CareNet, Inc.

Business Plans and Matters Related to HighGrowth Potential
Progress Report for
the Nine Months Ended September 30, 2023
Katsuhiro Fujii, President

Contents

1. Business Model

2. Market Environment - Pharmaceutical DX Business3. Our Competitiveness4. Mid-term Plan and Growth Strategy
5. Annual Plans and Progress
6. Risk Information2

1. Business Model[Contents]
1. Business Model
2. Market Environment - Pharmaceutical DX Business3. Our Competitiveness4. Mid-term Plan and Growth Strategy
5. Annual Plans and Progress
6. Risk Information

1. Business Model

Corporate Profile
Name

CareNet, Inc.

Address

Sumitomo Fudosan Chiyoda Fujimi Bldg., 8-19, Fujimi 1-chome Chiyoda-ku, Tokyo, Japan

Established

July 1996

Employees

299 (as of September 30, 2023)

Business
activities

Medical contents services for doctors and medical professionals,
Medical and pharmaceutical business support for pharmaceutical companies

Business Activities

Corporate Philosophy

Improvement of future medical care by
information technology and imaging

Striving to create a sustainable healthysociety in the digital age

CareNet distributes practical information that isuseful in routine clinical practice to doctors andother medical professionals via the Internet andprovides pharmaceutical companies with solutions
for the effective communication of pharmaceutical

CareNet contributes the creation of a sustainable
society that is healthy and offers comfortableworking environments for both the recipients andproviders of medical care by constantly evolving ourbusinesses through technology and enthusiasm.

information.
4

1. Business Model

Our History■ Founded as Japan’s first medical education TV station and transitioned to an Internet-based business model.
CareNet is currently expanding its business in response to the growing number of doctor members.
Businesstransition

Medical content services(Transitioned to Internet-based business model)

CareNet TV Medical Ch.® (Satellite broadcasting)Pharmaceutical sales support services

Pharmaceutical DX business

Doctormembers
exceeds
150,000

Doctormembers
exceeds
100,000

Number of doctor
members(Ten thousand)Developed Japan’s first
online pharmaceuticalpromotion “eDetailing®”

20

Medical platformbusiness

OpenedCareNet.com
15

Listed on TSE
Mothers

Launched
CareNeTV on
the Internet

OpenedBusiness“MEDuLite”
alliancewith
Established
WebMD
Macromill
Carenet

Opened“Doctor’s
Picks”

Doctormembers
exceeds
200,000

Business alliancewith University ofOccupational andEnvironmental
Health, Tokio
MarineDoctormembers
exceeds
210,000

Acquired
CoreHuman,Acquired
Inc.
AD
MedicaOpened Japan’s first TV
station for medical care,“CareNetTV Medical Ch.®”
10Founded

1996

1998

2000

2004

Initialization

2007

2010

2013

2014

2015

2016

Development

2018

2019

2020

2021

2022

2023

Active progress5

1. Business Model

Our Business Model■ CareNet develops a variety of businesses that utilize the “doctor platform” oriented around CareNet.com.
CareNet.com
Fee payment

Providepharmaceuticalinformation

PharmaceuticalDX businessPharmaceuticalcompanies

Supportbusiness/marketing

Fee payment
Medicalplatform
business

Fee payment

Hospitals

Doctors
Medicalprofessionals

Provide medical
education contents

Introduce doctors

Outplacement
servicecompanies

The “Pharmaceutical DX business” is engaged in the service of providing doctors with information on the proper use of therapeutic drugs under contract withpharmaceutical companies, using our doctor platforms such as “CareNet.com.” Its business model relies on obtaining service income from pharmaceuticalcompanies, and it is our main business that accounts for about 90% of the total net sales of the CareNet Group (the “Group”).

The “Medical platform business” is engaged in the service of providing fee-based medical education videos to our member doctors and medical professionals.
Since becoming the first company in Japan to provide specialized information programs for doctors, we have built an extensive track record in producing medical
education programs. The business also provides information services for supporting job changes and opening businesses through group companies, with a viewto helping our member doctors’ career advancement and work-life balance improvement.
6

1. Business Model

CareNet.com
Medical information website used by more than 400,000 medical professionals
Members

444,569

Doctors who aremembers

219,897(As of September 30, 2023)“Medical contents” for immediate use in the field
An abundant selection of content is available for immediate use inclinical settings, including videos of procedures, patient
instructions, and explanations of relevant guidelines.

International research and news on medical care
Carefully selected articles published in leading international
journals are summarized in Japanese and are made available
together with the latest medical news in Japan to facilitate quick
and easy understanding of the current state of medical care.

71. Business Model

Pharmaceutical DX BusinessBusiness model for the Pharmaceutical DX business■ CareNet has endeavored to spread the proper use of new medicine from pharmaceutical companies
through use of the doctor platform. We have partnerships with over 70 pharmaceutical companies, growing
this into the core business of the Company.
Doctor platform (CareNet.com, etc.)
Consignment
contract

Provide information
Facility DB

Doctormembers

Responses/logs

CareNet.com

Pharmaceuticalcompanies

Doctor DB

Reports on results

Main services of the Pharmaceutical DX businessIT solution for connecting doctors and pharmaceutical companies: MRPlus®
One of our core services that broadcasts video content created from the perspective that the involvement of doctors is needed
to target other doctors, enabling the analysis of doctors’ responses while creating opportunities for engagement with MRs. Morethan 50 pharmaceutical companies have adopted this service.
Online livestreams of seminars by Key Opinion Leaders (KOLs1) available nationwide: Online seminars
Busy doctors can watch KOL seminars without having to leave the office. Online livestreaming is a very effective way to quickly
broadcast information about new treatments nationwide. Over 500 seminars are conducted annually, and this is a core service
together with MRPlus®.
1 KOL is an abbreviation for key opinion leader. KOLs refer to doctors who have wide influence in the medical industry. As part of sales promotion activities for their products, pharmaceutical companies reachout to KOLs, who are medical experts, in order to spread the latest pharmaceutical information. KOLs include doctors who are authorities in academic societies, professors at university hospitals, anddirectors of large hospitals.

8

1. Business Model

Medical Platform Business
Main service: CareNeTV
On-demand clinical videos for self-study by medical professionals

6,412

Paying members(As of September 30, 2023)

About 20 years producing medical education programs
As Japan’s first TV station specializing in content for
medical professionals (satellite broadcasting ended in
March 2011, switching to Internet distribution), CareNet hasabundant experience in producing medical education
programs, and CareNeTV delivers programs that cater tothe specific learning needs of medical professionals.

Complete lineup of programsMore than 2,000 programs are available, with approx. 10
new programs being released every month. Packed withuplifting and useful information from leading lecturers who
are active on the front lines of clinical practice! Designed
around programs for improving clinical skills in everythingfrom primary care to specialized fields, video content isavailable for a variety of genres, including preparation for
medical specialist exams, presentations, English, andstatistics.
Fee▪ Monthly/5,500 yen ▪ PPV/330 yen 9

1. Business Model

Our Profit Structure (1)－Net Sales
Net Sales (by segment)
Pharmaceutical
医薬DX事業DX business(Million yen)

Medical Platform
メディカルプラットフォーム事業その他
business and others

10,000

9,327

9,000

8,004

8,000
7,000
6,000

5,304

5,000

4,000
3,000

2,902

3,268

2,000
1,000
0
Fiscal year ended
2018/12期
December 31, 2018••

Fiscal year ended
2019/12期
December 31, 2019

Fiscal year ended
2020/12期
December 31, 2020

Fiscal year ended
2021/12期
December 31, 2021

Fiscal year ended
2022/12期
December 31, 2022

Achieved continuous growth in income and profit for eight consecutive years in FY2022.
The “Pharmaceutical DX business” accounts for most sales. Growth is in tandem with expansion of thePharmaceutical DX business.
10

1. Business Model

Our Profit Structure (1)－Performance by Segment■

The “Pharmaceutical DX business” accounts for over 90% and of CareNet’s
consolidated net sales and operating profit. Our profits are significantly impacted by
the performance of the “Pharmaceutical DX business.”
Profit structure by business segment and company-wideconsolidated results for the fiscal year ended December 31, 2022
(Million yen)

By business segment
Pharmaceutical DX
business

Medical platform business

Consolidated profit

Net sales

8,473

854

9,327

Operatingprofit

4,207

228

2,851

Operatingprofit ratio

49.7%

26.7%

30.6%

• Our original business, developing
abundant medical education
content centered on CareNeTV.
• Running CareNet.com, a doctor
platform that supports the
Pharmaceutical DX business.
• Running career support businessfor doctors• The Pharmaceutical DX businessaccounts for over 90% of both net
sales and operating profit.
• The Pharmaceutical DX businessis expected to continue to serve asa revenue driver.

