TOP MESSAGE

Manufacture of sophisticated productswith No. 1 total product performance as
a company contributing in part to thecompetitive edge of industries in Japan

Itsuro Yoshida
President andRepresentative Director

We are dedicated to people’s genuine smiles andcontribute to people’s health.
I would like to express my heartfelt sympathy to all those
who have contracted COVID-19 and to their related
people. I would also like to extend my deepest gratitude to
the Medical professionals and others, who are working so
hard to prevent the spread of the disease.
New lifestyles have spread and work style reforms, etc.
have been widely implemented in the wake of the
COVID-19 pandemic. Society is undergoing drasticchanges. The resolution of global challenges, as
represented by the SDGs, and digital transformation (DX)are driving changes on a global scale. In Japan, a supergraying society, establishing a social security structure thatwill address the demographic challenge and extending
healthy life expectancy have become major issues today.
Japan’s social security expenses, continuing to rise year
by year, are expected to reach about JPY 140 trillion by2025. As one of the measures to suppress medical costs
without lowering the quality of healthcare, the Japanese
government has promoted the use of generic drugs since
the early 2000s. With the business model of manufacturing
and selling generic drugs as its core business, Towa has
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TOWA PHARMACEUTICAL Integrated Report 2022

been striving to contribute to the suppression of healthcare
costs. Of the pharmaceutical products consumed in a year,
simply switching medication to generic drugs, where it ispossible to do so, would help reduce the costs by about
JPY 1.9 trillion, thereby lightening the load on the country
and health insurance societies.
Now that the share of generic drugs has reachedapproximately 80% of the volume of pharmaceuticalproducts consumed, we believe that it is our corporatesocial responsibility to work even harder toward the stablesupply of generic products and raise their quality evenhigher. We are thoroughly carrying out product and quality
control and implementing proactive capital investment
toward the stable supply of products.
What is more, we are making company-wide efforts toaddress the following issues both at home and abroad.
1 To contribute, even in some small way, to global issues,
as represented by the SDGs.
2 To play a part as a corporate citizen in contributing toJapan’s future challenge of becoming a world leader inscience and technology with competitive edge in new

industries.
To contribute to strengthening and maintaining Japan’s
future social security system for all generations.
4 To contribute to creating new mechanisms for future
regional communities and their revitalization.
5 To complete Towa’s health information platform as asocial infrastructure for health, and contribute toextending the healthy life expectancy of all people.
We need to paint a long-term vision in anticipation ofmajor changes going forward, and steadily execute thevision by bringing together all the capabilities of Towa
Group. To this end, we must solidify the Group’s
governance toward achieving its Philosophy, “We
contribute to people’s health; We are dedicated to people’s
genuine smiles.” Specifically, we must establish goals foreach of the Group’s businesses and companies, andtransition to a structure in which we can exhibit synergy.
Each of the Group companies, as autonomous
organizations, will identify new social issues; and theGroup will aim to resolve such issues by leveraging its
combined strengths.
3

As a comprehensive generics manufacturer, we havefocused on “Manufacture of sophisticated products with
No. 1 total product performance,” one of our initiatives tocontribute in part to the competitive edge of industries inJapan. To put it another way, this is an initiative aimed atproviding society with Towa Quality products that people
can feel comfortable using. For example, this means to
manufacture products that are easy for patients to take andeasy for Medical professionals to handle. Typical examples
include orally disintegrating (OD) tablets, which disintegrate
in the mouth without water, and thus, are easy to take;techniques for masking a bitter taste; drug imprint thatmakes it easy for doctors and pharmacists to distinguishtablets; and scored tablets that can be administered in half
doses. A representative example of Towa’s value-added
formulation technology is RACTAB, our proprietary
technology combining the disintegrating feature that makes
a tablet easy to take, and the hardness that enables atablet to be handled like an ordinary tablet. We sometimes
hear words of appreciation from patients who say that they
can now take medication, which used to be hard to take,with ease. We are confident that such added values tailoredto the needs of customers, which are available only fromthe perspective of a generics manufacturer, will better
address the concerns of people and healthcare-related
issues around the world.
Presently, we are focusing particularly on efforts to further
improve the taste of drugs, as well as on formulation
research to make active ingredients less decomposable
under any environment. In regard to the improvement of
taste, we established Pharmaceutical Taste Laboratory, a
dedicated division, in 2022, and are engaged in initiatives
aimed at catering to the needs of patients who take drugs,
including research for optimizing the threshold of bitterness
to make medication easy even for children. Furthermore,
the formulation research for making active ingredients lessdecomposable in any environment is conducted primarily
with a view to enhancing the convenience of Medical
professionals who handle pharmaceutical products and toaddressing such issues as the reduction of waste drug,
which has become a social issue today. The life period of
ordinary drugs is about three years if they are intact in their
original packaging. However, the active ingredients candecompose if stored being exposed to sunlight, evenindoors, for example. If it is made possible to cover themby utilizing coating technology, we can help enhance theconvenience of Medical professionals and reduce thedisposal of drugs. What is more, with such technology, we
believe we can contribute to the storage of drugs incountries and regions with high temperatures and humidity.
Manufacture of sophisticated products with No. 1 total
product performance under thorough quality control
ensures that the products we deliver have a reliable quality.
We believe it is important that we keep upgrading andimproving our products by utilizing the latest technology tooffer up-to-date and best products as appropriate. To
implement these initiatives, we are strengthening andstreamlining our research and development functions
through upgrading and expanding our R&D facilities andequipment.
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TOP MESSAGE

Further expanding the production
capacity at Yamagata Plant toward
stable product supply
As mentioned earlier, along with further enhancement of
the quality and performance of our products, a stableproduct supply is our most important mission. However,people’s trust in generics, which has been nurtured formany years, has fallen apart in the wake of scandals that
occurred within the industry. Consequently, even now, theindustry as a whole is left in the situation in which generics
manufacturers are unable to fulfill its responsibility for the
stable supply of products.
Toward the goal of achieving an 80% volume share ofgeneric drugs sold in Japan, Towa has made persistentefforts, such as making capital investments and building aframework for collaboration with other companies. In 2018,
we put the 2nd solid formulation building into operation at
Yamagata Plant. With three plants together with Osaka
Plant and Okayama Plant, we secured an annual
production capacity of 11.5 billion tablets in FY2020, andof 12.0 billion tablets in FY2021 in total. Judging that weneed to further expand the production capacity, however,
we are making capital investment in the 2nd solid
formulation building at Yamagata Plant to raise its
production capacity by 2.0 billion tablets, aiming toeventually establish a production structure capable ofproducing a total of 14.0 billion tablets at the three plants
by the end of FY2022. Further, at Yamagata Plant, byOctober 2023, we also plan to construct the 3rd solid
formulation building that can accommodate facilities
capable of manufacturing 3.5 billion tablets. Through these
efforts, we expect to achieve a production capacity of 17.5
billion tablets in FY2024 and beyond. Alongside theseplans, we will also construct the 2nd sterile formulationbuilding at the Yamagata Plant to expand the production
capacity of liquid formulations and freeze-dried
formulations. In addition to such production enhancement
measures, if the entire industry succeeds in recovering its
production capacity to a certain degree, we believe we canease the shortage in production volume by around 2025.
In putting in place a structure for increased production, it
is important that we earn people’s trust in Towa’s

