Partial Change of the Production System Restructuring Plan

November 22, 2007 (Tokyo) - Chugai Pharmaceutical Co., Ltd. ("Chugai") [Head Office: Chuo-ku, Tokyo, President: Osamu Nagayama] announced today that the production system restructuring plan, initially announced in February 2005, has been partially modified.  According to the initial plan, the company's production system, composed of five plants, was to be integrated into two plants, i.e., Utsunomiya Plant (Utsunomiya City, Tochigi Prefecture) and Fujieda Plant (Fujieda City, Shizuoka Prefecture), in order to increase efficiency and intensive use of resources.  However, the company has decided to modify this plan, and will cancel the closure of Ukima Plant (Kita-ku, Tokyo) and adopt a three-plant production system composed of Ukima, Utsunomiya and Fujideda Plant.

The major reason for continuing operation at Ukima Plant, is the longer than expected period of time possible to utilize current facilities for production of biological products, allowing increased efficiencies in utilization of the company's current assets and resources as compared to the initial plan involving integration of the production into Utsunomiya Plant.  Kamakura Plant will be closed by the end of 2010, as initially scheduled.

Following the modification of the restructuring plan, Ukima Plant will continue production of bulk material for biological products such as Epogin and Neutrogin, and sterile injections such as Picibanil.  Utsunomiya Plant, which currently produces injection drugs including Epogin, and bulk material for Actemra, an antibody drug, will serve as a center of antibody drug production with the largest domestic animal cell culture facility (80,000 L in total), and will continue to maintain and strengthen the competitive advantage the company has created.  As originally scheduled, production of solid-form drugs (mainly highly active forms) will be transferred from Ukima and Kamakura Plants to Fujieda Plant, which will be integrated into an intensive plant for synthetic drugs, covering all stages of production from bulk material to finished products.

Chugai will endeavor to strengthen overall company competitiveness by maintaining and strengthening production technology related to biological products, antibody drugs and highly active drug preparations and improving its technology, product quality and cost competitiveness through restructuring of its production system.

This modification of the initial plan does not affect our previously announced estimation of non-consolidated and consolidated financial results for the current fiscal year.

[Reference]

Utsunomiya Plant:

Fujieda Plant:

Ukima Plant:

Kamakura Plant: