Annual Review

2018Year ended March 31, 2018

Profile
Mochida Pharmaceutical Co., Ltd. responds to the widespread requirementsof medical care by putting into practice its motto of “farsighted, innovative
research.” With the advent in Japan of the aging society and a stronger
emphasis on quality of life (QOL) and a continued focus on health,expectations regarding medical care are growing daily.
We aim to do as much as one company can to contribute to the worldof medical care. At Mochida Pharmaceutical, we embrace that objective as
our mission, and we are proactive in the far-reaching areas that constitutemedical care.

Corporate Philosophy
Throughout the Company’s history, it has stressed the importance offarsighted creativity to develop unique products and technologies for the
medical and pharmaceutical world, thereby contributing to the improvement of
human health.

Co ntents
1

Consolidated Financial Highlights

2

Message from the President

4

The Year in Review

6

Business Activities

8

Research & Development

10

Production

12

Licensing Activities

14

Pharmaceuticals

18

Skin Care Products

20

Highlights of Our Growth22

Corporate Governance24

Main Product Listing25

Financial Section

33

Corporate Data

Cover: The stained-glass window
expresses a prayer for health anddepicts St. Luke, the patron saint of
the medical profession, administering
medicine to people who are suffering.
This stained-glass window isdisplayed at the lobby of theCompany’s headquarters.

Consolidated Financial Highlights
Mochida Pharmaceutical Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

Thousands of
U.S.Dollars

Millions of Yen

2018

2017

2018

¥106,761¥ 97,349$1,004,911

Operating income

11,662

11,374

109,777

Income before income taxes and minority interests

12,116

11,583

114,049

Income taxes

3,092 *1

3,057 *2

29,110Net income

9,023

8,526

84,939Total assets

155,054

148,372

1,459,473

R&D expenditures¥ 11,912¥ 15,226$ 112,131

1,001

1,060

9,425

Net sales

Capital expenditures

Yen

Net income per share
Cash dividends per share

¥

454.6
170.0

U.S.Dollars

¥

429.5
155.0

$

4.28
1.60

*1: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥3,363 million), income taxes-deferred (-¥270 million) is included.
*2: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,072 million), income taxes-deferred (-¥1,014 million) is included.
Note: Unless otherwise indicated, all dollar figures herein refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for convenience only, at the rateof ¥106.24=$1.00, the approximate exchange rate on March 31, 2018.

Mochida Pharmaceutical Group1

Message from the President

Working to continuously boost enterprisevalue by meeting medical and healthcare needs
as a comprehensive healthcare group.
The Mochida Pharmaceutical Group was founded in Tokyo in 1913. Ever sincethat time, we have provided original innovative drugs to the market and played
an important role in the development of Japanese medical care. In addition topharmaceuticals, the Company advanced into the medical devices and skincare products fields from early on. Through these efforts, the Company has
contributed to improving patients’ health and QOL.
While never forgetting the spirit of our founding, we will continue meeting
medical and healthcare needs as a comprehensive healthcare group. Whilecontributing in this way to people’s health and welfare, we will work tocontinuously boost enterprise value.

Review of FY2017
During fiscal year 2017 (ended March 31, 2018), while uncertainty in overseas economies gave cause forconcern, the Japanese economy remained on a gradual recovery path.
In the Japanese pharmaceutical industry, the business environment remained harsh as the government
continued to advance measures to reduce drug costs against the background of securing fiscal sources forsocial security expenses and competition among companies intensified.
Under this environment, the Mochida Pharmaceutical Group posted increases in both net sales andincome for the fiscal year.

Basic Management Policy
In accordance with our corporate philosophy, “throughout the Company’s history, it has stressed theimportance of farsighted creativity to develop unique products and technologies for the medical andpharmaceutical world, thereby contributing to the improvement of human health,” the Mochida Pharmaceutical
Group aims at being a unique and distinctive comprehensive healthcare company with the pharmaceuticals
business as its core, together with the skin care business and related new businesses.
To realize our corporate philosophy, the company pursues enhanced corporate governance and absolutecompliance as key pillars of our management. Every group employee observes the Mochida Pharmaceutical
Group Code of Conduct, and we are striving to boost enterprise value by responding to the trust andexpectations of our stakeholders.
To also respond to changes in the business environment and maintain sustainable growth, the MochidaPharmaceuticals Group continues to place priority on “establishing businesses and specialized fields, where
Mochida has a competitive advantage” “placing a higher priority on partnerships,” and “thorough streamliningof resources” under the basic policy of emphasizing profit and continued investment for the future. We will
strive to continually increase our corporate value by taking full advantage of our agility and responsiveness as a
mid-sized firm.

Medium-Term Management Plan Policies for Fiscal Years 2018 through 2020
The Medium-Term Management Plan (FY2018-2020) policies are as follows.
We will respond to medical and healthcare needs with concentration of the total power of the Group
covering research and development, manufacturing and marketing, pursue sustainable growth by promoting
selection and focusing processes, and restructure the earnings structure to respond to further environmental
changes.

2

Mochida Pharmaceutical GroupThe three years from FY2018 to FY2020 are forecast to be even more challenging, given the continuing
government policy of pharmaceutical cost reduction in the context of the need to secure stable financial resources
for the social security system, the further promotion of generic drugs with the aim of raising the share of generic drugprescriptions to 80%, and the commencement of the drastic reform of the National Health Insurance (NHI) drug pricesystem.
The Mochida Pharmaceutical Group will intensively focus on the following three key points so the Group can deal
with all types of changes in the environment :1. Focusing on sales of new drugs, etc. by enhancing sales capabilities
2. Making continuous investments to create next-generation leading products
3. Redistributing resources strategically through the selection and focusing processes
We are pursuing investments in business activities that will lead to future competitiveness in order to create
leading next-generation products. In pharmaceutical research, we are enhancing our development pipelines byintroducing candidate drugs for development at an early stage through the promotion of open innovation.
We will boost productivity by proceeding with selection and concentration in company-wide organizational
management, further promoting structural reform, and strengthening interdepartmental cooperation. We will also
strategically maximize the use of the Group’s finite human, material, and financial resources, while actively seeking
collaboration with external resources at the same time.
We have reviewed the overall targeted areas of our core pharmaceutical business, which newly includes
gastroenterology, which is enhanced by Lialda®, an ulcerative colitis treatment drug, and Goofice® and AJG555,
chronic constipation treatments. As the top priority issue, we will concentrate our resources on the targeted areas ofcardiovascular medicine, obstetrics and gynecology, dermatology, psychiatry, and gastroenterology as well as focus
on new drugs to maximize profit. In addition, we will further promote strategic alliances which stress the importance ofpartnerships.
Aiming at specialty pharmaceuticals that will be valued globally, Mochida Pharmaceutical Group will strive tocontinually increase its corporate value as a group of companies in the comprehensive healthcare business by taking
full advantage of the agility and responsiveness of a mid-sized firm.
Because of the drastic reform of the NHI drug price system and other factors, as mentioned above, theenvironment surrounding the pharmaceutical industry is expected to become increasingly severe in the medium tolong term. Against this backdrop, our profitability will temporarily decline to a certain extent during the 18-20 MediumTerm Management Plan period, hitting the bottom in FY2018, due to the following reasons: drug prices will be revised
in FY2018, the first year of the Plan; our long-standing efforts for portfolio restructuring (shift to new drugs) have notyet been completed; and R&D expenditure is expected to remain at a high level for future investment. However, we
will aim to regain profitability towards the final year (FY2020) and after by taking advantage of the progress of our
implemented measures.

To Our Shareholders and Investors
The Mochida Pharmaceutical Group fulfills its social mission as a pharmaceutical company by creating and supplying
high-value-added products that meet customer needs based on its corporate philosophy “Throughout the Company’s
history, it has stressed the importance of farsighted creativity to develop unique products and technologies for the
medical and pharmaceutical world, thereby contributing to the improvement of human health.” We also conduct our
corporate activities with high ethical standards. We are working to become a specialty pharmaceutical company
whose presence is recognized worldwide, and to boost corporate value over the long term.
We thank our shareholders and other stakeholders for your continuing support.

July 2018

Naoyuki Mochida
President

Mochida Pharmaceutical Group3

T h e Ye a r i n R e v i e w

Overview of Performance
The Mochida Pharmaceutical Group (Mochida Pharmaceutical Co., Ltd. and its consolidated
subsidiaries) has continued to institute business reforms across all areas of management. That
includes improving the Group’s management systems, maintaining an optimum level of staffing, andincreasing productivity on a companywide basis.
In the pharmaceutical business, the Group has focused its resources on the priority areas ofcardiovascular medicine, obstetrics and gynecology, dermatology, emergency medicine andpsychiatry. With the aim of establishing itself as a specialty pharmaceutical company, the Group
undertook an aggressive campaign to disseminate academic information concerning mainstay andother products.
In the skin care business, the Group conducted business activities as an expert in basic
skin care products for sensitive skin, and worked to further cultivate the market by stepping up its
marketing activities.
As a result of these efforts, in the fiscal year ended March 31, 2018 the Mochida Pharmaceutical
Group realized consolidated net sales of ¥106,761 million, an increase of 9.7% from the previous year
as the pharmaceutical business segment performed favorably overall, despite the impact from therestriction of drug expenditures, and the skin care business segment was also steady.

