Value Creation Story

Message from the President
Backed by drug discovery capabilities built up over 100years and an organizational culture that nurtures
innovation, we are becoming a total healthcare company.
The businesses of ASKA Pharmaceutical Holdings are growing steadily, even amid the pharmaceuticalindustry’s increasingly severe business environment. The main initiatives of Medium-Term Management
Plan 2025 have begun to bear fruit, with sales reaching record highs for two consecutive fiscal years. In
this section of the report, President Yamaguchi explains the challenges of FY2023, which marks themidway point of the medium-term management plan. He also outlines ASKA’s new approaches to its
distinctive material issues of “contribution to women’s health” and “contribution to animal health,” andthe Group’s unique strengths and sources of motivation.

Toward Sustainable Growth— What is the focus for ASKA Pharmaceutical Holdings in terms of sustainablegrowth, and what do you see as your mission as a top member of management?
We are currently on track to achieve our vision for 2025

through advanced drug discovery,” “overseasof becoming a total healthcare company with a strong

operations,” and “provide new value to realize totalfoundation as a specialty pharma company. To achieve

healthcare.” Collaborating not only with companies inthis vision, we are promoting seven strategies based

the same industry but also those in other industries

on the three pillars of “specialty,” “ability to create,”

will therefore be key. We are actively promoting openand “social contribution.” We recognize that ainnovation with this in mind.

particularly important element in achieving sustainable

I recognize that my mission is to lead the Group ingrowth is specialty. In the Group’s core pharmaceuticalenhancing quality, as a corporate group, while growing

business, we are focusing on the three priority areas ofprimarily the core business and other multiple pillars. Ainternal medicine (gastrointestinal and thyroid), Ob/Gyn,company’s quality depends on its people. The other day,and urology. We recognize that continuous value

when I visited the Iwaki factory, one of the Group’s

creation through new drug development and provision

production bases, I was struck by how confident theof services that only we can offer, is a vital factor inemployees were in the way they spoke and acted. It

achieving sustainable growth.

was a moment when I felt that the talent we have isSustainable growth will also depend on diversifying ourTakashi Yamaguchi
President, Member of the Board ofDirectors, Representative Director
ASKA Pharmaceutical Holdings

steadily growing. Furthermore, in 2022 the Grouprevenue streams through collaboration with the animal

announced its intention to promote Femtech businesshealth business, testing, and the diagnostics business.

initiatives. I am proud of how we have continued toWe must build a management structure that can respondcontribute to women’s healthcare by developing drugs

to future risks and changes in the environment.

and providing information in the Ob/Gyn area. That

Our efforts will have limited results if the operating

makes me confident in our ability to rise to this newcompanies only work in isolation within the Group. Ofchallenge. In this business, we will investigate various

the seven strategies that the Group is pursuing, thisoptions for addressing women’s health issues, including

applies in particular to our efforts toward “enhance

the use of the latest technology and collaboration withcorporate value by strengthening initiatives in theother companies, as I mentioned above.

specialty areas,” “continuously create new drugs* Seven Strategies

See page 19 for details

VisionTotal Healthcare Company with a Strong Foundation as a Specialty Pharma Company
NumericalTargets

Operating profit
margin: 8%

Net sales: ¥70 billion(Consolidated)

13

ROE: 8%

Four Visions

Expand business scope centered on
pharmaceutical products
Become the top domestic company in ourspecialty areas for pharmaceutical products

24

Improve business operations by promoting
open innovation
Continue to be a company that is trusted
by society

The Foundation for the Medium-Term Management Plan

Specialty

12

ASKA HD REPORT 2023

Ability to create

Social contribution

ASKA HD REPORT 2023

13

Value Creation Story

Progress of the Medium-Term Management Plan

— Now that we have reached the midway point of Medium-Term Management Plan
2025, what results have been achieved so far and what challenges do you see ahead?
earnestly pursue high-quality work. While maintaining
this balance, we must continue to invest in management
resources and accelerate collaboration with a view torealizing our growth strategy beyond 2025.
In terms of the offensive approach, our overseas
operations will become even more important as a newpillar of growth. In our core pharmaceutical business,
we plan to expand our presence by developing
pharmaceutical products for international standards,
mainly in the Southeast Asian market. In line with thisplan, the new plant construction project, carried out
with our equity method affiliate Ha Tay Pharmaceutical
Joint Stock Company (Hataphar), a Vietnamese
In FY2022, the second year of the medium-termpharmaceutical company, was completed in August

management plan, performance remained strong, as it

2023. Preparations are currently underway at bothwas in the previous year, driven mainly by new products.

companies toward the start of commercial production.

As a result, sales exceeded ￥60 billion, a record high.

