal year 2022 was a year when MR activities were invested into products with additional
indications (RAPALIMUS® Tablets, UNITALC®) in addition to the three main products (NOBELZIN®,JEMINA®, MELATOBEL®). With the lifting of restrictions on the distribution of existing major product
MELATOBEL® in October of 2022, it has become possible to carry out full-scale MR activities. Also, in
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Year-onyear (%)

91.2

FY 2022, because of the effects of COVID-19 and changes in the medical environment, we introduced ateam system for MR activities to reduce the number of MRs. MR activities have shifted further from realface-to-face meetings to online meetings, and consequently, we are now in an era of rapid and efficientutilization of digital (DX) technologies. Sales amounted to 32.36 billion yen in FY 2022, up 7.8% yearon-year, compared with the sales target of 33.68 billion yen (on a wholesale price (NHI price) basis). The
biggest reasons why the sales target was not achieved were that there was a supply restriction on
prescriptions of MELATOBEL® from June 2021 to September 2022, and MR information activities could
not be carried out. This no longer applies in FY 2023, as the supply restriction on MELATOBEL® waslifted in October 2022. Because the MRs were unable to disseminate information on MELATOBEL® forabout one year, we will shift to a system in which half of the weight of MR information activities will
focus on MELATOBEL® in FY 2023. In addition, we will implement new efforts to enable new products
to penetrate the market quickly in the future.
1.5. Research and Development (Japan and overseas)
We have been working on the development of malaria vaccines for 8 years, but we have decided toabandon development because production of an investigational new drug has not proceeded as expected.
The table below summarizes the development stage, expected NDA and market size classification in thethree categories of A. New Drugs and Medical Devices, B. Life Cycle Management (LCM) and C.
Overseas Development as of March 1, 2023. Many are drugs based on new concepts that originated inJapan. Market size classification is as follows:
I: Potential primary sources of revenue (sales of over 3 billion yen)
II: 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 acid3

NPC-254
56

NPC-21Anti-CMV antibody
NPC-22
Scopolamin
NPC-28
Cultured periosteal
cells

Licensor

Development
stage

Estimated
approval

Classification

Partner Therapeutics
Inc.

Preparation
for filingJan 2024II

In-house

Preparation
for filingJan 2024

IIhypozincemia

In-house

PIII/
Preparation
for filingJan 2024

I

CMV infection

Evec Inc.

PII

Dec 2027

I

Hypersalivation

Kitasato University

PI/II

Sep 2026

IV

Jawboneregeneration

Niigata University
Kohjin Bio Co., Ltd.

Non-clinical

TBD

IV

Indication

Autoimmune
pulmonaryalveolarproteinosis
Progressive
muscle weakness
in GNE myopathy

7

GAIA-102

Neuroblastoma

8

P092
Anti-S100A8/A9
antibody

Prion disease
Inflammatory
disease9

Gaia BioMedicine
Inc.
Kyushu University
Gifu University

PI

TBD

III

Non-clinical

TBD

III

Okayama University

Non-clinical

TBD

IV

9/20

B. Life Cycle Management (LCM)
Compound1

NPC-12RAPALIMUS®

2

NPC-06
Fostoin®

3

NPC-184NPC-12RAPALIMUS®

5

NPC-12RAPALIMUS®

6

NPC-12RAPALIMUS®

7

NPC-12GRAPALIMUS®

8

NPC-159NPC-26
Sargramostim

Indication
Intractable vasculartumor/vascularmalformation(new indication)
Pain associated withherpes zoster(new indication)
Regeneration of
external auditory
canal
Pendred syndrome(new indication)
Epilepsy with focal
cortical dysplasia
type II(new indication)
Primaryimmunodeficiency
syndrome (newindication)
Intractable vasculartumor/vascularmalformation(new indication)
Xeroderma
pigmentosum
Pulmonary nontuberculous
mycobacteriosis(new indication)

Licensor

Development
stage

Estimated
approval

Classification

Gifu University

Preparation
for filingJan 2024

II

Pfizer Inc.