Features ofbusinesssegments
and profit
structure•

Consolidated• Our core business and source ofprofits.
• With increasing doctor members as
the driving force, expected to growsignificantly to increase companywide earnings.

Between the total value of each business segment and the company-wide consolidated results, there exists a segment profit adjustment of -1,584 million yen.
11

1. Business Model

Our Profit Structure (2) – Major Costs■

The components of major costs for our business model are for “doctor members,” “platform,” “content,” and “sales
and management,” which is common to each business segment. The cost for content production is included in costof sales, and other components are included in selling, general and administrative expenses.
(Million yen)
FY2022
Consolidated

Net sales

9,327

Ratio tonet sales

Details―• Around 90% of our consolidated net sales are generated by the Pharmaceutical DX
business.
• Most of our costs are related to content production regardless of business segment. By
creating and placing content on each business segment’s platform, we can offer services
such as delivering pharmaceutical information to doctor members, selling paid content,
and providing career support. The major costs are personnel expenses and outsourcing
costs regarding content production.

Cost of sales

2,915

31.3%

Gross profit

6,412

68.7%

Selling,
general andadministrative
expenses

3,560

38.2%

Operatingprofit

2,851

30.6%

• We have executed stringent cost controls (securing gross profit) based on sales forecasts
and order management.
• Our selling, general and administrative expenses are roughly divided into two
components. One is related to development of platforms and their operational
management, and the other is for personnel engaged in sales and management, etc.
• Costs related to development, operation, and management of platforms include those forinternal staff engaged in development/operational management, outsourcing, acquisitionof doctor members who use our platforms, activation of the platforms,
development/operational management of databases on member doctors, medical
facilities, etc.
• Costs for personnel engaged in sales and management include those for personnel incharge of planning, sales, and project promotion in each business segment, theiractivities, development of new businesses, personnel engaged in company-wide
administrative operations, house rent, and heating and lighting.
• Most of net sales in the Pharmaceutical DX business are generated from project orders.
Higher sales do not necessarily lead to an increase in operating profit as we need tostrengthen our sales management system in response to increases in sales (orders).
122. Market Environment- Pharmaceutical DX Business[Contents]
1. Business Model
2. Market Environment - Pharmaceutical DX Business3. Our Competitiveness4. Mid-term Plan and Growth Strategy
5. Annual Plans and Progress
6. Risk Information

2. Market Environment

Trends in Shares in the Japanese Ethical Drug Market■ The size of the ethical drug market is expected to remain flat in the future.
■ The specialty/rare disease area will continue to increase its market share while sharesin the primary care area has been shrinking.
9 trillion yen

10 trillion yen

10 trillion yen

100%
90%
80%

26%

70%

60%

71%

52%

50%
40%

60%

30%
20%
10%

40%
25%

0%

2010
スペシャリティ領域
Specialty area*1

2020
Primary care
プライマリ領域＊2
area*2

2030
Generic
ジェネリック
medicines

Prepared by the Company based on
IQVIA data and an SMBC Nikko
Securities report(on an NHI price basis)＊1*1 Specialty pharmaceuticals are developed by using advanced technologies. They are often biologics mainly used for the treatment of intractable diseases such as cancer
and rare diseases.
*2 Primary care drugs are low molecular weight compounds designed to be mass-produced mainly for the treatment of lifestyle-related diseases such as high blood pressure.

Each specialty pharmaceutical has a smaller patient population than primary care drugs. While the number of medical facilities thatcan prescribe such pharmaceuticals is limited, a high degree of specialization to provide medical information is required. Therefore,
unlike the era of primary-care drugs, a different type of promotion is needed for specialty pharmaceuticals.
14

2. Market Environment

Backdrop to Expansion of Pharmaceutical DX Market: Declining Number of MRs
Number of MRs

The number of medical representatives (MRs) has been reduced in response to the patent expirationof primary-care drugs and progress in development and release of specialty pharmaceuticals.
63,875 63,846

64,00065,752 64,657
64,13563,18561,24662,43359,90060,00057,15856,000Accelerated by the
COVID-19 crisis

53,586
51,84852,00049,682

0
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: “White Paper on MRs” released by the MR
Education & Accreditation Center of Japan

Market environment irreversibly changed by COVID-19
Reduction of MRs

MR reduction accelerated. More sales bases were consolidated.

Behaviors of
doctors

Gathering of pharmaceutical information on the Internet expanded.
Meetings became online.
Role changed from a tool to complement MRs (online
advertising) to a tool to replace MRs.

ePromotion

15

Backdrop to Expansion of Pharmaceutical DX Market: Changes in
Development of Specialty Pharmaceuticals

2. Market Environment■ Modalities*1 (drug discovery platform technology types) of specialty pharmaceuticals are becoming diversified andhighly specialized.
■ R&D by development-focused venture companies (EBPs*2) is driving the expansion of specialty pharmaceuticals.
*1) Modalities: A classification of drug discovery platform technologies for pharmaceuticals. Low molecular weight compounds used to dominate, but there has been a rise in newmodalities such as biopharmaceuticals in recent years. Specifically, in addition to antibody drugs known as molecular targeted drugs, modalities include cell therapy, gene therapy,
peptide drugs, and oligonucleotide drugs, among others.
*2) EBP: Emerging biopharma. EBPs refer to companies with annual revenue of less than $500 million and annual R&D spending of $200 million or less.

Number of new drug approvals
by modality
New
新規モダリティmodalities
100%

Low
molecular weight
低分子化合物
compounds
100%

80%
60%

49%
71%

Major
pharma
EBPs
大手製薬企業
EBP
firms

80%
60%

40%
20%

Share of EBPs in the global development pipeline
その他
Others24%

By country and region

38%
53%

49%

40%

51%
29%

65%
20%

78%

62%

33%

47%

Share of EBPs
in Japan
expected to
22% increase

Europe
欧州

Japan
日本

0%

0%

2016
2016年

2021
2021年

Prepared by the Company based on information fromthe Office of Pharmaceutical Industry Research

Provision of information on new drugs requires
a high level of expertise

2001年
2001

2021年
2021

U.S.
米国

Prepared by the Company based on IQVIA’s “Global Trends in R&D
OVERVIEW THROUGH 2021”

Outsourcing of operations, particularly sales and marketing processes,
has expanded due to the rise of EBPs

16

2. Market Environment

Estimated Market Size of Pharmaceutical DX Business (Our Point of View)■ As the specialty area expands, the structure of promotional costs for pharmaceutical companies will change significantly. In■

house costs (MR-related costs) will decrease, and more companies will switch to outsourcing.
The methods to provide pharmaceutical information will evolve through the “integration of humans and DX,” regardless ofwhether it is done by using internal resources of pharmaceutical companies or outsourcing.

Promotional costs of pharmaceutical companies

In-house
costs

MR-related
costs• Cost reduction due to expiration of primary care drug patent• Results of promoting DX, etc.

▪ MR personnel
costs▪ MR activity costs• Pharmaceutical companies have an obligation to provide,collect, and communicate information on the quality,
effectiveness, and safety of pharmaceuticals in order topromote proper use.
• MRs will continue to play an essential role in the future, butthey will primarily be stationed in acute care hospitals where
specialty pharmaceuticals are prescribed, and there will be ashift to more efficient information activities in conjunction withthe use of DX.

(Paper materials,
events, etc.)

Approx. 400 700 billion
yen4)

Approx. 1.2 - 1.4
trillion yen1)

Pharmaceutical DX Market
CSO*1
Outsourcing
costs

70 billion yen2)
ePromotion
50 billion yen3)*1) CSO: Contract
sales organization.
It refers to anorganization
contracted toprovidepharmaceuticalsales services

Approx. 300 - 400
billion yen5)

20201) The Company’s estimate is based on the “Handbook of Industrial Financial Data 2017” edited by

Development Bank of Japan Inc. and the “2020 White Paper on MRs” by the MR Education &Accreditation Center of Japan.
2) The Company’s estimate is based on data from Deloitte Tohmatsu MIC Research Institute Co., Ltd.
3) Calculated by totaling the Company’s estimates of sales scale for FY2021 of similar services forvarious companies, based on annual securities reports.