Individual Business Segments
In the pharmaceutical business segment, sales rose 9.9% year on year to ¥102,023 million.
Sales of new drugs such as the analgesic for chronic pain/ pain after tooth extraction Tramcet®
and the antidepressant Lexapro® increased year on year, and sales of Lialda®, an ulcerative colitis
treatment launched in November 2016, also grew steadily. The distribution of Tramcet®, which Mochidahas been co-marketing with Janssen Pharmaceutical K.K., was solely led by Mochida in January 2017.
Sales of long-listed drugs such as the treatment agent for hyperlipidemia and arteriosclerosis
obliterans Epadel and the long-acting calcium channel blocker Atelec® declined from the previous year
due to the effect of measures to promote the use of generics, and sales of Dinagest, the treatment ofendometriosis and adenomyosis, also fell year on year due to the market introduction of generics inJune 2017.
Sales of generics increased year on year, reflecting the contribution of the market introduction of
an authorized generic of Dinagest, in addition to growth in sales of biosimilars, generic anticancer drugs
and other generics.

4

Mochida Pharmaceutical GroupMochida also entered into an agreement with Janssen Pharmaceutical K.K. for the marketing ofJanssen’s anticancer agent Doxil ® in Japan, and began marketing Doxil ® in January 2018.
Mochida also entered an agreement with Meiji Seika Pharma Co., Ltd. to market Epadel S in Thailand.
In the skin care business segment, sales increased 5.8% year-on-year to ¥4,738 million, as
market growth showed a gradual upward trend but competition intensified.

Profit and Loss
In terms of profits, although sales increased, the gross profit margin decreased due to changes in
product mix in the pharmaceutical business segment. As a result of a year-on-year decrease in SG&A
expenses however, mainly due to decreased research and development expenses, operating income
was up 2.5% to ¥11,662 million, with recurring income similarly up by 3.1% to ¥12,008 million. Net
income saw a year-on-year increase of 5.8% to ¥9,023 million.

Research & Development
In terms of research, we are focusing on drug discovery activities in an effort to enhance ourdevelopment pipeline by introducing candidate drugs for development at an early stage through thepromotion of open innovation. We are also actively working to introduce drugs to treat schizophrenia
and chronic pain (TRPV1 antagonists).
In terms of clinical development meanwhile, we obtained marketing approval for Etanercept
BS「MA」(etanercept biosimilar, Development code: LBEC0101) as a treatment for rheumatoid
arthritis in January 2018. In January 2018, EA Pharma Co., Ltd. obtained marketing approval for
Goofice® (Development code: AJG533), a treatment for chronic constipation jointly developed with
Mochida. Goofice® went on sale from April 19, 2018. EA Pharma Co., Ltd. is also filing an application
for manufacturing and marketing approval for chronic constipation treatment AJG555, which is also
the subject of an agreement between the two companies. Phase III clinical trials are underway for
adalimumab biosimilar LBAL for the treatment of rheumatoid arthritis, teriparatide biosimilar RGB-10
for the treatment of osteoporosis, FYU-981, as a treatment for gout and hyperuricemia, an additional
indication of Dinagest for the treatment of dysmenorrhea, and a pediatric indication of Lialda® forulcerative colitis. Preparations are underway for a pediatric phase III clinical trial of Lexapro®. A phase I
clinical trial of MD-711 as a treatment for pulmonary arterial hypertension is currently being conducted.
An exploratory study (pilot study) is being conducted on dMD-001 as a treatment for articular cartilage
lesions.
During the fiscal year under review, consolidated R&D expenditures totaled ¥11,912 million.

Research Center (Gotemba)

Mochida Pharmaceutical Group5

Business Activities

Aiming to Becomea Comprehensive
Healthcare Company

As the focus of attention turns increasingly toward QOL and the aging society,health-related issues have moved to center stage in many people’s lives.
As both a healthcare provider and conscientious corporate group, MochidaPharmaceutical’s mission is to make a lasting contribution to the world of medicalcare. Thus, the Group is taking the initiative in providing innovative medical careover a wide range of fields.
Through our activities as a key player in ethical drugs and in medical
treatment and diagnostic reagents, the Mochida Pharmaceutical Group has beenable to develop an extensive and varied product line. We endeavor to provide
beneficial products that embody the Company’s approach of “farsighted,
innovative research” in our core pharmaceuticals business, and in the skin carebusiness and new businesses.

6

Mochida Pharmaceutical Group• Pharmaceuticals
Mochida Pharmaceutical Co., Ltd.
Mochida Pharmaceutical Co., Ltd. has devoted unstinting effort to developing and marketing abroad spectrum of innovative new drugs. The Company’s line of proprietary products began with thedevelopment of an agent for ophthalmologic disorders and grew to encompass hormones, enzymes,
and immunological products. Major successes include the development of Japan’s first topical antiviral
agent, Arasena-A; one of the world’s first human-derived enzyme inhibitors, Miraclid; and naturalinterferon preparations in the field of biotechnology. In the area of diagnostic reagents, the Company
developed Japan’s first pregnancy test kit, Gonavis, and reagents based on monoclonal antibodies
for use in the diagnosis of cancer. We are presently advancing research and development on highvalue-added pharmaceuticals, including development of bio-pharmaceuticals and medicines for thetreatment of intractable diseases.
One of the main objectives of the Company is to maximize the business performance of ourdrugs after they are developed and released, such as the performance of Epadel in hyperlipidemia.
Mochida Pharmaceutical now has unique products and a distinctive product line in our priority
areas of cardiovascular medicine, obstetrics and gynecology, dermatology, psychiatry andgastroenterology, and we are developing marketing strategies to maximize those products’ value.
We will continue responding to medical needs and customer needs in every area, including
research and development and marketing, as we strive to achieve sustainable growth.
Mochida Pharmaceutical Plant Co., Ltd.
Mochida Pharmaceutical Plant Co., Ltd. (MPP) is engaged in contracted manufacturing ofpharmaceutical products. Our plant manufactures injectable, solid (oral), and topical medicines. Dueto their complex nature, injectable solutions are manufactured using the latest technology under the
PIC/S (Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme)
GMP Guide.
• Skin Care Products
Mochida Healthcare Co., Ltd.
Mochida Healthcare Co., Ltd. (MHC) is able to draw on its extensive experience in the development ofpharmaceuticals to create skin care products for the general public, and these are supplied throughpharmacies, drugstores and mail-order sales.
The quality and reliability of the firm’s skin care products are widely recognized by physicians
and pharmacists, as well as consumers. Our skin care products business is currently expanding
product lines to meet growing demand for products in this field. Efforts are also focusing on increasingawareness of the Collage and Skina brands.

Strengthening Business Foundations through Partnerships
The companies of the Mochida Pharmaceutical Group are doing everything possible to achieve theGroup’s aim of making significant contributions to the improvement of human health and welfare as
a comprehensive healthcare group. While working to strengthen the foundations for the sustainablegrowth of each business, we also emphasize the importance of partnerships with other companies
to effectively complement and reinforce our businesses.

Mochida Pharmaceutical Group7

Research & Development

Developing Innovative

New Medicines for Tomorrow
Mochida Pharmaceutical’s principal aim is to contribute to the health of thecommunity by bringing innovative new drugs to market. The motivating force behind
all Company endeavors begins with the initial quest for useful pharmaceuticals andcontinues through the often-lengthy R&D phase right up to the actual market launchof the product. Mochida Pharmaceutical maximizes the manifestation of foresightand originality in all processes based on our unique capabilities and diverse
technological know-how cultivated over the years.
As of May 14,2018

CodeGeneric Name

Indications

AJG555—LBAL

Formulation

Stage

Remarks

Chronic constipation Oral

Filed

Co-development with EA Pharma [Japan]

adalimumab

Rheumatoid arthritis Injection

Phase III

Biosimilar
Licensed-in from LG Chem [Korea]

RGB-10teriparatide

Osteoporosis

Injection

Phase III

Biosimilar
Licensed-in from Gedeon Richter [Hungary]

FYU-981—

Gout andhyperuricemia

Oral

Phase III

Co-development with Fuji Yakuhin [Japan]

MJR-35dienogest

Dysmenorrhea

Oral

Phase III

Licensed-in from Jenapharm (a subsidiary of Bayer AG)[Germany]

MD-0901

mesalazine

Ulcerative colitis<pediatric>

Oral

Phase III<pediatric indication>
Licensed-in from Shire Pharmaceuticals Group [UK]MLD-55

escitalopram

Depression<pediatric>

Oral

Preparation forPhase III<pediatric indication>
Licensed-in from Lundbeck [Denmark]MD-711

treprostinil

Pulmonary arterial
hypertension

Inhalant

Phase I

Licensed-in from United Therapeutics [USA][Medical device]

dMD-001

8

Mochida Pharmaceutical Groupsodium alginate

Articular cartilage
lesionTherapeutic
exploratory study(Pilot study)

Rapid Development of Innovative New Medicines
With its extensive technical resources and expertise, Mochida Pharmaceutical has
established itself as a leader in developing pharmaceuticals utilizing natural bioactive
substances, with successes in the development of Thrombin, Uronase, Miraclid, IFN
Mochida, Epadel, and other products.
Mochida is introducing a schizophrenia drug candidate and a chronic
pain drug candidate (TRPV1 antagonists) developed in our drug research anddevelopment activities.
Mochida Pharmaceutical strives to provide medicines that correspond topatients ongoing requirements as quickly as we can. We maximize foresightand originality in all processes, based on our unique research and development
capabilities and diverse technological know-how cultivated over many years.
In order to make our pharmaceutical research even more efficient, we areenhancing development pipelines by introducing candidate drugs for development
at an early stage by promoting “open innovation.”

