Annual Review

2016Year ended March 31, 2016

Profile
Mochida Pharmaceutical Co., Ltd. responds to the widespread requirementsof medical care by putting into practice its motto of “Foresighted, innovative
research.” With the advent in Japan of the aging society and a stronger
emphasis on the 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 proactively in the far-reaching areas that constitutemedical care.

Corporate Philosophy
Throughout the Company's history, it has stressed the importance offoresighted 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

2016

2015

2016

¥ 92,272¥ 87,252$ 818,886

Operating income

12,154

11,689107,871

Income before income taxes and minority interests

12,097

11,141

107,361

Income taxes

3,946 *1

3,597 *2

35,027

Net income

8,150

7,544

72,334

Total assets

137,713

127,557

1,222,164

R&D expenditures¥ 13,454¥ 11,777$ 119,407

1,539

1,272

13,659Net sales

Capital expenditures

Yen

Net income per share¥

Cash dividends per share

410.5

U.S.Dollars

¥

377.3

$

3.64

150.0

150.0

1.33

*1: 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.
*2: 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.
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 ¥112.68=$1.00, the approximate exchange rate on March 31, 2016.

Net Sales

Net Income(Millions of Yen)

Net Income per Share(Millions of Yen)

10,00086,205 89,210

93,94787,252

92,272

10,000

(Yen)
9,892
8,150

430.5 442.3

8,000

6,000

6,000

300

4,000

4,000

200

2,000

2,000

100

2012

2013

2014

2015

2016

0

7,544

2012

2013 2014

2015

2016

410.5

400

8,000

0

488.7

500

9,076 9,152

0

377.3

2012

2013

2014

2015

2016

Mochida Pharmaceutical Group1

Message from the President

Working to continuously boost enterprisevalue by meeting medical and healthcare needs
as a comprehensive healthcare corporate 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 corporate group.
While contributing in this way to people’s health and welfare, we will work at
continuously boost enterprise value.

Review of FY2015
During fiscal year 2015 (ended March 31, 2016), while the Japanese economy continued on a gradual recovery
tone, the outlook remained unclear with concerns about the influence from the deceleration of the Chinese
economy and other instability in overseas economies.
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 foresighted 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 the corporate value by taking full advantage of the our agility and responsivenessof a mid-sized firm.

2

Mochida Pharmaceutical GroupMedium-Term Management Plan Policies for Fiscal Years 2016 through 2018
The Medium-Term Management Plan (FY2016-2018) policies are as follows.
We will respond to medical and healthcare needs by drawing together the total power of the MochidaPharmaceutical Group from research and development through to manufacturing and marketing, and restructure theearnings structure toward continuous growth by advancing selection and concentration.
The three years from FY2016 to FY2018 are forecast to be even more challenging, given the continuing
government policy of drug cost reductions in the context of the need to secure stable fiscal sources for the social
security system, the further promotion of generic drugs with the aim of raising the share of generic drug prescriptions
to 80%, and movements in National Health Insurance (NHI) drug-price revisions.
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. Strategic redistribution of resources through selection and concentration
2. Focus on sales of new drugs by enhancing sales capabilities
3. Continuous investments to create next-generation leading products
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.
In our core pharmaceutical business, the Group will focus its resources on the targeted areas of cardiovascular
medicine, obstetrics and gynecology, dermatology, emergency medicine and psychiatry, and work to further promotestrategic alliances which stress the importance of lifecycle management and partnerships. With approval for the
additional indication of social anxiety disorder, we aim to increase the sales of Lexapro®, an antidepressant to gain thelargest share among antidepressants on the Japanese market. We are taking on the challenge of new medical fields
such as the development of therapeutic drugs for the intractable diseases pulmonary arterial hypertension (PAH) andulcerative colitis, advancing work on biosimilar products and value-added products, and further promoting the genericdrug business with its high business potential and strategic significance.
Aiming, in the long term, at specialty pharmaceuticals that will be eventually be recognized for their value on a
global scale, we are advancing investment in business activities that will lead to future competitiveness and createnext-generation leading products.
In the past, the Group has announced management targets for the final fiscal year of the Medium-termManagement Plan period. Due to the extreme difficulty in forecasting the impact of changes in the market environment
including the government policy of promoting generic drugs and NHI drug price revisions, however, we have decided
to defer the formulation and announcement of management target values for the final fiscal year.