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TOWA PHARMACEUTICAL Integrated Report 2022

TOP MESSAGE

production and quality. Our products are manufactured at
all of our plants through procedures that are in compliancewith the three GMP principles. Ongoing education andtraining for employees have ensured that each employee
works with a high awareness of quality. Furthermore, todeliver appropriate products to the world based on evenstricter rules, we also proactively incorporate international
standards such as PIC/S GMP and ICH Guidelines, andbuild a structure that thoroughly eliminates human error.
What is more, to maintain and strengthen the system forstable product supply, we will push forward with efforts
such as purchasing APIs from multiple suppliers andaudits of manufacturing sites. We are also continuallyengaging in initiatives aimed at the strengthening ofgovernance and thoroughgoing compliance across theGroup, from the manufacturing of APIs to the
manufacturing of formulations, logistics, and distribution.
As part of such initiatives, on November 24, 2021, we
announced Towa Pharmaceutical Declaration of Legal
Compliance.
While an emergency situation continues, we also plan toinstall automation and unmanned facilities and systems forenhancing production efficiency. However, the burden on
employees working at the plants is becoming greater. We
will continually share the latest market trends and future
outlooks across the Group. All Group companies will work
as one to overcome this difficult situation and fulfill theirimportant roles in society, including stable product supply
and quality control.

Strengthening collaboration with
Towa HD and enhancing theGroup’s comprehensive strengths
We are currently implementing the 5th Mid-term Business
Plan 2021-2023 PROACTIVE II started in FY2021. Its basic
policies are: (1) Enhancing generics business as a core, (2)Expanding and growing business in overseas market, (3)Entering new health-related businesses, (4) Creating
technology innovations and product values, and (5) Making
job satisfaction and fostering talented human resources.
I talked earlier about the evolution of generic drugs overtime. The objective of expanding the business of Towa
Pharmaceutical globally was to roll out Towa’s high quality,
value-added generic drugs and formulation technologies
abroad. Towa Pharma International Holdings, S.L.
(headquartered in Spain; “Towa HD”), which we made into
a subsidiary in January 2020, has worked to deploy
business utilizing sales networks in multiple countries in
Europe as well as in the U.S. and production bases that
conform to strict pharmaceutical standards of Europe andthe U.S. They are also active in research and development.
Furthermore, it discloses extensive information on ESG.
For this reason, we would like to promote informationexchange with a view to cocreation and the division oflabor in various aspects, and lead the way to the creationof innovation.
As such, in June 2022, we added “Towa Pharmaceutical”
to the names of the three consolidated subsidiaries in
Spain, Italy, and Portugal, which are under the Towa HD
umbrella. Under the unified brand, we will spread the
Towa’ vision, foster a sense of unity as the Towa
Pharmaceutical Group, promote collaboration in
operations, and deliver value-added products. By doing
so, we will create a Towa brand image that is clear for
stakeholders, and aim to further expand our business.
In the U.S. market, where price competition is severe,
there is a need to continually launch new products.
However, we are thinking of creating a new market byemphasizing the added value of our products. In the caseof medicines that need to be taken every day, rather thanbitter medication, there should be a latent need for highquality medication that does not taste as such. We will
promote collaboration in operations, while leveraging thecharacteristics and needs of the U.S. and Europe as
reference, and pave the way through to the creation of
innovation in respective markets including Japan.

Tapping into new health-related
fields to help extend healthy life
expectancy
As one of our challenges, we aim for creating a future thatprovides full coverage, from medical care to the care andprevention of pre-symptomatic diseases, catering to asociety with a long and healthy life expectancy. In line with
our vision of contributing to people’s health, we are working
to create new health-related businesses that are suited tothe medical system for the future, while acquiring newtechniques and integrating them with completely new
knowledge and technologies.
As a new initiative, in March 2022, we made Sunsho
Pharmaceutical Co., Ltd. (“Sunsho Pharmaceutical”) a
wholly-owned subsidiary. Sunsho Pharmaceutical is aleading Japanese contract development and manufacturingorganization (CDMO) engaged in the planning,development, and manufacture of such items as healthfoods, pharmaceuticals, general foods and capsuleformulations. We believe the formulation technology for
health foods and capsule formulations, including
supplements, that Sunsho has fostered for many years, will
help realize the Towa Group’s aspiration to contribute topeople’s health by creating superior products and services,and will eventually contribute greatly to extending people’s
healthy life expectancy. What is more, Sunsho possesses
cutting-edge formulation and capsule technologies,
including UniORV® that can be used for a broad range ofapplications. UniORV® allows for producing coatedparticles without the conventional granulation or coating
technology. By combining these technologies with Towa’s
formulation technologies, we believe we can creating
technology innovations and product values.

Announcement of initiatives for compliance with laws and regulations on November 24, 2021
On November 12, 2021, President and Representative
Director Itsuro Yoshida announced a declaration tocomply with laws and regulations to all employees of theCompany, with special emphasis on the following three:• Ensuring thorough compliance• Strengthening governance• Giving utmost priority to quality
The Company is working diligently to ensure reliable
quality and safety. While pharmaceutical products are
related to people’s lives, it is hard to tell their quality fromappearance alone. That is why it is important that weearnestly pursue quality and safety.

Inspection of manufacturing and packaging facilities(Yamagata Plant)

What is more, as an initiative toward the recovery of trust,
we are implementing and continuing with the following:• Visits to manufacturing sites by officers in charge(continued since 1996)• Implementation of compliance month andquestionnaire survey (continued since 2013)• Further enhancement of the whistleblowing system• Other initiatives, including the timely dissemination of
information through the corporate website

Messages related to compliance with laws and regulations, as wellas quality control and manufacturing control (Yamagata Plant)

TOWA PHARMACEUTICAL Integrated Report 2022

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TOP MESSAGE

TOP MESSAGE

A major challenge in this super graying society is to detect
abnormalities in the early “pre-symptomatic disease” rather
than in the “disease”. For this reason, we converted
Protosera, Inc., a company that possesses an original
disease risk screening service (ProtoKey test), into a
subsidiary. Presently, the service is used to identify thefollowing three risks: colorectal cancer risk, dementia risk,
and oxidant stress. We have continued to review theanalysis results of samples and upgrade/improve ourservices through a wide range of case studies. Researchand development activities are underway also for risk
screenings of other diseases. We have been striving tounderstand the pre-symptomatic stages of disease, aiming
to establish a system whereby we can provide appropriate
advices on exercises and dietary aspects, and contribute toextending healthy life expectancy.
It is important that initiatives like these are promoted intandem with the Comprehensive Community Care System,
which are being developed as a national policy andscheduled for completion in around 2025, when Japanese
baby boomers turn 75 years of age (the age eligible for thelate-stage elderly medical care insurance system). For theregional community envisioned under the Comprehensive
Community Care System, it is required to develop a platform
which enables Medical professionals to easily share
information with ordinary citizens by utilizing cutting-edge
technologies, such as IoT, in which everything is connected
via the Internet; artificial intelligence (AI); and big data. Suchplatform is also required to enable appropriate and efficient
treatment and care-giving by Medical professionals and thepromotion of the health of ordinary citizens (a platform forcoordinating and sharing data from facilities such as
hospitals, pharmacies, and those for nursing care).
To achieve this, it is essential to complete the establishmentof a platform that utilizes personal health records (PHR) andelectronic health records (EHR). This will lead to the
suppression of medical costs and enable approaches in all
stages, from the healthy to symptomatic stages. Furthermore,with the objective of maintaining the dignity of the elderly andassisting their independent life, we can realize a local
comprehensive community support/service system that helps
the elderly continue living in their own fashion, as much as
possible, in communities that are familiar to them.