Epadel: The Outcome of Farsighted, Innovative Research
A drug that epitomizes the unique and innovative strengths of MochidaPharmaceutical’s R&D capabilities is Epadel, a drug for hyperlipidemia andarteriosclerosis obliterans. Epadel is the world’s first high-purity ethyl icosapentate(EPA-E). Working in cooperation with Nippon Suisan, Mochida Pharmaceuticalmade a historic breakthrough by turning purified EPA-E into a pharmaceutical.
EPA is a biologically active substance present in fish oil. A global epidemiologicalstudy on the relationship between diet and disease has found that people who
consume EPA as part of their diet are much less likely to suffer from such diseases
as high blood pressure and arteriosclerosis-induced myocardial infarction thanthose who do not consume EPA.

GEMTAB®: Development of High Value-Added Products
Mochida is developing high value-added products in response to drug market
needs. GEMTAB® is a formulation technology developed by Mochida which coats
the surface of small tablets with a thickener that turns into a gel with saliva andwater. Tablets with GEMTAB® technology are easy to swallow and easy to takesince the coating masks any bitterness. GEMTAB® is being recognized in medical
practice as a high value-added product from the patient’s point of view.

Mochida Pharmaceutical Group9

Production

Unrivaled Commitment

to Quality

A company operating in the pharmaceutical fieldmust have advanced technological capabilities, notjust in R&D but in manufacturing processes as well. While coordinating personnel,
facilities, and technology of the highest levels, Mochida Pharmaceutical Plant
Co., Ltd. (MPP) ensures systematic control over manufacturing and quality,from individual processes to the overall procedures. This is intrinsic to a quality
assurance system designed to ensure that only products of outstanding quality
leave the company. MPP takes a proactive approach to achieving superior quality
in all aspects of operations. It is an approach that demonstrates the company’s
indomitable spirit of originality and research based on a strong vision of the future.

10

Mochida Pharmaceutical GroupState-of-the-Art Manufacturing and Quality Control
In addition to efficacy and safety, high quality is essential to pharmaceutical products, which directly
impact life and health. MPP ensures strict adherence to the quality standards on which marketing
approval is based. It is by observing Good Manufacturing Practice (GMP) that the Company’s
pharmaceutical manufacturing unit has achieved high levels in both manufacturing and quality control.
MPP’s basic approach and a prerequisite for all manufacturing is to introduce products of superior
quality to the market. While ensuring that each employee operates within the scope of these rules,
MPP still maintains its own unique approach and continues to find new ways to achieve better quality.

Utilizing the Advances in “Hardware” and Technology
MPP manufactures injectable, solid (oral), and topical medicines.
Conforming to FDA and EMA quality control standards, all phases of production at the Injectable
Medicines building, from receipt of raw materials to the shipping of final products, are managed withcomputer systems. MPP utilizes this exacting production system in the manufacture of enzyme,
protein, and biological products and other injectable drugs, processes which require the highest levelsof technology. MPP’s flexible production system further enhances stability in production to cover thevariable order sizes in contract manufacturing, including orders for oral and topical medicines. We
are also actively working to improve packaging technology to prevent the misuse of drugs andincrease conformity with universal design.

Extensive Experience in the Development and Manufacturing of New Medicines
As a manufacturer working in the development and manufacturing of new medicines, MPP has vast
experience in scaling up manufacturing and in technology transfer of products developed in-house.
MPP has arranged a system to advance efficient technology transfer for contract manufacturing.

Giving Careful Consideration to Environmental Protection
MPP’s commitment to protecting natural resources, maintaining natural beauty, and preserving theenvironment around us is not only a fundamental aspect of the Company’s corporate activities, it isbased on the Company’s wish to contribute responsibly in its dealings with the larger community. As
part of this awareness, in all its production activities, MPP places great emphasis on the carefulselection of raw materials for products, reduction of the amount of packaging used, and safe andproper disposal of waste. In recognition of these efforts, the Head Office Plant (Otawara) was awarded
ISO 14001 certification by the International Standards Organization for its environmental management
system. This plant, which used heavy oil as fuel,switched to liquefied natural gas (LNG) and electricity
in March 2009, in an effort to further reduce theamount of carbon dioxide emissions.

Mochida Pharmaceutical Plant Co., Ltd. (Otawara)

Mochida Pharmaceutical Group11

Licensing Activities

Building Strong Partnerships
Mochida Pharmaceutical actively engages inalliances with external partners to ensure that wedeliver new medications that improve patients’
lives. Our partnerships extend from research tomarketing and sales promotion, and we value
highly these alliances of excellence as we takeon challenges together to satisfy unmet medical
needs.
Business Development
Functions

12

Mochida Pharmaceutical GroupCollaboration with Other Companies
Mochida Pharmaceutical prioritizes cardiovascular medicine, obstetrics and gynecology, dermatology, psychiatry andgastroenterology in allocating sales resources for the core pharmaceutical business.
We are strengthening our product pipeline, maximizing product value, and advancing the development ofhigh value-added products to meet unmet medical and customer needs through numerous domestic andinternational partnerships.
For example, we have developed and launched Beselna as a treatment for condyloma acuminatum and actinic
keratosis, licensed in Japan by iNova Pharmaceuticals Pte Limited, and Dinagest, an oral progestin for the treatmentof endometriosis and adenomyosis, licensed by Jenapharm (now a member of the Bayer AG Group). Other examples
include antidepressant Lexapro®, licensed by Lundbeck, Treprost®, a treatment for pulmonary arterial hypertension
originated by United Therapeutics Corporation, and Lialda®, an ulcerative colitis treatment drug licensed by the Shire
Pharmaceuticals Group.
The Company is co-marketing Lexapro® together with Mitsubishi Tanabe Pharma Corporation, andco-promoting the drug together with Yoshitomiyakuhin Corporation.
In March 2016, we concluded a contract with Ajinomoto Pharmaceuticals Co., Ltd. (now EA Pharma Co., Ltd.)for the joint development and sales of AJG533, a treatment for chronic constipation. EA Pharma obtained marketing
approval for AJG533, and EA Pharma and Mochida have been selling the drug under the brand name Goofice®
since April 2018. EA Pharma and Mochida also entered an agreement on the joint development and marketing of
AJG555, a chronic constipation treatment with a different mechanism of action from Goofice®, and EA Pharma filed
an application for manufacturing and marketing approval for AJG555 in November 2017.
In March 2017, we concluded a contract with Fuji Yakuhin Co., Ltd. for the joint development and marketing of
FYU-981, as a treatment for gout and hyperuricemia, which have been developed by Fuji Yakuhin. We also signed anagreement with United Therapeutics Corporation for the exclusive distribution of Tyvaso®, a treatment for pulmonary
arterial hypertension, in Japan.
In biopharmaceuticals, Mochida Pharmaceutical jointly developed the biosimilar G-CSF Filgrastim BS Syringe
for Inj. MOCHIDA with Fuji Pharma and launched it in May 2013. We are now advancing development of teriparatidebiosimilars from the Hungarian pharmaceutical company Gedeon Richter Plc under a business tie-up (long-term
comprehensive collaboration for development and commercialization in Japan). We have also entered agreementswith LG Chem, Ltd. (Korea) for development and commercialization in Japan of an etanercept biosimilar and an
adalimumab biosimilar. In January 2018, Mochida obtained marketing approval for Etanercept BS「MA」, and AYUMI
Pharmaceutical Corporation began marketing it in May.
In addition, the Company has maintained since October 2012 a comprehensive collaboration with Hospira
Japan Co., Ltd. (now Pfizer) for the promotion and distribution of Hospira’s generic oncology injectables in Japan.
In October 2013, the Company started co-marketing of Tramcet®, an analgesic for chronic pain/pain after tooth
extraction, with Janssen Pharmaceutical K.K. The distribution of Tramcet® became solely led by Mochida in January
2017. Mochida also entered into an agreement with Janssen Pharmaceutical K.K. for Janssen’s anticancer agent
Doxil ®, and began marketing Doxil ® in January 2018.
In November 2017, Mochida entered an agreement with Meiji Seika Pharma Co., Ltd. to market in Thailand
Epadel S, a high-purity ethyl icosapentate (EPA) product, which Mochida markets in Japan. In June 2018, Mochidaalso entered an agreement with Amarin
Corporation Plc Group to develop andcommercialize high-purity EPA products in
the US and certain other countries under
Mochida’s intellectual properties, including
new EPA formulation.
Through collaboration with ourvaluable partners, Mochida Pharmaceuticalcontinues fulfilling our mission of providing
pharmaceutical products to meet unmet
medical needs.
Mochida Pharmaceutical Group13

Pharmaceuticals

Pharmaceuticals That Contribute to theCommunities in Which We LiveA pharmaceutical company’s work does not
end when the product is successfully launched.
Drugs must be used properly in order to be
fully effective. This means that there must be aprocess for providing appropriate information
on drugs to medical institutions, for collecting
feedback from the institutions once the drugs arein use, and for informing the various institutionsof the Company’s evaluations and responses on
key issues. Mochida Pharmaceutical sees thistype of information-disseminating activity as away to further contribute to society.

