Chugai aims to continuously create innovative new drugs that address unmet medical needs. Making maximum use of our superior research organization with its strength in antibody drugs and our global infrastructure gained from our strategic alliance with Roche, we will continue working toward our goal of becoming a top Japanese pharmaceutical company.
In 2010, sales excluding Tamiflu® continued to grow.
Revenues decreased 11.5 percent compared with the previous year to ¥379.5 billion in 2010 and operating income fell 19.9 percent to ¥66.2 billion due to a sharp decline in Tamiflu® sales as the swine flu pandemic subsided. Excluding Tamiflu® sales, which vary widely year to year, sales rose 4.2 percent to a record ¥357.4 billion. Operating income excluding Tamiflu® also increased. This performance reflects the strong expansion of our growth drivers, led by Avastin® and Actemra®, which offset the impact of National Health Insurance (NHI) drug price revisions for Herceptin®, Epogin® and other products.
We made impressive progress in the areas of R&D and technology, the sources of future growth.
Chugai’s research and development had a highly productive year in 2010. In addition to obtaining FDA approval of Actemra® in January and approval of Epogin® in Japan for the additional indication of autologous blood transfusion in June, we filed for approval of four projects,1 and three novel compounds2 started clinical trials.
Moreover, in October 2010 we announced an innovative antibody engineering technology that enables a single antibody molecule to bind to a target antigen multiple times. We expect this technology not only to substantially broaden the possibilities for our own antibody drug discovery, but also to contribute to the pharmaceutical industry worldwide.
1. Xeloda®, Herceptin® (gastric cancer) and combination therapy of Pegasys® and Copegus® (compensated liver cirrhosis caused by hepatitis C virus )
2. AF802 (non-small cell lung cancer: in-house), PA799 (solid tumors: in-house) and SA237 (rheumatoid arthritis: in-house)
Chugai has established a firm position in the pharmaceutical industry.
Along with growth in generic drugs and expansion of newly industrialized markets, two trends in particular are gaining momentum in today’s pharmaceutical industry: the focus on addressing unmet medical needs and the shift to biopharmaceuticals, a market that is forecast to expand. These trends will be favorable for Chugai because it has continued to focus on creating innovative drugs, primarily in fields with unmet medical needs.
Chugai has established the top position in Japan in the fields of antibody drugs and oncology. One factor supporting this position is our research and development capabilities, symbolized by our leadership of biopharmaceutical research and development in Japan since the 1980s and Actemra®, the first antibody drug originating in Japan, which has grown into a global product. Going forward, we will conduct continuous innovation to further entrench our knowledge, technologies and other strengths.
Chugai aims to become a top Japanese pharmaceutical company to meet the expectations of all its stakeholders.
Our goal for the second half of this decade is to become a top Japanese pharmaceutical company, continuously supplying innovative new drugs to the world by responding effectively to the various changes in our operating environment and maximizing our strengths and value as a company. A top pharmaceutical company is one in which all employees share an awareness and sense of responsibility as part of a leading enterprise, and work proactively with a global perspective. It fully satisfies its stakeholders and in turn is rewarded with their active support and trust.
The key to achieving these objectives is making ongoing patient-oriented innovations and working to contribute to the medical community. In oncology, for example, we are fulfilling our leadership role by promoting standards of care and helping to make optimal cancer treatments uniformly available to patients throughout Japan in a variety of ways.
Our mid-term business plan Sunrise 2012 targets consolidated revenues of ¥460 billion and consolidated operating income of ¥80 billion in 2012 as milestones in becoming a top Japanese pharmaceutical company. To reach these milestones, we will focus on rapidly building the market presence of Edirol® and Mircera® , which we plan to launch in 2011; maximizing the value of our major oncology products; and expanding the market share of Actemra® in Japan while building it into a major product overseas.
Count on Chugai to continue its drive to become a top Japanese pharmaceutical company.
Chugai has made significant progress since it entered its strategic alliance with Roche in 2002. In addition to increasing revenues and profits, we have taken actions to enhance our business operations, including restructuring our manufacturing facilities, upgrading product lifecycle management and strengthening our research and development organization.
Launching and expanding the market presence of products licensed from Roche has significantly enriched our product portfolio and pipeline. Our human resources have also grown in tandem with these accomplishments.
We view the period through 2010, in which we have achieved these successes, as the first stage of the strategic alliance. This year marks the beginning of a new stage in which we will fulfill our major role of contributing to the Roche Group with products from our own research and leveraging our advantages as part of the world’s largest biotech group to continue providing innovative drugs.
We continue to move steadily toward becoming a top Japanese pharmaceutical company. That will not be an easy task by any means, but with the spirit of innovation and challenge we have fostered at Chugai, I am confident that we will reach our goal.
I want to thank all our stakeholders, including shareholders and investors.
March 2011
Osamu Nagayama
Representative Director
President and CEO