Building an Individual Health Information Platform

Support for personalized
and optimized treatment

Support for the promotionof health and the care ofpre-symptomatic diseases• Utilization of next-generation
testing and diagnostic
technologies, etc.

• Visualization of disease risks• Program for behavioral
transformation• Personalized healthpromotion programs, etc.

• Working style support for thechild-rearing generation• Job assistance, etc. for theelderly

Healthinformation
platform
Digital transformation ofhealthcare and caregiving• Construction of a foundation
for health and medical data
• Utilization of telemedicine,
etc.

15

Support for a society inwhich people can lead alife with purpose

TOWA PHARMACEUTICAL Integrated Report 2022

Healthcare andcaregiving support
through state-of-the-art
technologies• Livelihood support throughutilization of AI, robotics, etc.
• Utilization of VR, AR, etc.

Towa sells TIS Co., Ltd.’s Healthcare Passport, acoordinated system infrastructure for regional healthcare
and health information, jointly with TIS, and is building an
EHR platform. By enabling Medical professionals andordinary citizens to share medical records, the content ofprescriptions, and health information on a bi-directional
basis, the efficient and effective utilization of medical andhealthcare information, which was previously scattered
between ordinary citizens, hospitals, clinics, pharmacies,
and so on, will be possible. The platform has already been
adopted by multiple healthcare facilities, and thedevelopment of additional functions is also being promoted
to meet user needs.
Health-related businesses also aim for the improvementof medication adherence by patients and the resolution of
the issue of residual medication. We will start handling
Hana Support, a smartphone app that supports the taking
of drugs, which was developed using the advice of Bandai
Namco Research Inc.’s Game Method. Other items include,
Cognitive function Self checker, which tracks eye
movement using virtual reality to assess cognitive function.
Various cutting-edge technology envisioning Society5.0 will
be incorporated so that we may approach the extension ofhealthy life expectancy from many different fields.

Two keys to sustainable
management—talented humanresources and innovations
We see talented human resources as the source of oursustainable management. By carrying out operations under
the Towa’s vision while feeling satisfied with their jobs, each
employee will be able to sense changes in society andcreate new values. Meanwhile, as the size of the Company
became larger, the adverse impact of a vertical organizationand other effects began to take shape. For this reason, we
launched the Towa Work Style Reform Project in October
2020. From April 2021, the project shifted to an initiative
involving all employees, with the talented human resources
Division at the center. Through interviews and other means,the talented human resources Division is supporting each
employee in their career formation.
The era in which digital transformation (DX) and artificial
intelligence (AI) will get rid of many of our past operations isjust around the corner. Having each employee mull overtheir career goals, take the initiative, and act systematicallytoward achieving the goals will lead to job satisfaction andthe enrichment of their career, and will eventually help thedevelopment of the Company.
Meanwhile, to enhance the consideration for the global
environment and society, we newly established
Environment, Health and Safety Management Department
in March 2022. The department controls and manages theenvironment and safety throughout the Towa Group in a
unified manner and aims to further improve the environmentand safety for Towa employees and regional communities.
In regard to the impact of climate change on our businessactivities, profits, etc., we will strive to disclose information
based on the TCFD recommendations while carrying out
the scenario analyses of our own business activities andtaking stock of greenhouse gas emission reduction
measures.

We are also taking on the challenge of sustainable
innovation in manufacturing technologies. We have always
believed that APIs that are consumed in Japan should bemanufactured in Japan. However, due to legal restrictions,etc., we are dependent on imports for some APIs and theirintermediates. TOWA PHARMACEUTICAL is engaged indeveloping continuous flow precision synthesis, amanufacturing technique, which ensures that substances
are managed within sealed facilities and no substances that
could harm the environment will get out of the premises.
With this technique, we have sought to achieve local
production and local consumption by manufacturing APIs
at plants in Japan from the stage of synthesizing them.
Alongside the local production and local consumption, weare thinking of launching a green sustainable chemistryindustry, hoping to further contribute to the creation of jobs
through the launch.

With the aim of achieving genuine
smiles, rolling out the health-related
businesses from Japan to the world
On the occasion of last year’s 70th anniversary of Towa’s
founding, we announced internally Towa’s fundamental wayof thinking and what it should be like in the future so thateach of our employees can confront various social issues.
The fundamental way of thinking is based on the Towa
Group’s vision, “We are dedicated to people’s genuine
smiles.” The “genuine smile” refers to a state in whichhappiness wells up from within when the body is healthy
and the spirit is fulfilled, and brings a smile to a person’sface. People living in countries and regions suffering frompoverty, hunger, war, violence, suppression of humanrights, control of the freedom of speech, and so on, are notin an environment in which they can hope to experience“genuine smiles.” Meanwhile, Japan has maintained asociety of peace, freedom, and equality, and thus, is fully
eligible for enjoying “genuine smiles.”For Japan to remain like it is today, one of thecontributions that the Towa Group can make through its
business activities is to contribute in part to building thecompetitive edge of industries in Japan and demonstrate
its strong presence in the healthcare industry. We believe
this is achievable by rolling out all related businesses that
contribute to health from Japan to the world.
What we should be like in the future represents acompany that continues to be needed by people living in
the region and to deliver products and services that theyneed, at any age and in any region. If we will keep
upgrading and improving our products and services, using
the latest technology, into those that are the most up-todate and the best, and promote our business by placing
utmost emphasis on gaining high recognition andsatisfaction, and having them purchased at appropriate
prices, operating performance as a company (net sales andprofits) will come as a result of such activities. Of course,
we believe that it is also important to raise our performanceand achieve appropriate earnings for our sustainablegrowth, thereby leading to a virtuous economic cycle andgiving back to society.
We will continue to repeatedly communicate toemployees the Group’s fundamental way of thinking andwhat we should be like in the future so that each employee
can embody these ideas and we can become a company
that continues to be needed by society.
With a view to realizing people’s genuine smiles throughits health-related business, Towa will strive to roll out allkinds of health-related businesses that contribute to healthboth in Japan and around the world. We would like to ask
for your continued support in these endeavors.