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 foresighted creativity to develop unique products and technologies for the
medical and pharmaceutical world, thereby contributing to the improvement of human health” and we 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 2016

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 been directing its efforts toward business reforms across all areas of management.
This entails improving the Group’s management system, achieving an appropriate level of staffing, andincreasing productivity throughout the Company.
In the pharmaceutical business, the Group has focused its resources on the priority areas
cardiovascular 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, 2016 the Mochida Pharmaceutical
Group realized consolidated net sales of ¥92,272 million, an increase of 5.8% 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 5.8% year-on-year to ¥88,041 million.
Sales of the antidepressant Lexapro®, the oral progestin for the treatment of endometriosis
Dinagest , and the analgesic for chronic pain/pain after tooth extraction Tramcet®, all increased.
However, sales of the treatment agent for hyperlipidemia and arteriosclerosis obliterans Epadel
and the long-acting calcium channel blocker Atelec® declined from the previous year.
Sales of generics including biosimilars increased.
In the skin care business segment, sales increased 5.1% year-on-year to ¥4,231 million despitesluggish market growth and intensified competition.

4

Mochida Pharmaceutical GroupProfit and Loss
In profits, while research and development expenses increased from the previous fiscal year, SG&A
expenses decreased and the gross profit margin improved from higher sales in the pharmaceuticals
business. As a result, operating income rose 4.0% to ¥12,154 million, recurring income increased
4.1% to ¥12,392 million, and net income rose 8.0% to ¥8,150 million.

Research & Development
The Research Center continued to focus its efforts on two fields—CNS (Central Nervous System)
disorders, and diabetes and obesity—as it pursued the discovery and development of new andoriginal therapeutic drugs for the global market. The center works to improve research by conducting
joint research with Japanese and foreign organizations. The center also actively worked toward theintroduction of treatments for schizophrenia, therapeutic agent for the treatment of chronic pain
(TRPV1 antagonists), and antidiabetic drugs.
In clinical development, we received the approval of an additional indication, social anxiety
disorder, for Lexapro® in November 2015. An application for marketing approval was filed for
MD-0901, an agent to treat ulcerative colitis. We applied for the approval of Dinagest® for the
additional indication of adenomyosis. Phase II clinical trials are also underway for Dinagest® as atreatment of functional dysmenorrhea. Phase III clinical trials are now underway for AJG533, an agent
to treat chronic constipation, for which Mochida concluded a contract with Ajinomoto Pharmaceuticals
Co., Ltd. (now EA Pharma Co., Ltd.) concerning joint development and sales in March 2016.
Phase III clinical trials are also underway for the etanercept biosimilar LBEC0101 as a treatment forrheumatoid arthritis. In addition, Phase III clinical trials have begun for the adalimumab biosimilar
LBAL for treatment of rheumatoid arthritis and for the teriparatide biosimilar RGB-10 for treatment of
osteoporosis. Finally, 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 ¥13,454 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 "foresighted,
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 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, like the performance of Epadel in hyperlipidemia.
Mochida Pharmaceutical now has unique products and a distinctive product line in our priority
areas cardiovascular medicine, obstetrics and gynecology, dermatology, emergency medicine andpsychiatry, 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, toward 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 corporate group. While working to strengthen the foundations for thesustainable growth of each business, we also emphasize the importance of partnerships with othercompanies 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 13,2016

Code

Name

Indications

Formulation

MD-0901

mesalazine

MJR-35dienogest

LBEC0101

etanercept

Ulcerative colitis Oral
Adenomyosis
Oral
Functional
dysmenorrhea
Rheumatoid
Injection
arthritis

AJG533

Elobixibat

Chronic
constipation

LBAL

Adalimumab

RGB-10

Teriparatide

Stage

Remarks

Filed
Filed

Licensed-in from Shire Pharmaceuticals Group[UK]Phase II
Phase III

Biosimilar
Licensed-in from LG Life Sciences[Korea]

Oral

Phase III

Co-development with EA Pharma[Japan]

Rheumatoid
arthritis

Injection

Phase III

Biosimilar
Licensed-in from LG Life Sciences[Korea]

Osteoporosis

Injection

Phase III

Biosimilar
Licensed-in from Gedeon Richter[Hungary][Medical device]

dMD-001

8

Mochida Pharmaceutical Groupsodium alginate

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

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 schizophrenia drug candidates, chronic pain drugcandidates (oral TRPV1 antagonists), and antidiabetic drug candidates developed inour drug research and development activities.
We are introducing and utilizing new technologies to provide effective
medicines for patients as quickly as we can. Mochida Pharmaceutical has achieved
many tangible results through joint research frameworks with external researchorganizations. We emphasize links with external resources from the perspective ofspeeding up research and development, and the Company will continue actively
pursuing such collaboration in the future.