2030• The collaboration and integration (DX) of dispatched MRs(CSOs) and ePromotion will progress, and thecompetitiveness of outsourcing services will improve,
resulting in market expansion.
• As the digital transformation (DX) of the outsourcing market
advances, the CSO and ePromotion markets are combined
to be defined as the “pharmaceutical DX market.”4) As medical facilities which use specialty pharmaceuticals are limited to core hospitals in each area, theCompany estimated personnel and activity costs of MRs who are required to be assigned based on the numberof secondary medical areas (approx. 350).
5) The Company’s estimate is based on data, including estimated sales of specialty pharmaceuticals in IQVIA’s“Japan Pharmaceutical Market Statistics” and “Global Pharmaceutical Market Forecasts”, and the MHLW’s “Listof New Drugs”.

17

3. Our Competitiveness[Contents]
1. Business Model
2. Market Environment - Pharmaceutical DX Business3. Our Competitiveness4. Mid-term Plan and Growth Strategy
5. Annual Plans and Progress
6. Risk Information

3. Our Competitiveness

Competitive Advantages■ Industries that operate the business of supporting pharmaceutical promotion include platform
providers with doctor members such as CareNet, Internet service providers without doctor
members, contract sales organizations (CSOs), advertising agencies, and event organizers.
Our competitive advantages
1. Ownership of doctor platforms••

CareNet has now over 210,000 doctor members (reached 210,000 on February 13, 2023), covering over 60% of all doctors in Japan(Number of doctors: 339,623, according to the MHLW’s “Statistics of Physicians, Dentists and Pharmacists 2020”).
Doctor platform providers are characterized by their business model that they offer services to their doctor members by obtaining theirconsent for information provision (permission to not only provide them with information on drugs, etc. but also report their viewing
activities to pharmaceutical companies). There are only a limited number of players in this market in Japan, including M3, Medpeer, and
CareNet.

2. Operation of doctor education media••

Since our founding in 1996, we have created medical education video content for doctors. We have operated “CareNeTV,” one of Japan’slargest medical training media, enabling users to stream videos from over 2,000 programs in its library at any time.
We have established our brand as educational media for doctors owing to the high quality and reliability of the information we produce
and broadcast.

3. Demonstration of more advanced information communication capabilities thanks to a hybrid model••

We obtained a permit for worker dispatching undertakings in August 2022, and furthermore, decided to purchase CoreHuman, Inc., which
operates the CSO (dispatched MR) business.
This enabled us to operate a business to provide information through not only the Internet but also people.
By implementing the information provision model that integrates the Internet and people (hybrid model), we will acquire more superior
information communication capabilities than our competitors.

We are highly competitive in all aspects of information reliability, number of doctors covered, andability to communicate to doctors
19

3. Our CompetitivenessCharacteristics of Our Doctor Platform and Doctor Members
Our doctor platform
CareNet.com(Doctor member registration)

Pharmaceutical DX
business services

MRPlusDoctor members

Pharmaceuticalcompanies
Transactions withover 70 companies

Over 200,000
members,
continuing to
expandOnline seminar
Consent fromdoctormembers for
information
disclosure

Consent fromdoctormembers for
information
provision

0% 20% 40% 60% 80% 100%

•

•

•

CareNet has now over 210,000 doctor members (219,897 as of September
30, 2023), covering over 60% of all doctors in Japan (Number of doctors:
339,623, according to the MHLW’s “Statistics of Physicians, Dentists andPharmacists 2020”). We have the second largest number of doctor members
among doctor platform providers.

Looking at data for each specialty clinical department with strong connections
to therapeutic drugs, the ratio of our doctor members to all doctors has
exceeded 70% and continues to increase in many clinical departments.
From all doctor members registered on the doctor platform after theirverification, we obtain consent for provision of drug information frompharmaceutical companies and consent for disclosure of viewing history of
doctor members to pharmaceutical companies. Such doctor verification andconsent from doctors provide the grounds for receiving the outsourcing ofoperations from pharmaceutical companies.

Number ofmember doctors

All clinical departments
全診療科

67.9%

219,897

Internal medicine
内科

61.3%

37,721

循環器内科
Cardiovascular
medicine

86.7%

11,291

Respiratory呼吸器内科
medicine

85.7%

5,765

Diabetes,
metabolism and糖尿病・代謝・内分泌内科
endocrinology

83.3%

4,687

血液内科
Hematology

89.8%

2,550

Neurology
神経内科
Rheumatology and
膠原病・リウマチ科
connective tissues
心療内科
Psychosomatic medicine

65.8%
86.1%
73.3%

3,791
1,576
649

Source: MHLW’s “Survey出典：厚生労働省
of Physicians,
Dentists and Pharmacists 2020”
令和２年医師・歯科医師・薬剤師統計

20

Characteristics of CareNet’s Educational Media
1

Collaboration with KOL physicians

We operate “CareNeTV,” one of Japan’s largest medical
education media, enabling users to stream from over
2,000 programs in its library. In order to write and post
over 3,000 medical articles to our core doctor platform
CareNet.com every year, we keep in constant contact
with KOLs.

2

3. Our Competitiveness

Collaboration with KOL surgeons

CareNet has also built relationships of trust with not
only KOL physicians but also KOL surgeons.
Cancer@Misewaza, planned and operated by CareNet,
provides video content for young doctors in which
Japan’s leading KOLs in organ-specific cancer
treatment introduce their treatment strategies andtechniques.

These activities, carried out with the cooperation of many leading medical specialists, ensure the highquality and reliability of information we provide.
21

3. Our CompetitivenessHybrid Model’s Information Communication Capabilities■ We decided in August 2022 to make CSO (dispatched MR) company CoreHuman, Inc. a groupcompany of CareNet. As a result, we are now able to provide information through the integrationof humans and DX, in addition to through the Internet, which has been a standard method.
Doctor member DB
Analysis of behaviors of doctor members
using big data analysis owned byHealthcare Consulting Inc. (a groupcompany of CareNet)

Optimal message analysis using AI/speech
recognition technology owned byInteractive Solutions Corporation(business alliance partner)

Internet

Online conference system

Our main online service “MRPlus”“FORA,” an online conference system for doctors
developed by the Company

Visits by MRs
Digital MRs (DMR) who can engage in activities linked
to digital technology

第1回ザ★ディベート

We will promote the provision of a “hybrid model” that enables service users to select optimal messages andoptimal information channels in conjunction with doctor behavior analysis.
22

4. Mid-term Plan and Growth Strategy[Contents]
1. Business Model
2. Market Environment - Pharmaceutical DX Business3. Our Competitiveness4. Mid-term Plan and Growth Strategy
5. Annual Plans and Progress
6. Risk Information

4. Mid-term Plan

Targets Set in the Mid-term Plan
■ We aim to achieve consolidated net sales of 30.0 billion yen and consolidated operating profitof 10.0 billion yen by 2025.
⁃ We will continue to grow strongly in the expanding pharmaceutical DX market.
■ We aim to build a business model that contributes to the creation of a sustainable society.
⁃ We will build a model in which the Medical platform (MP) business and Health data science (HDS)
business are linked to the growing Pharmaceutical DX business.

Sales

Pharmaceutical DX
(New)

5.3
billionyen

8.0
billion
yen

2020

2021

Existing businesses of Pharmaceutical DX and
Medical platform (MP)Organic growth

Existing
business

Management targets

MP (New)Newbusiness

Growth through new business models
・M&A promotion
・Business alliance promotion
・Development investment promotion ・ESG/health management promotion

30.0
billionyen
2025(targets)

CAGR(Period of the
Mid-term Plan)

2020 (results)

2022 (results)

2023 (forecasts)

2025 (targets)

New sales

5.3 billion yen

9.3 billion yen

11.0 billion yen

30.0 billion yen

41%

Operatingprofit

1.5 billion yen

2.9 billion yen

3.0 billion yen

10.0 billion yen

46%

Operatingprofit ratio

28%

30%

27%

33%

Doctormembers

180, 000(~60% of doctors)

210,000(~70%)

220,000(~74%)

250,000(~80%)-*Figures are rounded to the nearest 100 million.

24

4. Mid-term Plan

Mid-term Sales Targets – by Segment■ The breakdown of our consolidated net sales target of 30.0 billion yen by segment is 26.0 billion
yen for the Pharmaceutical DX business and 4.0 billion yen for Medical platform and others.
⁃ The Medical platform business and the Health data science business will contribute to medium- to longterm growth from 2025.
Pharmaceutical
医薬DX事業(Billion yen)
35.0
35.0
350

DX business

Medical platform
MP事業その他

business and others

30.0 billion

30.0
300

4.0

25.0
250

200
20.0
15.0
150

100
10.0
5.0
50
00

Pharmaceutical DX
business
MP business andothersCompany-wide

5.3 billion
0.5
4.8

8.0 billion
0.6
7.4

9.3 billion
0.9

26.0

8.5

2020
2020年
Results
実績

2021
2021年
Results
実績

2022
2022年
Results
実績

2025
2025年
Targets
目標

2020
Results

2021
Results

2022
Results

2025
Targets

4.8

7.4

8.5

26.0

0.5

0.6

0.9

4.0

5.3

8.0

9.3

30.0

*Figures are rounded to the nearest 100 million.