PIII

September
2024

I

Kaken
Pharmaceutical

PIII

TBD

IV

Keio University

PII

TBD

III

Showa University PII

TBD

IV

Tokyo Medical
and Dental
University

PII

TBD

IV

Wakayama
Medical
University

PII

TBD

IV

Kobe University

PII

TBD

IV

Niigata
University

PII

TBD

I

C. Overseas Development
Compound

1

2

3
4
5

NPC-12G(RAPALIMUS®
Gel)
NPC-17Thyroid cartilage
fixationdevice(TITANBRIDGE®)
NPC-18(RETYMPA®)
NPC-02(NOBELZIN®)
NPC-15(MELATOBEL®)

Indication

Licensor

Angiofibroma-

Development
stage

Estimated
approval

Europe: FiledApr 2023

China: Filed

June 2023

US: Clinical trial
in preparation

TBD

Europe: CE
marking inprocess

November
2023

III

Classification

I

Adductor spasmodic
dysphonia-

Tympanic perforation

MEEI/ Harvard/
NY University

US: PII

TBD

III

Wilson’s disease-

China: Filed

Dec 2023

II

Sleep-onset difficulty
associated withneurodevelopmental
disorder in children-

China:
Preparation forfilingApril 2024

I

10/20

1.6. Funding and Major Lenders
In 2022, the Company borrowed 2,500 million yen, and repaid and redeemed 903 million yen to financial
institutions.
As a result, as of the end of December 2022, the balance of loans payable and bonds was 9,183 million
yen, and the balance of cash and deposits was 8,403 million yen.
As of December 31, 2022, the status of borrowing is as follows:
Loans payable
Mizuho Bank, Ltd.
3,300 million yen
Sumitomo Mitsui Banking Corporation
850 million yen
MUFG Bank, Ltd.
1,260 million yen
Resona Bank, Ltd.
400 million yen
The Bank of Yokohama, Ltd.
100 million yen
The Shoko Chukin Bank, Ltd.
860 million yen
The Tokyo Shinkin Bank
250 million yen
Japan Finance Corporation
62 million yen
Total
7,082 million yen
Japan Agency for Medical Research and Development
551 million yen
Corporate bond2nd 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: 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
1,550 million yen

1.7. Financial Results, Assets, 2023 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 MELATOBEL®
and our other existing major products, but because we expect to continue to accelerate research anddevelopment and make substantial R&D 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

2019
2020
2021
2022
(Actual results) (Actual results) (Actual results) (Actual results)
17th year
18th year
19th year
20th year
13,403
16,92920,741
21,204
2,951
3,466
4,747
3,948
2,370
2,511
3,551
2,701
175,000 yen
185,000 yen
262,000 yen
199,000 yen
14,13818,57423,00827,6795,330
7,052
10,094
12,20537.7 %
38.0 %
43.9 %
44.1 %
394,000 yen
521,000 yen
746,000 yen
902,000 yen

2023(Forecasts)
21st year
23,972
3,816
1,861
137,000 yen
29,064
13,52046.5 %
1 million yen

The “Revenue Recognition Accounting Standards” (Corporate Accounting Standards No. 29, March 31,2020), etc. have been applied from the beginning of the current fiscal year, and the major management
indices, etc. for the current fiscal year reflect the application of these accounting standards, etc.