Epadel: The Outcome of Foresighted, 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 historical 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 level, 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 it own unique approach and continues to find new ways to achieve better quality.

Utilizing the Advances in “Hardware” and Technology
The Head Office Plant (Otawara) 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 misuse of drugs and increase
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 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 careful selectionof raw materials for products, reduction of the amount of packaging used, and safe and proper
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.

Strategic
Planning &Coordination

Intellectual
Property

Licensing

Procurement
Planning

Business Development
Functions

12

Mochida Pharmaceutical GroupCollaboration with Other Companies
Mochida Pharmaceutical prioritize cardiovascular medicine, obstetrics and gynecology, dermatology, emergency
medicine, and psychiatry 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 needs and customer needs through numerous domestic andinternational partnerships.
For example, the Company has developed and launched Beselna, a treatment for condyloma acuminatum
and actinic keratosis, in Japan licensed by iNova Pharmaceuticals Pte Limited, Dinagest, an oral progestin for thetreatment of endometriosis licensed by Jenapharm (now a member of the Bayer Pharma AG Group), and Treprost®, atreatment for pulmonary arterial hypertension originated by United Therapeutics Corporation.
We have also concluded a licensing contract with the Shire Pharmaceuticals Group and are working on
development of the ulcerative colitis treatment MD-0901 as the next drug for intractable diseases following Treprost®.
In March 2016, we concluded a contract with Ajinomoto Pharmaceuticals Co., Ltd. (now EA Pharma Co., Ltd.)
concerning the joint development and sales of Elobixibat, a therapeutic agent for treatment of chronic constipation.
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 are also advancing development
in Japan of etanercept biosimilars and adalimumab biosimilars from LG Life Sciences, Ltd. (Korea) in Japan under analliance with that company.
In addition, the Company has entered a comprehensive collaboration with Hospira Japan Co., Ltd. in promotion
and distribution of Hospira’s generic oncology injectables in Japan since October 2012. The Company will aim toestablish a position in the biosimilars and generic oncology markets.
In August 2011, the Company began sales of Lexapro® (escitalopram), which was created by the Danish
pharmaceutical company, H. Lundbeck A/S, and licensed and developed by the Company in Japan. The Company
is co-marketing the drug together with Mitsubishi Tanabe Pharma Corporation, and co-promoting the drug together
with Yoshitomiyakuhin Corporation.
In October 2013, the Company started co-marketing of Tramcet® (an analgesic for chronic pain/pain after tooth
extraction) with Janssen Pharmaceutical K.K.
Through collaboration with our valuable partners, Mochida Pharmaceutical continues fulfilling our mission ofproviding pharmaceutical products to meet unmet medical needs.
Some Collaborations

Bayer HealthCare
Mitsubishi Tanabe Pharma
EA Pharma
Nippon Suisan
Fuji Pharma
Novo Nordisk
POLA PHARMA
Gedeon Richter
Sanofi
Hospira
MOCHIDAiNova Pharmaceuticals
Servier (Egis)
JanssenShire
KAINOS
Taisho Pharmaceuticals
LG Life Sciences
UCB
Lundbeck
United Therapeutics

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

Cardiovascular
medicine
Obstetrics
andGynecology

Dermatology

Psychiatry

Emergency
Medicine

Key Therapeutic Areas

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 of high blood pressure, lowers blood pressure all
day long with just a single daily dose. Atelec® is a dual L/N type calcium channel blocker unlike regular L type channel
blockers.
Mochida launched Atedio®, a combination of valsartan and cilnidipine, in May 2014, and we are maintaining ourposition in the hypertension treatment market through sales of Atelec® and Atedio®.
• Obstetrics and Gynecology
Mochida Pharmaceutical has traditionally placed strong emphasis on the Ob/Gyn area, where it has built an impressive
record with hormonal preparations and pregnancy test kits. Estriel is widely recognized for the treatment of post
menopausal disorders, vaginitis, and geriatric osteoporosis. The launch of Dinagest, a novel oral progestin, in January
2008 has expanded medication for patients suffering from endometriosis, in addition to Suprecur®, a GnRH analogue.
The Company has applied for approval of Dinagest for treating adenomyosis as an additional indication, and is also
conducting trials on Dinagest for treatment of functional dysmenorrhea.

Epadel (ethyl icosapentate)
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.

Fastic® (nateglinide)
Fastic® is a fast-acting postprandial
antihyperglycemic agent for improving
postprandial blood glucose levels in type-2
diabetes mellitus.

Dinagest (dienogest)
Dinagest is a novel and oral therapeutic agent
for endometriosis that activates selectively
progesterone receptors, and demonstrates its
therapeutic effect by inhibiting ovarian function
and proliferation of endometrial cells.