25

4. Mid-term Plan

Mid-term Sales Targets – Existing Business vs. New Business■ In addition to the organic growth of existing businesses, we will pursue the development of new
businesses.
⁃ We aim for 40% of sales from new businesses by 2025.
New businesses of pharmaceutical DX: DX of the outsourcing businesses such as CSO, site management organization (SMO) and contract
research organization (CRO), medical data analysis business, etc.
New businesses of medical platform: Medical institution management consulting business, development of non-covered treatment menu, etc.
Existing
既存(Billion yen)

New
新規

35.0
350

30.0 billion

30.0
300
25.0
250

12.5

200
20.0
150
15.0
8.0 billion

9.3 billion
0.1

8.0

9.3

2020
2020年
Results
実績

2021
2021年
Results
実績

2022
2022年
Results
実績

2025
2025年
Targets
目標

2020
Results

2021
Results

2022
Results

2025
Targets

Existing

5.3

8.0

9.3

17.5

New

0

0

0.1

12.5

Company-wide - Total

5.3

8.0

9.3

30.0

100
10.0
50
5.0
0

5.3 billion
5.3

17.5

*Figures are rounded to the nearest 100 million.

26

4. Mid-term Plan

Operating Profit Target■ We aim to achieve consolidated operating profit of 10.0 billion yen for consolidated net

sales target of 30.0 billion yen by 2025.

⁃ Our goal is to achieve operating profit ratio of more than 30% through efforts such as thorough control of
man-hours and costs and productivity improvement.
Operating
営業利益
profit(Billion yen)

Operating
営業利益率
profit ratio

150
15.0
31.6%
120
12.0

28.5%

30.6%

33.0%
10.0 billion

30.0%

90
9.0
20.0%

60
6.0
30
3.0

1.5 billion

2.5 billion

10.0%

2.9 billion

0

Operating profit
Operating profit ratio

0.0%
2020年
2020
実績
Results

2021年
2021
実績
Results

2022年
2022
Results
実績

2025年
2025
Targets
目標

2020
Results

2021
Results

2022
Results

2025
Targets

1.5

2.5

2.9

10.0

28.5%

31.6%

30.6%

33.0%

*Figures are rounded to the nearest 100 million.

27

4. Mid-term Plan

Important Management Indices■ Important indices that hold the keys to achieving targets⁃ “Number of doctor members”: Our doctor platform is a pillar of our business. Since the doctor⁃

platform is essential for our business growth, the number of registered doctors in this platform is an
important management index for CareNet.
“Ratio of net sales from new businesses”: We aim to achieve our mid-term sales targets throughthe development of new businesses. The ratio of net sales from new businesses is also an important
index.

Management index targets for 2025
Number of doctor
members
250,000

Ratio of net sales
from new businesses
40%

Net sales
target30.0 billion yen

Operating profit
ratio
33%

Operatingprofit target
10.0 billion yen

In the Pharmaceutical DX market, which continues to expand over the medium- to long-term, our management’s
highest priority is “growth” centered on new business development.

28

PharmaceuticalDX business4. Mid-term Plan

Pharmaceutical DX Business: Sales Targets■ The Pharmaceutical DX business, our core business, aims to achieve net sales of 26.0

billion yen by 2025.

⁃ Through the development and implementation of new businesses, we target to achieve net sales of 10.9
billion yen from new businesses and 40% of net sales from them.
Pharmaceutical DX
医薬DX事業-既存
business- existing(Billion yen)Pharmaceutical DX

医薬DX事業-新規
business - new

300
30.0

26.0 billion

250
25.0

10.9

200
20.0
150
15.0

7.4 billion

8.5 billion
0.1

7.4

8.4

2020年
2020
Results
実績

2021年
2021
Results
実績

2022年
2022
Results
実績

2025年
2025
Targets
目標

2020
Results

2021
Results

2022
Results

2025
Targets

Existing

4.8

7.4

8.4

15.1

New

0

0

0.1

10.9

4.8

7.4

8.5

26.0

100
10.0
50
5.0
00

Pharmaceutical DX
business - total

4.8 billion
4.8

15.1

New businesses• DX of CSO, SMO,
CRO, etc., medical
data analysis
service, etc.
Existing businesses• ePromotion
services such as
MRPlus andonline seminars*Figures are rounded to the nearest 100 million.

29

PharmaceuticalDX business4. Mid-term Plan

Business Strategy of Pharmaceutical DX■ An important policy for the Pharmaceutical DX business is to accelerate growththrough the development and implementation of new businesses.

⁃ By acquiring resources, we will expand the business stage that can be covered by the services we provide
and develop the foundation for our outsourcing business.

Key DX business strategies andsteps to be taken[1] Develop a hybrid model⁃Internet

People(professionals)

Capabilities

Current
statusEnter the CSO business to promote DX

Resources
offered(ePromotion)[2] Penetrate into the upstream segmentof the pharmaceutical stage⁃⁃

Sales andmarketingBusiness scale in 2025

Both clinical trials and sales of specialty
pharmaceuticals are concentrated atcore hospitals
Expand the range of support services
from pre-marketing clinical trials to postmarketing safety surveillance[3] Enhance the use of medical data

⁃

Data

Support for clinical trials, sales
enhancement, efficiency improvementof post-marketing surveillance

Clinical trials

Towards medium- tolong-term growth
Preclinical

Upstream business processes ofpharmaceutical companies
Pharmaceutical stage

30

PharmaceuticalDX business4. Mid-term Plan

Issues with the Current Business Model■ To achieve the Mid-term Vision, it is necessary to put the Company’s core business of Pharmaceutical DX as
the center of its growth strategy.
⁃ To expand the growth of Pharmaceutical DX, relying solely on the existing “ePromotion” model isinsufficient.
Current Business Model (ePromotion Model)
Communication
Content••

Doctormembers

ePromotion Service

MR Plus

Provide information
Communication
rate
•
•

Pharmaceuticals
Applicable to Business

Possible to provide uniform and detailed
information with video, etc.
Due to unidirectional provision, issues with
fixed messages, interactivity (discussions)

Consignment toprovideinformation

Pharmaceuticalcompanies

Online seminars

Simultaneous broadcast to the entire country and
immediately gain viewership
Limits to viewershipMarket Trend

CareNet.com

ePromotion Issues

Resolution Direction

Primary carepharmaceuticals

With the reduction of MRs, expand
utilization of ePromotion as alternative
means

•

Realize a communication rate expected as a
successor to MR
Competitive advantage against ePromotion
competitors••

Increase number of members
Establish a hybrid communication
process using people alongside
electronic methods

Specialty
pharmaceuticals

Shortage of marketing and sales
personnel who can handle the approvalrush of highly specialized specialty drugs

The key to specialty is to build a research networkof regional medical specialists using KOLs at thecore, but contribution will be difficult with thecurrent unidirectional eModel•

Platform to attain engagementwith KOLs
Improve productivity bycoordinating with MR activity

⚫
⚫

•

•

Development of a new “Pharmaceutical DX business model” is necessary to resolve the issues above.
We aim to accelerate development by building systems and creating business alliances along with raising sufficient financing thatwill be necessary.
31

PharmaceuticalDX business4. Mid-term Plan

[1] Develop a Hybrid Model

Hybrid model for all types of pharmaceuticals
Current online
services

DMR
Digital MR

KOL DB

VisitsDoctormemberDB

Onlineconferences

Call centers▪ MR Plus▪ Onlineseminars, etc.

KOL approach for specialty pharmaceuticals
KOL coordinator

DMR
Digital MR▪ Relationships between KOLs
▪ Research areas and interests of
KOLs▪ Planning of clinicalconferences▪ Follow-up▪ Arrangement of online▪ Closingconferences for relevant parties

Online clinicalconferences by KOLs

Support with AI
Target doctors

Participants are influencers from regional core
hospitals

BroadcastPrefer to use theInternet

Prefer to interact withpeopleBroadcast

Regional core
hospitals▪ Reliable communication to target doctors▪ Influencer marketing using KOLs

We obtained a permit for worker dispatching undertakings in August 2022 anddecided to make CoreHuman, Inc., which operates the CSO business, a groupcompany of CareNet. We will pursue DX of dispatched MRs with our Internet
technology and improve the ability to communicate to doctors with a hybrid
approach using the Internet and digital MRs.

