4Shoji Hatano
President,
General Hospital Company

GeneralHospitalCompany© Terumo Corporation

Business Overview: General Hospital Company
FY15 Sales

GeneralHospital
ProductsGeneralHospitalCompany

D&D

DM andConsumerHealthcare

78 B JPY

58 B JPY

FY14-15Growth

-1.1%

-0.3%

Major products• Infusion system• Infusion pump

• Infusion solution(B2B: 15 B JPY )• Prefilled syringes

25 B JPY• Blood glucose
monitoring device

3.8%• Needle for pen-injector
161 B JPY
© Terumo Corporation-0%
Dec 12, 2016

1/19

Mid-to Long-term Vision
Contribute to improving hospitalcare quality and efficiency
Contribute to drug delivery
innovation

Shift gears to enhance sales andachieve sustainable growth© Terumo Corporation

Dec 12, 20162/19

Market Dynamics and Healthcare Needs

Hospital market

Market Environment

JapanOverseas

Pharmaceuticalmarket

Healthcare Needs

Increase patient count due to aging society

Improve patients QOL

Healthcare expenditure constraints

Deliver care efficiently

Increased hospitals purchasing
power in developed countries

Offer affordable productsHigh market growth in India and China

Innovation in drugs(Biologics, Immunotherapy)

Establish a delivery system to match druginnovation

Intense competition inpharmaceutical industry

Deliver added value in drugs
Drug companies seek higher investment
efficiency and contract manufacturer© Terumo Corporation

Dec 12, 2016

3/19

Mid- to Long-term Strategy: General Hospital Company

Establish ahealthcare
platform

Expand the hospital business inJapan by offering comprehensivevalue

Be the best
partner for
pharmaceuticalcompanies

Deliver new value to expand B2B
business in the global market

Healthcare
needs© Terumo Corporation

Dec 12, 2016

4/19

Mid- to Long-term Strategy: General Hospital Company

Establish ahealthcare
platform

Expand the hospital business inJapan by offering comprehensivevalue

Be the best
partner for
pharmaceuticalcompanies

Deliver new value to expand B2B
business in the global market

Healthcareneeds© Terumo Corporation

Dec 12, 2016

5/19

Establish a Healthcare Platform
Address hospital needs by delivering comprehensive product offerings

Healthcare needs
Improve patient
QOL

Value to deliver

Key products

Improved safety

Advanced infusion system
Digital health

Deliver careefficiently

Operational efficiency
Pain management drugs
Adhesion barrier
Early discharge© Terumo Corporation

Glucose monitor
Insulin pumpDec 12, 20166/19

Improve Therapy Safety and Operational Efficiency
Provide a safer healthcare environment and establish a healthcare platform byconnecting products to hospital networks

Value to deliver
Advanced
infusion system•Prevent incorrect
administration

Connecting advanced infusion system and digital health
ClosedIV-lineInjection system for
Chemotherapy

Database
MonitorSolution•Prevent infection andexposure to hazardous
drugs

Order

Monitor+Digital health•Improve efficiency of
medication
management throughstandardization•Accumulate evidence
on patient management

Medication
ManagementSystem

Pumps

Dispatch
Dispense
Labeling, IC tag
Authorization

Training formedical staff

RecordPFSAccess© Terumo Corporation

Dec 12, 2016

7/19

Achieve Early Discharge and Improved QOL
Pain Management

Prevent Adhesion

Postoperative pain management enables
early discharge
Keys to early discharge:
Food consumption and exercising

Postoperative adhesion is a majorcomplication
Stomachache, intestinal obstruction, andsterility occurring with 50-90% of patients

Upgrade tosoftbag in 2017

AcelioImprove QOL by cancer pain management

Adhesion barrier suitable forlaparoscopic procedure
Easy to use even in narrow space and odd shapeAcelio

Oxycodone

Prepenon

MethapainAdSpray(Launch: Jan. 2017)

Continuous line extension© Terumo Corporation

Dec 12, 2016

8/19

Optimize Sales Force to Align with Healthcare Policy
Adapt to the shift from hospital-based to community-based healthcare

Past healthcare regime

Future healthcare system

Clinic, Homecare

Chronic careAcute care
Convalescent care

Short-term acute care

General ward

Functionalandlocal

Short-term
acute care

Approach
acute care
first

Acute care
Convalescent
Chronic
Clinic, Homecare

Offer complete set of functions
within the hospital© Terumo Corporation

Dec 12, 20169/19

Mid- to Long-term Strategy: General Hospital Company

Establish ahealthcare
platform

Expand the hospital business inJapan by offering comprehensivevalue

Be the best
partner for
pharmaceuticalcompanies

Deliver new value to expand B2B
business in the global market

Healthcare
needs© Terumo Corporation

Dec 12, 201610/19

Be the Best Partner for Pharmaceutical Companies
Expand B2B business by matching evolved pharmaceutical companies’ needs

Pharmaceutical needs
Design a delivery
system adapted tonew drugs

Focus on researchby outsourcing
production
Offer easy-to-use,
safe dedicateddevicesValue to deliver
Material technologies forbiologics
Devices for drugs with highvolume and high viscosity
Sophisticated aseptic filling
technologies
Easy-to-use, safe deliverysystems© Terumo Corporation

Key products

Delivery systems forbiologics and vaccines
Prefilled syringe CMO
for biologics
Specialized needles for
prepackaging

Dec 12, 2016

11/19

Significant Opportunities Arise for Device by Drug Innovation
Expansion of biologics and immune therapy create new markets for medtech companies

Immune therapy
医療ニーズ

Biologics
Biologics market

From tablet to injection+9% p.a.