Suprecur® (buserelin)Suprecur®, a GnRH analogue, is used fortreating endometriosis, precocious puberty, anduterine myoma. Nasal spray and micro particle
injection are available.

Divigel (estradiol)
Divigel is an estradiol gel preparation absorbed
through the skin. A daily application eases
the hot flashes and sweating associated withmenopausal disorders and ovarian deficiency
syndrome.
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.
• Emergency Medicine
Miraclid has demonstrated excellent clinical efficacy as a drug for treatment of acute circulatory failure caused by shock, and acutepancreatitis. This drug represents the first commercial application of ulinastatin, which inhibits various enzyme activities. It reflects
Mochida Pharmaceutical’s advanced technological capabilities in the development of new biologically active agents. Thrombin, ahemostatic agent, and Novo-Heparin, an anticoagulant agent, are also indispensable drugs to emergency medical care.
• 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 the best possible 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 dystomia drug Grandaxin, MochidaPharmaceutical is committed to improving the QOL for psychiatric patients.

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, an antiviral agent, is used fortreating herpes zoster, herpes simplex, andherpes simplex encephalitis. Arasena-A
Ointment is the first topical antiviral drug
developed in Japan. Other formulation includes
a cream and a injection.

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

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.

Liquid Thrombin MOCHIDA Softbottle
Liquid Thrombin MOCHIDA is a hemostatic
agent. These concertina-shaped soft bottles
are designed not only to greatly improve
convenience of application, but also to prevent
fatal medical accidents caused by possible
inadvertent injection of the agent.

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

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

Grandaxin (tofisopam)
Grandaxin relieves various symptoms causedby tension imbalances between the sympathetic
and para-sympathetic nervous systems. It has
proved effective in treating a variety of stressinduced ailments.

Tramcet® (tramadol hydrochloride/
acetaminophen)
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.

• Drugs for Treatment of Intractable Diseases
Mochida received approval for manufacturing and sales of Treprost® for injection, a treatment for
pulmonary arterial hypertension, in March 2014 and began sales from September 2014. In October
2015, Mochida filed a new drug application for the treatment of ulcerative colitis. We are advancing
development of these drugs for the treatment of intractable diseases, and will continue to embracechallenges in new medical fields.
• Biosimilars
Filgrastim BS Syringe for Inj. MOCHIDA, a Granulocyte Colony Stimulating Factor (G-CSF) which
is used to treat neutropenia in cancer chemotherapy, was launched in May 2013. This drug is abiosimilar co-developed with Fuji Pharma Co., Ltd., and the first G-CSF biosimilar approved formarketing in Japan.
The biosimilars market is expected to grow given the medical economics needs. Mochida ispresently developing teriparatide biosimlars, adalimumab biosimilars and etanercept biosiimlars. We
will continue advancing the biosimilars business in the future.
• 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.
• 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.
The high regard in which the efficacy of Epadel is held was confirmed, when the study results were presented in
the eminent British medical journal, The Lancet (2007, Vol. 369, pp. 1090–1098). Epadel is also recommended as apharmaceutical treatment in the various guidelines of The Japanese Circulation Society as primary prevention for high-risk
cardiovascular cases, secondary prevention for myocardial infarction, and to prevent recurrence of cerebral apoplexy.
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.
Mochida Pharmaceutical Group17

Skin Care Products

Providing Truly

Useful Skin Care ProductsHigh Performance Value Added Skin Care Products based on
Dermatology
Under the motto “foresighted and original research,” as a member of the MochidaPharmaceutical Group, Mochida Healthcare Co., Ltd. (MHC) focuses on developing
high performance and 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, as well as
the Collage Furfur series developed from skin research which are the first personalcare 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. Mochida 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.
In 2005, the Company also responded to the needs of customers withparticularly sensitive skin types who wish to use a whitening treatment. It developed
the Collage Whitening series, Japan’s first low irritation whitening series for sensitive
skin types. It also developed the anti-aging skin care products series Collage B.K.
Age for the skin of customers in their 40s and 50s which tends to be sensitive anddry, and began 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 skinwhich removes old keratin and then gives moisture to the skin, which supports thebarrier 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
non-irritating soap formulated for each specific skin type, the Collage D Medi
Power series moisturizing products for dry skin, and Japan’s first shampoo
containing an antimycotic agent – enjoy a high reputation among consumers fortheir effectiveness. The Company provides Collage Furfur Next shampoo and rinse,
which contain an antimycotic agent, and we are developing this into an antimycotic
series including liquid soap. Through these products, MHC will continue to betterthe QOL for people with skin problems.

