Business Report for the 21st Year

Nobelpharma Co., Ltd.
[From January 1, 2023 to December 31, 2023]

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Business Report(From January 1, 2023 to December 31, 2023)

1. Nobelpharma
1.1 Corporate Mission, Policies, Code of Conduct
Corporate Mission
The company conducts its business activities under its corporate mission, “to contribute to society byproviding critical but neglected pharmaceuticals and medical devices”.
Although sales and profits are important management indices that should be pursued, the company
considers them to be a means for executing the corporate mission and the result of executing thecorporate mission.
The management policy, behavioral standards, and request to line managers (Attachment) areindicated below. The management policy, behavioral standards, and request to line managers(Attachment) were partially changed (underlined) in January 2023 to reflect the fact that working fromhome has been routine since 2020. In over 20 years in business, we have seen changes in our personnel
lineup, but all the while we have consciously maintained a commitment to upholding this corporate
mission.
Policies
1. General
1) Give priority to legal and ethical compliance in the course of business--never prioritize loyalty
to company over morals.
2) Share our Mission, Policies and Code of Conduct among all stakeholders (employees,
shareholders, officers)* They cannot be shared unless they can repeatedly be invoked on a regular basis.
3) Pursue evolution of the Company, yet becoming larger is not our main goal
4) Aim to be a company that lasts 100 years while protecting its mission5) Ensure transparency and disclosure6) Launch business overseas
2. Personnel
1) Value employees and families, and respect self-development
2) Employ the principle of “select few*,” and create an environment where they can enjoy working* The “select few” are those who have knowledge and experience, think for themselves andact on their own, and are passionately devoted to working.
* The select few are recognized irrespective of gender, age, nationality, religion, or preference* Each member of the select few has an independent character and treats others with respect
3) Value suggestions and opinions from employees
3. Products
1) Pursue high-quality products and data
2) Ensure post-marketing safety
3) Search for product seeds externally
4. Capital
1) Profits are a result of and means of achieving the Mission2) Focus on higher return on sales/profits per employee3) Keep in mind the disadvantages of failure--not the assumption of success--when making
investment decisions
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4) Profits are distributed to shareholders (dividends*), employees, and internal reserves* dividends: 1/3 of profits after tax* employees: not to exceed dividends
5) Invest asset only with a principal guarantee
Code of Conduct
1. Principle:
When in doubt, the patient benefit takes priority
2. Our Challenges:
1) YMWS: “Yatte Minakucha Wakaranai, shikashi Songiri wo tamerauna” = You never know how
it will turn out unless you try, but do not hesitate to cut losses”
2) ZY: “Zenrei ga nainara Yattemiru” = Even if there is no precedent, be the first to try it
3. Speed:
1) Never forget patients are waiting
2) Be unafraid to buy time3) Without worrying about possible delays, set a challenging deadline (day, month, and year)
intuitively to begin with, and do not give up easily, but persist in attempting to realize andachieve it* Stay away from “approximately/around” and “early/late ~,” etc.
* Loose deadlines focused on immediate concerns are not the smart way. Decide on a concrete
goal in advance.
* “Wait-and-see” is a waste of time4) If problems or mistakes occur, prevent their expansion first before preventing reoccurrence5) Speedy decisions by managers who have authority over  million-yen projects* For the time being,  million = 10 million for Division Manager; 3 million for
Department/Branch Manager/PM/PL
4. Cost/Efficiency:
1) Never take or lead to wasteful actions
2) Zero overtime work, working from home, and using up accumulated leave are considered
optimal3) Consider patient needs, scientific rationality and laws/regulations when pursuing higher quality
in products/data
4) As a general rule, competitive quotes should be obtained from at least  companies for projects
valued at  million yen or more, and in certain cases, multiple purchases should be made* For the time being,  = 1, and  = 2 (for from 1 million yen to less than 3 million yen) or
3 (for 3 million yen or more)
5. Communications/Relationship:
1) Embrace inter-departmental advice and cooperation—hiding in silos is a symptom of “Big
Company” Disease2) Courageously state the opinion you think is correct, and do not choose your words while trying
to gauge your superior’s reaction3) Confidently entrust tasks to subordinates, but never leave them unmanaged4) Hear anyone out--never interrupt in the middle
5) Start with the conclusion/result when explaining/responding6) Greetings may seem small, but they are important

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1.2 Noteworthy Points in 2022
1.2.1. Domestic sales•
As a result of various factors, actual sales fell far short of our sales plan (23,100 million yen vs. 29,800
million yen). One big reason for this was that our plan erred on the timing for the launch for a genericversion of our key product NOBELZIN® Later, market share for our NOBELZIN® Family rallied withthe launch of the AG (authorized generic), and we plan to connect this momentum to the new drug
ZINTUS®.
• We set a very ambitious target for MELATOBEL® (4,300 million yen), which we consequently fell shortof (2,900 million yen), but adoption of this product at the front lines of medicine is still proceedingsmoothly. We think that this also reflects the fruits of our collaboration with the Medipal Group.
• The 3 sales department, 12 area system we had maintained until FY 2023 has changed to a 2 sales
department, 8 area system effective FY 2024. Moreover, in FY 2024, we have made a big shift in MRs’
information provision activities by dividing them into 2 parts: [1] information provision activities
mediated by MRs (PUSH products) and [2] information provision activities that are not mediated byMRs (PULL products). PUSH products concentrated on activities targeting key doctors, while PULL
products deploy information provision activities efficiently with most of the activities being conductedby SCs (special coordinators).
1.2.2. Overseas development/overseas sales•US sales of NPC-12G (Japanese product name RAPALIMUS® Gel), a new drug for the treatment offacial angiofibroma accompanying tuberous sclerosis, showed disappointing growth following the 2022
launch. If our US subsidiary were to go into the red, it would have an adverse effect upon the entire
Group. Therefore, the Japanese head office has begun to support its subsidiary in increasing sales andcutting expenses aiming a radical improvement since January 2024.
•
RAPALIMUS® Gel was approved in China in March 2023, in the EU in May 2023, and in England in
September 2023, and it went on sale (commissioned sale) in England and Germany in October and in
China in December. The Chinese trademark for this drug is 纤洛丽 (“Xian Luo Li”), and the trademark
in the EU and US is HYFTOR.
•
We are promoting and preparing for development of TITANBRIDGE® (NPC-17) and RETYMPA®
(NPC-18) in the EU and US and NOBELZIN® (NPC-02), MELATOBEL® (NPC-15), and JEMINA®
(NPC-16) in China as our product lineup to follow RAPALIMUS® Gel. In February 2024, NPC-02 wasapproved for Wilson’s disease in China.
1.2.3. Production•
We deeply regretted the supply shortage of MELATOBEL® Granules and NOBELZIN® Granules in
2022, which greatly inconvenienced the patients and everyone at the medical institutions. In response,
we constructed a solid system for providing a stable supply of both products by increasing our production
facilities, etc., in 2023. On the other hand, sales conditions were such that this resulted in overproduction,and the following loss on abandonment is expected.
MELATOBEL® Granules: 542 million yen (2024)
NOBELZIN® Granules: 182 million yen (2025)•
Based on the occurrence of these kinds of situations, we have reconstructed our internal system to moreaccurately forecast the demand-supply balance.
•Moreover, full-fledged export of products overseas began in 2023, and we have constructed a system for
supplying each of the US, EU, and China smoothly. As a result, we realized a stable supply for all of our
products both within Japan and overseas in 2023.