TOWA PHARMACEUTICAL Integrated Report 2022

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Expand warehouse (rendering)

Expansion of production capacity at Yamagata Plant

2nd sterile formulation building (rendering)

3rd solid formulation building (rendering)

01

Feature Topic

Production capacity
expansion

Towa works steadfastly to expand its production
capacity toward a stable supply of generics.

Plant to 10.0 billion tablets and the total production
capacity of Towa’s three domestic plants to 17.5
billion tablets.
We plan to gradually commence the shipment of
products from the 3rd solid formulation building in
FY2024.
In constructing the 3rd solid formulation building,we will implement measures for preventing humanerrors and labor shortages in this aging society withlow birth rates. Such measures include installing
automated and unmanned facilities and systems to
the extent possible, aiming at the improvement of
production efficiency. Furthermore, we aim not only
to increase production volume but also to make ourplants environmentally friendly and safe to work.
In the 2nd sterile formulation building being
constructed alongside the 3rd solid formulationbuilding, we will install a production line for vials to
expand the production capacity of vial formulations(liquid/freeze-dried formulations). We will also securea space for future business development.
We are determined to make company-wide efforts
to ensure the stable delivery of safe and secure
generics to patients and medical professionals.

Since 2020, a spate of quality problems by multiple
generics manufacturers have cast a shadow over theentire industry. It remains uncertain when the industry
will restore a stable supply. Generics manufacturers
are working hard to increase production, but theirproduction capacity is limited.
Under these circumstances, Towa completed thefinal installation of facilities in the 2nd solid
formulation building at Yamagata Plant in FY2021.
This is aimed at expediting the expansion of our
production capacity to a maximum of 14.0 billion
tablets per year (total production capacity of thethree domestic plants). Through qualification of theinstalled facilities and validation of each formulation,
we will expand our production capacity to 14.0 billion
tablets per year in the second half of FY2022, up 2.0
billion tablets from 12.0 billion tablets per year in
FY2021. From FY2023 onwards, we can secure thisproduction capacity on a full-year basis.
Nonetheless, we determined that this capacity
expansion plan alone was insufficient to fulfill our
responsibility to secure a stable supply. Thus, wehave decided to newly construct 3rd solid formulationbuilding, 2nd sterile formulation building, and a raw
materials/products warehouse building to further
expand the production capacity at Yamagata Plant.
The construction started in June this year and isscheduled to complete in October 2023.
The 3rd solid formation building is expected tohave a production capacity of 3.5 billion tablets,
which boosts the production capacity at Yamagata

Amid rising concerns over stable supply in the generics sector, we strive to produce products
systematically and efficiently to establish a stable product supply, and also to expand our
production capacity.

Kazuhiko Konno
Senior Managing Director

Fulfilling our mission to ensure a stable supply of pharmaceuticals
In recent years, the environment surrounding the generics
market has remained harsh, as multiple generics
manufacturers were ordered to suspend their operations
due to their violation of Good Manufacturing Practice(GMP; the standard for manufacturing control and quality
control of pharmaceutical products). This has been
affecting their supply of products and making it difficult
for medical institutions and pharmacies to secure thenecessary quantities of pharmaceuticals.
In response to this issue, with a sense of mission, we
have been making company-wide efforts to increase our
production for a stable supply of generics. For systematicand efficient production, we consider various factors,
including market demand, the procurement of raw and
17

TOWA PHARMACEUTICAL Integrated Report 2022

other materials, the utilization rate of our manufacturing
facilities. In addition, alongside the introduction of new
machines and facilities and the expansion of our plantbuildings, we have been increasing the number of
employees and improving our training system inpreparation for the expansion of the production capacity.
We also plan to expand our annual production capacity
to 14.0 billion tablets by the end of FY2022, and thenfurther expand the annual capacity to 17.5 billion tablets
over the medium term through such measures as building
additional plant buildings, to continue stepping up our
production capacity. We will pursue our social mission toensure a stable supply of generics through various
measures as mentioned above.

Production capacity expansion with the three-plant production system

Establishing a production system with an annual production capacity of 17.5 billion tablets by the end of FY2023

Osaka Plant

Okayama Plant

Yamagata Plant

Yamagata Plant(Unit: billion Tab/Cap)

20.0

17.5

15.0
11.5

12.0

10.0

4.0

4.5

5.0

5.0

5.0

0

14.0

3.5

6.5

6.5

5.0

5.0

2.5

2.5

2.5

2.5

FY2020

FY2021

FY2022

FY2023

Capacity expansion at 2nd
solid formulation building

Yamagata Plant
Construction of 3rd solid
formulation building and 2ndsterile formulation building(currently planned)(planned)(planned)*Production capacity of tablets/capsules
Production capacity: Actual number of tablets that can be produced
Production system: Number of tablets that can be produced after installing the facilities

Making steady strides
toward increasing the
production
At Yamagata Plant, we willrealize a production capacity of
14.0 billion tablets per year in
FY2022 through capital
investments, and construct
additional buildings, including
the 3rd solid formulationbuilding, by the end of FY2023
to realize a production capacityof 17.5 billion tablets gradually
starting in FY2024.

TOWA PHARMACEUTICAL Integrated Report 2022

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02

Feature Topic

Overseas markets
development

Towa will propel efforts toward its businessexpansion and growth in overseas markets.
Aiming to deliver value-added products to overseas markets, we are pushing forward with businessdevelopment abroad by leveraging our sales network in the U.S. and multiple countries in Europe aswell as our production base in Spain that is compliant with relevant standards of the markets.

Strengthening our business bases in overseas markets to contributeto people’s health around the world
Delivering high-quality, value-added generics tocontribute to the health of people around the world,
one of our challenges set out in the 5th Mid-term
Business Plan, Towa Pharma International Holdings,
S.L. (“Towa HD”) has worked to foster its corporate
culture and strengthen its organization as a memberof the Group for the past two and a half years after its
acquisition. In fostering the corporate culture, wehave worked to raise employee awareness of being acompany that develops, manufactures, anddistributes high-quality value-added generics
catering to patients’ needs based on our existing
quality control and manufacturing control
foundations, which are essential for manufacturers.
To this end, Towa HD is strengthening its organizationand driving collaboration with Towa Pharmaceutical.
In addition, we changed the trade names of threesales subsidiaries in Spain, Portugal, and Italy to
Towa Pharmaceutical in June 2022 to forge a senseof unity among the Group companies and raise
Towa’s brand awareness overseas. While Towa
Pharmaceutical is recognized in the U.S. and Europe,
we have yet to release our products under the Towa
brand. We believe we can enhance the Group’s
presence overseas by integrating the sales
subsidiaries into the Towa brand. With regard to the
U.S., at the moment, we are deliberating on thetiming of the trade name change considering theprocedures related to pharmaceutical regulations.
We are also discussing the feasibility of transferring
the manufacture of some products that we have

manufactured in Japan to Towa Pharmaceutical
Europe, S.L. (“Towa EU”) by utilizing its superior
production facilities and technologies. While having
difficulty traveling to and from Europe due to the
COVID-19 crisis, we manage to visit the production
sites of Towa EU and actively collaborate with thecompany. As a result, we are inspired mutually today.
To sell in overseas markets our value-added generics
that are well recognized in Japan, we havecommenced the selection of products and a market
survey. Although we are not yet ready to provide
detailed information as we need some more time tocustomize our products to suit each country andregion, we are making steady strides, including
compliance with local pharmaceutical regulations.
During the 3rd growth period for the Group, we aim
to generate synergies between Japan, the U.S., andEurope in R&D and production, as we plan tocontinue promoting business development inoverseas markets that are new to the Group.