Evidence-based case studies are the most effective means of promoting
the proper use of specialty pharmaceuticals. Leveraging our
relationships with KOLs, we will create valuable opportunities for casestudies among busy KOLs through a hybrid approach.
32

PharmaceuticalDX business[2] Penetrate into the Upstream Segment of thePharmaceutical Stage4. Mid-term Plan

■ Both clinical trials and sales of specialty pharmaceuticals are concentrated at core hospitals.
■ We will expand the range of support services from pre-marketing clinical trials to post-marketing
safety surveillance.
• Opportunities for post-marketing safety surveillance have increased due to the expansion of drugs
receiving fast-track approval• The outsourcing of operations has further expanded due to the rise of EBPs
• Building relationships with pharmaceutical companies and hospitals from the clinical trial stage has
contributed to increasing back-end promotion orders

Concentrated at regional core hospitals (DPC hospitals)
Pre-marketing
Basic
research
Preclinicalstudies

Outsourcing
operators

Approval

Clinical trial
Ph I

CRO

Ph II

Post-marketing

Sales and marketing
Ph IIISMOCRACE Co.,Ltd. YMG SUPPORT CO., LTD

Sales

CSO
CoreHuman, Inc.

Develop new solutions in partnership with companies who became part of the
CareNet Group

Post-marketing
monitoring

PMS
supportPromotepartnership

CareNet’s doctor platform
We will promote DX of outsourcing operations and provide highly productive services in tandem withthe doctor platform.
33

PharmaceuticalDX business4. Mid-term Plan

[3] Enhance the Use of Medical Data

■ Data collection and acquisition of analytical capabilities will be essential for pursuing the outsourcing
business with pharmaceutical companies.
Unmet needs of pharmaceutical companies in data analysis at the development andsales stages
Clinical trials
Support for
protocoldevelopment

Patient
recruitment

Sales and marketing
Health technology
assessment (HTA)

Development of new analysis
services by integrating andanalyzing various medical data•

Real world
evidence

Post-marketing
safety (PMS)

Medical big data analysis by a groupcompany Healthcare Consulting Inc.

Regional core
hospitals

Doctor members

Alliance partners• DPC data
• Medical
treatment data

• Treatment statussurveys• Unmet needs surveys• Prescription data
• Nationwide DPC
data

In addition to expanding data sources for utilization in the development of new Pharmaceutical DX businesses,
we will horizontally expand utilization for new businesses in the Medical platform business and Health data
science business.
34

PharmaceuticalDX business

Outline of the Pharmaceutical DX Business
Model Development Plan Starting from FY2022

4. Mid-term Plan

Pharmaceutical DX Business Model
Business Model

Consignment to provide information witha hybrid model

Treatment education and taking charge ofoutreach with KOLs at the core

Goals (To Be Achieved by 2025)

Delivery to 100,000 hospitals nationwide(both primary and specialty care areas)

Delivery to 1,000 key hospitals nationwide(targeting mainly specialty areas)

Solutions

Reliable reaching of targets through a
hybrid of real world and online channels

Sharing case experience of KOLs, spreading
new treatments to key hospitals and medical
specialists in each region

Platform
expansion

Platform coordinating the real world andeDTLInteractive engagement with KOLs

AI implementation

Delivery message optimization

Optimize targeting medical specialists(doctors, patients) using AI

Development
Goals(2022-2023)

Resource
expansionDevelopment approach (including
alliances, M&A)

Progress in 2022

DMR*
implementation

Increase doctor
members

Medical treatment
data analysis

Secure KOLs

DMR company
employment and training

Linking the Company’s
Medical platform business▪ Training (video andpublications)▪ Expanding content forcareer services, etc.

Alliance in AI anddata analysis

Employment and trainingof medical coordinators

Linking the Company’s
Health data sciencebusiness development

Linking the Company’s
Medical platform business(training)• Established Healthcare Consulting
Inc. (medical big data)• Business alliance with Interactive
Solutions Corporation• Made YMG SUPPORT CO.,LTD (SMO) and CRACE
Co.,Ltd. (CRO) groupcompanies

Collaborating with
CSOs
• Obtained a permit for worker
dispatching undertakings• Made CoreHuman, Inc. (CSO)a group company• Doctor members
exceeded 200,000

We will allocate funds raised in FY2021 to development of each model and begin development in earnest by joining company development,
alliances, M&A, etc.
*) DMR: Abbreviation of Digital Medical Representative. Dispatched to the pharmaceutical industry, a MR armed with digital skills (having received digital training, and able to link platforms and activities).

35

Medium to longtermdevelopment

4. Mid-term Plan

Medical Platform Business and Others: Sales Targets■ The 2025 sales target for the Medical platform (MP) business is 4.0 billion yen.
⁃

We plan to develop and roll out new businesses, including the Health data science business, and increase
sales from new businesses to 1.7 billion yen, or 40% of total sales.
MP business and others MP事業その他-既存
existing(Billion yen)

MP business and others -MP事業その他-新規
new

50
5.0
4.0 billion

40
4.0

1.7

30
3.0
20
2.0
10
1.0

0.9 billion

2.3

0.5 billion

0.6 billion

0.5

0.6

0.9

2020年
2020
Results
実績

2021年
2021
Results
実績

2022年
2022
Results
実績

2025年
2025
Targets
目標

2020
Results

2021
Results

2022
Results

2025
Targets

Existing

0.5

0.6

0.9

2.3

New

0

0

0

1.7

0.5

0.6

0.9

4.0

00

MP business - total*Figures are rounded to the nearest 100 million.

36

4. Mid-term Plan

Medium to longtermdevelopment

Aim of Medium to Long Term Development in New Business Field■ In line with the further growth of our core Pharmaceutical DX business, we will also work on the “Medical

platform business” to support clinics and the “Health data science business” to support health care and healthmanagement through work settings as new growth businesses, centered around our doctor platform.

Work settings

HealthinsuranceNewbusiness

Medicalcosts

Healthscreenings

Company

Clinical settings

Employees/
patients

Medicaltreatment

Doctors

Health support service through work
settings• Support employee health promotion andcorporate health management through healthmanagement in work settings for companies• Support medical treatment and managementfor doctor members (attracting
patients,
メディカルプラットフ
improving efficiency, etc.)
ォーム事業✔ Prescriptions / health screening data
✔ Attendance data / Mental health checkups✔ Biometric data / life logs
✔ Medical examination history / service history✔ Advisory contracts with companies✔ Remote reservations✔ Hybrid medical interviews (In-person, remote)✔ Specialist counseling, Non-covered treatment

 Development of data-based health management
platform for companies and individuals

New
medicine

Pharmaceuticals

Smart clinic support service

New Pharmaceutical DX
business model

support✔ Patient monitoring✔ Recruiting, Clinic efficiency support

 Development of smart clinic services

Existing
business

Health data science business

CareNeTV / Career services

MR Plus/Online
seminars

Medical platform businessPharmaceutical DX
business37Medium to longtermdevelopment

4. Mid-term Plan

Medical Platform Business - Direction of Future Development (for clinics)■ Toward our philosophy of “creating a sustainable healthy society in the digital age,” CareNet is working to encouragesmarter clinics where there is room for improving the efficiency of medical treatment and business operations throughdigitalization.
New development of the “smart clinic” (SC) service line-up
Attracting patients
Remote reservations• Online reservations for
medical treatment

Diagnostics(medical interview)
Hybrid medical interviews• In-person, remote, AI
medical interviews• Diagnostic support

Treatment

Continuation

Specialist counselingManagement

Patient monitoring• Biometric data
• Life logs
etc.

Recruiting• Staff dispatch / introduction• Staff education

Online specialist consultation

Clinic efficiency support• Administration• Electronic records,prescriptions
etc.

Non-covered treatment
support• Anti-aging• Cosmetic treatment• Nutritional consultations etc.

Advisory contracts withcompanies• Proposing corporate
support to solve employee
health management issues

Educational clinical medicine channel that provides fun learning from top-level
senior medical professionals

Expanding doctor platform with over 200,000 registered doctor members
Website providing daily information on medical care with over 3,000
articles and news items posted every year

Search papers on PubMed
in Japanese

Medical news selected by
specialists(CareNet.com)
38

Medium to longtermdevelopment

4. Mid-term Plan

Health Data Science Business (Under Development) – Business Opportunities■ Corporate investment in health is increasing year to year (compulsory expenses in regular health screenings, stress checks, industrial
physician costs, etc. in addition to services in collaboration with health insurance associations and other health promotion services
provided as benefits that aren’t required by law). The number of companies recognized as “Certified Health & Productivity Management
Outstanding Organizations” has continued to increase with the promotion of work-style reforms.

Health & Productivity
Management Market Scale*(Orgs.)