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A. Domestic Development Schedule
Item

2022

2024

2023

(3)
Application(1)
Approval(Hypozincemia)(4)
Application(Progressive muscle weakness in GNE myopathy)(1)
Approval(4)
Application(1)
Approval(Autoimmune pulmonary alveolar
proteinosis)

Phase III study (investigator-initiated,
nontuberculous mycobacteriosis)

POC study (investigator-initiated, nontuberculous
mycobacteriosis)(4)
Application

2025

(1)
Approval(Intractable vascular tumor/
vascular malformation)(9)
Application

Phase III study (herpes zoster pain)(9)
Approval(2)
Application

Phase III study (investigator-initiated,
regeneration of external auditory canal)

Phase II study (investigator-initiated, refractory vasculartumor/vascular malformation)

Phase III study (investigator-initiated, refractory vasculartumor/vascular malformation)

Phase III Japan-US global study (CMV infection)

Phase II Japan-US global study (CMV infection)

Phase III study (hypersalivation)

Phase I/II study (extension)
Note)blue arrows show from clinical trial notification to the end of observation, and as a general rule,descriptions are omitted for investigator-initiated P-II studies.

Orange arrows show fromapplication to approval,

B. Overseas Development Schedule
Item

Year
Month
Europe
China

2023

2022

(Angiofibroma)(Angiofibroma)

EuropeChina(6)Approval

Phase III study (adductor spasmodic dysphonia)(11)
CE Marking Self-Declaration

CE Marking Review

Phase II study (investigator-initiated, tympanic perforation)(4)
Application

China
(12)
Application
Note)

2025

(4)
Approval(5)
IDE application

UnitedStatesUnitedStates2024(Sleep-onset difficulty associated withneurodevelopmental disorder in children)(Wilson’s disease)

Orange arrows show fromapplication to approval,

Phase III study (investigator-initiated, tympanic perforation)(4)
Approval(12)
Approval

blue arrows show from IND to the end of observation. For the timeline of the global study of NPC21, refer to the domestic study.

1.8 Status of reexamination and safety management
Reexamination: The GPSP on-site inspection for reexamination of UNITALC® by the PMDA was
conducted remotely, and notification of conformance was received in September. In the same month, anapplication for reexamination of JEMINA® was submitted.
Safety management: The number of adverse events collected was 3,615 in Japan (2021: 4,095) and
2,336 overseas (2021: 2,934) The package inserts and precautions for FOSTOIN®, NOBELBAR®,UNITALC®, ALABEL®, LUNABELL®, JEMINA®, MELATOBEL®, and RAPALIMUS® Gel/Tablets,
etc. have been revised. Pharmacovigilance (PV) audits were conducted by foreign business partners for
COSMEGEN® and ZANOSAR®.

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Post-marketing surveillance: Patient registration for all-case surveillance of RAPALIMUS® Gel wascompleted in March.
Quality: A total of 142 quality information cases (complaints) were collected, and appropriate action
was taken to investigate the cause and make improvements. Regarding the TITANBRIDGE® breakage
incident, we recalled the product in March and performed monitoring of patients as well as analysis andevaluation of risk. Shipments of products were resumed on September 5. The quintennial QMS inspectionof TITANBRIDGE® was conducted by PMDA in September.
Overseas expansion: The Global PV system audit by the internal audit department took place over 3
days in May as part of the establishment and strengthening of the system as the global head of safety
management. In addition, we upgraded the PV system in association with the launch of RAPALIMUS®
Gel in the United States.
1.9 Status of Compliance
To “prevent legal and regulatory violations from occurring, and in the unlikely event that one does occur,[to] prevent it from expanding in scope”, we conduct the following activities: monitoring, informationcollection through the in-house whistle-blowing system, investigation of whistle-blowing cases andplanning of corrective action, training on laws and regulations, etc., and consultation on whether situations
constitute violations of laws or regulations. 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 whistleblowing cases.
In order to further accommodate the concept of risk-based quality assurance, the Clinical Quality
Assurance Department is promoting more efficient and effective regulatory auditing methods. We will
establish a system for PV audits in compliance with global PV regulations, improve staff education andtraining, reliably conduct PV audits based on the global audit plan, and establish audit functions to ensure
the quality of computer systems related to GCP and PV functions.
Provision of sales information: Promotional materials, etc. are subjected to preliminary checks andapproval, and sales information provision activities are monitored. We will explore a risk-based
management system so that we can handle the annually increasing volume of materials.
1.10 Status of Administrative Departments
Management Planning: We will reexamine the system so that we can respond to emergencies resulting
from the expansion of our business into new lines and the diversification of our operations.
Accounting and Finance: We will complete the introduction of the new accounting system so that we
can quickly grasp our financial status, make appropriate management decisions on ever-changing
situations, and increase the accuracy of accounting. In addition, we will focus on grasping and managing
the revenue and financial condition of overseas bases.
DX Promotion: We will promote business reform through the application of digital technology while
supporting business expansion from the IT side. We will also improve the IT environment of our overseas
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.