14

Mochida Pharmaceutical GroupProducing Products with Beneficial Effects Tailored to Specific Fields• Cardiovascular medicine
Epadel is the first drug in the world containing EPA-E (ethyl icosapentate: one of the poly-unsaturated fatty acids
contained in fish oil) which was successfully extracted from fish oil and purified to a high degree. This drug has opened
up a new field in the treatment for arteriosclerosis obliterans and hyperlipidemia.
Atelec® (cilnidipine) a calcium channel blocker that is presently considered the first choice for the treatment ofhigh blood pressure, lowers blood pressure all day long with just a single daily dose. Atelec® is a dual L/N type calcium
channel blocker in contrast to regular L type channel blockers. Mochida launched Atedio®, a combination of valsartan
and cilnidipine, in May 2014, and we are maintaining our position in the hypertension treatment market through sales ofAtelec® and Atedio®.
• Obstetrics and Gynecology
Mochida Pharmaceutical has traditionally placed a strong emphasis on the Ob/Gyn area, where it has built animpressive record with hormonal preparations and pregnancy test kits. Estriel is widely recognized for the treatmentof menopausal disorders, vaginitis, and geriatric osteoporosis. The launch of Dinagest, a novel oral progestin, in
January 2008, expanded medication for patients suffering from endometriosis, alongside the GnRH analogue
Suprecur ®. The Company received approval of an additional indication, the reduction of pain caused by adenomyosis,
for Dinagest, and is also conducting trials on Dinagest for the treatment of dysmenorrhea.

Epadel (icosapent)
Epadel is the world’s first ethical drug
containing high-purity ethyl icosapentate
extracted from fish oil. It is used for treatingarteriosclerosis obliterans and hyperlipidemia.
A capsule formulation, seamless capsule, wasadded in 1999.

Atelec® (cilnidipine) and Atedio® (valsartan/
cilnidipine)
Atelec ® is a dual L/N type calcium channel
blocker with a long-acting hypotensive effect.
Atedio®, the first combination drug of valsartan
and cilnidipine in Japan, was launched in May
2014.

Treprost ® (treprostinil)
Treprost ®, a treatment for pulmonary arterial
hypertension, is a Prostaglandin I2 analog, which
can be administrated by either continuous
intravenous infusion or by continuous
subcutaneous infusion using a small
ambulatory infusion pump.

Dinagest (dienogest)
Dinagest is a novel oral therapeutic agent
for endometriosis that selectively activatesprogesterone receptors, and has thetherapeutic effect of inhibiting ovarian function
and the proliferation of endometrial cells. It has
also been approved for the reduction of pain
caused by adenomyosis.

Doxil ® (doxorubicin)
Anticancer agent Doxil ® is a DDS formulationof doxorubicin liposome injection which isindicated for the treatment of ovarian cancer
exacerbated after the chemotherapy, andAIDS-related Kaposi’s sarcoma.

Suprecur ® (buserelin)Suprecur ® is a GnRH analogue. Nasal solution(spray) and micro particle injection are available.
They are used for treating endometriosis anduterine myoma. Suprecur ® nasal solution has
also been approved for the treatment of central
precocious puberty.
Mochida Pharmaceutical Group15

Pharmaceuticals• Dermatology
Florid ®, an antimycotic drug, is a leading product in this treatment area. The drug is provided in the form of a cream fordermatomycosis. Arasena-A is the first antiviral drug for the topical treatment of herpes zoster and herpes simplex to be
developed in Japan. Beselna was launched in December 2007 as the first therapeutic agent for condyloma acuminatum(external genital and perianal warts) in Japan, which gives patients a new treatment option other than surgical therapies.
Beselna was approved for the additional indication of actinic keratosis in November 2011.
• Psychiatry
The antidepressant Lexapro® (escitalopram), which went on sale in August 2011, is a selective serotonin reuptake inhibitor(SSRI). The drug is approved in over 97 countries worldwide, and has been highly evaluated overseas as an antidepressantthat provides a good balance between efficacy and acceptability. Lexapro® has become a new treatment option in Japan
as well. In November 2015, approval was gained for Lexapro® for the additional indication of social anxiety disorder. With
the addition of Lexapro® to our tetracyclic antidepressant Tecipul and our autonomic symptoms drug Grandaxin, MochidaPharmaceutical is committed to improving the QOL for psychiatric patients.
• Gastroenterology
Mochida launched Lialda®, a treatment for ulcerative colitis in November 2016 and Goofice®, a treatment for chronic
constipation, in April 2018. In June 2017, the Company launched Calprotectin Mochida, the first in-vitro diagnostic agent for
ulcerative colitis in Japan. Also in terms of diseases in the gastroenterology area, we are meeting patient needs.

16

Florid ® (miconazole)
Florid ®-F injection is an antimycotic drugfor treating systemic mycosis. An oral gel
formulation was launched, expanding theindications to include candidiasis of the oralcavity and esophagus. Other formulations
include a vaginal suppository and a cream.

Arasena-A (vidarabine)
Arasena-A Ointment is the first topical antiviraldrug developed in Japan. Arasena-A Ointment
and Cream are used for treating herpes zosterand herpes simplex. Arasena-A for I.V. Infusion
is used for herpes simplex encephalitis andherpes zoster in patients with immunosuppression.

Beselna (imiquimod)
Beselna is the first therapeutic agent for
condyloma acuminatum (external genital andperianal warts) in Japan. It has also been
approved for the treatment of actinic keratosis.

Lexapro® (escitalopram)
Lexapro® selectively inhibits the reuptake ofserotonin and has an antidepressant effect.
It provides a good balance between efficacy
and acceptability as a first-line therapy in thetreatment of depression. It has also been
approved for the treatment of social anxiety
disorder.

Lialda® (mesalazine)
Lialda® is a new DDS formulation of
mesalazine. The drug is designed tocontinuously release the medication to andthroughout the colon, and is approved as aonce-daily oral treatment in both the active andremission phases of ulcerative colitis.

Goofice® (elobixibat)
Goofice ® is a once-daily oral treatment forchronic constipation with a novel mechanismof action. The drug inhibits the bile acidtransporter and suppresses the reabsorption ofbile acids, thus enhancing natural defecation.

Mochida Pharmaceutical GroupTramcet ® (tramadol/paracetamol)
Tramcet ®, an analgesic for chronic pain
and pain after tooth extraction which theCompany started co-marketing with Janssen
Pharmaceutical K.K. from October 2013, is thefirst analgesic in Japan combining tramadolhydrochloride and acetaminophen.

Heparin Sodium for Inj. MOCHIDA
Heparin Sodium for Inj. MOCHIDA, ananticoagulant derived from porcine intestinal
mucosa, is indicated for the treatment ofdisseminated intravascular coagulation
syndrome, and prevention of thromboembolism,etc.

Miraclid (ulinastatin)
Miraclid, a multivalent enzyme inhibitor,
represents the first ethical drug using ulinastatin
purified from human urine. Its indications are
acute circulatory failure and acute pancreatitis.

• Drugs for Treatment of Intractable Diseases
Mochida received marketing approval for Treprost ®, a treatment for pulmonary arterial hypertension, in March 2014 and begansales in September. We also received marketing approval for Lialda®, a treatment for ulcerative colitis, in September 2016, andbegan sales in November. We are committed to developing drugs for the treatment of intractable diseases, and will continue toembrace challenges in new medical fields.
• The Generics and Biosimilars
The Mochida Pharmaceutical Group continues to promote its generic drugs business, anchoredby Mochida Pharmaceutical Sales Co., Ltd., on a viable and strategic basis, including biosimilars,
generic oncologic drugs, and value-added pharmaceuticals.
The biosimilar market is expected to grow in line with medical economics needs.
Leveraging the biomedicine experience and technologies built up to date, MochidaPharmaceutical has developed and launched a biosimilar of filgrastim for the treatment of
neutropenia caused by cancer chemotherapy and an etanercept biosimilar for the treatment ofrheumatoid arthritis. We will also work on the development of biosimilars from the viewpoints ofreducing medical expenses and lessening the economic burden on patients.
• The Prominence of EBM
Mochida Pharmaceutical considers evidence-based medicine (EBM) to be important. The Company participated in a largescale clinical trial, the Japan EPA Lipid Intervention Study (JELIS), investigating whether Epadel can prevent cardiovascular
events in hyperlipidemic patients. The test results were presented at the American Heart Association’s (AHA’s) Scientific
Sessions 2005; results showing Epadel significantly suppressed onset of major coronary events received much attention fromexperts in the field.
A stream of useful information has been being derived from JELIS. Utilizing these results, Mochida Pharmaceutical isproviding beneficial and high-quality information to medical experts.
• Diagnostic ReagentsIn the field of diagnostic reagents, Mochida Pharmaceutical pioneered immunological diagnostics inJapan, and developed Gonavis, the nation’s first pregnancy test kit. Since the launch of Gonavis, theCompany has developed a number of products with its own technologies and through joint research
and/or technology transfer with leading overseas companies. Our product lineup includes GonastickW, a one-step, stick-type pregnancy test kit; and Cand-Tec®, a candida antigen detection test.