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 Next 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

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.

1930

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®; IFN Mochida; IFNß 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

Ei Mochida

Susumu Watanabe

20

Mochida Pharmaceutical Group

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 the 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 the 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 the 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®

Naoyuki Mochida

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 elobixibat

Mochida Pharmaceutical Group

21

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

Basic Policy on Corporate Governance
The Mochida Pharmaceutical Group strives to increase its 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 measures for fulfilling corporate governance, important management decisions
are made at meetings of the Board of Executive Managing Directors and the Board of GroupManagement, which are held weekly respectively, based on, as necessary, the outcome of sufficient
discussions at the Management Policy Meeting. We clearly separate the functions of the Boardof 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 Director (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

Meeting of
Shareholders

Election/Dismissal

Election/Dismissal

Election/Dismissal

Confirmation of Appropriate Execution of Audits

ReportBoard of Directors

Audit &
Supervisory Board
Full-Time Audit &Supervisory Board Members

Representative Directors
Audit

ReportAccounting Auditor

Directors

Outside Audit &Supervisory Board Members

Audit

Outside Directors
Supervision

Audit

Election/Dismissal

Representative Director,
President

Board of Executive
Managing Directors

Board of GroupManagement

Excecutive Director (Officer) Meeting

Ethics Committee
Executive Directors (Officers)

Management Policy Meeting

Audit & Corporate Ethics Promotion DivisionInternal Audit Department
Audit

Corporate Ethics
Promotion Department
Compliance Promotion

Each Department and Group Company

22

Mochida Pharmaceutical Group

Risk Management Committee andVarious Committees

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) toensure the appropriate function of checking the management and (2) to pursue management efficiency
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)the 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
The Mochida Pharmaceutical Group constructs, maintains, 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 overall business, 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 the 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, and each Audit & Supervisory Board member 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 secure effectiveness of the audits.

Mochida Pharmaceutical Group23

Main Product Listing

Ethical Drugs
Cardiovascular Agents• Epadel [ethyl icosapentate] (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 hydrochloride/acetaminophen](tablet) Chronic pain, Pain after tooth extraction
Antidiabetes Agent• Fastic® [nateglinide] (tablet) Diabetes
Hormone Preparations• Dinagest [dienogest] (tablet) Endometriosis• Divigel® [estradiol] (gel) Menopausal symptoms
such as hot flash and hidrosis• Suprecur® [buserelin acetate] (nasal spray,
micro particle injection) Endometriosis, Central
precocious puberty, Uterine myoma• Desopan® [trilostane] (tablet) Antiadrenal cortical
hormone• Estriel [estriol] (tablet, vaginal tablet, depot
injection) Hormone replacement therapy (HRT),
Osteoporosis, Vaginitis• HCG Mochida [human chorionic gonadotrophin](injection) Infertility, Threatened miscarriage,
Habitual abortion
Neurological Agents• Lexapro® [escitalopram oxalate] (tablet)
Depression and depressive symptoms, Social
anxiety disorder• Grandaxin [tofisopam] (tablet, fine granule)Autonomic symptoms• Tecipul [setiptiline maleate] (tablet) Depression
Anti-Infectives• Florid® [miconazole (nitrate)] (injection, vaginal
suppository, cream, oral gel) Mycosis• Arasena-A [vidarabine] (injection, ointment, cream)
Herpes zoster, Herpes simplex, Herpes simplex
encephalitis• Isoprinosine® [inosine pranobex] (tablet)
Subacute sclerosing panencephalitis (SSPE)• Francetin [fradiomycin sulfate] (powder) Antibiotic• Beselna [imiquimod] (cream) Condyloma
acuminatum, Actinic keratosis

24

Mochida Pharmaceutical Group

Biological Preparations• Miraclid [ulinastatin] (injection) Acute circulatory
failure, Acute pancreatitis• Thrombin [thrombin] (liquid, fine granule)
Hemostatic• Heparin Sodium Injection MOCHIDA [heparin
sodium] (injection) Thrombosis• Uronase [urokinase] (injection) Acute myocardial
infarction
Biosimilar• Filgrastim BS Syringe for Inj. MOCHIDA[G-CSF] (injection) Neutropenia

Diagnostic Reagents
Reagents for Fertility/Infertility• Gonastick25 (hCG)• Gonastick W (hCG)
Other Reagents• Cand-Tec (Candida antigen)

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 Hand Moisture• 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• 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

