We will devote all our effort to further expansion to make Chugai a top Japanese pharmaceutical company with global-level capabilities
Under our new management structure, we will create innovative new medicines and work for further growth
Chugai's mission is to add exceptional value through the creation of innovative medical products and services for the benefit of the medical community and human health around the world. Consistent with this mission, we have made it a fundamental management goal to become a top Japanese pharmaceutical company in the second half of this decade by providing a continuous flow of innovative new medicines in Japan and internationally.
With this in mind, Chugai decided on March 28, 2012 to introduce a new management structure to further strengthen management and promote faster decision-making in order to deal with its rapidly changing operating environment. Osamu Nagayama will assume the post of Representative Director, Chairman and CEO and will lead medium-to-long-term strategy for the Company as a whole and make decisions on key issues. Tatsuro Kosaka will assume the post of Representative Director, President and COO and will make decisions on business execution. In addition, Motoo Ueno will assume the post of Representative Director and Deputy Chairman with responsibility for overall corporate governance and compliance, including corporate social responsibility, risk management and audits.
Our initiatives for growth were limited in 2011, with the impact of the Great East Japan Earthquake
The dominant factor in 2011 was the impact of the Great East Japan Earthquake that struck in March. First, we would like to take this opportunity to express our sincere condolences to everyone who suffered in the disaster, and our hope for the earliest possible recovery for the affected region.
This unprecedented disaster also had major effects on Chugai. Due to damage to some of our production sites, including those of contract manufacturers, we incurred losses and had to adjust shipments of certain products until the end of October. Thanks to the tremendous cooperation of our wholesalers, we managed to avoid any interruption in the supply of medicines to patients. However, the activities of our medical representatives (MRs) were significantly curtailed. We were also forced to cancel or scale back planned marketing promotions. The impact on Chugai's performance was substantial, as we had to cancel launch events for two new products, Mircera® and Edirol®, and did not see the expected accelerated growth of major products Avastin® and Actemra®. As a result, revenues decreased 1.6 percent compared with the previous year to ¥373.5 billion and net income fell 15.0 percent to ¥35.2 billion.
We were able to make record progress in research and development
In 2011, in addition to our two new products, we obtained approvals of 12 additional indications, including Xeloda® and Herceptin® for gastric cancer. So we actually obtained 14 regulatory approvals in total, more than any other year in the Company's history. We expect these new products and additional indications to contribute substantially to revenue growth in 2012 and beyond. Moreover, our pipeline remains well stocked, with six compounds starting clinical trials.
As for our technological successes, we built on the groundbreaking recycling antibody technology we announced in 2010 to develop sweeping antibody technology, which improves recycling efficiency to enable the removal of antigens from plasma. In January 2012 we established Chugai Pharmabody Research Pte. Ltd. in Singapore to quickly create new antibodies using these technologies.
With our extensive knowledge and outstanding technologies, we are moving forward as a leader in Personalized Healthcare
Today's pharmaceutical industry is undergoing rapid change on a global level. In addition to the growth of generics and the expansion of markets in developing nations, moves to enter areas of unmet medical need and the shift to biopharmaceuticals, a market where growth is forecast, are gaining strength. Under these circumstances, we still see ample opportunities and potential for continued strong growth for Chugai, which has been focusing on creating innovative new medicines that address unmet medical needs. We have leading positions in future growth markets, with the top share of Japan's antibody and oncology markets. That gives us a powerful advantage.
Leveraging these strengths, we are also taking initiatives in Personalized Healthcare, which will be central to medical care in the future. Our biopharmaceutical and antibody technologies have given us a head start on our competitors in the field of Personalized Healthcare, and we plan to accelerate our efforts as a leading company in this field. In collaboration with the Roche Group's Diagnostics Division, we will focus on discovery and development based on Personalized Healthcare, and will push ahead with efforts to expand the use of this approach to treatments.
We aim to become a top Japanese pharmaceutical company by maximizing Chugai's strengths and value
Our goal for the second half of this decade is to become a top Japanese pharmaceutical company that meets the expectations of all stakeholders. Our main strategies for accomplishing this goal are continued development and acquisition of innovative new medicines, the maximization of product value, and overseas expansion. For continued development and acquisition of innovative new medicines, we will make maximum use of our strengths in biopharmaceuticals, antibody drugs and molecular target search technology to discover and create innovative medicines. We will also grow our pipeline by introducing promising development candidates from Roche. To maximize product value, we will focus on strengthening product lifecycle management and further expanding our presence in core therapeutic fields such as oncology. For overseas expansion, we will work to accelerate the global market penetration of Actemra®, which was developed in-house, and develop and launch innovative new medicines to follow Actemra®.
Look for Chugai to raise its corporate value in the process of becoming a top Japanese pharmaceutical company
In October 2012, ten years will have passed since we entered into a strategic alliance with Roche in 2002. Looking back, we are proud that the alliance has gone as originally planned in all areas, including research and development, production and marketing. In addition to launching and establishing numerous products licensed from Roche, primarily in oncology, we have taken full advantage of our relationship with Roche to build a strong foundation for future growth. Today, we rank in the top tier of pharmaceutical companies in Japan in the oncology and antibody markets, not just in market share, but also in terms of our pipeline, research and development platform, and technologies. Through our initiatives to establish product lifecycle management, increase productivity and make other improvements in our workforce and our manufacturing and research facilities, which expanded as a result of the merger, we have transformed into a leaner organization.
With this solid foundation in place, Chugai entered a new stage of growth from 2011. We will continue to make further innovations in our business operations to become a top Japanese pharmaceutical company while responding to the increasingly rapid changes in our operating environment.
Working to improve the quality of medical care as we aim to become a top Japanese pharmaceutical company will raise Chugai's corporate value, and we are confident that it is the best way to meet the expectations of our shareholders and other stakeholders.
We hope you will look forward to the exciting developments ahead at Chugai.