•Stabilizing theformula•High viscosity•Aseptic filling20052015

Immune therapy (vaccine)+8% p.a.

2005

2022E

Expansion of Biosimilars

Differentiate bydelivery device

Increase demand for self
injection at homeUsability

2011

2017E

Differentiate bydelivery device

Reference: Mizuho industry focus Vol.156, and others© Terumo Corporation

Dec 12, 2016

12/19

Biologics: Strategic Partnership with Pharmaceutical Companies (Japan)
Provide solutions for biologics to expand the CMO Package business

Value to deliver Device development
and production suitablefor biologics
 Regulatory filingcapability
 Quality management
system ready for the US,Europe, and Japan

CMO: Device and Production
 Material technologies for biologics•Prefilled syringes (PFS) Usability, high volume-ready, and highviscosity-ready• Auto injectors• Safety devices

Marketexpansion
Offercomprehensivesolutions topharmaceuticalcompanies
developingbiologics andbiosimilars• PFS with tapered needle• Delivery system for large volume+

Provide solution
for customers’
global expansion

Advanced aseptic filling technology© Terumo Corporation

Dec 12, 2016

13/19

Biologics: Enhance Drug Value through Devices
Offer specialized products to expand the business where unmet needs exist

Value to deliver

Develop devices to beprepackaged with drugs

Market expansion

Suitable delivery devicefor drugs

Strengthen theprepackaged businessNew disease area

• Needle, Winged infusion needle• Psychoactive drugs,schizophrenia, infection,blood-related, and others• Inject adequate volumes• Improve safety• Safety needles

Value-added products
driven by coretechnologies

Enhance the productpipeline

Lyophilized biologics• Less invasive deliverysystems• Safe and easy-to-use
dispensers• Reduced injection frequency• Ophthalmic needles• Plastic needles for solutions• Tapered needles• Large volume injectors

High viscosity biologics© Terumo Corporation

Dec 12, 2016

14/19

Immune Therapy: Generate Markets with New Device
Expand intradermal injection device business with strategic partners in immune therapy market

Value to deliver

Intradermal injection device Market expansion

Increases efficacy ofimmune effectEasy and accurate injection• Rich dendritic cells exist inintradermal layer• Inject drugs in intradermal layer
with 2mm thickness

Introduce the device
for seasonal flu vaccine• More efficient antigenrecognition• Improve efficacy of vaccine

EpidermismmDermis

Hypodermal tissueBenefit of the device

Expand application todevelop market• Easy injection• Allergy treatment• Needle stays within
intradermal layer• Cancer vaccines• Lower patients
resistance to needle© Terumo Corporation

Dec 12, 201615/19

Evolve the Organization to Execute Growth Strategy
Reorganize into Hospital System and Alliance divisions

Current organization

New organizational structure

GeneralHospital
Products
GeneralHospitalCompany

D&D

Hospital
Systems• GHP• D&D (excluding B2B)
• DM andConsumer Healthcare

Alliance• D&D (B2B)

GeneralHospitalCompanyDM andConsumerHealthcare© Terumo CorporationDec 12, 2016

16/19

Enrich the Product Pipeline around Key Initiatives
Long Term Pipeline
Long- term
New products
contributing to(BeyondgrowthbeyondFY20)
2020

Mid- term(FY17-19)
Hospital
System• Next generation SmartPump• Vertical Infusion Pump
• Pain Management Drugs(Extend lineup)• AdSpray (adhesion barrier)• Insulin Pump
• High accuracy CGM• Access device for infusion• Pain Management Drugs(Extend lineup)• 12 new products• 10 new products

Alliance• CMO• Advanced • Plastic needle for solution
products • Ophthalmic needle© Terumo Corporation• Large volume injector• PLAJEX with tapered needle

Dec 12, 2016

17/19

Sales and Operating Income Target toward FY21
Sales

Operating Income*

Shift gears to enhance sales

Achieve faster profit growth thansales growth through continuousprofit management

Mid-single-digit
growthHigh single-digit
growthAdjusted operating margin improvesby 2 - 3% pts

Plan FX rate: USD=105 JPU, EUR=115 JPY*Adjusted operating income (IFRS)
Adjusted items: Intangible asset derived from acquisition, one-time acquisition expense, impairment, gain/loss from sales of stocks and others

FY10FY16FY21FY10© Terumo Corporation

FY13

FY16

Dec 12, 2016

FY2118/19

Beyond FY21
Hospital Systems Division

Alliance Division

Achieve stable growth in Japan andselective growth in overseas markets

Growth driver• Provide medical devices and services tosupport community-integrated care systems• Maintain a competitive edge by gaining
customer loyalty• Reduce hospitalization days and prevent readmission• Execute multiple alliances at anaccelerated pace in global markets toexpand the business• Deliver preventive, diagnosis, andtherapeutic options for diabetes• Develop and manufacture localized productsoverseas• Bring innovation to drug delivery by
developing new devices© Terumo Corporation

Dec 12, 201619/19

© Terumo Corporation

Disclaimer
The information that Terumo discloses and the forward-looking statements
including financial projections are based upon our assumptions using
information available to us at the time and are not intended to be guarantees of
future events or performance. Accordingly, it should be noted that actual
results may differ from those forecasts on projections due to various factors.
Factors affecting actual results include, but are not limited to, changes in
economic conditions surrounding Terumo, fluctuations of foreign exchange
rates, and state of the competition.
The market share information in this presentation is partly derived from ourown independent research.

© Terumo Corporation