Mochida Pharmaceutical Group17

Skin Care Products

Providing Truly

Useful Skin Care ProductsHigh Performance Value Added Skin Care Products based on
Dermatology
Under the motto “farsighted, innovative research,” as a member of the MochidaPharmaceutical Group, Mochida Healthcare Co., Ltd. (MHC) focuses on developing
high-performance, value-added skin care products based on dermatologythat only a pharmaceutical company can make through communications withdermatologists, obstetrician-gynecologists and nurses.
These products include Skina Babe, which is the first skin care product thatbabies experience, the Collage series, which provides total skin care for sensitive
skin, and the Skina series of easy hygiene products for the bedridden. They also
include the Collage Furfur series developed from skin research, which are the first
personal care products in Japan that contain an antimycotic (antifungal) agent.
MHC never compromises in the production of its skin care products for theskins of customers of all ages, from babies to senior citizens. We will continue
developing innovative products using the capabilities we have fostered through thedevelopment of pharmaceuticals.

18

Mochida Pharmaceutical Group

Antimycotic
Products

Baby Care
Products

Skin Care
Products

Nursing Care
Products
Developing Products
Based on Dermatological Research

Development of Cosmetics with Foresight and Originality
MHC’s foresight and originality are evident in the development of the Collage series,
the nation’s first skin care products, containing natural soluble collagen (S-Collagen).
After many years of research based on dermatological science, in 2003, theCompany launched the Collage S series using “trimethylglycine” to further improvethe moisturizing activity of the original Collage series.
It developed the anti-aging skin care products series Collage B.K. Age forthe skin of customers in their 40s and 50s which tends to be sensitive and dry, andbegan sales from May 2013.
Then, in 2014, we revised the Collage series, which combines two ceramides
and collagen. This is a basic skin care product series for sensitive and dry skinthat removes old keratin and then gives moisture to the skin, supporting the barrier
function.
The Company is focusing on product development that responds to changing
customer needs. For example, it has released a mild soap series, which provides achoice of products suited to a range of skin types and uses.

Collage series

Medically Based Technology and Experience
MHC’s products based on dermatology – including the Collage Soap series of lowirritating soap formulated for each specific skin type, the Collage D Medi Power
series of moisturizing products for dry skin, and Japan’s first shampoo containing
an antimycotic agent – are highly regarded by consumers for their effectiveness. We
currently provide Collage Furfur Next shampoo and rinse containing an antimycotic
agent, and are developing this into an antimycotic series including body soap. We
have recently launched the Collage Furfur Hair Growth series, which contains female
hormones to tackle the issue of hair loss. MHC will continue to improve the qualityof life for people suffering from skin conditions in the future through products suchas these.

Collage B.K.AGE series

From Baby Care to Geriatric CareIn the field of baby care products, Skina Babe, having the biggest share in baby
bath oil, has continued to protect infants’ skin since it was introduced over 40 years
ago. From these early days, MHC has also been developing products for seniorcitizens, and these will become even more necessary in the future. The Company
markets Skina Fukifuki and Skina Clen, skin cleansing and bed bath products, andSkina Dry Shampoo, a foam-type hair shampoo that eliminates the need for rinsing.
These products contribute to the betterment of nursing care for the bedridden. The
Company aims to continue developing products that will be beneficial to the skincare of every generation.

Collage Furfur series

Skina Babe and Skina series

Mochida Pharmaceutical Group19

Re
p rmoewntth
Hi gs he lai rgchht s& oDf eOv ue rl oG

Ryokichi Mochida

Nobuo Mochida

Ei Mochida

Susumu Watanabe

20

Mochida Pharmaceutical Group

1913

Mochida was established by Ryokichi Mochida, and started production and marketingof Luestin (antiluetic) and Ogoko (ophthalmic ointment).

1918

The Company was renamed Mochida Pharmaceutical Company.

1932

Pelanin (first estrogen preparation developed in Japan)

1945

The Company was incorporated.

1951

Sprase (first hyaluronidase preparation developed in Japan)

1954

Began overseas marketing with exports to Taiwan.

1956

Thrombin Mochida (hemostatic enzyme)

1959

Transferred focus of sales strategy to obstetrics and gynecology.

1962

Established the Immunology Division.

1963

Listed on the Second Section of the Tokyo Stock Exchange (TSE).

1964

Nobuo Mochida was appointed president.
Gonavis (Japan’s first immunological pregnancy test kit); Kimotab (anti-inflammatory)

1967

Completed the Research Laboratory in Oji.

1970

Established the Paramedical Division.
Gonavislide (pregnancy test kit); Uronase (fibrinolytic); Skina Babe (baby bath oil)1972

Established the Medical Electronics and Equipment Division.
Completed the Shizuoka Plant.

1975

Listed on the First Section of the TSE.

1976

Completed the new headquarters office building in Yotsuya.

1978

Received a Noteworthy Invention Testimonial from the Science and Technology Agency for
the Medilaser balance-type surgical laser head.

1979

Rocornal

1980

Developed monoclonal antibody technology for an immunodiagnostic test.
Medilaser-S

1981

Signed an agreement with Hayashibara Biochemical Laboratory, Inc. for joint research of interferon.

1982

Completed the Fuji Central Research Laboratory.

1983

Established the Mochida Memorial Foundation for Medical and Pharmaceutical Research.

1984

Nobuo Mochida was awarded the Medal with Purple Ribbon for research on the first surgicallaser unit developed in Japan.
Arasena-A

1985

Ei Mochida was appointed president.
Miraclid

1986

Florid ®-F injection; Grandaxin

1987

Ei Mochida was awarded the Medal with Purple Ribbon for R&D activities on an
immunochemical diagnostic reagent.

1988

Signed an agreement with Taisho Pharmaceutical Co., Ltd., allowing that company to market
Dermarin, an OTC drug for treating dermatomycosis.
Collage Soap series; Isoprinosine ®; IFNα Mochida; IFNβ Mochida

1989

Finalized agreements with Upjohn Co. for developing and marketing its prostaglandin derivative.
Tecipul1990

Susumu Watanabe was appointed president.
Concluded a marketing agreement with Matsushita Electric Industrial Co., Ltd. for the
Medilaser-10S fiber-optic carbon dioxide surgical laser unit.
Epadel Capsule 300

1991

Commenced operations at the Otawara Plant.
Concluded agreement of an antimycotic agent with Imperial Chemical Industries, PLC.
Mammotec

1992

Signed agreements with Ostex International, Inc. for the commercialization and marketing ofOsteomark ®; and with Yokogawa-Hewlett-Packard, Ltd. to market an obstetric care unit.
Commenced J-MIC (EBM study for Rocornal ).

1994

Additional indication for Epadel (for hyperlipidemia) was approved.

1995

Signed agreements with Smithkline Beecham Seiyaku K.K. for co-marketing of Arasena-A.

1996

Signed agreements with Norian Corporation for the development and marketing in Japan of
Norian SRS ®; and with Dainippon Pharmaceutical Co., Ltd. for co-marketing of Epadel
in Japan.
Commenced JELIS (EBM study for Epadel ).

1997

Concluded distribution agreement with Ajinomoto Co., Inc. for Atelec ®.
Gonastick

1998

Co-marketed Dainippon Pharmaceutical’s Cetapril ® (ACE inhibitor).

1999

Naoyuki Mochida was appointed president.
Concluded distribution agreement with Janssen Kyowa Co., Ltd. for Ortho ® 777-28/M-21.
Licensed a patent of Fas/FasL (for gene therapy) to Novartis.
Licensed a patent of Fas/FasL (for screening) to Bristol Myers Squibb.
Epadel S 300 and 600; Collage Furfur; Miotecter ®

2000

Signed agreements with RIKEN for co-research in structural genomics.

2001

Signed agreements with 3M for the development and marketing of Aldara.

2002

Signed agreements with Aventis Pharma Ltd. for the distribution and co-promotion ofSuprecur ®; and with Lundbeck A/S for co-development and co-marketing of escitalopram.

2003

Signed agreements with Novo Nordisk for the distribution of Novo-Heparin.
Started operation of Mochida Medical Systems Co., Ltd.
Thrombin Mochida Soft bottle; Novo-Heparin; Collage S series

2004

Started operation of Mochida Healthcare Co., Ltd.
Started operation of Mochida Siemens Medical Systems Co., Ltd.
Epadel S 900

2005

Started operation of Mochida Pharmaceutical Plant Co., Ltd.

