Annual Review

2014Year ended March 31, 2014

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

C o ns olida t ed Fi n an ci al H i gh l i gh ts

2

M e s s a ge f rom th e P resi d en t

4

T he Ye a r in Revi ew

6

Bus ines s A c tivi ti es

8

Res e a rc h & D evel op men t

10

Pro duc tio n

12

Lic e ns ing A c tivi ti es

14

Pha r ma c eut ic al s

18

S k in C a re Prod u cts

20

Nutr a c eut ic a ls

21

Ma in Produc t Li sti n g

22Highlig ht s o f Ou r Growth24

C or po r a te G o v ern an ce

26

S ix -Yea r S ummary

27

C ons olida t ed Statemen ts of In come ( U n au dit e d)		C ons olida t ed Statemen ts of Comp reh en si ve I nc o m e (Una udit e d)28

C ons olida t ed Bal an ce Sh eets ( U n au d i ted )30

C ons olida t ed Statemen ts of Ch an ges i n N et A s s e t s (Una udit e d)32

C ons olida t ed Statemen ts of Cash Fl ows ( U na udit e d)33

Ma na g ement / Corp orate Data

Cover: The stained-glass window
expresses a prayer for healthand depicts St. Luke, the patron
saint of the medical profession,
administering medicine to people
who are suffering.
This window is in the Company’s
collection.

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

Thousands of
U.S.Dollars

Millions of Yen

2014

2013

2014

¥ 93,947¥ 89,210$ 912,815

Operating income

16,60014,017161,299

Income before income taxes and minority interests

15,806

14,061

153,575

Income taxes

5,913 *1

4,909 *2

57,459Net income

9,892

9,152

96,115

Total assets

130,669

120,828

1,269,623

R&D expenditures¥ 11,961¥ 12,519$ 116,219

2,598

1,529

25,252

Net sales

Capital expenditures

Yen

Net income per share¥

488.7 *

3

Cash dividends per share

U.S.Dollars

¥

– *4

442.3 *

$

3

4.75

27.0 *40.00*1: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥6,378 million), income taxes-deferred (–¥465 million) is included.
*2: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,610 million), income taxes-deferred (+¥298 million) is included.
*3: 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 the previous fiscal year.
*4: 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 “–”.
The dividend per share for the period ending March 2014 not considering the reverse stock split was ¥32 per share (including a ¥3 commemorative dividend).
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 ¥102.92=$1.00, the approximate exchange rate on March 31, 2014.

Net Sales

Net Income(Millions of Yen)
10,0008,000

Net Income per Share(Millions of Yen)

79,460 79,506

86,20589,21093,947

10,000

(Yen)
9,892

9,869
9,076 9,152

434.3

6,000

300

5,333

242.2

4,000

4,000

200

2,000

2,000

100

0

2010

2011

2012

2013

2014

0

430.5 442.3

400

8,000

6,000

488.7

500

2010

2011

2012 2013

2014

0

2010

2011

2012

2013

2014

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.
In 2013, Mochida Pharmaceutical celebrates its 100th anniversary. Whilenever 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 FY2013
During fiscal year 2013 (ended March 31, 2014) the Japanese economy was on a gradual recovery tone
with correction of the high yen and a rebound in stock prices, but the outlook remained unclear.
The business environment for the pharmaceutical industry remained harsh under continued
measures to reduce drug costs against the background of securing fiscal sources for social security
expenses, and amid intensifying competition among companies.
Under this environment, the Mochida Pharmaceutical Group realized increased net sales andincreased income for the fiscal year.
Net sales increased because the pharmaceuticals business performed well overall and the skin carebusiness was also firm.

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
and pharmaceutical world, thereby contributing to the improvement of human health,” the MochidaPharmaceutical Group aims at being a unique and distinctive comprehensive healthcare company with thepharmaceuticals business as its core, together with the healthcare field and related new businesses.
To realize our corporate philosophy, the company pursues enhanced corporate governance andabsolute compliance as key pillars of our management. Every group employee observes the MochidaPharmaceutical Group Code of Conduct, and we are striving to boost enterprise value by responding to
the trust and expectations of our stakeholders.
To also respond to changes in the business environment and maintain sustainable growth, theMochida Pharmaceuticals 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 streamlining of resources” under the basic policy of emphasizing profit and continued
investment for the future.

2

Mochida Pharmaceutical GroupMedium-Term Management Plan for Fiscal Years 2014 through 2016
In order to increase the corporate value as a group of companies in the comprehensive healthcare
business during the coming three years which start in FY2014, we will continue to work hard topromote further structural reform in areas including the improvement of head office functions and theefficient management of the organization under the Medium-term Management Plan for establishinga stable earning basis directed at sustainable growth by responding to medical and healthcare
needs with concentration of the total power of the Group covering research and development,
manufacturing and marketing through stronger cooperation and bonds among group departments.
We will also maximize the productivity of our finite resources, including human resources, and actively
seek collaboration with external resources at the same time. Aiming, in the long term, at specialty
pharmaceuticals that will be recognized for the value of their existence also on a global scale, weare pursuing investment in business activities that will lead to future competitiveness in order to, forexample, create next-generation leading products.
Our core pharmaceutical business will focus its resources on the targeted areas ofcardiovascular medicine, obstetrics and gynecology, dermatology, emergency medicine and psychiatry
so as to further promote strategic alliances which stress the importance of lifecycle management andpartnerships. Furthermore, we will introduce and develop high value-added products which meet theneeds of medical professionals as well as customers. We will also challenge new medical fields suchas the development of therapeutic drugs for intractable diseases and will embrace a commitment
to biosimilars and further promote generic drug business, including the entry into the field of generic
anticancer drugs. We aim to increase the sales of Lexapro®, an antidepressant, to gain the largest
share of antidepressants in the Japanese market. We make new attempts to tackle intractablediseases through the launch of Treprost® for the treatment of pulmonary arterial hypertension (PAH).
The targets for FY2016 are net sales of ¥110,000 million, operating income of ¥16,000 million
and R&D expenditures of ¥16,000 million.