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•
As for the 4 new products for which we expect to obtain approval in 2024, we plan to exercise strict
management to maintain a stable supply and ensure appropriate levels of inventory.
1.2.4. Medical Division• The Medical Division was newly established in April of 2023, and the following form the foundation of
its activities.
(1) Post-marketing drug development: promoting and supporting clinical research throughinvestigator-initiated trials and joint research(2) Promotion of Patient Centricity: conducting patient hearings and creating SOPs for interactions
with patients(3) Creating medical plans based on Patient Insights and Doctor’s Insights(4) Considering clinical research on HYFTOR in collaboration with NPA
1.2.5. Human Resources•
The number of employees in Japan decreased by 6 from 382 in 2022 to 376 in 2023 (both as of the endof December). Total personnel expenses decreased slightly from 3,552 million yen (including personnel
expenses for R&D and excluding 980 million yen allocated to the retroactive portion of the Managing
Director and CEO’s retirement benefit) to 3,401 million yen.
•The average overtime hours and rate of leave taking were favorable at 2.25 hours per month and 78.3%.
•The average age is 53.7 and the average length of service is 5.8 years.
•
We are promoting optimization of the Sales & Marketing Division’s personnel.
•We now have 34 overseas employees in the US, 12 in China, and 16 in the EU (as of the end of December2023).
•With the downgrading of COVID-19 to a Category V infectious disease, the remote work system thatwas initiated in March 2020 will be maintained, but we will continue to take the following measures
introduced last year to promote communication and increase consciousness of being a member of thecompany. Additionally, targets for the frequency of physically reporting to work at the company wereset for each department in November 2023. As a result, the average attendance rate was 20.7%, up from
12.7% in 2022 (both as of December).
Management conferences and meetings of executive officers are live in-person events.
Executive Officers and General Managers must be physically present at the meetings(mandatory).
An all-employees meeting will be held at least once a year, and everyone must be physicallypresent (mandatory).
All-employees meetings will be held at the division unit level at least once a year, and everyone
must be physically present (mandatory).
The Board of Directors meetings and shareholders’ meetings will be held as in-person meetings.
1 on 1 meetings will continue to be held, and it is recommended that they sometimes be held in
person.
Evaluation interviews will be held in person (mandatory).
In recruitment, at least the final interview will be held in person, and the initial recruitment
interview will be held in person if possible.
Training for new employees will be conducted in person (mandatory).
If there are new employees, in-person lunch meetings should be held at the division anddepartment levels, etc. (mandatory).
The head office will hold a buffet-style home party once a month.
Quarterly explanatory meetings will continue to be held online.

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We will introduce a system that allows employees to build relationships with other employees
freely, outside of work, through a mixture of online and in-person involvement in hobbies, sports,
and interests. Financial support to cover the cost of activities will be considered.
mil yen2022% to total sales

Year-onyear (%)

2023

2022

2023

Sales *

21,20419,02789.7%

100.0%

100.0%

Cost of goods sold

2,698

3,455

128.0%

12.7%

18.2%

Gross profit

18,506

15,572

84.1%

87.3%

81.8%

SG&A expense *

14,706

12,925

87.9%

69.4%

67.9%

Personnel expenses *

3,634

2,365

65.1%

17.1%

12.4%

R&D expenses *

5,892

5,479

93.0%

27.8%

28.8%

Operating income

3,799

2,646

69.7%

17.9%

13.9%

149

162

108.9%

0.7%

0.9%

3,948

2,809

71.1%

18.6%

14.8%

-30

-

-

0.0%

-

Net income before tax

3,918

2,809

71.7%

18.5%

14.8%

Income taxes

1,217

730

60.0%

5.7%

3.8%

Net income

2,701

2,078

76.9%

12.7%

10.9%

7,070

5,527

8,868

10,979Dividend

590

396

Net income

2,701

2,078

Ending balance

10,97912,661Non-operating income/expenses
Ordinary income
Extraordinary income/loss

Net income per employee (‘000 yen)
Retained earnings brought forward
Beginning balance