2016

2015

2014

2013

2012

2011

¥ 92,272¥ 87,252¥ 93,947¥ 89,210¥ 86,205¥ 79,506

Years ended March 31

For the Year:Net sales
Cost of sales

37,27333,91334,35832,77729,85030,387

Selling, general and administrative expenses

42,84541,65842,98742,414

41,42637,443Operating Income

12,154

11,68916,60014,017

14,928

11,675

Income before income taxes and minority interests

12,097

11,14115,806

14,061

15,119

Income taxes

3,946

Net income

8,155

3,597

5,913

4,909

6,043

5,913*6

8,150

7,544

9,892

9,152

9,076

5,333

¥102,043¥ 91,904¥ 93,842¥ 86,692¥ 79,401¥ 77,191

*2

*1

*3

*4

*5

At Year-End:Total current assets
Total current liabilities

25,79522,44329,041

25,35423,871

23,099Working capital

76,247

69,46164,80061,33855,53054,092

Total property, plant and equipment

15,79916,622

17,484

16,677

17,10817,630Total long-term liabilities

6,988

6,443

7,939

6,932

6,810

7,348

Total net assets

104,929

98,67093,68888,542

82,18978,129Total assets

137,713

127,557

130,669

120,828

112,871

108,577

1,539

1,272

2,598

1,529

1,671

1,977

Other Statistics:
Capital expenditures

Yen

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

¥

410.5
150.0

¥

377.3
150.0

¥

488.7
–

¥

442.3
27.0

¥

430.5
26.0

¥

242.2
22.0

Number of employees (people)

1,726

1,746

1,726

1,753

1,730

1,721

Number of shares outstanding at end of year (thousand)

20,98021,10021,900113,000

115,500

119,000*1: 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.
*2: 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.
*3: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥6,378 million), income taxes-deferred (-¥465million) is included.
*4: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,610 million), income taxes-deferred (+¥298million) is included.
*5: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,682 million), income taxes-deferred (+¥1,361 million) is included.
*6: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,284 million), income taxes-deferred (-¥1,462 million) 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 2011.
*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
For the years ended March 31

Consolidated Statements of Income (Unaudited)Years ended March 31

Thousands of
U.S.Dollars

Millions of Yen

2016

2015

2014

2016

¥ 92,272¥ 87,252¥ 93,947$ 818,886

Cost of Sales

37,271

33,91334,358

330,772

Gross profit

55,00053,33959,588488,11442,84541,65842,987

380,242

12,154

11,68916,600107,871

Interest and dividend income

209

162

149

1,858

Interest and charge (commission) expense

(113)

(47)

(49)

(1,009)Real estate rent

64

66

92

576

Others

76

38

5

679

Net Sales

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

Recurring income

237

220

198

2,104

12,392

11,90916,799109,976

156

–

29

1,387

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

–

–

0

–

Compensation income

–

54

–

–

(53)

(57)

(10)

(473)

–

–

(1,012)

–

(397)

(765)

–

(3,528)

(294)

(768)

(993)

(2,614)

12,097

11,14115,806

107,361

Loss on sales and disposal of fixed assets
Loss on valuation of investment securities
Impairment loss

Income before income taxes and minority interests
Income taxes

3,946

3,597

5,913

Net income

8,150

7,544

9,892

72,334¥ 8,150¥ 7,544¥ 9,892$ 72,334

Profit attributable to owners of parent*1

Consolidated Statements of Comprehensive Income(Unaudited)*2*3

35,027

Thousands of
U.S.Dollars

Millions of Yen

2016

2015

2014

2016

¥ 8,150¥ 7,544¥ 9,892$ 72,334

Unrealized gain on available-for-sale securities

1,225

1,350

1,622

10,876

Remeasurements of defined benefit plans, net of tax

(255)

(34)

–

(2,264)Years ended March 31

Income before minority interests
Other comprehensive income,net of tax

Total:Other comprehensive income,net of tax

970

1,315

1,622

8,612

9,121

8,860

11,51480,946

Owners of parent

9,121

8,860

11,51480,946

Minority interests

–

–

–

–

Total comprehensive income
Total comprehensive income attributable to:*1: 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.
*2: 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.
*3: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥6,378 million), income taxes-deferred (-¥465million) 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 ¥112.68 = $1.00, the approximate exchange rate on March 31, 2016.
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