To Our Shareholders and Investors
The Mochida Pharmaceutical Group fulfills its social mission as a pharmaceutical company bycreating 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 highethical standards. We are working to become a specialty pharmaceutical company whose presence isrecognized worldwide, and to boost corporate value over the long term.
We thank our shareholders and other stakeholders for your continuing support.
July 2014

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, 2014, the Mochida Pharmaceutical
Group realized consolidated net sales of ¥93,947 million, an increase of 5.3% from the previous year.

Individual Business Segments
In the pharmaceutical business segment, sales increased 5.2% year-on-year, to ¥89,586 million.
Sales of the antidepressant Lexapro®, the oral progestin for the treatment of endometriosis
Dinagest, and the treatment for hyperlipidemia and arteriosclerosis obliterans Epadel all increased, andsales of generics also increased.
Additional contributions came from the analgesic for chronic pain/tooth extraction pain Tramcet®,which was started co-marketing in October 2013.
In the skin care business segment, sales increased 8.1% year-on-year, to ¥4,360 million, despite
the sluggish market, with firm sales of the Collage Furfur series of shampoo, rinse and other products,
which contain an antimycotic agent.

4

Mochida Pharmaceutical GroupProfit and Loss
The gross profit margin improved from higher sales in the pharmaceuticals business and SG&A
expenses declined. As a result, operating income rose 18.4% to ¥16,600 million, recurring income
increased 18.4% to ¥16,799 million, and net income rose 8.1% to ¥9,892 million. A valuation loss on
investment securities was posted in the first quarter.

Research & Development
The Research Center continued to focus its efforts on two fields—chronic pain, and diabetes andobesity—as it pursued the discovery and development of new and original therapeutic drugs for the
global market. The center works to improve research by conducting joint research with Japaneseand foreign organizations. The center also actively worked toward the introduction of the antibody
drug for the treatment of sepsis and the therapeutic agent for the treatment of chronic pain (TRPV1
antagonist).
The application by Ajinomoto Pharmaceuticals for marketing approval of the combination
hypertension therapeutic agent Atedio® (AJH801, valsartan/cilnidipine) was granted in March2014 and the drug was placed on sale in May 2014. Marketing approval for the pulmonary arterial
hypertension drug Treprost® (MD-0701, treprostinil) was also received in March 2014.
Phase III clinical trials for MD-0901, an agent to treat ulcerative colitisat, Phase III clinical trials
for Lexapro® for the treatment of social anxiety disorder, late Phase II clinical trials on Dinagest for thetreatment of uterine adenomyosis, and early Phase II clinical trials on Beselna for treatment of common
warts are all underway.
During the fiscal year under review, consolidated R&D expenditures totaled ¥11,961 million.

Research Center

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 careproducts business and nutraceuticals business (new business).

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 foruse in the diagnosis of cancer. We are presently advancing research and development on high value
added pharmaceuticals, including research on global new medicines as well as development of biopharmaceuticals and medicines for the treatment 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 the hyperlipidemia
sector. 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. The Head Office Plant manufactures injectable, solid (oral), and topical
medicines. Due to 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 and drugstores. 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 iscurrently expanding product lines to meet growing demand for products in this field. Efforts are also
focusing on increasing awareness 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
and continues through the often-lengthy R&D phase right up to the actual market
launch of the product. Mochida Pharmaceutical applies to all R&D projects its
unique resources, comprised of a broad spectrum of technical and developmental
expertise cultivated over the years and an approach based on insight and originality.
Work starts with an initial stage of probative studies and research. For successful
products, the process culminates with clinical development and marketing.

As of May 12, 2014

Code

8

Mochida Pharmaceutical Group

Name

Indications

Formulation

Stage

Remarks

MD-0901

mesalazine

Ulcerative colitis

Oral

Phase III

Licensed-in from Shire
Pharmaceuticals Group (UK)

MLD-55

escitalopram

Social anxiety disorder

Oral

Phase III

Licensed-in from Lundbeck(Denmark)

MND-21ethyl icosapentate

Non-alcoholicsteatohepatitis

Oral

Phase II
completed

MJR-35dienogest

Uterine adenomyosis

Oral

Late Phase II

Licensed-in from Jenapharm(Bayer Pharma AG)

MTD-39imiquimod

common warts

Topical

Early Phase II

Licensed-in from iNova
Pharmaceuticals

Rapid Development of New Medicines Used Worldwide
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 thedevelopment of Thrombin, Uronase, Miraclid, IFN Mochida, Epadel, and other products. To enable
more rapid development of medicines for use throughout the world, we are currently focusing on
research efforts in the fields of diabetes, obesity, and chronic pain, utilizing the latest in computer andhigh-throughput screening techniques.
Overeating and sedentary lifestyles in developed countries have resulted in an accelerating
increase in the number of people suffering from metabolic syndrome and diabetes. Given that these
symptoms can ultimately lead to atherosclerotic disease, providing prevention and treatment methods
for obesity and diabetes is an important mission for a healthcare company. Mochida is creating
candidate substances for diabetes medicine, and introducing them worldwide, resulting in a License
Agreement with Merck relating to a portfolio of drug candidates invented by Mochida for the potential
treatment of type-2 diabetes.
Worldwide, 75−80 million people suffer from chronic pain; many of them reported that pain
had deleterious effects on their mental health, employment status, sleep, and personal relationships.
The impact of pain on patient QOL and the unmet needs in pain management were fully recognizedby physicians and healthcare companies. With an aging population and the simultaneous rise in theconditions that lead to chronic pain, along with the need for better efficacy and safety profiles, newtherapeutics need to be developed.
In the chronic pain field, Mochida Pharmaceutical invented an oral transient receptor potential
vanilloid sub type 1 (TRPV1) receptor antagonist and this compound is at the Phase I clinical stage.

Extensive Links with Outside Research Organizations
We are introducing and utilizing new technologies to provide effective medicines for patients asquickly as we can. Mochida Pharmaceutical has achieved many tangible results, not only in its
in-house research but also through joint research frameworks with external research organizations.
We emphasize links with external resources from the perspective of speeding up drug discovery anddevelopment as well, 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 Mochida Pharmaceutical’s R&D
capabilities is Epadel, a drug for hyperlipidemia and arteriosclerosis obliterans. Epadel is the world’s
first high-purity ethyl icosapentate (EPA-E). Working in cooperation with Nippon Suisan, MochidaPharmaceutical made a historical breakthrough by turning purified EPA-E into a pharmaceutical.
EPA is a biologically active substance present in fish oil. A global epidemiological study on
the relationship between diet and disease has found that people who consume EPA as partof their diet are much less likely to suffer from such diseases as high blood pressure andarteriosclerosis-induced myocardial infarction than those who do not consume EPA.

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 hierarchical 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. / Head Office Plant

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 we value highly these alliances of
excellence as we take on challenges together tosatisfy unmet medical needs.

Strategic
Planning &Coordination

LicensingIntellectual
Property

Business Development
Functions

12

Mochida Pharmaceutical GroupCollaboration with Other Companies
Mochida Pharmaceutical has prioritized cardiovascular medicine, obstetrics and gynecology, dermatology, andemergency medicine in allocating sales resources for the core pharmaceutical business. The antidepressantLexapro® (escitalopram) went on sale in 2011, adding psychiatry to these key areas.
We are strengthening our product pipeline, maximizing product value, and advancing the development ofhigh-value-added products to meet medical treatment needs and customer needs through numerous domestic
and international 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, and Dinagest, anoral progestin for the treatment of endometriosis licensed by Jenapharm (Bayer Pharma AG).
We are also working on the development of drugs for intractable diseases, including the pulmonary
hypertension treatment MD-0701 (marketing approval granted March 2014) under an exclusive distribution
license from United Therapeutics Corporation and the ulcerative colitis treatment MD-0901 licensed by Shire
Pharmaceuticals Group.
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. In December 2010, the Company
concluded a long-term comprehensive agreement for collaboration in biosimilar products with the Hungarianpharmaceutical company, Gedeon Richter Plc. for the development and marketing of Richter's biosimilar
product portfolio in Japan.
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 to establish 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 introduced and developed by the Company. The Company
is co-marketing the drug together with Mitsubishi Tanabe Pharma Corporation, and co-promoting the drug
together with Yoshitomi Yakuhin Corporation.
In October 2013, the Company started co-marketing of Tramcet® (an analgesic for chronic pain/tooth
extraction pain) with Janssen Pharmaceutical K.K.
Also in December 2011, the Company concluded an agreement with Merck licensing out drug candidates
for the potential treatment of type-2 diabetes.
Through collaboration with our valuable partners, Mochida Pharmaceutical continues fulfilling our missionof providing pharmaceutical products to meet unmet medical needs.
Some Collaborations

Novo Nordisk

Bayer HealthCare Pharmaceuticals

Lundbeck

Nippon Suisan

JanssenTaisho Pharmaceutical

Shire
Ajinomoto

Gedeon Richter
Siemens

KAINOS

Medix
Servier (Egis)

United Therapeutics

MOCHIDA
MOCH

UCB

Merck

Fuji Pharma
Sanofi

UnitikaJCR

iNova Pharmaceuticals

Mitsubishi Tanabe Pharma
HospiraMochida 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 in which EPA-E (ethyl icosapentate: one of the poly-unsaturated fatty acids
contained in fish oil) was successfully extracted and purified to a high degree. This drug has opened up a new fieldin the treatment for arteriosclerosis obliterans and hyperlipidemia. Atelec®, a calcium channel blocker that is presently
considered the first choice for the treatment of high blood pressure, begins to work gradually in the morning and has along-lasting effect on lowering blood pressure during the day. Atelec® is a dual L/N type calcium channel blocker which,unlike regular L type channel blockers, has the unique property of also providing a renoprotective effect.
Mochida launched Atedio®, a combination of valsartan and cilnidipine, in May 2004, and is working to increase
the combined 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. Some other examples are Ortho® 777-21 and Ortho®
M-21, a low-dose triphasic oral contraceptive and a low-dose monophasic oral contraceptive, and Grandaxin, which
has been used for autonomic dystonia, a common symptom of menopausal syndrome. The launch of Dinagest, anovel oral progestin, in January 2008 has expanded medication for patients suffering from endometriosis, in addition
to Suprecur®, a GnRH analogue.The Company is presently conducting clinical trials on Dinagest to confirm its
effectiveness for treating uterine adenomyosis as an additional indication.