03

Feature Topic

SunshoPharmaceutical

We will pave the way for new growththrough health-related businesses.
We have worked to create new health-related businesses catering to the new medical system while
combining new technologies and knowledge with our expertise as a generics manufacturer.

Diversifying business portfolio by utilizing cutting-edge formulationand capsule technologies
Under one of the basic policies of the 5th Mid-term
Business Plan, “entering new health-related businesses,”
we have aimed to contribute to extending healthy life
expectancy through the care of pre-symptomatic diseases
and disease prevention. As part of this effort, the Groupacquired Sunsho Pharmaceutical Co., Ltd. (“Sunsho
Pharmaceutical”) and made it one of its consolidated
subsidiaries in March 2022. Sunsho Pharmaceutical is oneof the leading CDMOs (Contract Development andManufacturing Organizations) in Japan, which mainly
plans, develops, and manufactures health foods, including
dietary supplements, general foods, and capsuleformulations of pharmaceuticals and others. The company
owns cutting-edge formulation and capsule technologies,
such as the proprietary UniORV® technology.
With the addition of Sunsho Pharmaceutical, the Grouphas established an unwavering position in the domestic
soft capsules manufacturing market and has commenced
a full-fledged development of health foods of Towa Quality.

Business expansion through collaboration withSunsho Pharmaceutical

Soft capsules

Towa Pharma
International
Holdings, S.L.

Innovation Center

Shigehiro Kubo
Senior Operating Officer in charge ofInternational Business Division

19

TOWA PHARMACEUTICAL
ARMACEUTICAL Integrated Report 2022

Further, the Group has forged ahead with a postmerger integration (PMI) process to maximize theeffect of integration after M&A, considering the group
governance, centered on the integration ofmanagement, operations, and awareness. Goingforward, we expect to innovate technologies andcreate new product value by combining Sunsho
Pharmaceutical’s knowledge and superb formulation
technologies in health foods with the Group’s
knowledge and formulation technologies. Moreover,the integration will help realize our vision to contributeto people’s health by creating superior products andservices. In the future,
we will diversify ourhealth-related businessportfolio with a view todelivering health foodproducts including soft
capsules overseas.

Seamless capsules

Sunsho Pharmaceutical manufactures products in small to large lots at four
manufacturing sites and five packaging sites, with the Innovation Center, an
R&D base, which the company started construction in July 2021 and wascompleted in November this year, at the core. As two of thesemanufacturing sites have obtained approval to manufacture pharmaceuticalproducts, we expect the company to contribute to a stable supply ofpharmaceuticals, let alone health foods. The innovation center is designed
to serve as a hub to deliver to the world a great many innovations throughthe development of formulation and processing technologies including
UniORV®, the research of functionality, and the creation of new applicationsof formulation technologies. We strive toexpand health-related businesses byintegrating Towa Pharmaceutical’s
formulation technologies into the center.

Hideshi Nakamura
Deputy Division Manager, Corporate
Strategy Division / General Manager,
Corporate Planning Department

TOWA PHARMACEUTICAL Integrated Report 2022

20

Our Value Creation Process
To address social issues, Towa Group has created value by allocating its business capitals to every business that
contributes to people’s health. We will contribute to the health of all people and help them achieve a genuine smile
based on the “5th Mid-term Business Plan 2021–2023 PROACTIVE II.”INPUT Business Capital

Towa
Quality

Financial capital

Towa Group’s
value proposition

Total assets: JPY 329.9 billion (consolidated)
Net assets: JPY 132.1 billion (consolidated)

Social Issues

Manufactured capital
Production sites: 12

Extension of healthy
life expectancy anddisease prevention
Production ofhigh-quality
pharmaceuticalproducts(11 in Japan [including Towa’s 3 plants], 1 in Europe)

Production capacity (Towa’s 3 plants):
12 billion tablets (tablets and capsules)
Production facilities for various dosage forms

Better accessibility
to primary
healthcare services
Application ofadvanced technology
to healthcare services
Improvement ofworkingenvironment

Manufacture of sophisticated productswith No. 1 total product performance

Extending healthy
life expectancy ofmore than 7billion people
around the world

R&D offices: 10 (9 in Japan, 1 in Europe)

R&D expenditure: JPY 35 billion or more
API synthesis process knowhow

Human capital
Employees: 4,078 (consolidated)
Consolidated subsidiaries: 12

5th Mid-term
Business Plan
2021–2023
PROACTIVE II(4 in Japan, 8 in overseas countries)

Qualified pharmacists: 254 (consolidated in Japan)

Enhancing generics
business as a coreSocial and relationship capital
Collaborate with business partners including
raw material manufacturers, medical products
distributors, and agents
Medical institutions coverage ratio (Towa):
Hospitals 90.7%
Dispensing pharmacies 95.9%

Energy input: 20,203 kl

Corporate Governance(Compliance and Risk Management)

Our Commitments (T-SMILE)

Water usage: 278,060m (Towa’s 3 plants)

TOWA PHARMACEUTICAL Integrated Report 2022

Maintaining
sustainable
healthcare system

People’shealthCreating technology
innovations
and product value

Vision(crude oil equivalent, Towa’s 3 plants)
3

Entering newhealth-related businesses

GenuinesmilesControlling
healthcare costs ofthe government,
administrative
agencies, and local
communities

Expanding andgrowing business inoverseas markets

MRs: 799 (consolidated in Japan)

Natural capital21

We will support everyone
who cares about good
health to live a healthy
lifestyle by making it easier
to be and stay healthy aspart of everyday life.

SocialImpactIntellectual capital(accumulative) (FY2021–FY2023)

Quality assurance
and stable supplyof pharmaceuticalproducts

OUTCOME

Foundations supporting
value creation

Making job satisfaction
and fostering talented
human resources

TOWA PHARMACEUTICAL Integrated Report 2022

22

External Environment Surrounding Towa Group

Towa Group’s CapitalEntering the era where measures for new challenges are required
despite having achieved the government’s generics volume share target

Towa focuses on creating value across its Group by working sincerely to solve social issues while leveraging various
capitals gained in the past business operations. By solving issues including the extension of healthy life expectancy,
we will contribute to the health of people around the world.

a full speed revolution at a stroke that would take 10
years under normal circumstances. Achieving ahigh-quality economic society in the “New Normal
Lifestyle” is set as a goal for the New Future in the
post-pandemic.
Meanwhile, under the “Future Social Security
Reform – Looking to 2040” issued by the Ministry of
Health, Labour and Welfare, the government aims torealize a society where everyone can work longer andmore energetically by solving issues such as “diverse
employment and social participation,” “extension ofhealthy life expectancy” and “medical and welfare
service reforms.” Generics are playing a greater role
under these government policies and we are
expected to contribute to extending healthy life
expectancy by forming an infrastructure to create
ideal local communities and providing necessary
health promotion services to people in need of them.