1.3. Progress and Results of Operations* Personnel expenses and R&D expenses are major items included in SG&A expenses.
* Personnel expenses did not include those of R&D, and R&D expenses included personnel expensesof R&D.
With the launch of generic versions of key products during the term (FY 2023), etc., total sales decreased
to 15,572 million yen (down 2,933 million yen year-on-year), but thanks to decreases in the personnel
expenses component of the SG&A expense, as well as a decrease in development expenses owing to an
overhaul of the R&D project plan, we were able to secure ordinary income of 2,809 million yen (down
1,139 million yen year-on-year).
The details are as follows.
Total sales came to 19,027 million yen (YoY 89.7%). The NOBELZIN® family (NOBELZIN®,NOBELZIN® Granules, NOBELZIN® AG) and dysmenorrhea (LEP) family (LUNABELL® LD,
LUNABELL® ULD, JEMINA® and FREWELL®) posted sales of 9,396 million yen and 4,605 million
yen, respectively, accounting for 49.6% and 24.3%, respectively, of total product sales. Overseas export
sales came to 157 million yen.
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The cost of goods sold was 3,455 million yen including valuation loss of 923 million yen for products
and raw materials (YoY 128.0%), accounting for 18.2% of total sales. Selling, general and administrative
expenses totaled 12,925 million yen (YoY 87.9%), accounting for 67.9% of total sales. The main
components were personnel expenses of 2,365 million yen (YoY 65.1%), accounting for 12.4% of total
sales; R&D expenses of 5,479 million yen (YoY 93.0%), accounting for 28.8% of total sales; sales
promotion expenses of 1,394 million yen (YoY 90.6%); and outsourcing expenses of 1,726 million yen(YoY 99.0%). Sales promotion expenses mainly included 881 million yen in sales commissions, etc. (YoY
97.9%) on NOBELZIN® and JEMINA® to ASKA Pharmaceutical Co., Ltd., etc.
The major decrease in personnel expenses was owing to lump-sum allocation of 980 million yen to theretroactive portion of the Managing Director and CEO’s retirement benefit in the previous fiscal year.
Outsourcing expenses mainly included 320 million yen for business management services and indirect
department operations outsourcing to Hisanaga & Co. Ltd., 188 million yen as the commission for safety
information processing support operations, etc. by CMIC, 151 million yen to Mebix, Inc., for specificclinical research, and 100 million yen for royalties on Medichat, etc. by Medipal Holdings Corporation.
As a result, operating income was 2,646 million yen (YoY 69.7%), and it accounted for 13.9% of total
sales.
Ordinary income was 2,809 million yen (YoY 71.1%), accounting for 14.8% of total sales, afterrecording non-operating income of 296 million yen including subsidy income of 137 million yen, interest
income of 64 million yen from loans to subsidiaries, and currency exchange profit of 51 million, with nonoperating expenses of 134 million yen including payment interest of 45 million yen, loss on revaluationof investments in securities of 66 million yen, and bond interest expenses of 9 million yen.
With income taxes of 730 million yen, net income was 2,078 million yen (YoY 76.9%), accounting for10.9% of total sales, and net income per employee was 5 million yen (previous year: 7 million yen).
Retained earnings brought forward as of December 31, 2023 were 12,661 million yen, with the
beginning balance of retained earnings brought forward of 10,979 million yen and a dividend payment of
396 million yen.
Foreign subsidiaries (reference)

Results in FY 2023*
Sales

mil yenNobelpharma
Plusultra
Plusultra pharma Jiangsu Nobelpharma
Total
America LLC pharma GmbH UK LimitedCo., Ltd.
1,124
33
34
1,191

Operating income-1,046

-292

-143

-199

-1,680Current income-1,109

-292

-143

-197

-1,741Retained earnings-4,803

-743

-333

-502

-6,380* Figures for overseas subsidiaries were converted at the exchange rate for the local currency as of theend of 2023.
Overseas subsidiaries in China, the EU, and England were able to obtain approval for “HYFTOR” in
2023 after the North American subsidiary in the preceding year, and 2023 became the year in which ourcompany began full-scale overseas sales, which has been its goal since its founding.
Results for US sales came to 1,124 million yen (preceding year’s sales: 129 million yen), however,falling substantially short of initial expectations.
The US company is now working upon improvement measures with the head office in Japan to deal
with this situation as soon as possible.

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Other bases had operating losses, as launch in the latter half of the year made it impossible to achievesales that exceeded expenses, but from FY 2024 forward, they are expected to secure profits year afteryear, as described in the Mid-Term Five Year Plan.
1.4. Domestic sales
The table below shows sales by product in 2023 on a wholesale price (NHI price) basis.
Area

Obstetrics andGynecology
FamilyBrand Name

Launch

LUNABELL® LD
LUNABELL® ULD

July 2008
September
2013
October 2018
December2018

Dysmenorrhea

INDACIN®

December
2008
January 2013

COSMEGEN®

January 2013

Respia®

December
2014
June 2021

Neonatal convulsion,
status epilepticus
Patent ductus arteriosus ofprematurity
Wilms’ tumor,
choriocarcinoma, pediatricsolid malignant tumor, etc.
Apnea of prematurity

JEMINA®
FREWELL® LD
FREWELL® ULD

Indication

Dysmenorrhea
Dysmenorrhea

Subtotal
NOBELBAR®

Pediatric
FamilyMelatobel®

Subtotal
NOBELZIN®
FamilySubtotal
Neurosurgery
FamilySleep-onset difficulty
associated withneurodevelopmental disorderin children

NOBELZIN®

April 2008
March 2017

(Wilson’s disease),hypozincemia

Fostoin®

January 2012

Alabel®

September
2013

Status epilepticus, preventionof postoperative seizures, etc.
Diagnosis of malignant glioma

Unitalc®

December
2013
March 2022

RAPALIMUS®

December
2014
September
2021

Subtotal

Respiratory
FamilySubtotal
Otolaryngology TITANBRIDGE®
FamilyRETYMPA®
Subtotal
ZANOSAR®
Other Drug
Families
RAPALIMUS® Gel

Prevention of recurrent
malignant pleural effusion
Secondary intractable
pneumothorax that is difficult
to treat with surgery
Lymphangioleiomyomatosis
Refractory lymphatic disease(lymphatic malformation,
lymphangiomatosis, Gorham’s
disease, lymphangiectasia)

July 2018
Adductor spasmodic dysphonia
December 2019 Tympanic perforation
February 2015
June 2018

Gastroenteropancreatic
neuroendocrine tumor
Skin lesions associated withtuberous sclerosis

Subtotal
Total

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Sales (on a wholesale
price (NHI price) basis)(Yen in millions)
2022
2023
2,721
2,060