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 effectthat also provides a renoprotective 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.

Ortho® 777-21 and Ortho® M-21
(norethisterone/ethinylestradiol)
Ortho® 777-21 is a low-dose triphasic oral
contraceptive. Ortho® M-21 is a low-dosemonophasic oral contraceptive.

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

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.
Mochida Pharmaceutical Group15

Pharmaceuticals• Dermatology
Florid®, an antimycotic drug, is a leading product in this treatment area. The drug is provided in theform of a cream for dermatomycosis. 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 wasapproved for the additional indication of actinic keratosis in November 2011. Clinical trials are currently
underway for the additional indication of common warts.
• Emergency Medicine
Miraclid has demonstrated excellent clinical efficacy as a drug for treatment of acute circulatory failure causedby shock, and acute pancreatitis. 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, a hemostatic 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
serotonoin reuptake inhibitor (SSRI). The drug is apporoved in over 97 countries worldwide, and has
been highly evaluated overseas as an antidepressant that provides the best possible balance between

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 genital andperianal warts) in Japan. It has been approved
for the additional indication 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 (thrombin)
Liquid Thrombin MOCHIDA is a hemostatic
agent. These new concertina-shaped softbottles 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.

Novo-Heparin Injection (heparin sodium)Novo-Heparin Injection, an anticoagulant
derived from porcine intestinal mucosa, isindicated for the treatment of disseminatedintravascular coagulation syndrome, andprevention of thromboembolism, etc.

Mochida Pharmaceutical Groupefficacy and acceptability. Lexapro® is expected to be well received in Japan as a new treatment
option. Clinical trials are also underway for the additional indication of social anxiety disorder. With
the addition of Lexapro® to our tetracyclic antidepressant Tecipul and our autonomic dystomia drug
Grandaxin, Mochida Pharmaceutical is commited to improving the QOL for psychiatric patients.

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.

Grandaxin (tofisopam)
Grandaxin relieves various symptoms
caused by tension imbalances between thesympathetic and para-sympathetic nervous
systems. It has proved effective in treating avariety of stress-induced ailments.

Tramcet® (tramadol hydrochloride/
acetaminophen)
Tramcet®, an analgesic for chronic pain andtooth extraction pain which the Company
started co-marketing with Janssen
Pharmaceutical K.K. from October 2013, is thefirst analgesic in Japan combining tramadolhydrochloride and acetaminophen.

• 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 Gonastick W,
a one-step, stick-type pregnancy test kit; and CanD-Tec, a candida antigen detection test.
• Biosimilars
Marketing approval was granted in November 2012 for Filgrastim BS Syringe for Inj. MOCHIDA,
a Granulocyte Colony Stimulating Factor (G-CSF), which is used to treat neutropenia in cancer
chemotherapy, and it was launched in May 2013. This drug is a biosimilar co-developed with Fuji
Pharma, and the first G-CSF biosimilar approved for marketing in Japan.
The biosimilars market is expected to grow given the medical economics needs. Mochida has enteredinto a comprehensive collaboration agreement with Gedeon Richter Plc. The two companies are developing
products to follow the G-CSF biosimilar, and Mochida will continue to advance their biosimilars business.
• The Prominence of EBM
Mochida Pharmaceutical considers evidence-based medicine (EBM) to be important. The Company
participated in a large-scale clinical trial, the Japan EPA Lipid Intervention Study (JELIS), investigating
whether Epadel can prevent cardiovascular events in hyperlipidemic patients. In November 2005, thetest results were presented in a late-breaking clinical trials session at the American Heart Association’s(AHA’s) Scientific Sessions 2005; results showing Epadel significantly suppressed onset of major
coronary events received much attention from experts in the field.
The high regard in which the efficacy of Epadel is held was confirmed in March 2007, 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 a pharmaceutical 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 is being derived from JELIS. Utilizing these results, MochidaPharmaceutical will provide beneficial and high-quality information to medical experts.

Mochida Pharmaceutical Group17

Skin Care Products

Providing Truly

Useful Skin Care Products

In 2004, Mochida’s Skin Care Product Division was
spun off as Mochida Healthcare Co., Ltd. (MHC),
which undertakes the development, production,and marketing of skin care products.
Employing its extensive expertise acquiredin the development of pharmaceuticals, MHC
specializes in areas of dermatology such as carefor sensitive skin, antimicrobial personal care,baby care, and nursing products. To ensure that
we provide products for our customers that are
truly useful, we support the development processwith clinical trials in close collaboration withdermatologists. Our products are sold at specialty
pharmacies and drugstores.

18

Mochida Pharmaceutical Group

Antimycotic
Products

Baby Care
Products

Skin Care
Products

Nursing Care
Products
Developing Products
Based on Dermatological ResearchTruly Essential Products
MHC’s mission is to develop and provide useful products that benefit the community. The Company
has extended its lineup of healthcare products to include various fields related to medicine. MHC’s skincare products are created to meet real requirements and are based on close cooperation with medical
professionals. The basic prerequisites are that they should be useful and functional.