2006

Collage Whitening series

2007

Signed agreements with JCR Pharmaceuticals Co., Ltd. for co-development andcommercialization of a cellular-based drug (agreement terminated 2011); with Novartis Pharma
K.K. for co-promotion of Diovan ® (agreement terminated end of 2008); and with United
Therapeutics Corporation for the distribution of Remodulin ®.
Beselna2008

Signed a license agreement with Wyeth Pharmaceuticals Inc. for TRPV1 antagonists(agreement terminated 2010).
Dinagest; Divigel ®; Collage White Peel2009

Signed a license agreement with Shire Pharmaceuticals Group plc (U.K.) for Lialda ®.
Gonastick W; Collage Furfur Next

2010

Signed agreement with Fuji Pharma Co., Ltd. for co-development of G-CSF; and with
Mitsubishi Tanabe Pharma Corporation for co-marketing of escitalopram.

2011

Signed a license agreement with Merck (MSD outside the United States and Canada) for the
potential treatment for type-2 diabetes (agreement terminated 2015).
Lexapro ®

2012

Fastic ®

2013

Co-marketed Janssen Pharmaceutical’s Tramcet ®.
Epadel switch-OTC drug; Collage B.K. Age series; Filgrastim BS Syringe for Inj. Mochida2014

Atedio ®; Collage series; Treprest ®

2016

Signed agreement with Ajinomoto Pharmaceuticals Co., Ltd. for co-development of AJG533.
Lialda ®

2017

Signed agreement with Fuji Yakuhin Co., Ltd. for co-development of FYU-981; with United
Therapeutics Corporation for the distribution of Tyvaso®; with Ajinomoto Pharmaceuticals Co.,
Ltd. for co-development of AJG555; and with Janssen Pharmaceutical K.K. for the distributionof Doxil ®.
Calprotectin MOCHIDA

2018

Goofice®; Etanercept BS「MA」

Naoyuki Mochida

Mochida Pharmaceutical Group

21

Re
eo
arc
l oapnmCo sr paht e &GDo ev ve er ncent

Basic Policy on Corporate GovernanceMochida Pharmaceutical strives to increase its Group’s corporate value by placing the fulfillmentof corporate governance and the reinforcement of compliance at the axis of its overall Groupmanagement, to better respond to its stakeholders’ trust and expectations.
As part of our policy on reinforcing corporate governance, important management decisions
are discussed thoroughly by the Management Policy Meeting, if necessary, and are made throughdiscussion by the Board of Executive Managing Directors and the Board of Group Management,
both of which meet on a weekly basis. We clearly separate the functions of the Board of Directors
into management decision-making and the supervision of business operations. For the purpose of
expediting management decision-making and business operations, the Group has introduced an
Executive Officer system.
Governance Structure
Mochida Pharmaceutical put in place the Board of Directors (including Outside Directors) and the
Audit & Supervisory Board (including Outside Audit & Supervisory Board Members) as organizations
under the Companies Act.

Corporate Governance Structure

22

Mochida Pharmaceutical GroupAs reasons for adopting this governance structure, considering the Company’s size andbusiness nature, we judge that at this point in time, the most suitable governance structure (1) topursue management efficiency and (2) to ensure the appropriate function of checking the management
simultaneously requires: (1) management decision-making by the Board of Directors with a reasonable
number of members, comprising Inside Directors with thorough knowledge of the Company and its
business and Outside Directors with abundant knowledge and experience in specialized fields, and(2) a system for checking the management by Audit & Supervisory Board Members including Outside
Audit & Supervisory Board Members.
Outside Directors and Outside Audit & Supervisory Board Members supervise the management
and perform auditing from an independent standpoint, because they have no business relationshipor any other special interests or conflict of interests with the Mochida Pharmaceutical Group or its
management, or conflict of interests with other shareholders in general.
Internal Control System, Risk Management System, Compliance System, and CSR
Mochida Pharmaceutical maintains, operates and evaluates its internal control system based on
resolutions by the Board of Directors under the Companies Act and on the Financial Instruments
and Exchange Act. Specifically, we maintain a companywide risk management system based on the“Mochida Pharmaceutical Group Risk Management Rules” to manage major risks affecting our overallbusiness, as part of our internal control system based on the Companies Act.
As measures for reinforcing compliance, we maintain our compliance system by (1) establishingthe “Code of Conduct of Mochida Pharmaceutical Group”, (2) holding regular meetings of the Ethics
Committee which includes outside experts, and (3) establishing the Corporate Ethics Promotion
Department etc.; and we run regular training programs on compliance for our group employees.
The Mochida Pharmaceutical Group will continue striving to ensure full compliance, and to respondpromptly to various environmental changes, by receiving appropriate advice from our attorneys andAccounting Auditor as necessary.
While the concerned departments are earnestly addressing Corporate Social Responsibility(CSR), we have also established the CSR Promotion Committee as a basic body to promote CSR
throughout the Mochida Pharmaceutical Group and to meet more precisely social demands.
Audit Structure
Mochida Pharmaceutical has established the Internal Audit Department as an internal audit
organization which (1) implements internal audits of the business operations of the MochidaPharmaceutical Group in its entirety from the viewpoint of compliance and risk management,(2) reports the results of such audits and provides advice to the Board of Executive Managing
Directors and the Board of Directors and (3) reports such results to the Audit & Supervisory Board
Members.
To secure lawfulness and transparency of management decision-making and business operations, inaccordance with fiscal year auditing policy and plans, each Audit & Supervisory Board Member strives to(1) smoothly communicate with Board Directors, the Internal Audit Department etc., (2) collect the relevant
information and improve the auditing environments. Each Audit & Supervisory Board Member also attends
meetings of the Board of Directors and other important meetings, and investigates business operations andassets at the headquarters, main business offices and subsidiaries of Mochida Pharmaceutical, including
supervision and verification of the status of the internal control system, the independence of the Accounting
Auditor, and the appropriate execution of audits by the Accounting Auditor.
Mochida Pharmaceutical is also audited by our Accounting Auditor, Ernst & Young ShinNihon
LLC, based on the provisions of the Companies Act and the Financial Instruments and Exchange Act.
The Internal Audit Department, Audit & Supervisory Board Members, and Accounting Auditor work
closely to ensure the effectiveness of the audits.

Mochida Pharmaceutical Group23

Main Product Listing

Ethical Drugs
Cardiovascular Agents• Epadel [icosapent] (capsule)
Arteriosclerosis obliterans, Hyperlipidemia• Atelec® [cilnidipine] (tablet) Hypertension• Atedio® [valsartan/cilnidipine] (tablet) Hypertention• Rocornal [trapidil] (tablet, fine granule)
Angina pectoris• Treprost ® [treprostinil] (injection)
Pulmonary arterial hypertension (PAH)
Analgesic Agent• Tramcet ® [tramadol/paracetamol] (tablet)
Chronic pain, Pain after tooth extraction
Gastrointestinal Agent• Lialda® [mesalazine] (tablet) Ulcerative colitis• Goofice® [elobixibat] (tablet) Chronic constipation
Hormone Preparations• Dinagest [dienogest] (tablet) Endometriosis,
Pain caused by adenomyosis• Divigel ® [estradiol] (gel) Menopausal symptoms
such as hot flash and hidrosis• Suprecur ® [buserelin] (nasal solution, micro particle
injection) Endometriosis, Uterine myoma,
Central precocious puberty (injection)• Desopan® [trilostane] (tablet) Antiadrenal cortical
hormone• Estriel [estriol] (tablet, vaginal tablet, depot
injection) Menopausal disorders (tablet and depot
injection), Geriatric osteoporosis (tablet), Vaginitis• HCG Mochida [human chorionic gonadotrophin](injection) Infertility, Threatened miscarriage,
Habitual abortion
Neurological Agents• Lexapro® [escitalopram] (tablet)
Depression and depressive symptoms, Social
anxiety disorder• Grandaxin [tofisopam] (tablet, fine granule)Autonomic symptoms• Tecipul [setiptiline] (tablet) Depression anddepressive symptoms
Anti-Infectives• Florid ® [miconazole] (injection, vaginal suppository,
cream, oral gel) Mycosis• Arasena-A [vidarabine] (injection, ointment, cream)
Herpes zoster, Herpes simplex, Herpes simplex
encephalitis (injection)• Isoprinosine ® [inosine acedoben dimepranol] (tablet)
Subacute sclerosing panencephalitis (SSPE)• Francetin [neomycin] (powder) Antibiotic• Beselna [imiquimod] (cream) Condyloma
acuminatum, Actinic keratosis
Antidiabetes Agent• Fastic ® [nateglinide] (tablet) Diabetes
24

Mochida Pharmaceutical Group

Anticancer Agent• Doxil ® [doxorubicin] (injection) Ovarian cancer
exacerbated after the chemotherapy, AIDS-related
Kaposi’s sarcoma
Biological Preparations• Miraclid [ulinastatin] (injection) Acute circulatory
failure, Acute pancreatitis• Thrombin [thrombin] (liquid, fine granule)
Hemostatic• Heparin Sodium for Inj. MOCHIDA [heparin
sodium] (injection) Thrombosis• Uronase [urokinase] (injection) Acute myocardial
Infarction (120,000 and 240,000 units), Cerebral
Thrombosis (60,000 units)
Biosimilar• Filgrastim BS Syringe for Inj. MOCHIDA[filgrastim] (injection) Neutropenia• Etanercept BS「MA」[etanercept] (injection)
Rheumatoid arthritis, Polyarticular-course juvenile
idiopathic arthritis (vial)

Diagnostic Reagents
Reagents for Fertility/Infertility• Gonastick25 (hCG)• Gonastick W (hCG)
Other Reagents• Cand-Tec® [Candida kit]
• Calprotectin MOCHIDA [Calprotectin kit]

Skin Care Products

Mochida Healthcare Co., Ltd.