Year-onyear (%)
80.9

3,880
4,835

3,938
4,094

101.5
93.3

11,436
119

10,091
112

88.2
94.2

44

34

78.6

26

31

120.6

215

212

98.4

1,939

2,878

148.4

2,342
15,358

3,267
13,227139.5
86.1

15,358914

13,227
914

86.1
100.0

295

318

107.8

1,209
79

1,232
83

101.9
104.9

576

709

123.0

656
7
100
107
256

792
21
104
125
201

120.8
294.6
103.5
116.2
78.6

377

372

98.8

633
31,741574
29,30890.6
92.3

FY 2023 was a year in which the launch of the generic version of key product NOBELZIN® in August
had a major effect on results. As for MELATOBEL®, another key product, the spreading effect to areas
where efforts were made to develop bases centered around pediatric specialists created a situation in which
it was possible to deliver MELATOBEL® to many patients. Moreover, a team system was introduced forsales activity in FY 2022, and it became well established in FY 2023. MR activities, owing in part to the“reform of doctors’ work styles”, have shifted further from real face-to-face meetings to online meetings,
and consequently, we are now in an era of rapid and efficient utilization of digital (DX) technologies. Sales
amounted to 29.31 billion yen in FY 2023 (YoY 92.3%), compared with the sales target of 31.75 billion
yen (on a wholesale price (NHI price) basis). The reason why we did not reach our sales target was thatsales switched from the original NOBELZIN® to the generic version that was introduced to the market inAugust 2023. In FY 2024, we plan to launch 4 new products (including additional indications). Our
activities will aim to introduce the new products to the market early on and promote the further growth of
MELATOBEL®.
1.5. Research and Development (Japan and overseas)
Domestic Development
Among the 4 products for which approval applications were filed in FY 2023 (NPC-12, NPC-25, NPC09, and NPC-26), RAPALIMUS (NPC-12, for intractable vascular tumor and intractable vascularmalformation), on which we worked jointly with Gifu University, was approved in January 2024.
Moreover, we expect to receive approval in March 2024 for all of the following: zinc histidine hydrate(NPC-25) for the indication of hypozincemia, aceneuramic acid (NPC-09) for the indication of progressive
muscle weakness in GNE myopathy, and sargramostim (NPC-26) for the indication of autoimmune
pulmonary alveolar proteinosis. On the other hand, development has been discontinued for NPC-06, a
drug for acute phase herpes zoster pain, as a life cycle management product, because it was not possible
to verify a significant difference from placebo in the phase III study. Moreover, in the Phase II joint study
conducted in Japan and the United States on NPC-21 for CMV infection, the expected results were notobtained for the primary endpoint. However, since results indicating that a certain degree of efficacy could
be expected for the secondary endpoint have been obtained, we plan to formulate our future development
plan by May 2024 while confirming the opinions of experts and the regulatory authorities.
What is more, we decided upon development themes for 3 new products (NPC-29, NPC-30, and NPC31) by January 2024, and we are conducting clinical studies in collaboration with various partners, as wellas preparing for next-phase studies. While reflecting upon the reasons why we did not succeed in the
aforementioned efforts, we aim to proceed with development carefully and rapidly.
Overseas Development
RAPALIMUS® Gel (NPC-12G) was approved first in the US in March 2022 and then in China in March
2023, in the EU in May 2023, and in England in September 2023. Moreover, NPC-02 (Japanese productname: NOBELZIN®) was approved in China in February 2024 for the indication of Wilson’s disease. In
addition, an application for approval of NPC-15 (Japanese product name: MELATOBEL®) in China for
the indication of sleep-onset difficulty associated with neurodevelopmental disorder in children was
submitted in January 2024.
The table below summarizes the development stage, expected NDA and market size classification in thethree categories of A. New Drugs and Medical Devices, B. Life Cycle Management (LCM) and C.
Overseas Development in the development pipeline as of March 1, 2024. Overseas Development as of

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March 1, 2023. Many are drugs based on new concepts that originated in Japan. Market size classification
is as follows:
I: Potential primary sources of revenue (sales of over 3 billion yen)
II: Short term approval and marginal profit are expected; however, they are not likely to be a primarysource of revenue.
III: Projects originating in academia, such as business-university collaboration, where short term
approval is expected. Lower development cost with promising public subsidies. Difficult to estimate
sales due to innovative concepts.
IV: Similar to III but relatively long time required for approval.
A. New Drugs and Medical Devices (including global simultaneous development products)
CompoundIndication

Licensor

Development
stage

Estimated
approval

Classification

1

NPC-25
Zinc histidine
hydratehypozincemia

In-house

Application
pending

March 2024

I

2

NPC-09
Aceneuramic acidIn-house

Application
pending

March 2024

II3

NPC-26
Sargramostim

Partner
Therapeutics Inc.

Application
pending

March 2024

II

4

NPC-22
ScopolaminHypersalivation

Kitasato
University

In
preparation
for PII/III

March 2027

I

CMV infection

Evec Inc.

PII

TBD

I

Multiple system
atrophy

University of
Tokyo
Gaia
BioMedicine
Inc.
KyushuUniversity

PII

TBD

I

PI

TBD

III

In
preparation
for PI

TBD

III

5
6

NPC-21Anti-CMV antibody
NPC-29Ubiquinol

Progressive
muscleweakness in
GNE myopathy
Autoimmune
Pulmonaryalveolarproteinosis

7

NPC-30(GAIA-102)
High-activity NKlike cells

Neuroblastoma

8

NPC-31
P092 maleate

Prion disease

Gifu University

B. Life Cycle Management (LCM) (including global simultaneous development products)
Compound1

NPC-12RAPALIMUS®

2

NPC-06
Fostoin®

3

NPC-18RETYMPA®

4

NPC-12RAPALIMUS®

5

NPC-12RAPALIMUS®

Indication
Intractable vasculartumor/ vascularmalformation(new indication)
Neurology area(new indication)
Regeneration of
external auditory canal(new indication)
Epilepsy with focal
cortical dysplasia typeII(new indication)
Pendred syndrome(new indication)

Licensor

Development
stage

Estimated
approval

Classification

Gifu University

Already
approved

Jan 2024

II

Pfizer Inc.