The First in Domestic Skin Care Products containing S-Collagen
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, the Company has
succeeded in developing the Collage S series using “trimethylglycine” to achieve
further improvement of the moisturizing activity of the original Collage series. As
with the original Collage series, Collage S products do not contain fragrances orcoloring agents, so even customers with the most delicate skin can use themwith confidence.
The Company has also responded to the needs of customers with particularly
sensitive skin types who wish to use a whitening treatment. It developed the Collage
Whitening series, Japan’s first hypoallergenic whitening series for sensitive skin types.
It also developed the anti-aging skin care products series Collage B.K. Age for theskin of customers in their 40s and 50s which tends to be sensitive and dry, andbegan sales from May 2013.
The Company is focusing on product development that responds to changing
customer needs. For example, it has released a hypoallergenic soap series, which
provides a choice of products suited to a range of skin types and uses.

Medically Based Technology and Experience

Collage S series

Collage B.K.AGE series

MHC’s products based on dermatology – including the Collage soap series of nonirritating soap formulated for each specific skin type, the Collage D Medi Power
series moisturizing products for dry skin, and Japan’s first shampoo containing anantimycotic agent – enjoy a high reputation among consumers for their 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 better the QOL for people
with skin problems.

From Baby Care to Geriatric Care

Collage Furfur Next series

In 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.
Skina Babe and Skina series

Mochida Pharmaceutical Group19

Nutraceuticals

Supporting a Healthy Life with

High-Quality Nutritional Supplements
Aiming to be a comprehensive healthcare provider,
Mochida Pharmaceutical is developing nutritional
supplements as a new line of business. We selectraw materials based on expertise acquired throughour drug research and development and offer
products that have been manufactured with strict
attention to quality. Mochida Pharmaceuticalcontinues to explore opportunities in new areas.

Vitacollage Series
The Vitacollage series employs high-quality raw
materials and carefully selected combinationsof ingredients. Reflecting heightened interest inlifestyle habits, the Vitacollage series provides
an extensive lineup of supplements which is a
new easy-to-use nutritional supplement speciallysuited to people who are dieting or careful about
excessive carbohydrate intake. In 2012, wereleased our first standardized FOSHU (foodfor specified health use) Glucoriina. MochidaPharmaceutical will continue to support balanced
diet, beauty and health.

20

Mochida Pharmaceutical Group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

Biological Preparations• Miraclid [ulinastatin] (injection) Acute circulatory
failure, Acute pancreatitis• Thrombin [thrombin] (liquid, fine granule)
Hemostatic• Novo-Heparin [heparin sodium] (injection)
Thrombosis• Uronase [urokinase] (injection) Acute myocardial
infarction

Analgesic Agent• Tramcet® [tramadol hydrochloride/acetaminophen](tablet) Chronic pain, Tooth extraction pain

Biosimilar• Filgrastim BS Syringe for Inj. MOCHIDA[G-CSF] (injection) Neutropenia

Antidiabetes Agent• Fastic® [nateglinide] (tablet) Diabetes

Diagnostic Reagents

Hormone Preparations• Dinagest [dienogest] (tablet) Endometriosis• Divigel® [estradiol] (gel) Menopausal symptoms
such as hot flash treatment and hydrosis• Suprecur® [buserelin acetate] (nasal spray, micro
particle injection) Endometriosis, Precocious
puberty, Uterine myoma• Desopan® [trilostane] (tablet) Antiadrenal cortical
hormone• Ortho® 777-21/M-21 [norethisterone/
ethinylestradiol] (tablet) Oral contraceptive• Estriel [estriol] (tablet, vaginal tablet, depot
injection) Hormone replacement therapy (HRT),
Osteoporosis• HCG Mochida [human chorionic gonadotrophin](injection) hCG
Neurological Agents• Lexapro® [escitalopram oxalate] (tablet)
Depression• Grandaxin [tofisopam] (tablet, fine granule)Autonomic dystonia• 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

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 S Skin Care series		 (Moisture lotion, essence, moisture milk,		 cream, UV protection, cleansing)• 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 for dandruff and conditioner)• Collage Furfur Scalp Shampoo• Collage Furfur Hair Growth Lotion• Collage Shampoo S• Collage Rinse S• Collage Rich (Hair growth tonic for women)
Skina Babe and Skina Series• Skina Babe (Baby bath oil)
• Skina (Cleanser)• Skina Clen (Gentle skin cleanser)• Skina Fukifuki (Cleanser)• Skina Dry Shampoo

Nutraceuticals• Vitacollage series

Mochida Pharmaceutical Group21

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

Ryokichi Mochida

Nobuo Mochida

Ei Mochida

22

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.

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

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®.
Atelec®; Gonastick1998

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.
Established the nutraceutical business.
Obtained ISO 14001 certification for the Otawara Plant.
Suprecur®

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; with Novartis Pharma K.K. for co-promotion of
Diovan® (agreement terminated end of 2008); and with United Therapeutics Corporation forthe 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.
Lexapro®

2012

Fastic®; FOSHU (food for specified health use) Glucoriina

2013

Epadel switch-OTC drug; Collage B.K. Age series; Filgrastim BS Syringe for Inj. Mochida ;Tramcet®

2014

Atedio®

Susumu Watanabe

Naoyuki Mochida

Mochida Pharmaceutical Group

23

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 the outcome of sufficient discussions
at the Management Policy Meeting. 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 Director (Officer) system.
Governance Structure
Mochida Pharmaceutical put in place the Board of Directors (including Outside Director(s)) andthe Board of Statutory Auditors (including Outside Statutory Auditor(s)) as organizations under theCompanies Act.
Corporate Governance Structure