2016

2015

¥ 28,916¥ 31,016

25,93826,002

230,197

261

–

2,317

Marketable securities

24,184

11,339214,634

Inventories

17,81918,790158,139

Deferred income taxes

2,579

2,598

22,893

Other current assets

2,343

2,158

20,794–(0)–

102,043

91,904

905,602

Buildings and other structures

6,367

6,695

56,511

Machinery and equipment and transportation equipment

2,547

2,444

22,610

Land

5,772

6,093

51,226

Construction in progress

222

371

1,975

Others

888

1,016

7,889

Intangible fixed assets

478

509

4,246

Total fixed assets

16,277

17,132

144,459

Investments in securities

14,15012,628125,578

Deferred income taxes

1,641

1,585

14,566

Others

3,600

4,306

31,957

19,392

18,520172,102¥ 137,713¥ 127,557$ 1,222,164

2016

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

Allowance for doubtful accounts
Total current assets$

256,625

Fixed Assets:
Property, plant and equipment:

Investments and Other Assets:

Total 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 ¥112.68=$1.00, the approximate exchange rate on March 31, 2016.

28

Mochida Pharmaceutical GroupThousands of
U.S.Dollars

Millions of Yen

2015

2016

2016

LIABILITIESCurrent Liabilities:
Notes and accounts payable
Electronically recorded obligations-operating

¥

8,139

¥

7,762

$

79,085

3,116

2,482

30,284

500

500

4,858

Income taxes payable

2,914

393

28,317

Provision

3,375

3,350

32,794

Other current liabilities

7,749

7,954

75,300Total current liabilities

25,79522,443

250,639

6,444

5,732

62,615

Short-term debt

Long-Term Liabilities:
Net defined benefit liability
Other long-term liabilities

543

710

5,283

Total long-term liabilities

6,988

6,443

67,898

Total liabilities

32,78328,886

318,538

Paid-in capital

7,229

7,229

70,248

Capital surplus

1,871

1,871

18,180Retained earnings

96,59891,884

938,576

Treasury stock(5,687)(6,261)(55,260)

100,01294,723

971,745

Unrealized gain on available-for-sale securities

5,912

4,687

57,451Remeasurements of defined benefit plans

(995)

(740)

(9,670)Total accumulated other comprehensive income

4,917

3,947

47,780Minority interests

–

–

–

Total net assets

104,929

98,6701,019,525¥ 137,713¥ 127,557$ 1,338,063

NET ASSETS
Shareholders’ equity

Total Shareholders’ equity
Accumulated other comprehensive income:

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)

Shareholders’ equity
Common stock

Balance at beginnig of year

Capital surplus¥ 7,229

Retained earnings¥ 1,871

Cumulative effect of changes in accounting policies
Restarted balance¥ 90,762
979

7,229

1,871

91,741

Change in the fiscal year:
Dividends from surplus(3,363)

Net income

7,544

Acquisition of treasury stock
Disposal of treasury stock0

Retirement of treasury stock(0)(4,038)Net changes of items other than shareholders' equity
Total
Balance at end of year

Balance at beginnig of year

–

–

142

7,229

1,871

91,884¥ 7,229¥ 1,871¥ 91,884

Change in the fiscal year:
Dividends from surplus(2,829)Net income

8,150

Acquisition of treasury stock
Disposal of treasury stock0

Retirement of treasury stock

(0)

(606)

–

–

4,714

7,229

1,871

96,598$ 64,163$ 16,606$ 815,444

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(25,114)

Net income

72,334

Acquisition of treasury stock
Disposal of treasury stock2

Retirement of treasury stock(2)(5,384)––

41,83564,163

16,606857,279

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

30

Mochida Pharmaceutical GroupMochida Pharmaceutical Co., Ltd. and Consolidated Subsidiaries
For the years ended March 31

Millions of yen

Year ended March 31, 2015
Valuation and translation adjustments
Treasury stock

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

Total¥ (8,806)¥ 91,057¥ 3,337

Remeasurementsof defined benefit plans

¥

(705)

Total net assets

Total¥ 2,631979(8,806)

92,036¥ 93,688
979

3,337

(705)

2,631

94,667(3,363)(3,363)

7,544

7,544

(1,495)(1,495)(1,495)

1

1

1

4,038

–

–
1,350

(34)

1,315

1,315

2,544

2,686

1,350

(34)

1,315

4,002

(6,261)

94,723

4,687

(740)

3,947

98,670(740)¥ 3,947¥ 98,670

Millions of yen

Year ended March 31, 2016
¥ (6,261)¥ 94,723¥ 4,687¥(2,829)(2,829)

8,150

8,150

(33)

(33)

(33)

0

0

0

606

–

–
1,225

(255)

970

970

574

5,288

1,225

(255)

970

6,258

(5,687)100,012

5,912

(995)

4,917

104,929$ 41,597$ (6,568)$ 35,029$ 875,672

Thousands of U.S.Dollars$ (55,570)$ 840,642(25,114)(25,114)72,33472,334

(293)