PIII

March 2026

II

Kaken
Pharmaceutical

PIII

March 2026

IV

Showa
University

PIII

June 2026

IV

Keio
University

PII

TBD

III

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6

NPC-12RAPALIMUS®

7

NPC-12RAPALIMUS®

Primaryimmunodeficiency
syndrome (newindication)
Systemic sclerosis(new indication)

8

NPC-12GRAPALIMUS®
Gel

Skin lesions due tovascular abnormality(new indication)

9

NPC-15
Melatobel®

10

NPC-15
Melatobel®

11

NPC-26
Sargramostim

Mild cognitive
impairment /mild sleep-onset
difficulty in dementia(new indication)
Xeroderma
pigmentosum(new indication)
Pulmonary nontuberculous
mycobacteriosis(new indication)

Tokyo Medical
and Dental
University

PII

TBD

IV

Oita University

PI/II

TBD

IV

Wakayama
Medical
University

In
preparation
for PIII(Global joint
study)

TBD

I

In-house

PII

TBD

I

Kobe
University

PII

TBD

IV

Niigata
University

PII

TBD

I

C. Overseas Development
Compound1

NPC-12G(RAPALIMUS®
Gel)

Indication

Licensor

Angiofibroma-

2

NPC-02(NOBELZIN®)

Wilson’s disease-3

NPC-15(MELATOBEL®)

Sleep-onset difficulty
associated withneurodevelopmental
disorder in children-

4

NPC-17Thyroid cartilage
fixation device(TITANBRIDGE®)

Adductor spasmodic
dysphonia-

5

NPC-16(JEMINA®)

Dysmenorrhea-

6

NPC-18(RETYMPA®)

Tympanic
perforation

MEEI/
Harvard/ NY
University

Development stage
EU: Alreadyapproved
England: Alreadyapproved
China: Alreadyapproved
China: Alreadyapproved

Estimated
approval
May 2023
September
2023

Classification

I

March 2023
February
2024

II

China: Filed

January
2025

I

US: Clinical trial
in preparation

TBD

Europe: CE
marking inprocess
China: inpreparation for
PIII
US: PII

III
April 2025
June 2028

I

TBD

III

1.6. Funding and Major Lenders
In 2023, the Company borrowed 1,350 million yen, and repaid 523 million yen to financial institutions.
As a result, as of the end of December 2023, the balance of loans payable and bonds was 10,010 million
yen, and the balance of cash and deposits was 8,638 million yen.

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As of December 31, 2023, the status of borrowing is as follows:
Loans payable
Mizuho Bank, Ltd.
4,450 million yen
Sumitomo Mitsui Banking Corporation
850 million yen
MUFG Bank, Ltd.
1,150 million yen
Resona Bank, Ltd.
400 million yen
The Bank of Yokohama, Ltd.
100 million yen
The Shoko Chukin Bank, Ltd.
812 million yen
The Tokyo Shinkin Bank
100 million yen
Japan Finance Corporation
47 million yen
Total
7,909 million yen
Japan Agency for Medical Research and Development
551 million yen
Corporate bond2nd straight bond
7th straight bond
8th straight bond
9th straight bondOsaka Soda Co., Ltd.
Resona Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
10th straight bond Resona Bank, Ltd.
Total

500 million yen (maturity date: Dec. 2024)
300 million yen (maturity date: May 2026)
150 million yen (maturity date: Mar. 2027)
500 million yen (maturity date: Mar. 2027)
100 million yen (maturity date: Mar. 2028)
1,550 million yen

1.7. Financial Results, Assets, 2023 Forecast, and Development Schedule
The Company’s financial results, assets and next year forecasts are as follows:
In the current term (FY 2024), there are some factors that will augment earnings, such as a major
increase in shipments of key product MELATOBEL® and launch of 4 new products. However, we expect
both income and profits to decrease, reflecting the major impact of the launch of the generic version of
NOBELZIN® in 2023. Among overseas subsidiaries, those in the US and EU are expected to show a profit
in the next term. In the US, we are preparing to take action if necessary while monitoring the risk of adownturn in sales. In China, the aim is to turn a profit in 2025, including lump-sum payments
accompanying sales contracts.
Mil yen except for *Sales
Ordinary income
Net income* Net income per share
Total assets
Net assets* Equity ratio* Net assets per share

2020(Results)
18th year
16,9293,466
2,511
185,000
18,574
7,052
38.0%
521,000

2021(Results)
19th year
20,741
4,747
3,551
262,000
23,008
10,09443.9%
746,000

2022(Results)
20th year
21,204
3,948
2,701
199,000
27,67912,20544.1%
902,000

2023(Results)
21st year
19,0272,809
2,078
153,000
28,806
13,88748.2%
1,026,000

2024(Estimate)
22nd year
15,943-1,056-585-43,000
26,28013,71752.2%
1,014,000“Accounting Standards for Revenue Recognition” (Accounting Standards for Corporations No. 29;
March 31, 2020), etc., were applied starting at the beginning of the previous fiscal year (FY 2022).

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A. Domestic Development Schedule (including global simultaneous development)
Item
NPC-12
NPC-25
NPC-09
NPC-26
NPC-06
NPC-18
NPC-12

2023
11 12

1

2

3

4

2024
6 7

5

8

9

10 11 12

1

2

3

4

5

2025
6 7

8

9

10 11 122026
1 2

[1] Approval(Intractable vascular tumor/vascular malformation)[3] Approval(Hypozincemia)

Phase III study (pediatric dose)[3] Approval(Progressive muscle weakness in GNE myopathy)[3] Approval(Autoimmune pulmonary alveolar proteinosis)[3]
Application

Phase III study (investigator-initiated, neurological diseases)[5]
Application

Phase III study (investigator-initiated, regeneration of external auditory canal)[9]
Application

Phase III study (investigator-initiated, epilepsy with focal cortical dysplasia type II)

NPC-22Phase II/III study (hypersalivation)

NPC-12G
Phase III Japan-US joint study (skin lesions due to vascular abnormality)

NPC-29
NPC-15Phase III study (investigator-initiated, multiple system atrophy)

Phase II study (mild cognitive impairment / mild sleep-onset difficulty in dementia)

NPC-21

Phase III study

Phase II Japan-US global study (CMV infection)

NPC-31

Phase I study (prion disease)

B. Overseas Development Schedule
Item

Year 2023
Month 11 12

NPC-17

EuropeNPC-18

UnitedStates

NPC-02

China

NPC-15China

NPC-16

China

1

2

3

4

2024
6 7

5

[4]
Start of review

8

9 10 11 12

1

2

3

4

5

2025
6 7

8

9

10 11 122026
1 2[4] CE Marking Self-Declaration
CE Marking Review

Phase II study (investigator-initiated, tympanic perforation)

Phase III study[2]
Approval(Wilson’s disease)[1]
Application(Sleep-onset difficulty associated withneurodevelopmental disorder in children)[1]
Approval

Phase III study (dysmenorrhea)