Meeting of
Shareholders

Election/Dismissal

Election/Dismissal

Election/Dismissal

Confirmation of Appropriate Execution of Audits

ReportBoard of Directors

Board of Statutory
Auditors
Full-Time Statutory Auditor

Representative Director
Audit

ReportAccounting Auditor

Director

Audit

Outside Statutory Auditor
Outside Director
Audit

Supervision

Election/Dismissal

Representative Director,
President

Ethics Committee
Risk Management Committee andVarious Committees
Board of Executive
Managing Directors

Board of GroupManagement

Excecutive Director (Officer) Meeting
Executive Director (Officer)
Management Policy Meeting

Audit & Corporate Ethics Promotion DivisionInternal Audit Department
Audit

Corporate Ethics
Promotion Department
Compliance Promotion

Each Department and Group Company

24

Mochida Pharmaceutical GroupAs reasons for adopting this governance structure, considering the Company’s size andbusiness nature, we judged 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 andits business and Outside Director(s) with abundant knowledge and experience in specialized fields,and (2) the system for checking the management by Statutory Auditors including Outside Statutory
Auditor(s).
Outside Director(s) and Outside Statutory Auditor(s) supervise the management and perform
auditing from an independent standpoint, because they have no business relationship or any otherspecial 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) establishing“Code of Conduct of Mochida Pharmaceutical Group”, (2) holding regular meetings of the Ethics
Committee which includes outside experts, (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 organization which
implements internal audits of the Pharmaceutical Business (Sales) Division, Research Division andother divisions as necessary.
To secure lawfulness and transparency of management decision-making and business
operations, in accordance with fiscal year auditing policy and plans, each Statutory Auditor strives
to (1) smoothly communicate with Board Directors, the Internal Audit Department etc., (2) collect
the relevant information and (3) improve the auditing environments, attends meetings of the Boardof Directors and other important meetings, and investigates business operations and assets 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, Deloitte Touche Tohmatsu
LLC, based on the provisions of the Companies Act and the Financial Instruments and ExchangeAct. the Internal Audit Department, Statutory Auditors and Accounting Auditor work closely to secure
effectiveness of the audits.

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

2014

2013

2012

2011

2010

2009

¥ 93,947¥ 89,210¥ 86,205¥ 79,506¥ 79,460¥ 75,766

Years ended March 31

For the Year:Net sales
Cost of sales

34,35832,77729,85030,387

29,10028,503

Selling, general and administrative expenses

42,98742,414

41,42637,44335,50033,694

Operating Income

16,60014,017

14,928

11,675

14,86013,567

Income before income taxes and minority interests

15,806

14,061

15,1198,155

15,783

Income taxes

5,913*Net income

13,727

4,909*

6,043*

5,913*

5,913*

4,973*6

9,892

9,152

9,076

5,333

9,869

8,754

¥ 93,842¥ 86,692¥ 79,401¥ 77,191¥ 73,812¥ 68,118

2

1

3

4

5

At Year-End:Total current assets
Total current liabilities

29,041

25,35423,871

23,09921,05021,439Working capital

64,80061,33855,53054,092

52,762

46,678

Total property, plant and equipment

17,484

16,677

17,10817,63018,03618,805

Total long-term liabilities

7,939

6,932

6,810

7,348

6,027

6,752

Total net assets

93,68888,542

82,18978,12979,76874,151

Total assets

130,669

120,828

112,871

108,577

106,845

102,344

2,598

1,529

1,671

1,977

1,757

3,272

Other Statistics:
Capital expenditures

Yen

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

¥

488.7
–

¥

442.3
27.0

¥

430.5
26.0

¥

242.2
22.0

¥

434.3
25.0

¥

376.5
22.0

Number of employees (people)

1,726

1,753

1,730

1,721

1,727

1,702

Number of shares outstanding at end of year (thousand)

21,900113,000

115,500

119,000

123,000

125,800*1: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥6,378 million), income taxes-deferred (–¥465 million) is included.
*2: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,610 million), income taxes-deferred (+¥298 million) is included.
*3: 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.
*4: 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.
*5: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥5,506 million), income taxes-deferred (+¥407 million) is included.
*6: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥5,022 million), income taxes-deferred (–¥49 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 2009.
*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 “–”.
The dividend per share for the period ending March 2014 not considering the reverse stock split was ¥32 per share (including a ¥3 commemorative dividend).

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

2014

2013

2012

2014

¥ 93,947¥ 89,210¥ 86,205$ 912,815

Cost of Sales

34,35832,77729,850333,834

Gross profit

59,58856,43256,354578,981

42,98742,414

41,426417,681

16,60014,017

14,928161,299

Net Sales

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

149

185

225

1,447

Interest and charge (commission) expense

(49)

(138)

(94)

(481)

Real estate rent

92

72

75

900

Others

5

51

151

56

198

170

358

1,924

16,79914,18815,286

163,224

Gain on sales of investment securities

29

32

–

291

Gain on sales of fixed assets

0

–

30

0

Reversal of provision for loss on disaster

–

–

532

–

Recurring income
Extraodinary Gains (Losses):

Subsidies for employment adjustment related to earthquake
Loss on sales and disposal of fixed assets

–

–

30

–

(10)

(159)

(12)

(98)