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Public Relations: We will provide various kinds of information to establish our corporate branding
inside and outside the company. We will also establish a website with information for children living withintractable diseases and carry out activities that are close to patients and parents.
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
Sales
Ordinary income

2.

Target50 billion yen
10 billion yen

Current Status of the Company

2.1. Shares (as of December 31, 2022)(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 24, 2023, the status of full-time and part-time directors is as follows:
Managing Director & CEO: Jin Shiomura
Director (part-time):

Isamu Sojyo(former Executive Managing Director of JapanIntellectual Property Association)

Director (part-time):

Nobukuni Taneya(Outside Director, arara Inc.)

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Director (part-time):

Takahisa Iizuka(Executive Officer, Deputy General Manager ofBusiness Development Division, MEDIPALHOLDINGS CORPORATION)

Director (part-time):

Koichi Noda

(Executive Officer, General Manager, Financial
Management Office, Inabata & Co., Ltd.)

Director (part-time):

Toshio Miyata(President, Mih Clinic)

Director (part-time):

Georg Holländer

(Head of Department of Pediatrics, University of
Oxford)Audit & Supervisory Board Member (part-time):
Yoshitaka Kishi(former full-time member of Audit & Supervisory
Committee, DIA RIX CORPORATION)

Audit & Supervisory Board Member (part-time):
Tomoyasu Toyoda(Company Auditor, MEDIPAL HOLDINGSCORPORATION)

Audit & Supervisory Board Member (part-time):
Yasuhiro Kaga

(former Member of the Board of
Directors,Managing Executive Officer of
Mitsubishi UFJ Securities Holdings)(2) Executive Officers
As of April 1, 2023, the status of executive officers and directors is as follows:
Vice President

Shigeki Shimasaki(Head of Research & Development Division)

Senior Executive Officer Arata Tabata(Head of Bio Business Division/External
Relations)

Senior Executive Officer Hitoshi Yokoyama(Head of Sales & Marketing Division)

Executive Officer

Kozo Hayase(Head of Administrative Affairs & Corporate
Planning Division/Overseas Subsidiaries)

Executive Officer

Kenji Shimizu(Deputy Head of Research & Development
Division, General Manager of ClinicalDevelopment Department 2)

Executive Officer

Yoshiki Yagi

(Head of Project Planning & Development
Division/Deputy Head of Bio Business Division)

Executive Officer

Toshiaki Okamura(Head of Regulatory Affairs Division/General
Manager of External Relations Department)

Executive Officer

Yoshihide Yamamoto (Head of President Office)Executive Officer

Hitoshi Hasegawa(Head of PMS Regulatory Compliance &Assurance Division/General Marketing
Compliance Officer)

Executive Officer

Masanori Osakabe(Deputy Head of Research & Development
Division/General Manager of International
Clinical Development Department)

Executive Officer

Yoshiki Kida

(President & CEO, Nobelpharma America, LLC)

Executive Officer

Makoto Shiragami(Head of Compliance Division/General Manager
of Compliance Promotion Department)

Executive Officer

Yukio Urasaki(Head of Business Development Division)

Executive Officer

Masayoshi Onozaki(Head of Global Business Development Division)