In the animal health business, we are working toWith regard to operating profit margin and ROE, we

expand our product lineup by applying our strengths

have already exceeded the targets we set for the final

in breeding, immunity, and nutrition, which we acquired

year of the current medium-term management plan,in the livestock and fisheries field, to the companion

and we will continue pushing ourselves to achieve

animal field. In the testing and diagnostics business,even higher levels.

we are expanding our test items and sample lineup

Looking back over the past two years, we havebased on trace analysis technology for endogenous

worked to hone our efforts in the area of “specialty,”

hormones. For example, we believe that kits that canwhich is the source of our value creation, and solidified

test stress levels from hair and nails may open up new

our foundation as a holding company. The Group ismarkets, such as in company benefit plans.

currently balancing “offensive” approaches, represented

In FY2023, the midway point of the medium-termby R&D investments to promote innovation and themanagement plan, we are continuing to work on

development of new markets, and “defensive” approaches,

achieving the quantitative and qualitative targets

such as risk management, governance systems, andannounced in May 2021, taking into account the issues

the development of human resources who canI have mentioned and our progress on each initiative.

Growth Potential in the Ob/Gyn Market— What is the market potential for Ob/Gyn products, which is our greatest strength?
Also, what new measures are we taking to contribute to women’s health?

14

ASKA Pharmaceutical achieved the No.1 share of sales

healthcare, such as women’s advancement, changes inin the Ob/Gyn field in Japan in the second half of

medical administration, and improvements in health

FY2022, becoming the leading company in this area.

literacy. Overseas, the Ob/Gyn market has also beenJapan’s pharmaceutical market is often seen asgrowing, with pharmaceuticals used for treatment thatshrinking, as the country’s population is declining.

are not widely available in Japan. We therefore see

However, the Ob/Gyn market is expanding due toconsiderable market potential for Ob/Gyn products,

various environmental changes related to women’swith a lot of room for growth.

ASKA HD REPORT 2023

The concept of medical care has changed in recent

initiative we have been focusing on for some time. Inyears, expanding its scope to include prevention,

our workplace, sensitive topics such as menstruation

testing and diagnosis, treatment, and prognosis. In

are discussed as a matter of course. But, from oureach of those areas, many businesses targeting thestandpoint as a specialist and a leading company inneeds of women’s healthcare have newly entered thethe Ob/Gyn field, we need to disseminate information

field. We aim to promote collaboration with suchto a wider range of people with expressions that arecompanies through the Femtech Business Promotion

easy to understand while at the same time becoming

Unit we established in April 2023. In addition, during

more conscious of our external stakeholders.

the same period, we established a corporate venture
capital fund to secure strategic returns throughinvestments in startups that offer potential synergies

Ob/Gyn Market Size*(Billions of yen)with our Group, such as those with a focus on

100.0

addressing women’s health issues.

80.0

We hope more investors come to know about ourbusiness, which is dedicated to addressing women’s

40.0

example, to hold briefings that are focused solely on

20.0

status of new drug candidate compounds. There arealso improvements to be made in terms of thedissemination of information on women’s health, an

72.7

60.0

health issues. That is why we feel it necessary, forthe development pipeline; that is to say, the R&D

94.5

86.5

0

2020

2021

2022

2023

2024

2025

Projection

Forecast

Forecast

Forecast(Year)* FUJI KEIZAI CO., LTD. “Trend analysis and future forecast of the market related to obstetrics
and gynecology, which is attracting attention in insurance coverage”
All rights reserved.

The Unique Organizational Culture of the ASKA Pharmaceutical Group— The ASKA Group recognizes that the foundation to become a total healthcarecompany is human capital. What mindset and characteristics are shared by thehuman resources of the Group companies?
The answer can be found in the Group’s origins. Whenmessage to our Company employees, I made the point

we started researching hormone preparations 103

that even if you aim for Mount Everest from theyears ago as a venture involved in medical care, what

beginning, it will be difficult to reach the summit on

mattered most were the ideas and motivation of ourthe first try. But if you climb lower mountains againemployees. Through daily contact with the medicaland again, racking up both successes and failures, you

front line, a passion to contribute to the world throughwill eventually realize the main goal of reaching theunique ideas and drug discovery capabilities graduallysummit of Mount Everest. In other words, trying

grew among our employees. The sense of mission—

something new is bound to have moments of failure.

that we are directly involved in the life and health of

A positive failure always feeds into success. The Grouppeople and animals—is also a common awarenesstoday also has accumulated successes that havewithin the Group. In fact, even before the concepts ofemerged from such challenges. As a result, we have

ESG or CSR existed, we had a sense of not only

become able to expand the scope of our business withresponsibility but also a dedication toward the mission

a focus on pharmaceuticals and to develop ourthat we should fulfill as a pharmaceutical company,

business in a way that enables us to target the entire

and made that sense a natural part of the spirit of ourhealthcare market. We believe that, backed by thecorporate organization.

drug discovery capabilities we have built up over ourThis spirit and this corporate climate of innovation

century-long history, we have grown into a corporate

have been passed down to the present day. We in thegroup that can respond to the diverse demands ofmanagement team value the ideas and motivationsociety. Going forward, we will continue to take onthat our employees have brought to the Company

further challenges while evolving our relationships

over time and strive to create a constant flow of ideas

with stakeholders toward co-creation to build newthat will blossom into new businesses. In a recent

value together.

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