1.8. Status of reexamination, pharmaceutical risk management plan, and quality control
Reexamination: We are handling reexamination for 3 products: JEMINA®, NOBELZIN® (low zinc),and ALABEL®. We received the results of the reexamination of JEMINA® (Category 1) in October. We
applied for reexamination of NOBELZIN® (low zinc) in April, and in November we received the resultsof the GPSP on-site inspection and the compliance document inspection (“Pass”). The application forreexamination of ALABEL® was submitted in June.
Safety control: 4,138 adverse events were collected among Japanese cases (2022: 3,615 events) and
1,193 among overseas cases (2022: 2,336 events). Package insert precautions were revised for the

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following 9 products: FOSTOIN®, NOBELBAR®, ALABEL®, RAPALIMUS® Tablets, RETYMPA®,ZANOSAR®, NOBELZIN®, INDACIN®, and JEMINA®.
Post-marketing surveys: The conditions for approval of ZANOSAR® (all-cases survey) were lifted inMay. Case fixation has been completed for 2024 reexamination items RESPIA®, RAPALIMUS® Tablets,
and ZANOSAR®, as well as for treatment outcome evaluation item TITANBRIDGE®.
Quality: A total of 160 quality information cases (complaints) were collected (2022: 142), andappropriate action was taken to investigate the cause and make improvements. Periodic GMP inspections
were performed at 16 manufacturing sites, and changes in approval documents and licenses/certificateswere handled appropriately.
Overseas expansion: The NPA PV system audit by the internal audit department was conducted while
promoting the strengthening of the system as the global head of safety management. In addition, we
upgraded the PV system in association with the launch of RAPALIMUS® Gel in the EU and China,
following the US.
1.9. Status of Compliance
To “prevent legal and regulatory violations from occurring, and in the unlikely event that one does occur,[to] prevent it from expanding in scope”, we conduct the following activities: monitoring, informationcollection through the in-house whistle-blowing system, investigation of whistle-blowing cases andplanning of corrective action, training on laws and regulations, etc., consultation on whether situations
constitute violations of laws or regulations, and issuing of compliance reports. We are striving to make thesystem as accessible to employees as possible by giving the highest priority to protection of the whistleblower in the handling of whistle-blowing cases. As new efforts, we also confirmed the compliancesystems of new manufacturing subcontractors and began holding periodic meetings with the compliancedivisions of subsidiaries in foreign countries.
In order to further accommodate the concept of risk-based quality assurance, the Clinical Quality
Assurance Department is promoting more efficient and effective regulatory auditing methods. We will
establish a system for PV audits in compliance with global PV regulations, improve staff education andtraining, reliably conduct PV audits based on the global audit plan, and establish audit functions to ensure
the quality of computer systems related to GCP and PV functions.
Provision of sales information: Promotional materials, etc. are subjected to preliminary checks andapproval, and sales information provision activities are monitored. We will explore a risk-based
management system so that we can handle the annually increasing volume of materials.
1.10.Status of Administrative Departments
Management Planning: We will reexamine the system so that we can respond to emergencies resulting
from the expansion of our business into new lines and the diversification of our operations. Moreover,regarding the generic versions of NOBELZIN® Tablets 25 mg and 50 mg for the treatment of Wilson’s
disease (copper absorption inhibitor) and hypozincemia, we filed suit with Tokyo District Court on April
17, 2023 to demand an injunction against Sawai Pharmaceutical Co., Ltd., which obtained marketing
approval on February 15, 2023, for infringement of patents held by Nobelpharma (Patent No. 6716464,
Patent No. 6768984).
Accounting and Finance: We strive to quickly grasp our financial status, make appropriate management
decisions on ever-changing situations, and increase the accuracy of accounting. In addition, we will focus
on grasping and managing the revenue and financial condition of overseas bases.
DX Promotion: We will promote business reform through the application of digital technology while
supporting business expansion from the IT side. We will also improve the IT environment of our overseas
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bases and strengthen their cooperation with Japan. In 2023, we improved our information security related
rules and implemented user education through e-learning. We also are continually making efforts tostrengthen our system security.
Intellectual Property: Introduction of academia-initiated drug discovery stage projects is increasing, andwe will build a strategic portfolio in cooperation with academic personnel in charge of intellectual property.
In addition, we are striving to create a good intellectual property portfolio by ensuring that a Freedom toOperate (FTO) infringement search is conducted for each project. We also place importance on theenhancement of intellectual property education and are working to raise levels of understanding ofintellectual property throughout the company through e-learning and invitation of external lecturers.
Public Relations: We will provide various kinds of information to establish our corporate branding
inside and outside the company. We will also establish a website with information for children living withintractable diseases and carry out activities that are close to patients and parents.
We set the targets for the mid-long term future vision of sales and profit as an immovable high goal
named North Star. In 2019, the numerical targets in 2023 as North Star in the 2019-23 mid-term businessplan were sales of 50 billion yen and ordinary income of 10 billion yen. In 2023, we unfortunately failed
to reach the numerical target for 2023 set as the “North Star”, but we will continue to aim for the North
Star.
North Star
Sales
Ordinary income

Target50 billion yen
10 billion yen

2. Current Status of the Company
2.1. Shares (as of December 31, 2023)[1] Number of shares authorized[2] Number of shares issued

Ordinary share
Number of shareholders[3] Status of Major Shareholders
Hisanaga & Co., Ltd. (ordinary shares)
Medipal Holdings Corporation (ordinary shares)
Inabata & Co., Ltd. (ordinary shares)

50,000 shares
13,525 shares
3
10,000 shares (73.9%)
2,705 shares (20.0%)820 shares (6.1%)

2.2. Share Warrant
2.2.1. Share warrant that is issued to and held by the Company’s executive officers as considerationfor execution of their duties
Not applicable
2.2.2. Share warrant that is issued to and held by the Company’s employees as consideration for
execution of their duties
Not applicable
2.2.3. Share warrant in issue
Not applicable

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2.3. Corporate Executives
2.3.1. Management Reshuffle(1) Directors and Company Auditors
As of March 28, 2024, the status of full-time and part-time directors is as follows:
Managing Director & CEO: Jin Shiomura
Director (part-time):
Nobukuni Taneya
Director (part-time):
Takahisa Iizuka

Director (part-time):

Koichi Noda

Director (part-time):
Director (part-time):

Toshio Miyata
Georg Holländer

Director (part-time):

Takashi Kobayashi

Audit & Supervisory Board
Member (part-time):
Audit & Supervisory Board
Member (part-time):