Loss on disaster
Loss on valuation of investment securities

–

–

(329)

–

(1,012)–(393)(9,842)OthersIncome before income taxes and minority interests

–

–

(24)

–

(993)

(126)

(167)

(9,648)

Income taxes

5,913*Net income¥ 9,892

Consolidated Statements of Comprehensive Income(Unaudited)Years ended March 31

Income before minority interests

14,06115,806
1

15,119153,575

4,909*

6,043*

57,459¥ 9,152¥ 9,076$ 96,115

2

3

Thousands of
U.S.Dollars

Millions of Yen

2014

2013

2012

2014

¥ 9,892¥ 9,152¥ 9,076$ 96,115

1,622

1,075

962

15,762Other comprehensive income,net of tax
Unrealized gain on available-for-sale securities
Total:Other comprehensive income,net of tax

1,622

1,075

962

15,762

11,514

10,227

10,038111,878

Owners of parent

11,514

10,227

10,038111,878

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 ¥6,378 million), income taxes-deferred (–¥465 million) is included.
*2: As a result of tax effect accounting, corporate tax, resident tax and business tax (total ¥4,610 million), income taxes-deferred (+¥298 million) is included.
*3: 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.
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 ¥102.92 = $1.00, the approximate exchange rate on March 31, 2014.
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

2014

2013

¥ 33,135¥ 29,109

Notes and accounts receivable

27,982

27,784

271,885

Marketable securities

11,337

11,334

110,157

Inventories

16,55914,387

160,898

Deferred income taxes

3,407

2,909

33,103

Other current assets

1,420

1,167

13,801

(1)

(0)

(9)

93,842

86,692

911,795

Buildings and other structures

7,006

7,124

68,075

Machinery and equipment and transportation equipment

2,051

2,154

19,932

Land

6,093

6,093

59,208Construction in progress

1,381

308

13,423

951

995

9,243

Intangible fixed assets

392

621

3,811

Total fixed assets

17,876

17,298

173,695

Investments in securities

11,218

10,071109,005

Deferred income taxes

1,708

1,932

16,601Others

6,023

4,833

58,526

18,95016,837

184,132¥ 130,669¥ 120,828$ 1,269,623

2014

ASSETS
Current Assets:
Cash and time deposits

Allowance for doubtful accounts
Total current assets$

321,958

Fixed Assets:
Property, plant and equipment:

OthersInvestments 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 ¥102.92=$1.00, the approximate exchange rate on March 31, 2014.

28

Mochida Pharmaceutical GroupThousands of
U.S.Dollars

Millions of Yen

2014

2013

¥ 11,575¥ 10,284

875

875

8,501

Income taxes payable

4,293

2,499

41,720

Provision

3,810

3,674

37,023

Other current liabilities

8,487

8,020

82,462

Total current liabilities

29,041

25,354

282,180

–

5,494

–

7,062

–

68,625

Other long-term liabilities

876

1,438

8,516

Total long-term liabilities

7,939

6,932

77,141

Total liabilities

36,98132,286359,322

Paid-in capital

7,229

7,229

70,248

Capital surplus

1,871

1,872

18,180Retained earnings

90,76287,062881,872

Treasury stock(8,806)(9,336)(85,565)

Total Shareholders’ equity

91,05786,827884,736

Unrealized gain on available-for-sale securities

3,337

1,714

32,424Remeasurements of defined benefit plans

(705)

–

(6,858)

Total accumulated other comprehensive income

2,631

1,714

25,565

Minority interests––

Total net assets

93,68888,542

910,301¥ 130,669¥ 120,828$ 1,269,623

2014

LIABILITIESCurrent Liabilities:
Notes and accounts payable
Short-term debt$

112,471

Long-Term Liabilities:
Provision for retirement benefits
Net defined benefit liability

NET ASSETS
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¥ 83,095

Change in the fiscal year:
Dividends from surplus(2,901)

Net income

9,152

Acquisition of treasury stock0

Disposal of treasury stock(2,283)Retirement of treasury stock
Net changes of items other than shareholders' equity
Total
Balance at end of year

Balance at beginnig of year

–

0

3,967

7,229

1,872

87,062¥ 7,229¥ 1,872¥ 87,062

Change in the fiscal year:
Dividends from surplus(2,801)

Net income

9,892

Acquisition of treasury stock
Disposal of treasury stock0

Retirement of treasury stock(1)(3,390)

–

0

3,700

7,229

1,871

90,762$ 70,248$ 18,190$ 845,920

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(27,220)

Net income

96,115Acquisition of treasury stock
Disposal of treasury stock2

Retirement of treasury stock(11)(32,943)–(9)35,951

70,24818,180881,872

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, 2013
Valuation and translation adjustments
Treasury stock

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

Total¥ (10,645)¥ 81,550¥

639

Remeasurementsof defined benefit plans¥

Total net assets

Total

–

¥

639

¥ 82,189(2,901)(2,901)

9,152

9,152

(983)

(983)

(983)

8

8

8

2,283

–

–
1,075

–

1,075

1,075

1,308

5,276

1,075

–

1,075

6,352

(9,336)86,827

1,714

–

1,714

88,542–¥ 1,714¥ 88,542

Millions of yen

Year ended March 31, 2014
¥ (9,336)¥ 86,827¥ 1,714¥(2,801)(2,801)

9,892

9,892

(2,862)(2,862)(2,862)

0

1

1

3,391

–

–
1,622

(705)