Large Enterprise Category**

3,000

2,676
2,299

2016
2016年

2025
2025年

1.88
1.4

1.5

1.6

1.7

1.8

1.9

539

2,501
318

775

0
2017 2018年
2018 2019年
2019 2020年
2020 2021年
2021 2022年
2022 2023年
2023
2017年

*) Total values of markets for services supporting health &productivity management and health status measurement from
the Ministry of Economy, Trade and Industry “Promoting Healthand Productivity Management” (2018)

Health insurance
association
Data health plan

4,811

3,000

0

2

7,934

6,000

813
235

(Trillion yen)

12,255

9,000

1,476
1,000

14,012

15,00012,000

1,801

2,000

1.58

SME Category**(Orgs.)**) Annual total of Ministry of Economy, Trade and Industry’s “Certified Health & Productivity
Management Outstanding Organizations” in (large enterprise category) and (SME category)

Company
Collabo-health

2017年
2019年
2022年
2017 2018年
20182019 2020年
2020 2021年
2021
2022 2023年
2023
2017
2018
2019
2020
2021

Healthmanagement Employees

Insufficient
coordination

Medical institution
Provision ofintervention services

With increasing corporate investment in health, companies and health insurance associations are promoting further
collaboration in data and services. However, there is still a lack of coordination with external intervention services toprovide health guidance to pre-disease groups or to prevent aggravating the conditions of employees facing healthissues, and this has not led to measurement of the effectiveness of health investments or subsequent improvements.
39

Medium to longtermdevelopment

Health Data Science Business (Under Development) – Direction ofBusiness Development

4. Mid-term Plan

Service for supporting the promotion of corporate health management through individual health management centeredon work settings
Development of a health platform that provides a one-stop access point for a variety of functions ranging from data analysis to necessary
medical and health care services and verifications of effectivenessWorkplaces

Insurance providers

Large enterprises
Approx. 10,000

Health insurance
associations
Approx. 1,400

SME enterprises
Approx. 3.80 million

Collabo-healthPrescriptions / healthscreening data

Attendance data
Mental health checkups

Medical care / health care
Medical institutions
Individuals(insured)
Approx. 16.00
million

Biometric data / life logs

Health care services(Nutritional guidance,
mental care, fitness, etc.)
Advisory
contracts

Medical examination history/ service history

Health management platform provided for companies and individuals
Data analysis

Optimization of healthinsurance finances

Algorithms

Increased productivity

Intervention
services

AdviceEnhanced health

Effectivenessmeasurement

ROI

We will promote data analysis and algorithm development through our alliance with the Health Management Systemof the University of Occupational and Environmental Health and the Tokio Marine Group concluded in FY2020. By
linking the medical platform developed by CareNet with the services and programs of each partner, we will develop
and provide a platform for supporting both corporate and individual health.
40

4. Mid-term Plan

Trends in and Target for Number of Doctor Members■

We aim to reach 250,000 doctor members by 2025.
Number of doctor members
260,000

250,000

240,000

219,897
220,000

209,413
193,946

200,000

181,352
180,000

153,705

160,000

140,000

138,895

144,457

132,730

120,000

2016年
2016

2017年
2017

2018年
2018

2019年
2019

2020年
2020

2021年
2021

2022年
2022

2023年9月
Sep 2023

～
～

0

2025
2025年(計画)(Plan)

41

4. Mid-term Plan

Key Measures to Expand Membership of Doctors■

Improve content quality and quantity⁃⁃■

We provide useful information for doctors and medical professionals in routine clinical practice, in accordance with our businessphilosophy.
We will aim to attract the attention and support of as many doctors as possible by enhancing new content for high-profile disease
areas in terms of both quality and quantity.

Strengthen ties with universities⁃■

Through our initiatives such as providing CareNeTV free of charge to medical students and young doctors under clinical training,
we will strive to gain recognition of our services among them from an early stage in order to lead them to become our members.

Enhance mobile specifications⁃

We will continue to improve content planning and system specifications so that our content and services can be accessed moreconveniently from mobile devices. Improving convenience is important for maintaining and increasing the frequency of use bybusy doctors. Information sharing with colleagues also leads to referrals of doctor members.

42

5. Annual Plans and Progress[Contents]
1. Business Model
2. Market Environment - Pharmaceutical DX Business3. Our Competitiveness4. Mid-term Plan and Growth Strategy
5. Annual Plans and Progress
6. Risk Information

5. Annual Plans and Progress

Financial Year 2023 Plans■

Since forecasting results is difficult due to the overall cost reduction initiatives, which include asignificant reduction in the number of MRs at pharmaceutical companies, our major customers,
and the impact of the recent depreciation of the yen, the forecasts disclosed are only figuresthat can be determined with a high degree of accuracy as of the end of FY2022.
■ In addition, regarding the aforementioned forecast, we are postponing disclosure regarding
FY2023 due to the reasons above.

(Million yen)
Fiscal year ended
December 31, 2022
Results

Fiscal year ending
December 31, 2023
Forecast

Net sales

9,327

11,00017.9%

Operating profit

2,851

3,000

5.2%

Ordinary profit

2,894

3,000

3.7%

Profit attributable toowners of parent

1,847

2,000

8.3%

Growth rate44

5. Annual Plans and Progress

The Nine Months Ended September 30, 2023 - Financial Results Summary■

Cost reduction efforts in the overall pharmaceutical industry have intensified more than we anticipated at the
beginning of the fiscal year. In addition, due to the impact of resumed MR activities following thereclassification of COVID-19 as Class 5 infectious diseases in May 2023, the Pharmaceutical DX business,
our core business, has slowed down. Accordingly, the company-wide performance was below the plan for
the third quarter of the fiscal year ending December 31, 2023.

(Million yen)
The nine months ended September 30, 2023
By segment
Company-wide Pharmaceutical Medical platform
DX business

Adjustment
amountProgress ratebusiness

Net sales

7,271

6,490

780

-

66.1%

Operating profit

1,736

2,707

246

-1,217

57.9%

Ordinary profit

1,772

-

-

-

59.1%

Profit attributableto owners ofparent

1,106

-

-

-

55.3%

45

5. Annual Plans and Progress

The Nine Months Ended September 30, 2023 – Plan and Progress■■

Due to the expanding impact of cost reduction initiatives in the overall pharmaceutical industry, etc., net sales forthe third quarter of the fiscal year ending December 31, 2023 underperformed against the plan. With theslowdown in sales, operating profit was also below the planned figure.
Our business has seasonality that sales grow most significantly in the fourth quarter. Toward the end of the fiscal
year, we all will work together to achieve the targets for FY2023 (full-year plan.)(Million yen)

Net sales

Year-over-year
progress rate

14,000Operating profit
4,000

Full-yearplan
11,00012,000Full-year
plan
3,000

3,000

10,000
8,000

7,271

6,000

5,014

4,000

2,487

66.1%

2,257

11,000

2,000
1,318
1,000

2,526

23.0%

2,000

1,736

45.6%

2,487

Year-over-year
progress rate

715

57.9%

417

3,000

44.0%

603

23.8%

2,526

715

0

0
1Q
第

１
四
半
期

2Q
第

２
四
半
期

3Q
第

３
四
半
期

4Q
第

４
四
半
期

Plan
計

画

1Q
第

１
四
半
期

2Q
第

２
四
半
期

3Q
第

３
四
半
期

4Q
第

４
四
半
期

Plan
計

画

46

5. Annual Plans and Progress

The Nine Months Ended September 30, 2023 – Year-over-year Results■■

As described previously, net sales increased only slightly year over year due to the impact of cost reduction
initiatives in the overall pharmaceutical industry, etc.
Continuing from the first quarter period, operating profit decreased year over year with the slowdown in sales amid
a projected increase in selling, general and administrative expenses resulting from investment in new businessdevelopment and enhancement of personnel.
(Million yen)

Net sales
2022年12月期
FY2022

Operating profit
2022年12月期
FY2022

2023年12月期
FY2023

2023年12月期
FY2023
2,851

3,000

10,000

9,327
2,500

8,000

- 12.1%+ 17.3%

2,000

5,014

1,500

- 14.7%

1,000

838
715

6,000

4,000

+ 13.7%4,274+ 21.2%

2,487
2,526
2,222
2,051

- 8.8%

1,500
1,318

- 47.0%+ 4.0%
2,882

2,171

2,257

2,000

500

662603

788
417

563

0

0
第1四半期
第2四半期
上期
第4四半期
1Q
2Q First
half 第3四半期
3Q
4Q
Full通期
year

第1四半期
第2四半期
上期half 第3四半期
第4四半期
1Q
2Q First
3Q
4Q
Full通期
year

47

5. Annual Plans and Progress

Trends in Company-wide Performance (1)Net sales(Million yen)
第1四半期
1Q

第2四半期
2Q

第3四半期
3Q

第4四半期
4Q

12,00010,000

Full year
8,004

8,000
6,000
4,000
2,000

0

3Q
7,270

2,882
Full year
5,304
Full year
3,268

2,118

YoY
1,121 change
1,340
783 +71.1% 1,023
678
821
683

2,368

YoY
change+35.6%

1,817

Although net sales for the third
quarter period increased year overyear supported by growth of thePharmaceutical DX business, due tothe impact of cost reduction
initiatives in the pharmaceuticalindustry, it increased only by 4.0% to
2,257 million yen.