In recent years, generics have come to play anincreasingly vital role in the society. Under the “Basic
Policy on Economic and Fiscal Management andReform 2017” approved by the Cabinet in 2017, thegovernment has set a target to increase the generics
volume share to 80% by September 2020. In
response to this, the generics industry including
Towa has focused on enhancing production capacityand ensuring stable supply. The results of analysis
issued by the Japan Generic Medicines Association
show the volume share reached 80.1% in the fourth
quarter of fiscal 2020 (January to March 2021) andindicated the target of 80% was achieved.
Furthermore, in the “Basic Policy on Economic andFiscal Management and Reform 2020,” thegovernment says it will “protect people’s lives,
livelihoods, jobs, and businesses” to achieve the“New Future in the post-pandemic.” The government
also envisions achieving a “New Normal Lifestyle” by

There is a pressing need for industry-wide initiative to restore
confidence in generics which has been eroded

Turmoil

85%
80%
75%

79.5%

70%
65%

23

TOWA PHARMACEUTICAL Integrated Report 2022

FY2017FY2018FY2019FY2020

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q

60%

Manufactured capital
Production sites:

12(11 in Japan [including Towa’s 3 plants], 1 in Europe)

Production capacity (Towa’s 3 plants):

12 billion tablets(tablets and capsules)

Production facilities for various dosage forms

Total assets at the end of FY2021 increased JPY
84,266 million YoY to JPY 329,935 million. Net assets
at the end of FY2021 increased JPY 15,596 million YoY
to JPY 132,169 million. Consequently, capital-to-asset
ratio was 40.1% at the end of the consolidated fiscal
year under review.

R&D offices:10(9 in Japan, 1 in Europe)

R&D expenditure: JPY

35 billion or more(accumulative) (FY2021–FY2023)

API synthesis process knowhow
R&D is conducted in 10 offices in total, comprising 9 inJapan and 1 in Europe. Target R&D expenditure fromFY2021 to FY2023 is JPY 35.0 billion or more(accumulative). This covers the leading-edge researchon API synthesis including molecular control technology.

Social andrelationship capital

Generics volume share

FY2016329.9 billion (consolidated)
Net assets: JPY 132.1 billion (consolidated)Total assets: JPYIntellectual capitalconfidence in generics, the entire industry shall
implement measures for ensuring a stable supply
based on thorough manufacturing and quality
management.
While still pursuing Towa Quality, we will make theutmost efforts to restore public confidence in theindustry by enhancing the product lineup needed andmaintaining and strengthening the system for stablesupply/quality assurance as well as for information
provision.
Our activities on health-related businesses conformto this direction and we will strive to become a valued
company that contributes to the society.

While the generics volume share has steadily risen,
the recent quality problems in the generics industry
have affected the entire industry. Public confidence ingenerics built by the industry so far is declining. As
the drug companies involved in quality problems
suspended their operations, the industry as a wholehas failed to fulfill its responsibilities for stable supply.
As a result, the generics market is in turmoil and thefuture of generics companies is worrisome.
Under such circumstances, the Ministry of Health,Labour and Welfare mentioned that the industry
would never gain understanding from patients andMedical professionals only by setting new numericaltargets for generics. In order to regain public

Financial capital ollaborate with business partners including raw
Cmaterial manufacturers, medical products
distributors, and agents
Medical institutions coverage ratio (Towa) :90.7

Hospitals%
Dispensing pharmacies

95.9 %

We engage in nationwide marketing activities through71 sales offices, 31 agents at 62 sites, and medical
products distributors, among others, in Japan. Towa
has a high coverage ratio of medical institutions: 90.7%
for hospitals and 95.9% for dispensing pharmacies.

Towa Group has 12 production sites in total, comprising of 11
in Japan and 1 in Catalonia, Spain. Production capacity
stands at 12.0 billion tablets for tablets and capsules
produced at Towa’s 3 main plants. Our subsidiaries produce
ointment, soft capsules, etc. and the Group is distinguishedby its capacity to produce diverse dosage forms.

Human capitalEmployees:

4,078(consolidated)

12
Qualified pharmacists: 254
MRs: 799

C onsolidated subsidiaries:(4 in Japan, 8 in overseas countries)(consolidated in Japan)(consolidated in Japan)

Towa Group hires 799 MRs and 254 qualified
pharmacists (both consolidated in Japan). In addition,
we have introduced an internal qualification system forbusiness operations (experts, etc.) to nurture
professionals.

Natural capitalEnergy input:

20,203 kl(crude oil equivalent, Towa’s 3 plants)

Water usage:

278,060 m

3(Towa’s 3 plants)

We use good quality water and energy resources to
produce high-quality pharmaceutical products. In thisregard, from an environmental perspective, we manage
chemical substances properly, enhance the plants’water discharge and air emission systems, take energysaving measures, and make other efforts.

FY2021

TOWA PHARMACEUTICAL Integrated Report 202224

Mid-term Business Plan

Mid-term Business Plan
2021–2023

PROACTIVE

Under our 5th Mid-term Business Plan 2021–2023
PROACTIVE II (the “Mid-term Plan”), the Group will
be developing health-related businesses in line withfive policies as shown in the diagram below. With ourdomestic generics business, which is our corebusiness, we will be aiming to make an even greater
contribution as we move forward into the future. And
as for overseas markets, we will be expanding thenumber of countries and territories in which we offer

Towa Group’s
Health-Related
Businesses

Progress with implementation of Mid-term Business Plan

the Group’s products. Furthermore, in the realm of
new health-related businesses, we are embarking on
a new era, so will be steadily doing what’s necessary
as we look ahead to the future.
To implement these policies, it will be important tocontinuously deliver technological innovation andproduct value, and we will therefore be continuously
working to enhance job satisfaction and foster
talented human resources.

Regarding our performance in the fiscal year ended
March 31, 2022, while operating profit decreased fromthe previous fiscal year, net sales and profit attributableto owners of parent both climbed.
As for the basic policies in the Mid-term Business
Plan, with respect to Policy 1 (Enhancing generics
business as a core), we are moving forward withpreparations to expand our production capacity to 17.5
billion tablets from FY2024. In addition, we worked on
boosting our logistics capacity to cope with the volume

Policy 3Entering new health-related
businesses

FutureNet sales

Operating profit

Targets

Target (cumulative)

JPY 200.0 billion

JPY 150.0 billion(consolidated)(non-consolidated)

JPY 57.0 billion or more

Results for FY2021

JPY 165.6 billion(consolidated)

Policy 2

we will need to handle once output is increased.
Regarding Policy 2 (Expanding and growing businessin overseas markets), Towa Pharma International
Holdings, S.L. (“Towa HD”), which is based in Spain,
has business offices in the United States and fiveEuropean countries, and supplies generic drugs withover 210 ingredients in more than 20 countries acrossthe globe.
And as of the other three basic policies, we aremaking steady progress toward achieving of our goals.