Tomoyasu Toyoda
Yasuhiro Kaga

(Outside Director, arara Inc.)(Executive Officer, Deputy General Manager
of Business Development Division,
MEDIPAL HOLDINGS CORPORATION)(Executive Officer, General Manager,
Financial Management Office, Inabata & Co.,
Ltd.)
(M.D., Ph.D., President, Mih Clinic)(Head of Department of Pediatrics, Universityof Oxford)(Representative Director, BioResource
Innovation Hub in Kobe)(Company Auditor, MEDIPAL HOLDINGSCORPORATION)(former Member of the Board of Directors,
Managing Executive Officer of Mitsubishi
UFJ Securities Holdings Co., Ltd.)(2) Executive Officers
As of April 1, 2024, the status of executive officers and directors is as follows:
Vice President
Senior Executive Officer

Senior Executive Officer
Executive Officer
Executive Officer
Executive Officer

Executive Officer
Executive Officer

Executive Officer

Executive Officer
Executive Officer

Shigeki Shimasaki(Head of Research & Development
Division)
Arata Tabata(Head of Business Development & Project
Planning Division/External Relations
Department Supervisor)
Hitoshi Yokoyama(Head of Sales & Marketing Division)Toshiaki Okamura(Head of Regulatory Affairs Division/Headof External Relations Department)
Yoshihide Yamamoto (Head of President Office)Kenji Shimizu(Deputy Head of Research & Development
Division/Head of Clinical Development
Department 2)
Yoshiki Yagi
(Deputy Head of Research & Development
Division)
Hitoshi Hasegawa(Head of PMS Regulatory Compliance &Assurance Division/General Marketing
Compliance Officer
Masanori Osakabe(Deputy Head of Research & Development
Division/Head of International ClinicalDevelopment Department/Head of Medical
Device Development)
Yoshiki Kida
(President & CEO, Nobelpharma America,
LLC)
Makoto Shiragami(Head of Compliance Division/Head ofCompliance Promotion Department)
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Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Director
Executive Director
Executive Director
Executive Director

Executive Director
Executive Director
Executive Director
Executive Director
Executive Director
Executive Director
Executive Director
Executive Director

Executive Director
Executive Director

Masayoshi Onozaki(Head of Global Business Development
Division)
Tetsuro Noguchi(Head of Supply Chain & Manufacturing
Division)
Eijiro Akatsu(Head of Administrative Affars & Corporate
Planning Division)
Sachiko Ezoe
(Head of Medical Division)
Hiromi Okatake(Head of Legal/IP Management Department)
Masato Iwamoto(General Manager of Supply Chain
Management Department)
Atsunori Iwao
(General Manager of Quality Assurance
Department/Quality Assurance Officer)
Masatomi Nemoto(General Manager of Pharmacovigilance
Department/Safety Management Officer)
Yasuo Suga
(Deputy Head of Sales and Marketing
Division/Product Marketing Development 1
Supervisor)
Tsutomu Iwasa(General Manager of West Japan Sales
Department)
Yasuo Satake(General Manager of Sales HR
Development Department)
Takahiro Yamasaki(President & CEO, Plusultra pharma GmbH)
Yumi Imai(General Manager of PMS Regulatory
Compliance Department)
Nobuyuki Sato
(General Manager of Digital Transformation
Department)
Toru Yokoyama(General Manager of Central/East Japan
Sales Department)
Yukio Urasaki(Head of BD/Project Planning &Development Division)
Yoshinobu Takahashi (Deputy Head of Sales and Marketing
Division/Product Marketing Development 2
Supervisor)
Rongzhe Jiang(General Manager, Jiangsu NobelpharmaCo., Ltd.)
Hideki Matsuoka(General Manager of HR & General Affairs
Department)

2.3.2. Remuneration paid to directors and company auditors
Classification
Directors
Company auditor
Total

Headcount
72
9

2.4. Matters related to accounting auditor
2.4.1. Name of accounting auditor
Deloitte Touche Tohmatsu LLC

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Amount paid
15,601,000 yen
3,300,000 yen
18,901,000 yen2.4.2. Amount of remuneration, etc. for accounting auditor
Amount of remuneration, etc. for accounting auditor in the current business year: 16 million yen(Note) This is remuneration, etc. for business stipulated by Article 2, Paragraph 1 of the Certified
Public Accountants Act (Law No. 103 of 1948) and compensation for audit certification under
the Companies Act.
2.4.3. Reasons that company auditor approves remuneration, etc. for the accounting auditor
The company auditor obtained necessary documents and received reports from the relevant departmentof the Company and the accounting auditor, and confirmed and verified the details of the accounting
auditor’s audit plan, the status of the execution of duties by the accounting auditor and calculation basisof estimated remuneration. As a result, the company auditor determined that the amount of remuneration,etc. for the accounting auditor was appropriate and approved it in accordance with Article 399, Paragraph
1 of the Companies Act.
2.4.4. Policy on decision to dismiss or not to reappoint accounting auditor
When the accounting auditor meets any of the items of Article 340, Paragraph 1 of the Companies Act,and when it is deemed to be difficult to carry out an adequate audit due to events that damage theaccounting auditor’s quality and independence, the company auditor may determine the details of a
proposal on dismissal or refusal of reappointment of an accounting auditor to be submitted to a general
meeting of shareholders.

< Remainder of this page intentionally left blank >18/21

Attachment
Revised on January 19, 2023 (underlined parts)
September 1 Postscript (commentary)
July 16, 2019
Managing Director and CEO