Full year
9,327

YoY
change+19.5%

YoY
change2,171 +4.0%

1,759

2,051

2,058

2,222

2,257
2,487
2,526

FY2019FY2020
FY2021
FY2022 2023年12月期
FY20232019年12月期
2020年12月期
2021年12月期
2022年12月期
1Q

2Q

3Q

4Q

Full year

Fiscal year ended
December 31, 2019

683

678

783

1,121

3,268

Fiscal year ended
December 31, 2020

821

1,023

1,340

2,118

5,304

Fiscal year ended
December 31, 2021

2,058

1,759

1,817

2,368

8,004

Fiscal year ended
December 31, 2022

2,222

2,051

2,171

2,882

9,327

Fiscal year ending
December 31, 2023

2,526

2,487

2,257

-

-

48

5. Annual Plans and Progress

Trends in Company-wide Performance (2)Operating profit(Million yen)
第1四半期
1Q

2Q
第2四半期

3,000

第3四半期
3Q

Full year
2,851

Full year
2,532

563

2,500

518

2,000

Full year
1,510

1,500
1,000
500

0

Full year
605
206
161
113
124

473
YoY
change+256.3%626
YoY
change+9.0%

Operating profit for the third
quarter period was 417 million
yen, down 47.0% from the same
period of the previous fiscal year,with the slowdown in sales amid acontinuous increase in selling,
general and administrative
expenses mainly resulting frominvestment in new businessdevelopment.

4Q
第4四半期

YoY
change+25.9%

788

537

662

849

838

YoY
change-47.0%

3Q
1,736

417
603

574
271
189

715

FY2019FY2020
FY2021
FY2022
FY20232019年12月期
2020年12月期
2021年12月期
2022年12月期
2023年12月期

1Q

2Q

3Q

4Q

Full year

Fiscal year ended
December 31, 2019

124

113

161

206

605

Fiscal year ended
December 31, 2020

189

271

574

473

1,510

Fiscal year ended
December 31, 2021

849

537

626

518

2,532

Fiscal year ended
December 31, 2022

838

662

788

563

2,851

Fiscal year ending
December 31, 2023

715

603

417

-

-

49

Progress by Segment

5. Annual Plans and Progress

Segment Performance – Pharmaceutical DX Business (1)Net sales
Net sales in the third quarter
period increased only by 6.1%
year over year to 2,064 million
yen, as ePromotion orders haveslowed down due to the impact of
cost reduction initiatives in theoverall pharmaceutical industry .

(Million yen)
第1四半期
1Q

2Q
第2四半期

第3四半期
3Q

10,000

Full year
7,425

8,000

4Q
第4四半期

Full year
8,473
Q3
6,490

2,698
Full year
4,816

6,000

4,000
2,000
0

Full year
2,870
1,011
677
589
591

1,996

YoY
change+80.0%

2,222
1,671

YoY
change+37.2%

1,218
879
722

YoY
change+16.4%

YoY
change1,945 +6.1%

1,600

1,813

1,932

2,016

2,064
2,125
2,299

FY2019FY2020 2021年12月期
FY2021
FY2022
FY20232019年12月期
2020年12月期
2022年12月期
2023年12月期

1Q

2Q

3Q

4Q

Full year

Fiscal year ended
December 31, 2019

591

589

677

1,011

2,870

Fiscal year ended
December 31, 2020

722

879

1,218

1,996

4,816

Fiscal year ended
December 31, 2021

1,932

1,600

1,671

2,222

7,425

Fiscal year ended
December 31, 2022

2,016

1,813

1,945

2,698

8,473

Fiscal year ending
December 31, 2023

2,299

2,125

2,064

-

-

From the beginning of the fiscal
year ending December 31, 2023,
CoreHuman, Inc. and CRACE
Co., Ltd., which became oursubsidiaries last year, have been
incorporated
intothePharmaceutical DX business.
Furthermore, on June 1, 2023,
AD Medica Inc. has changed
from a consolidated subsidiary toan equity method affiliate.

51

5. Annual Plans and Progress

Segment Performance – Pharmaceutical DX Business (2)Segment profit(Million yen)
第1四半期
1Q

2Q
第2四半期

第3四半期
3Q

5,000

Full year
4,207

Full year
3,837

4,000

Full year
2,669

3,000

Segment profit for the third
quarter period decreased by
17.4% year over year to 858
million yen, due to the profit
decline with the slowdown insales.

4Q
第4四半期

1,230

1,121

3Q
2,707

YoY

2,000
1,000

0

Full year
1,500

1,117

557 YoY 738
change347 +112.7%
441
289
371
305

YoY
change+16.9%

change 1,039 YoY
863 +20.4%
change 858-17.4%

789

879

863

1,064

1,058

985

2019年12月期
2020年12月期
2021年12月期
2022年12月期
2023年12月期
FY2019FY2020
FY2021
FY2022
FY2023

1Q

2Q

3Q

4Q

Full year

Fiscal year ended
December 31, 2019

305

289

347

557

1,500

Fiscal year ended
December 31, 2020

371

441

738

1,117

2,669

Fiscal year ended
December 31, 2021

1,064

789

863

1,121

3,837

Fiscal year ended
December 31, 2022

1,058

879

1,039

1,230

4,207

Fiscal year ending
December 31, 2023

985

863

858

-

52

5. Annual Plans and Progress

Doctors who are Members■

Continuing from the previous fiscal year, the number of doctors who are members
has been steadily increasing, reaching 210,000 as of March 31, 2023.
Number of doctor members
260,000

250,000

240,000

219,897
220,000

209,413

193,946

200,000

181,352
180,000

153,705

160,000

140,000

138,895

144,457

132,730

120,000

2016年
2016

2017年
2017

2018年
2018

2019年
2019

2020年
2020

2021年
2021

2022年
2022

2023年9月
Sep 2023

～
～

0

2025
2025年(計画)(Plan)53

5. Annual Plans and Progress

Segment Performance – Medical Platform Business (1)Net sales(Million yen)
第1四半期
1Q

第2四半期
2Q

3Q
第3四半期

Full year
854

1,000
800

600
400
200
0

第4四半期
4Q

Full year
398

Full year
487

121

110

106
89
92

YoY
change+15.1%

122

183

Full year
578

YoY
change+19.7%

146

YoYchange+54.1%

225

Q3
780

YoY
change-14.7%

192
361

146

238

159

144
98

227

206

125

FY2019FY2020
FY2021
FY2022
FY20232019年12月期
2020年12月期
2021年12月期
2022年12月期
2023年12月期

1Q

2Q

3Q

4Q

Full year

Fiscal year ended
December 31, 2019

92

89

106

110

398

Fiscal year ended
December 31, 2020

98

144

122

121

487

Fiscal year ended
December 31, 2021

125

159

146

146

578

Fiscal year ended
December 31, 2022

206

238

225

183

854

Fiscal year ending
December 31, 2023

227

361

192

-

-

In job change support services for
doctors in the doctor career business,there is seasonality that sales
significantly increase in the second
quarter every year. As this seasonality
was particularly strong in the fiscal year
ending December 31, 2023, net sales
in this segment for the third quarter
period decreased by 14.7% year overyear to 192 million yen. However, theoverall doctor career business has
been steadily expanding.

54

5. Annual Plans and Progress

Segment Performance – Medical Platform Business (2)Segment profit(Million yen)
第1四半期
1Q

3Q
第3四半期

第2四半期
2Q

4Q
第4四半期

Full year
228

300

250

83

200

150
100
50
0
-50

Full year
29

Full year
53
YoY
24 change
12
22-6+58.3%

38
28
17
-55

Full year
111

YoY
change+10.5%

16

42
26
26

YoY
change-85.5%

Segment profit of the Medical platformbusiness for the third quarter period
decreased by 86.5% year over year to
12 million yen, due to the significant
seasonality of sales in the fiscal year
ending December 31, 2023 as well as
an increase in selling, general andadministrative
expenses
mainlyresulting from investment in humanresources.