Expanding and growing businessin overseas markets

Results for FY2021

JPY 123.3 billion

JPY 19.2 billion(non-consolidated)

R&D expenditure

Capital investment

Dividend policy

Target (accumulative)

Target (accumulative)

TargetJPY 35.0 billion or more

JPY 75.0 billion or more

Stable dividends

Results for FY2021

Results for FY2021

Results for FY2021

JPY 11.5 billion

JPY 14.8 billion

Annual dividend of JPY 60

Policy 1

Enhancing generics
business as a core

Present

25

Policy 4

Creating technology innovations and product value

Policy 5

Making job satisfaction and fostering talented human resources

Challenges

PolicySecuring stable supply and providing appropriate
information based on thorough manufacturingcontrol and quality control to restore trust in generics
Being a more trusted and needed company as acomprehensive generics manufacturer[ Policy 1 ]Enhancing generics
business as a core

Delivering high-quality, value-added generics tocontribute to the health of people around the world[ Policy 2 ]Expanding and growing businessin overseas markets

Contributing to the realization of healthcare and nursing
care for society with long and healthy life expectancy
and also to society that shifts from medical care to careof pre-symptomatic disease care and prevention[ Policy 3 ]Entering new health-related
businesses

Contributing to society by constantly supplying the Towa
Quality products and achieving sustainable growth[ Policy 4 ]Creating technology innovations
and product value

Continuing to be an ever-growing company that provides
job satisfaction to each and every employee throughgrowth of both the company and its employees[ Policy 5 ]Making job satisfaction andfostering talented human resources

TOWA PHARMACEUTICAL Integrated Report 2022

Key Theme• Stable product supply- Stable API procurement- Enhanced production capacity- Optimized Towa Sales System• Quality assurance• Broad product lineup• Manufacture of sophisticatedproducts with No. 1 total
product performance• Entry to Disease risk testing
service business

Policy1Enhancing generics
business as a core

Stable product supply
To maintain and strengthen a Stable product supply,
we will emphasize the perspective of supply chain
management, and will share information andencourage cooperation across departments tooptimize the entire system. In this way, we will moveahead with risk-adapted initiatives. Specifically, we will

provide Towa products to medical institutions,
pharmacies, and patients, who need the products, byincreasing production capacity through our three-plant
production structure and by optimizing the Towa Sales
System. In particular, we will be pursuing initiatives
that take into account the risks in API procurement.

Quality assurance system
Throughout manufacturing and quality control processes,
we will comply with GMP, GQP, and GVP ministerial
ordinances and the GDP guidelines to maintain andstrengthen our quality assurance system. In every processfrom the acceptance of APIs to the testing of intermediate

products, the testing of finished products, productshipment decision-making by plants, and productshipment decision-making by the HQ QA Dept, we will
strengthen our management systems and schemes, andcontinue to work to ensure reliable quality and safety.

TOWA PHARMACEUTICAL Integrated Report 2022

26

Mid-term Business PlanBroad product lineup
We will put together a generic-drug productlineup with a focus on medicines deemednecessary for future medicinal treatment.
With joint sales of Infliximab BS as a
stepping stone, we have entered thebiosimilar market, and in December 2021,
we started manufacturing and sales of our
first authorized generic, Eldecalcitol
Capsules 0.5 μg/0.75 μg Towa, so we now
offer a product lineup that spans a wide
range of fields. In addition, we will be taking
on challenges in diversified areas such as
drug re-positioning with iPS drug discovery,
development of Rivastigmine transdermal
system twice-a-week medicine, etc.

PolicyFY2030 Product Composition by
Therapeutic Area (Forecast)

FY2020 Product Composition by
Therapeutic Area

Other

Bio-pharmaceuticals

Other

Cardiovascular

Oncology

Oncology

Respiratory
VitaminRespiratory
Vitamin120

Gastrointestinal

Medicaleffects andmechanisms

Anti-allergic

Antibiotics andchemotherapeutic

Bio-pharmaceuticals
New TA
Cardiovascular

130

Medicaleffects andmechanisms

Gastrointestinal
Anti-Allergic

Antibiotics andchemotherapeutic

Neurological
Metabolic etc.

Neurological
Metabolic etc.

Manufacture of sophisticated productswith No. 1 total product performance
Manufacture of sophisticated productswith No. 1 total product performance refers
to our initiatives in providing the market
with products characterized by “Towa
Quality” that are desired and needed bycustomers. This guarantees the quality ofthe products that we supply underthorough quality control. We are constantly
using the latest technologies to improveand modify the quality of the products, andwe are constantly upgrading the products
to the latest and best. We arestrengthening and streamlining researchand development functions throughinvestment in facilities and equipment.

Ideal
products

Pursuit of
Towa Quality
Development andlaunch of
new products

32Application oftechnologies
Improvement andmodification

Towa
Quality

Information provision

Feedback
Information collection
Ideas for improvements

Analysis and evaluation

In-house manufacturing of APIs / innovative technology development and application research

Muscle Suit Every

Strengthening and streamlining of research and development functions

comuoonSports facilities, etc.

Business scale

Public health nurses
Sustainable business growth with Towa HD as a
hub through new product launches in Europe andthe United States

GrowthCommunity
Comprehensive
Support Center, etc.

Expansion

Frai
l
Care
d

Generics

Prevention

Local residents, etc.

tic

a
mptom
Pre-sdyisease

Treatment

In d•OTC drugs•Medication support tools

ase

Dise

Caregivers•Communication
support•Nursing support

Pharmacists

Doctors

Nursing homes, etc.

City offices and community centers

Researchers

Care managers

Development of Towa Quality products meeting
existing and potential patients’ needs overseas

Exploration of market opportunities
in new countries/regions

Certifiedsocial workers

Nursing
supportCore businessCompanies anduniversities

Good
HealthTrainers

Public health centers

Overseas
markets with
Towa HD
as a hubHana Support• Building a foundation for extending healthy life expectancy by utilizing data
• Contributing to Community-based Integrated Care System• Further enhancing lineup of products and services to maintain and improve health• Entering the disease risk Disease risk testing service business• Creating synergies between and with existing businesses

Expanding and growing businessin overseas markets

We will strive for the sustainable growth ofour business by introducing new productsin Europe and the United States, mainly
through Towa HD, which we acquired in2020. At the same time, we will develop
Towa Quality products that meet patients’needs overseas. Furthermore, we will
explore market opportunities in new
countries/regions.

who are hard of hearing should find ways to hear better.
Instead, it is about making the person speaking moreeasily heard. It is now being used in an increasing
number of settings, including medical institutions,
pharmacies, and nursing homes.
Besides these products, a smartphone app called
Hana Support assists users with taking their medicines.
By continuously recording the medication they havetaken in this app, users can confirm for themselves what
they have taken and provide accurate information topharmacists. It therefore helps them to avoid forgetting
to take their medicine or taking their medicine twice.
Furthermore, in March 2022 we completed ouracquisition of the shares of Sunsho Pharmaceutical Co.,
Ltd. (“Sunsho Pharmaceutical”) and made it a whollyowned subsidiary. The health food product and capsulemanufacturing technology that Sunsho Pharmaceuticalhas developed over many years will support the Towa
Group in realizing its vision to contribute to people’s
health by creating superior products and services, and we
expect it to help extend people’s healthy life expectancy.