916

916

530

4,229

1,622

(705)

916

5,146

(8,806)

91,057

3,337

(705)

2,631

93,688–$ 16,661$ 860,299

Thousands of U.S.Dollars$ (90,720)$ 843,637$ 16,661$(27,220)(27,220)

96,115

96,115(27,809)(27,809)(27,809)

9

11

11

32,955––
15,762(6,858)

8,903

8,903

5,155

41,09815,762(6,858)

8,903

50,002(85,565)884,736

32,424(6,858)25,565910,301

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 ¥102.92=$1.00, the approximate exchange rate on March 31, 2014.
Mochida Pharmaceutical Group31

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

Millions of Yen

2014

2013

2014

¥ 15,806¥ 14,061$ 153,575

2,741

2,861

26,639

10

159

98

Cash flows from operating activities:
Income before income taxes and minority interests
Depreciation and amortization
Loss (gain) on sale and disposal of fixed assets
Loss (gain) on sales of investment securities

(29)

(32)

(291)

1,012

–

9,842

Increase (decrease) in allowance for doubtful accounts

0

0

0

Increase (decrease) in provision for bonuses

2

21

22

Loss (gain) on valuation of investment securities

Increase in provision for retirement benefits
Increase (decrease) in retirement benefits liability
Incresese (decrease) in provision for directors' retirement benefits
Interest and dividend income
Interest and charge (commission) expense
Decrease (increase) in notes and accounts receivable-trade

–

606

–

476

–

4,632

–

(56)

–

(149)

(185)

(1,447)

49

138

481

(197)

(1,974)(1,918)Decrease (increase) in inventories(2,172)(1,017)(21,104)

Decrease (increase) in other current assets

(116)

1,134

(1,133)

Increase (decrease) in notes and accounts payable-trade

1,290

188

12,541

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

67

1,385

660

(1,812)(714)(17,606)

16,98016,575

164,991

148

186

1,444

(48)

(136)

(467)

(4,603)(4,715)(44,727)

12,478

11,909121,240

Payments into time deposits(9,020)(6,720)(87,640)

Proceeds from withdrawal of time deposits

7,020

6,720

68,208

Payment for purchases of tangible and intangible fixed assets(2,435)(2,043)(23,666)

76

78

740

(4,359)(1,964)(42,358)

(375)

(375)

(3,643)

Dividends paid

(2,796)(2,895)(27,170)

Payment for acquisition of treasury stock(2,863)(804)(27,818)

Proceeds from disposal of treasury stock

1

8

11

(56)

(56)

(548)

(6,089)(4,122)(59,169)

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

Other
Net cash used in investing activities
Cash flows from financing activities:
Repayment of long-term debt

Other
Net cash used in financing activities

0

0

6

Net increase (decrease) in cash and cash equivalents

2,029

5,823

19,719Cash and Cash Equivalents at Beginning of Year33,72327,900327,670

Cash and Cash Equivalents at End of Year35,75333,723347,390

Effect of Exchange Rate Changes on Cash and Cash Equivalents

32

Mochida Pharmaceutical GroupManagement / Corporate Data

Members of the Board

Executive Directors

Executive Directors(As of June 27, 2014)

Akira Hirata, D. Med. Sc.

Akira Karasawa, Ph.D.

PresidentInternal Audit
Corporate Ethics

Naoyuki Mochida

Hiroshi Nakamura

Senior Executive Vice President
Makoto Aoki

Quality Assurance

Junichi Sakaki, Ph. D.
Business Development

Senior Executive Managing

Outside Director

Director

Tomoo Kugisawa

Yasuo Isomura, Ph.D.

Research
Clinical Research and Development

Shoji Furusako, Ph.D.
Research

Kazuhiro Miyaji
Planning and Administration
Finance

Takayuki Katou
Business Development

Kazunori Takada

Research
Clinical Research and Development

Corporate Auditors

Executive Managing Directors

Takashi Inagaki

Yoichi Kono

Kiyotaka Ishikawa

Akihiko Ito

Hiroshi Watanabe

Internal Audit
Corporate Ethics

Production
Skin Care BusinessKeiichi Sagisaka

Hiroshi Ogawa

Tetsuya Kobayashi

Pharmaceutical BusinessPharmaceutical Business
MarketingKiyoshi Mizuguchi, Ph. D.
Clinical Research and Development

Ichiro Takahashi

Chu Sakata

Planning and Administration
General Affairs

Planning and Administration

Kazumasa Fukuchi
Tokyo Branch Manager

FoundedResearch Laboratories

April 16, 1913

April 28, 1945

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

Paid-in Capital

Subsidiaries¥7.2 billion

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

Incorporated

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/

Affiliated Companies andOrganizations• Medical View Co., Ltd.
• Mochida Memorial Foundation for
Medical and Pharmaceutical
Research

Mochida Healthcare Co., Ltd.
Paxxs Building,
2-12, Ichigaya-Honmura cho,
Shinjuku-ku, Tokyo 162-8451, Japan
Mochida International Co., Ltd.
Y.S. Building, 9, San-eicho,
Shinjuku-ku, Tokyo 160-0008, Japan
Technonet Co., Ltd.
7, Yotsuya 1-chome,
Shinjuku-ku, Tokyo 160-8515, Japan
Technofine Co., Ltd.
342, Gensuke,
Fujieda, Shizuoka 426-8640, Japan

Mochida’s Head Office in Tokyo

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
2014.7