168

88

YoY
change+97.6%

Q3
246
12

87

65

-30

-100
2019年12月期
2020年12月期
2021年12月期
2022年12月期
FY2019FY2020
FY2021
FY2022 2023年12月期
FY2023
1Q

2Q

3Q

4Q

Full year

Fiscal year ended
December 31, 2019

22

12

24

-6

53

Fiscal year ended
December 31, 2020

17

28

38

-55

29

Fiscal year ended
December 31, 2021

26

26

42

16

111

Fiscal year ended
December 31, 2022

87

88

83

-30

228

Fiscal year ending
December 31, 2023

65

168

12

-

55

6. Risk Information[Contents]
1. Business Model
2. Market Environment - Pharmaceutical DX Business3. Our Competitiveness4. Mid-term Plan and Growth Strategy
5. Annual Plans and Progress
6. Risk Information

6. Risk information

Recognized Risks and Countermeasures (1)■ Major risks that CareNet, Inc. (the “Company”) is aware of are as follows. Unless otherwise
stated, any forward-looking statements are determined by the Company based on information
available as of the end of the third quarter of the fiscal year ending December 31, 2023.
Classification

Risks

Countermeasures

Risks
related todependance on
themedicalandpharmaceuticalindustries

Most sales of the CareNet Group (the “Group”) are generated by sales frompharmaceutical companies, doctors, and medical professionals. When theGroup is unable to respond to stagnation or shrinking of the medical andhealthcare markets due to situations such as reductions in medical costs or
drug prices, generic erosion, changes in the current health care system, etc.,
as well as new market trends, those events could have an impact on theGroup’s business performance, etc. In addition, the pharmaceutical industry
is facing intensifying global competition among companies and accelerating
moves towards reorganization. While competition among companies may
accelerate the adoption of various services provided by the Company, there
is a possibility that the existing customers who are reorganized mayreevaluate their transactions with the Company. Such cases may affect theGroup’s business results, etc.

By not only providing services that meet the needsof pharmaceutical companies, etc., but by also
developing new products, the Group will establish asystem that can respond to various companies
without concentrating customers in specificcountries, regions, and companies, with the aim ofdiversifying risk. In addition, the Company strives toreduce the risk of loss of customers byappropriately implementing credit management forcustomers on a regular basis.

Risksrelated toentry ofrivals andacquisition/retentionof doctor
members

The Group requires cooperation from many doctors. Since the Groupalready has 210,000 doctor members (219,897 as of September 30, 2023),
we believe that the Group has established strong advantages in this service.
However, while we need the cooperation of many doctors in order to provide
our services, the Company may become unable to maintain our advantages
when newcomers enter to the market or competition intensifies due tolaunch of similar services by companies with doctor members or
pharmaceutical companies themselves. Such cases could affect theGroup’s business results.

The Group has acquired members by providing
highly satisfactory medical information to doctor
members through our membership-based websites
for doctors and medical professionals, including
CareNet.com. In addition, the Group has put its
efforts into developing more specialized websites
through cooperation with doctor members. With theincrease in the number of doctor members, we will
strive to secure our advantages by improving ourservices supporting pharmaceutical companies fortheir Internet-based marketing and activities onproper drug use.
57

6. Risk information

Recognized Risks and Countermeasures (2)Classification

Risks

Countermeasures

Risks
related tohandlingof
personal
information

The Group’s business is based on cooperation with doctors. For this reason,
we hold personal information of many doctors for the execution of ourbusiness. In March 2005, the Group was granted the PrivacyMark
certification, which meets Japan Industrial Standards (JIS Q15001:
Requirements for compliance program on personal information protection).
We are working to ensure the thorough management of personal
information by taking measures such as the development of internal
regulations regarding personal information protection and operational
checks. With these measures, we believe it is extremely unlikely that thepersonal information of doctors, etc., will be leaked. However, if by any
chance leakage of doctors’ personal information occurs, we would lose thetrust of doctors, which may result in interfering with almost all of the Group’s
services that are supported by doctor members, and subsequently affect theGroup’s business performance.

In order to manage their personal information, we
are working to not only continuously conduct
educational activities through training, etc., to raise
the awareness of our executives and employees
regarding personal information protection, but also
execute our business in accordance with personal
information protection regulations that stipulate
specific operational procedures to protect personal
information. In addition, we have established acooperative framework with our system department
in order to take further measures to prevent
information leakage, including limiting the numberof employees having security access privileges forcomputer system servers, etc.

Risksrelated toPharmaceuticalandMedical
DeviceLaw, etc.

The Group not only provides medical professionals with medical andpharmaceutical information through the Internet, print media, etc., but also
conducts advertising activities for pharmaceutical companies under contract.
For this reason, labeling and expressions used in such media are regulatedby the Act on Securing Quality, Efficacy and Safety of Products Including
Pharmaceuticals and Medical Devices, the JPMA Promotion Code for
Prescription Drugs, the Guideline for Preparation of Product Overview for
Prescription Drug, the Guidelines on advertising of prescription drugs for
specialized papers/journals, and the Standards for Fair Advertising
Practices. These laws and regulations restrict the use of words andexpressions posted on websites, etc., regarding medical-or pharmaceuticalrelated names, efficacy, efficiency, safety, and handling of other companies’
products, and required descriptions. If the Group were to violate such laws
and regulations, it could affect the Group’s business results, etc.

In order to prevent risks related to legal restrictions,
the Group is committed to ensuring collecting
information regarding enactment and revision of
relevant laws and regulations, and monitoring themin each specialized field as proactive measures.
We also strive to reduce risks associated with legal
restrictions by ensuring specialists, executives, andemployees understand relevant laws andregulations.

58

6. Risk information

Recognized Risks and Countermeasures (3)Classification

Risks

Countermeasures

Risks
related tocorporateacquisitions andstrategic
alliances

The Group may enter into a strategic alliance, M&A, investment or loan, etc.,
as a means of business expansion. We will execute strategic alliances,
M&As, and other investments and loans after careful consideration.
However, if the executed strategic alliance, M&A, investment or loan, etc.,
fails to produce the results initially expected, or if the operating performanceof the entity the Group has invested in or provided loans to deteriorates, theGroup’s business results, etc., may be affected as a result of losses incurred.

When entering into a strategic alliance, M&A,
investment or loan, etc., the Group identifies therisks involved after clarifying its purpose andsignificance, quantitatively assesses theperformance of recovery of the invested capital,and has deliberations at meetings of the Board of
Directors. While we strive to recover our investment
after M&A, investment, or lending, if losses are
expected in the medium-to long-term due tochanges in economic conditions, we estimate thefuture recoverable amount based on certain
assumptions and reflect the required accounting
treatment in our financial results.

For risks and countermeasures other than those described in this list, please refer to the“Business Risks” section in CareNet’s Annual Securities Report.

59

Disclosure Schedule*This schedule is tentative andsubject to change.

Next progress report
The fourth quarter of the fiscal
year ending December 31, 2023

The first quarter of the fiscal year
ending December 31, 2024

The second quarter of the fiscal
year ending December 31, 2024

The third quarter of the fiscal
year ending December 31, 2024

Jan 2024

Apr 2024

Jul 2024

Oct 2024

Feb 2024

Mar 2024

Financialresultsannouncement

Results briefing for
fiscal year ending
December 31, 2023
(February 14)

May 2024

Jun 2024

1Q results briefing
for fiscal year ending
December 31, 2024

Aug 2024

Sep 2024

2Q results briefing
for fiscal year ending
December 31, 2024

Nov 2024

Dec 2024

3Q results briefing
for fiscal year ending
December 31, 2024

29th annual shareholders meeting

Quiet
periodDisclosure
documents

Financialstatement

Financialstatement

Financialstatement

Financialstatement

Business plans and mattersrelated to high growth potential

Business plans and mattersrelated to high growth potential

Business plans and mattersrelated to high growth potential

Business plans and mattersrelated to high growth potential

Quarterly report

Quarterly report

Quarterly report

Annual securities
reportConvocation notice ofshareholders meeting
Stock information

The next progress report will be presented in three months at a financial results briefing for the fiscal year
ending December 31, 2023 (scheduled for February 14, 2024).
60

This material contains projections, plans, management targets, and other forwardlooking statements, etc., relating to CareNet, Inc. (the “Company”).
These statements are drawn from assumptions (information and forecasts currently

available to the Company), and it is possible that such assumptions are inaccurate
and that actual results produced may differ from those mentioned in said
statements.

Furthermore, information and data other than that concerning the Company has
been quoted from public sources, and the Company offers no guarantee regarding
the accuracy of such information.

CareNet, Inc.
Inquiries regarding IR: ir@carenet.co.jp

61