Collage Series
Face and Body Care
• Collage Skin Care series		 (Moisture lotion, moisture milk, moisture cream,
UV protection, cleansing, powder wash)• Collage Whitening series• Collage B.K.AGE series• Collage Soap series• Collage D Medi Power series• Collage Furfur Soap series
Hair Care• Collage Furfur Next series
		 (Shampoo and conditioner for dandruff)• Collage Furfur Scalp Shampoo• Collage Furfur Hair Growth Lotion and Spray• Collage Shampoo S• Collage Rinse S
Skina Babe and Skina Series• Skina Babe (Baby bath oil)
• Skina (Cleanser)• Skina Clen (Gentle skin cleanser)• Skina Fukifuki (Cleanser)• Skina Dry Shampoo

Financial Section
26 Six-Year Summary
27 Consolidated Statement of Income
Consolidated Statements of Comprehensive Income (Unaudited)
28 Consolidated Balance Sheets (Unaudited)
30 Consolidated Statements of Changes in Net Assets (Unaudited)
32 Consolidated Statements of Cash Flows (Unaudited)

Mochida Pharmaceutical Group25

S i x - Ye a r S u m m a r y
Mochida Pharmaceutical Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

Millions of Yen

2018

2017

2016

2015

2014

2013

¥106,761¥ 97,349¥ 92,272¥ 87,252¥ 93,947¥ 89,210

Years ended March 31

For the Year:Net sales
Cost of sales

53,194

41,03937,27133,90434,35832,777

Selling, general and administrative expenses

41,90444,93642,84541,65842,98742,414

Operating Income

11,662

11,374

12,154

11,68916,60014,017

Income before income taxes and minority interests

12,116

11,58312,097

11,14115,806

Income taxes

3,092

Net income

14,061

3,057

3,946

3,597

5,913

4,909*6

9,023

8,526

8,150

7,544

9,892

9,152

¥116,302¥112,016¥102,043¥ 91,904¥ 93,842¥ 86,692

*2

*1

*3

*4

*5

At Year-End:Total current assets
Total current liabilities

29,57430,26925,79522,44329,041

25,354

Working capital

86,72881,74776,247

69,46164,80061,338

Total property, plant and equipment

13,91515,00915,79916,622

17,484

16,677

Total long-term liabilities

5,793

6,233

6,988

6,443

7,939

6,932

Total net assets

119,687

111,869

104,929

98,67093,68888,542

Total assets

155,054

148,372

137,713

127,557

130,669

120,828

1,001

1,060

1,539

1,272

2,598

1,529

Other Statistics:
Capital expenditures

Yen

Per Share Data:
Net income*7
Cash dividends*8

¥

454.6
170.0

¥

429.5
155.0

¥

410.5
150.0

¥

377.3
150.0

¥

488.7
–

¥

442.3
27.0

Number of employees (people)

1,666

1,713

1,726

1,746

1,726

1,753

Number of shares outstanding at end of year (thousand)

20,315

20,51520,98021,10021,900113,000*1: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥3,363 million), income taxes-deferred (-¥270 million) is included.
*2: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,072 million), income taxes-deferred (-¥1,014 million) is included.
*3: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,345 million), income taxes-deferred (-¥398 million) is included.
*4: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥3,265 million), income taxes-deferred (+¥331 million) is included.
*5: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥6,378 million), income taxes-deferred (-¥465million) is included.
*6: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,610 million), income taxes-deferred (+¥298million) is included.
*7: The Company implemented a reverse stock split of one share for every five shares of common stock on October 1, 2013. Net income per share are calculated
based on the assumption that the reverse split of stocks was executed at the beginning of fiscal year 2012.
*8: The Company implemented a reverse stock split of one share for every five shares of common stock on October 1, 2013. The dividend per share for the period
ending March 2013 shows the actual amount before the reverse stock split, and the total amount of dividends for the period ending March 2014 is listed as “–”.

26

Mochida Pharmaceutical GroupConsolidated Statement of Income / Consolidated Statements of Comprehensive Income (Unaudited)
Mochida Pharmaceutical Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

Consolidated Statements of Income (Unaudited)Thousands of
U.S.Dollars

Millions of Yen

Years ended March 31

2018

2017

2016

2018

¥106,761¥ 97,349¥ 92,272$1,004,911

Cost of Sales

53,194

41,03937,271

500,705

Gross profit

53,56656,31055,000504,205

41,90444,93642,845394,428

11,662

11,374

12,154

109,777

Interest and dividend income

224

207

209

2,109

Interest and charge (commission) expense

(39)

(46)

(113)

(375)

Real estate rent

68

67

64

645

Others

93

45

76

877

Net Sales

Selling, General and Administrative Expenses
Operating income
Other Income (Expenses):

Recurring income

346

273

237

3,256

12,008

11,64812,392

113,034

–

–

156

–

Extraodinary Gains (Losses):Gain on sales of investment securities
Gain on sales of fixed assets

194

0

–

1,831

Loss on sales and disposal of fixed assets

(86)

(64)

(53)

(816)

Impairment loss

Income before income taxes and minority interests

–

–

(397)

–

107

(64)

(294)

1,014

11,58312,097

114,049

12,116

Income taxes

3,092

3,057

3,946

29,110Net income

9,023

8,526

8,150

84,9399,023¥ 8,526¥ 8,150

Profit attributable to owners of parent¥

Consolidated Statements of Comprehensive Income(Unaudited)

*2

*3

¥

$

84,939Thousands of
U.S.Dollars

Millions of Yen

Years ended March 31

Income before minority interests

*1

2018

2017

2016

9,023

¥ 8,526¥ 8,150

2,049

343

1,225

19,288

184

815

(255)

1,735

2018
$

84,939Other comprehensive income, net of tax
Unrealized gain on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Total: Other comprehensive income, net of tax

2,233

1,159

970

21,023

Total comprehensive income

11,257

9,686

9,121

105,962

Owners of parent

11,257

9,686

9,121

105,962

Minority interests

–

–

–

–

Total comprehensive income attributable to:*1: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥3,363 million), income taxes-deferred (-¥270 million) is included.
*2: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,072 million), income taxes-deferred (-¥1,014 million) is included.
*3: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,345 million), income taxes-deferred (-¥398 million) is included.
Note: Unless otherwise indicated, all dollar figures herein refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for convenience only, at the rateof ¥106.24 = $1.00, the approximate exchange rate on March 31, 2018.

Mochida Pharmaceutical Group

27

Re
C
o sn es ao rl ci dha &teD
d eBv ae ll ao np cmee nS th e e t s ( U n a u d i t e d )Mochida Pharmaceutical Co., Ltd. and Consolidated Subsidiaries
March 31

Thousands of
U.S.Dollars

Millions of Yen

2018

2017

¥ 45,683¥ 46,308

31,32030,439294,806

449

354

4,233

Marketable securities

7,999

7,999

75,299Inventories

25,007

21,263

235,386

Deferred income taxes

3,150

2,670

29,658Other current assets

2,691

2,980

25,332

Total current assets

116,302

112,016

1,094,714

Buildings and other structures

5,677

5,944

53,442

Machinery and equipment and transportation equipment

2,207

2,336

20,774

Land

5,256

5,772

49,474

Construction in progress

158

196

1,493

Others

615

760

5,796

Intangible fixed assets

365

410

3,441

Total fixed assets

14,281

15,420134,422

Investments in securities

17,597

14,645

165,643

Deferred income taxes

860

2,084

8,100

6,012

4,205

56,592

24,47020,935

230,336¥ 155,054¥ 148,372$ 1,459,473

2018

ASSETS
Current Assets:
Cash and time deposits
Notes and accounts receivable
Electronically recorded monetary claims-operating$

429,998

Fixed Assets:
Property, plant and equipment:

Investments and Other Assets:

OthersTotal investments and other assets
Total Assets

Note: Unless otherwise indicated, all dollar figures herein refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for convenience only, at the rateof ¥106.24=$1.00, the approximate exchange rate on March 31, 2018.