(293)

(293)

4

6

6

5,386

-

–
10,876(2,264)

8,612

8,612

5,096

46,932

10,876(2,264)

8,612

55,545(50,473)

887,575

52,474(8,833)43,641

931,217

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 ¥112.68=$1.00, the approximate exchange rate on March 31, 2016
Mochida Pharmaceutical Group31

Consolidated Statements of Cash Flows (Unaudited)Thousands of
U.S.Dollars

Millions of Yen

2016

2015

2016

¥ 12,097¥ 11,141$ 107,361

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

2,764

3,006

24,536

Loss (gain) on sale and disposal of fixed assets

Depreciation and amortization

53

57

473

Impairment loss

397

765

3,528

Loss (gain) on sales of investment securities

(156)

–

(1,387)

(0)

(0)

0

Increase (decrease) in provision for bonuses

132

(155)

1,178

Increase (decrease) in retirement benefits liability

370

181

3,291

Interest and dividend income

(209)

(162)

(1,858)

Increase (decrease) in allowance for doubtful accounts

Interest and charge (commission) expense

113

47

1,009

Decrease (increase) in notes and accounts receivable-trade

(197)

1,980

(1,753)

Decrease (increase) in inventories

970(2,230)8,616

Decrease (increase) in other current assets

(216)

(752)

(1,921)

Increase (decrease) in notes and accounts payable-trade

1,011(1,331)

8,980

Increase (decrease) in other current liabilities

(65)

61

(581)

Other

(186)

(291)

(1,652)

16,881

12,317

149,821

205

162

1,826

SubtotalInterest and dividends received
Interest and commission paid

(115)

(40)

(1,027)(1,760)(7,316)(15,624)

15,211

5,122

134,995(9,800)(10,020)(86,971)

Proceeds from withdrawal of time deposits

9,270

10,02082,268Purchase of short-term investment securities(18,000)–(159,744)

Proceeds from sales of short-term investment securities

4,500

–

39,936

Payment for purchases of tangible and intangible fixed assets(1,827)(1,930)(16,216)

284

–

2,527

Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Payments into time deposits

Proceeds from sales of investment securities
Other
Net cash used in investing activities

(4)

(23)

(38)

(15,576)(1,953)(138,239)

Cash flows from financing activities:
Repayment of long-term debt

–

(375)

–

(2,826)(3,359)(25,080)

Payment for acquisition of treasury stock(33)(1,500)(294)

Proceeds from disposal of treasury stock

0

1

6

(59)

(55)

(526)

(2,917)(5,288)(25,894)

(0)

1

(4)

Dividends paid

Other
Net cash used in financing activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net increase (decrease) in cash and cash equivalents(3,283)(2,117)(29,143)

Cash and Cash Equivalents at Beginning of Year33,63535,753

298,504

Cash and Cash Equivalents at End of Year30,351

33,635

269,360

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 ¥112.68=$1.00, the approximate exchange rate on March 31, 2016.

32

Mochida Pharmaceutical GroupCorporate Data

Mochida Pharmaceutical Co., Ltd. Corporate Data (As of June 29, 2016)
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
1,726 (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

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

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

Mochida’s Head Office in Tokyo

Members of the Board

Executive Directors

Executive Directors (Officers)

President

Hiroshi Nakamura

Kazuhiro Miyaji

Naoyuki Mochida

Quality Assurance

Kiyoshi Mizuguchi, Ph.D.

Internal Audit
Corporate Ethics

Senior Executive Managing

Clinical Research and Development

Ichiro Takahashi

Directors
Chu Sakata
Planning and Administration
Internal Audit
Corporate Ethics

Keiichi Sagisaka
Pharmaceutical Business

Executive Managing Directors
Yoichi Kono
Production
Skin Care BusinessAkira Karasawa, Ph.D.
Research
Clinical Research and Development

Junichi Sakaki, Ph.D.
Business Development

Corporate Advisor
Makoto Aoki
Outside Directors

Planning and Administration

Shoji Furusako, Ph.D.
Research

Takayuki KatoBusiness Development

Tomoo Kugisawa

Kazunori Takada

Hirokuni Sogawa

Pharmaceutical Business

Kazumasa Fukuchi

Audit&Supervisory Board
Members
Hiroshi Ogawa
Takashi Inagaki

Pharmaceutical BusinessYutaka Kawakami, Ph.D.
Clinical Research and Development

Shigeharu Suzuki
Pharmaceutical Laboratory

Hiroshi Watanabe

Masayoshi Takeda

Tetsuya Kobayashi

Finance

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 Japan
2016.7