As part of our challenges, the Group aims to contributeto the realization of healthcare and nursing care forsociety with a long and healthy life expectancy and also
to society that shifts from medical care to care of presymptomatic disease and prevention. Recognizing thisas a task to accomplish, and in line with our vision ofcontributing to people’s health, we are working to create
new health-related businesses that are suited to thenew medical system, while acquiring new techniques
and integrating them with completely new knowledge
and technologies.
An example is our wearable work support robot,
Muscle Suit, which assists with movement through theflexing of artificial muscles powered by air pressure.
This product helps to improve working conditions andtackle labor shortages by easing the burden on thelower back when lifting a person, holding up a heavy
object, or maintaining a half-sitting posture.
Another product is comuoon, an interactive support
device. This is a revolutionary system based on aconcept that is the reverse of the notion that peopleKeymeasures

PolicyEntering new health-related
businesses

Dispensing
pharmacies

NursesMedical institutions

m
ivid
tfor
ual HealPnalth Informatio•Health foods•Supplements•Health promoting tools

Contributing to forming of infrastructure for the creation of ideal local communities
Providing necessary health promotion services to people who need them and contributing to the extension of healthy life expectancy
Market / Area

27

TOWA PHARMACEUTICAL Integrated Report 2022

TOWA PHARMACEUTICAL Integrated Report 2022

28

Mid-term Business Plan

Towa Group’s Target Business
Policy4Creating technology innovations
and product value

To contribute to society by constantly supplying Towa
Quality products and achieving sustainable growth as
a company, we will continue to work on creating
technology innovation and product value.
In particular, we will pursue technological innovationin API technologies such as molecular control
technology, chiral synthesis technology, andcontinuous-flow precision synthesis, in formulation
technologies such as ones that allow the production of
OD tablets that are easy to take, and in manufacturing
technologies for continuous production.
Sunsho Pharmaceutical, which is now a Group
company, constructed an Innovation Center to serve
as a R&D base for enabling the development of stateof-the-art pharmaceutical formulation technologies.
The company also possesses advanced drug
formulation and capsule technologies such as

UniORV® technology, and we are aiming for innovation
by integrating them with our own RACTAB® technology.
We are also stepping up efforts to create new
product value. Regarding joint research aimed at
obtaining a new indication for Bromocriptine theresults of physician-led trials suggest potential forformulation development based on iPS drug
discovery. Going forward, Towa Pharmaceutical andTime Therapeutics, Inc., in cooperation with Kyoto
University, plans to consult with the regulatory
authorities and determine a development policy with aview to obtaining approval.
As for our formulation of Rivastigmine a drug usedby Alzheimer’s disease patients, we are conducting
clinical trials (Phase III trial) with a view to obtaining
approval for manufacturing and sale of theformulation.

Based on our vision “We contribute to people’s
health; we are dedicated to people’s genuine smiles,”Towa Group contributes to people’s health bycreating superior products and services. Through our
corporate activities, we aim to be a company that isvalued and needed by patients, Medical
professionals, local communities, and others.
Under the 5th Mid-Term Business Plan, we will
maintain our vision while expanding the scope of ourbusiness to include health-related businesses.
Nevertheless, our core generic business in Japan andoverseas will maintain its central role in ouroperations.
In this core business, we will further strengthen andutilize the results of all the efforts we have made so
far. Based on the premise of “pursuit of Towa
Quality,” we will strengthen our “Assortment ofneeded products” to meet the demands of society as

Restoration of healthat pre-symptomatic
stage

Maintenance of
healthy conditions

API Technology
Establishment of molecular control technology
Freely controlling crystal form and particle size of APIs
Contribution to the development of value-added products
Establishment of chiral synthesis technology
Enabling efficient API synthesis
Development of continuous flow precision synthesis
Pursuing green sustainable chemistry with wastes reductions
and low CO2 emissions as key initiatives

Production carried out under an integrated flow leading to labor saving
Smaller manufacturing facilities and occupation area

Lineup ofessential products

Pursuing OD tablets that are easy to take
Further improvement of RACTAB
Masking technology to reduce bitterness, miniaturization of tablets,and better oral disintegration
Realization of stable formulations
Development of formulations stable in term of heat, light, moisture, and oxygen
Assurance of expiration period of formulation for three years or more

Creation of New Product Value
Joint research aimed at obtaining a new indication for Bromocriptine

Application to integrated continuous manufacturing system

Extension of healthy
life expectancy

Formulation Technology

Manufacturing Technology

Establishment of technology to monitor products in real time
(PAT: Process Analytical Technology)

a comprehensive generics manufacturer. In addition,
we will maintain and strengthen our system toprovide a stable supply of products that meet quality
standards and to deliver information on safety andquality in a timely and accurate manner.
Furthermore, the Group will pursue corporate
activities to contribute to the creation of new healthrelated businesses. Through these businesses, wewill help form an infrastructure to create ideal local
communities, and contribute to extending healthy life
expectancy by providing necessary health promotion
services to people in need of them.
And with regard to the Sustainable Development
Goals (SDGs), international objectives to be achievedby 2030, we aim to contribute mainly to theattainment of Goal 3 (Good Health and Wellbeing),
while also working to achieve the other goals.

Clinical trials for familial Alzheimer’s disease started

Pursuit of
Towa Quality

Generic
business

Build up basics onhealth related
infrastructure

Maintenance andstrengthening of stablesupply and quality
assurance systems
Response to local
Comprehensive
Community Care System

Grasping healthconditions

Maintenance andstrengthening of
information provision

Health-related
businesses

OthersDevelopment of new Rivastigmine formulation
Development of transdermal system twice-a-week medicine
Hope for reducing the burdens on patients, their families, and caregivers
Phase III clinical trials started in the summer 2021

With generics business set as our core, expansion of
all health-related businesses contributing to people’s healthIn response to the international initiatives of SDGs to beachieved by 2030, we will focus on Goal 3 (Good Health andWell-being), while also working to achieve the other goals.

Policy5

Making job satisfaction andfostering talented human resources

As the growth of employees leads to the strengtheningof corporate fundamentals and facilitates growthcorresponding to change, we are working to establish
an environment for the enhancement of corporate
fundamentals. In connection with this, we are aiming
to create workplaces where there is respect for

29

TOWA PHARMACEUTICAL Integrated Report 2022

diversity in work styles and motivation for each andevery employee. We also view our employees as vital
investment resources and assets for the Company,
and are stepping up fostering talented humanresources who can make an impact as we pursue
growth.

TOWA PHARMACEUTICAL Integrated Report 202230