28

Mochida Pharmaceutical GroupThousands of
U.S.Dollars

Millions of Yen

2018

2017

¥ 13,430¥ 14,319

Electronically recorded obligations-operating

3,067

2,739

28,873

Income taxes payable

1,233

1,903

11,614

Provision

3,377

3,350

31,793

Other current liabilities

8,463

7,956

79,668

Total current liabilities

29,57430,269278,371

Net defined benefit liability

5,374

5,731

50,584

Other long-term liabilities

419

501

3,945

Total long-term liabilities

5,793

6,233

54,529Total liabilities

35,36736,502332,900

Paid-in capital

7,229

7,229

68,052

Capital surplus

1,871

1,871

17,612Retained earnings

104,625

100,040

984,802(2,349)(3,349)(22,119)

111,376

105,792

1,048,349

8,305

6,256

78,178

4

(179)

44

8,310

6,076

78,223

119,687

111,869

1,126,572¥ 155,054¥ 148,372$ 1,459,473

2018

LIABILITIESCurrent Liabilities:
Notes and accounts payable$

126,421Long-Term Liabilities:

NET ASSETS
Shareholders’ equity

Treasury stock
Total Shareholders’ equity
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Minority interests
Total net assets
Total Liabilities and Net Assets

Mochida Pharmaceutical Group29

Co n s o lid a t e d S t a t e m e n t s of C h a n g es i n N et A s s et s ( U naudi t ed)
Mochida Pharmaceutical Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

Shareholders’ equity
Common stock

Balance at beginnig of year

Capital surplus¥ 7,229

Retained earnings¥ 1,871¥ 96,598

Change in the fiscal year:
Dividends from surplus(2,730)Net income

8,526

Acquisition of treasury stock
Disposal of treasury stock0

Retirement of treasury stock(0)(2,354)

–

–

3,442

7,229

1,871

100,040¥ 7,229¥ 1,871¥ 100,040

Net changes of items other than shareholders’ equity
Total
Balance at end of year

Balance at beginnig of year
Change in the fiscal year:
Dividends from surplus(3,424)

Net income

9,023

Acquisition of treasury stock
Disposal of treasury stock0

Retirement of treasury stock(0)(1,014)

Net changes of items other than shareholders’ equity
Total
Balance at end of year

Balance at beginnig of year

–

–

4,584

7,229

1,871

104,625$ 68,052$ 17,612$ 941,648

Change in the fiscal year:
Dividends from surplus(32,235)

Net income

84,939Acquisition of treasury stock
Disposal of treasury stock–

Retirement of treasury stock–(9,549)––43,15468,052

17,612984,802

Net changes of items other than shareholders’ equity
Total
Balance at end of year

30

Mochida Pharmaceutical GroupMillions of yen

Year ended March 31, 2017
Valuation and translation adjustments
Treasury stock

Unrealized gain (loss) on
available-for-sale securities

Total¥ (5,687)¥ 100,012¥ 5,912Remeasurementsof defined benefit plans¥

Total net assets

Total

(995)

¥ 4,917¥ 104,929(2,730)(2,730)

8,526

8,526

(16)

(16)

(16)

0

0

0

2,354

–

–
343

815

1,159

1,159

2,338

5,780

343

815

1,159

6,939

(3,349)105,792

6,256

(179)

6,076

111,869(179)¥ 6,076¥ 111,869

Millions of yen

Year ended March 31, 2018
¥ (3,349)¥ 105,792¥ 6,256¥(3,424)(3,424)

9,023

9,023

(15)

(15)

(15)

0

0

0

1,014

–

–
2,049

184

2,233

2,233

999

5,584

2,049

184

2,233

7,817

(2,349)111,376

8,305

4

8,310

119,687$ 58,890$ (1,690)$ 57,200$1,052,987

Thousands of U.S.Dollars$ (31,526)$ 995,787(32,235)(32,235)

84,93984,939

(142)

(142)

(142)

0

0

0

9,549

–

–
19,288

1,735

21,02321,023

9,406

52,561

19,288

1,735

21,02373,585(22,119)

1,048,349

78,17844

78,223

1,126,572

Note: Unless otherwise indicated, all dollar figures herein refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for convenience only, at the rateof ¥106.24=$1.00, the approximate exchange rate on March 31, 2018.

Mochida Pharmaceutical Group31

Consolidated Statements of Cash Flows (Unaudited)
Mochida Pharmaceutical Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

Thousands of
U.S.Dollars

Millions of Yen

2018

2017

2018

¥ 12,116¥ 11,583$ 114,049

Cash flows from operating activities:
Income before income taxes and minority interests
Depreciation and amortization

2,618

2,734

24,648Loss (gain) on sale and disposal of fixed assets

(107)

64

(1,014)

Increase (decrease) in provision for bonuses

(61)

(86)

(583)

Increase (decrease) in retirement benefits liability

(91)

462

(863)

Interest and dividend income

(224)

(207)

(2,109)

39

46

375

Interest and charge (commission) expense
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories(976)(4,594)(9,186)(3,743)(3,444)(35,240)

Decrease (increase) in other current assets

558

(518)

5,259

Increase (decrease) in notes and accounts payable-trade

(559)

5,802

(5,269)

Increase (decrease) in other current liabilities
Other
SubtotalInterest and dividends received
Interest and commission paid

26

111

249

(2,639)(1,326)(24,846)

6,955

10,62765,467

224

212

2,109

(39)

(47)

(375)

(3,855)(5,209)(36,291)

3,283

5,583

30,909Payments into time deposits(19,500)(19,500)(183,546)

Proceeds from withdrawal of time deposits

19,500

10,250183,546

Purchase of short-term investment securities(5,000)(6,000)(47,063)

Proceeds from sales of short-term investment securities

5,000

14,50047,063

Payment for purchases of tangible and intangible fixed assets(1,095)(1,106)(10,307)710–

Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:

Proceeds from sales of property, plant and equipment
Other
Net cash used in investing activities

(41)

21

(392)

(426)

(1,835)(4,011)

–

(500)

–

(3,422)(2,726)(32,217)

(15)

(16)

(143)

Cash flows from financing activities:
Repayment of short-term debt
Dividends paid
Payment for acquisition of treasury stock
Proceeds from disposal of treasury stock
Other
Net cash used in financing activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents

0

0

0

(45)

(48)

(425)

(3,483)(3,291)(32,786)

0

(0)

4

(625)

456

(5,885)

Cash and Cash Equivalents at Beginning of Year30,80830,351

289,985

Cash and Cash Equivalents at End of Year30,18230,808284,100

Net increase (decrease) in cash and cash equivalents

Note: Unless otherwise indicated, all dollar figures herein refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for convenience only, at the rateof ¥106.24=$1.00, the approximate exchange rate on March 31, 2018.

32

Mochida Pharmaceutical GroupCorporate Data

Mochida Pharmaceutical Co., Ltd. Corporate Data (As of June 28, 2018)
Founded

Subsidiaries

April 16, 1913

Mochida Pharmaceutical Plant Co., Ltd.
431, Nakadawara,
Otawara, Tochigi 324-0062, Japan

Incorporated
April 28, 1945

Paid-in Capital¥7.2 billion

Stock Exchange Listing
Tokyo Stock Exchange, First Section

Employees
1,666 (Consolidated)

Head Office7, Yotsuya 1-chome,
Shinjuku-ku, Tokyo 160-8515, Japan
Phone: +81-3-3358-7211
Facsimile: +81-3-3358-7887
Internet Home Page:
http://www.mochida.co.jp/

Mochida Healthcare Co., Ltd.
Paxxs Building,
2-12, Ichigaya-Honmura cho,
Shinjuku-ku, Tokyo 162-8451, Japan

Affiliated Companies andOrganizations• Mochida Memorial Foundation for
Medical and Pharmaceutical
Research

Mochida Pharmaceutical Sales Co., Ltd.
Paxxs Building,
2-12, Ichigaya-Honmura cho,
Shinjuku-ku, Tokyo 162-0845, Japan
Technonet Co., Ltd.
7, Yotsuya 1-chome,
Shinjuku-ku, Tokyo 160-8515, Japan
Technofine Co., Ltd.
342, Gensuke,
Fujieda, Shizuoka 426-8640, Japan

Research Laboratories• Research Center(Gotemba, Shizuoka)• Pharmaceutical Laboratory(Fujieda, Shizuoka)

Mochida’s Head Office in Tokyo

Members of the Board

Corporate Advisor

Executive Officers

President

Makoto Aoki

Takayuki Kato

Naoyuki Mochida

Outside Directors

Senior Executive Managing

Tomoo Kugisawa

Directors

Hirokuni Sogawa

Chu Sakata

Yutaka Kawakami, Ph.D.
Kazumasa Fukuchi
Shigeharu Suzuki
Tomokazu Matsusue

Keiichi Sagisaka

Audit & Supervisory Board
Members

Tadashi Morikawa

Executive Managing Directors

Full-time Audit & Supervisory

Takeshi Mochida

Yoichi Kono

Board Members

Reiko Nakano

Junichi Sakaki, Ph.D.

Yoshiharu Hashimoto

Kiyoshi Mizuguchi, Ph.D.

Kazuhiro Miyaji

Executive Directors

Outside Audit & Supervisory

Hiroshi Nakamura

Board Members

Ichiro Takahashi

Hiroshi Watanabe

Masayoshi Takeda

Tetsuya Kobayashi
Kyosuke Wagai

Mochida Pharmaceutical Group33

“Plaisir”
This sculpture is “Plaisir” (Joy), a work created by thewell-known Japanese artist Taro Okamoto (1911–1996)
for the Company’s 65th anniversary in 1978. “Plaisir”
was named after our wish to be tied to people with joy,and our joy in contributing to human health and welfare,
as a comprehensive healthcare company.

http://www.mochida.co.jp/

Printed in Japan2018.7