Request to Line Managers
Commentary We have many employees who have joined us mid-career and those with management
experience have been appointed as line managers; accordingly, manager education has not been adequately
provided. In 2019, when the company was evolving to a new stage, I thought it would be a good idea tooffer some guidelines as to what line managers should be mindful of.
Just let me clarify that these guidelines are not meant to make an alibi or an excuse after something
wrong happens, as is often the case in organizations these days. In order for a company of a certain size tooperate functionally, it is necessary to maintain good human relationships, and for this reason we havecreated this. In addition, it is also a commandment to myself. However, please note that we are notnecessarily saying that you have no qualification as line manager just because you cannot carry out theseguidelines. The general aim is to encourage you to be conscious of and work towards these guidelines.
1. Review the Corporate Mission, Management Policies, and Code of Conduct periodically, to understandand take them deeply to heart.
Commentary The Corporate Mission is the meaning of our company to exist in society, or the life of thecompany, if you will. Talk about it from time to time with valued customers, contractors, business partners,
and even with your family and personal friends outside the company. Then please internalize it and makeit a part of you.
2. Be aware that your behavior is always being observed. The most unacceptable behaviors are those thatappear to mix work and private matters.
Commentary The point is the “appearance” of mixing work with private matters. Even if you have nointention of mixing work with private affairs, the behavior is not acceptable as long as any member of thecompany perceives it as such. Keep in mind that even the littlest things tend to be taken as mixing.
3. It is when a job is tough (such as apologizing to a customer) that the manager should take the lead.
Staff members respect courageous managers.
Commentary It is not just apologies to customers; making important decisions is also tough. Everyone hassomething they are not good at. It may be hard but showing your staff that you will not run away from any
tough jobs is also an important duty of a line manager.
4. Do not create an impression of favoritism, such as having lunch/going out for drinks with a specificstaff member (or even a group of staff members).
Commentary The point is creating “wrong impression.” Even if there is no intention, some staff members
may take it as an act of favoritism. This is not to say that lunches with staff members are absolutely out of
the question. They are OK as long as they do not give the impression of favoritism. On the other hand, letme point out to staff members that it is a common sense, in my opinion, to accept friendly gathering
invitations from line managers “once in a while.”

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5. Inviting a staff member of the opposite gender out for one-on-one lunch/drinks is not acceptable. Staff
find it difficult to refuse, so it could be construed as harassment.
Commentary Such invitations are unacceptable. As staff are in the weaker position, they might be smilingoutside and angry inside.
“Don’t straighten your cap under a plum tree (Don’t do anything that could be misconstrued, because when
you raise your hand it might look as if you are trying to steal the plums.).” Of course, as long as it is not
one-on-one, such invitations should be fine every now and then.
6. Do not hesitate to make amends for your wrongs (Analects of Confucius).
Commentary What this means is that everyone makes mistakes and acknowledging one’s own mistakes
can be hard, yet we should have the courage to do just that. Words of Confucius from more than 2,000
years ago are convincing. The Analects of Confucius contain universal wisdom.
7. Do not point out other’s mistakes, nor boast of your own achievements (Nakane Tori).
Commentary Criticizing others and boasting about yourself can make you feel good. That is why we tend
to do so without thinking. However, if we take these words to heart, it will curb such behavior. If you are
not conscious of it, you will become mediocre person who has lost sight of the purpose of life. Staff will
not respect someone like that.
Nakane Tori was a scholar from Japanese Edo Period who turned his back on fame and fortune to pursue
a life of seclusion. This injunction was posted on the wall for all his students to see.
8. Managers should greet out loud when you come into or leave the office. Also, if the manager is quickwith harmless jokes, the workplace becomes brighter. Puns are just fine.
Commentary Workplaces that have smile and laughter will raise efficiency and lower stress. I would ask
line managers to take the lead in this regard. Greetings are something that shows “I have no hostility
toward you.” Conversely, without greetings, the other person may feel bitterness in you.
9. Even in online meetings, it is a good idea for the manager to take the initiative to greet participants andbreak the ice with a joke. You should also call on people by name to encourage those who usually do not
speak up to do so. Then be sure to listen to everyone’s opinions.
Commentary It is difficult for subordinates to speak up even if they have an opinion. The manager ormoderator should exercise care to ensure that everyone participates.
To subordinates, I would say that it is common sense to show your face and participate in online meetings.
Consider it your duty as a member of society.
10. Have one-on-one communication with your staff regularly and repeatedly under no influence ofalcohol. The purpose of such talks is to listen to what your staff want to say.
Commentary It may be difficult, but the “regularly and repeatedly” is the important point. Talks overdrinks are not very effective. In these one-on-one communications, if your staff member does 60% of thetalking, it is successful. Be careful not to make it your one-man show.
11. Do it in private when giving lectures or in public when giving compliments.
Commentary This is advice that we all remember hearing at some point. Yet we tend to do just the opposite.
Try to keep this in mind all the time.

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12. There is nothing good to result by a heavy-handed order. The harsher the message, the more carefully
you should express it.
Commentary In the pre-war Japanese army, high-handed orders and obedience through violence werecommonplace. It is clear what the results have been.
13. Never reject a staff member’s proposal on the spot. Listen first, then if necessary, leave a day or two
before saying no.
Commentary It takes courage for staff to bring proposals to their managers. More often than not, theycome forward with it after giving serious thoughts. Having more knowledge and experience than staff, line
managers may think the proposals from staff are not so good. Even so, if you reject them on the spot, they
will lose motivation. Conversely, if their proposals are given even a little praise, your staff will try evenharder and come up with better proposals. It is also often the case that proposals that seem insignificant at
first glance turn out to have some good points upon reflection.
14. There are times when you must give your staff instructions that are against their intent. At such times,
strive to gain their understanding by carefully explaining the background and objective of your instructions.
However, if they are still not convinced even after you have carefully explained three times, you may carrythrough with the instructions.
Commentary This is related to No. 12 above. People who understand and are convinced will show better
performance. You may find it onerous, but if you make the effort to convince them, it will be more efficientin the end. If they still do not understand after explaining three times, you should direct them to do as you
ask. That is not being high-handed.
15. If a staff member does not improve even after giving guidance five times, there is a strong chance thatsuch member is not suited to that work. Making such staff understand this and recommending to transfer
may be a thoughtful thing to do.
Commentary There is no guarantee that the current work is the best for the staff. Nor is there any guaranteethat their current manager is the best for them. Even the company may not be the best fit for them. They
might demonstrate their strengths better somewhere else. You should not give up easily, but if you haveguide them carefully five times and they still have not improved, recommendation for a change will also
be a kind consideration for them. However, the key point here is “having that staff understand,” and you
must not transfer them blindly.
16. Do not buy or sell the shares of related parties, either listed or unlisted.
Commentary This is an extra point. More than 3,600 companies in Japan have their shares listed on thestock exchange, so if you want to invest in shares, you should do so in companies that are not related toyour work, either directly or indirectly. Even just being suspected of conducting insider trading can betroublesome. This is another of those “don’t tie your shoelaces in a watermelon patch (lest you be thoughtof as a watermelon thief)” lessons.
END OF DOCUMENT

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