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Executive Officer

Tetsuro Noguchi(Head of Supply Chain & Manufacturing
Division)

Executive Officer

Eijiro Akatsu(Deputy Head of Administrative Affairs &Corporate Planning Division/General Manager ofCorporate Finance Department)

Executive Director

Masato Iwamoto(General Manager of Supply Chain Management
Department)

Executive Director

Atsunori Iwao

(General Manager of Quality Assurance
Department/Quality Assurance Officer)

Executive Director

Masatomi Nemoto(General Manager of Pharmacovigilance
Department/Safety Management Officer)

Executive Director

Yasuo Suga

(Deputy Head of Sales and Marketing
Division/Product Marketing Departments 1 and 2)

Executive Director

Tsutomu Iwasa(General Manager of West Japan Sales
Department)

Executive Director

Yasuo Satake(General Manager of HR & General Affairs
Department)

Executive Director

Takahiro Yamasaki(President & CEO, Plusultra pharma GmbH)

Executive Director

Yumi Imai(General Manager of PMS Regulatory
Compliance Department)

Executive Director

Nobuyuki Sato

(General Manager of Digital Transformation
Department)

Executive Director

Toru Yokoyama(General Manager of Central/East Japan Sales
Department)

Executive Director

Sachiko Ezoe

(Director of Medical Division)

Executive Director

Yoshinobu Takahashi (Deputy Head of Sales & Marketing Division/
General Manager of Marketing Communication
Department/Product Marketing Department 3 andMarketing Communication Department)

Executive Director

Rongzhe Jiang(General Manager, Jiangsu Nobelpharma Co.,Ltd.)

2.3.2. Remuneration paid to directors and company auditors
Classification
HeadcountDirectors
7
Company auditor
2
Total
9

Amount paid
15.6 million yen
4,800,000 yen
20.4 million yen

2.4. Matters related to accounting auditor
2.4.1 Name of accounting auditor
Deloitte Touche Tohmatsu LLC
2.4.2 Amount of remuneration, etc. for accounting auditor
Amount of remuneration, etc. for accounting auditor in the current business year: 16 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
the Companies Act.
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2.4.3 Reasons that company auditor approves remuneration, etc. for the accounting auditor
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.
2.4.4 Policy 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
Revised on January 19, 2023
September 1 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, when the company was evolving to a new stage, I thought it would be a good idea tooffer some 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. Please note that we are not necessarily sayingthat you have no qualification as line manager just because you cannot carry out on these guidelines. The
general aim 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, to understandand 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,
and even with your family and personal friends outside the company. Then please internalize it and makeit a part of you.
2. Be aware that your behavior is always being observed. The most unacceptable behaviors are those thatappear 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 hassomething they are not good at. It may be hard but showing your staff that you will not run away from any
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.”

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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.
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. This injunction was posted on the wall for all his students to see.
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. Even in online meetings, it is a good idea for the manager to take the initiative to greet participants andbreak the ice with a joke. You should also call on people by name to encourage those who usually do not
speak up to do so. Then be sure to listen to everyone’s opinions.
Commentary It is difficult for subordinates to speak up even if they have an opinion. The manager ormoderator should exercise care to ensure that everyone participates.
To subordinates, I would say that it is common sense to show your face and participate in online meetings.
Consider it your duty as a member of society.
10. 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.
11. 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.

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12. 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.
13. 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.
14. 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 is related to No. 12 above. 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 efficientin 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.
15. If a staff member does not improve even after giving guidance five times, there is a strong chance thatsuch member is not suited to that work. Making such staff understand this and recommending to transfer
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 guaranteethat their current manager is the best for them. Even the company may not be the best fit for them. They
might demonstrate their strengths better somewhere else. You should not give up easily, but if you haveguide 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.
16. 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. This is another of those “don’t tie your shoelaces in a watermelon patch (lest you be thoughtof as a watermelon thief)” lessons.
END OF DOCUMENT

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