The objective of Sunrise 2012 is to establish Chugai as a leading presence in Japan, realize the highest growth rate among domestic pharmaceutical companies and strengthen the Company's win-win relationship with Roche. Sunrise 2012 also sets quantitative targets of ¥460.0 billion in annual consolidated revenue and ¥80.0 billion in annual consolidated operating income for 2012.

Moreover, the Chugai Group aims to be a company that enjoys the respect of patients and other stakeholders by ensuring that they remain highly satisfied. In order to achieve this goal, all Group employees are continuing to engage in actions that lead to greater customer satisfaction.

Quantitative Goals of Sunrise 2012

In recent years, operating conditions for the pharmaceutical industry have continued to escalate in severity. Amid a wide array of environmental changes, including initiatives to control healthcare costs, the expansion of the generic product market and a diversification of needs, are a number of medical needs that remain unmet. For this reason, the key to survival for Japanese pharmaceutical companies is the ongoing creation of innovative pharmaceuticals and establishment of a presence that is recognized not only in Japan, but in markets worldwide.

Under these circumstances, there has been a movement among competitors to acquire venture businesses and companies that possess corporate structures differing from their own—including those based overseas—and enter into segments with unmet needs for such diseases as cancer as well as to obtain biopharmaceutical products and technologies.

However, Chugai has already been making steady gains in these areas. The Company's accomplishments are reflected in its efforts to accumulate biopharmaceutical technologies since the 1980s and the subsequent launches of two biopharmaceutical products, Epogin® and Neutrogin®. Moreover, upon becoming a member of the Roche Group in October 2002, Chugai successfully launched Actemra®, Japan's first antibody-based drug, in the global market in cooperation with Roche.

Utilization of Chugai's Strategic Alliance with Roche

In terms of research, Chugai has substantially improved its research efficiency through such means as sharing research platforms with Roche. In addition, the Company has maintained the richest development pipeline in Japan by increasing the number of projects that originate from Roche and by advancing multiple in-house compounds to the clinical development stage, in which the administration to human subjects have commenced.

With regard to production, Chugai has contributed to the development of a trilateral production system within the Roche Group that is first rate from a global perspective and outclasses those of its rivals. We have done so by effectively utilizing our high-level biopharmaceutical production technology and the large-capacity facilities we have cultivated to date.

In marketing activities, Chugai achieved the top position in terms of domestic sales in the oncology field in 2008. Beyond supplying products, Chugai engages in a variety of activities that increase the added value of the Company by contributing to the treatment of cancer. Such activities include the provision of information to healthcare professionals and patients and the enhancement of safety measures.

Chugai Pharmaceutical is making a contribution to medical community and human health around the world through compounds derived from its unique research and the effective utilization of the Company's resources within the Roche Group.

• I. Strengthen portfolio management
  • Prioritization of projects and optimization of resource allocation
  • Prompt achievement of PoC through the utilization of alliances with Roche and other measures.
• II.Exhibition of strategic marketing functions
  • Create new markets by maximizing the value of innovative drugs (especially for oncology and rheumatoid arthritis areas)
  • Strengthen presence in the hemodialysis area
  • Establish robust franchises in the key therapeutic areas
• III. Maximize Companywide productivity

*Proof of Concept: The verification at the clinical trial phase of the effect that drugs are assumed to have during the research phase. Normally, this is achieved during the period between Phase I and Phase II trials.

Shift in growth from dependence on mature in-market products to innovative new products

Chugai expects the proportion of its sales accounted for by the oncology field to remain essentially the same, while the proportion of its sales attributable to the bone and joint field is forecasted to increase significantly.

Proportion of Chugai Pharmaceutical Sales Accounted for by Sales in Each Disease Field

In terms of earning structures, despite an increase in the cost of sales ratio accompanying the rise in sales of products introduced by Roche, Chugai expects that the operating income ratio will improve due to a reduction in SG&A and research and development expense ratios.

Earning Structures

Chugai Pharmaceutical aims to become Japan's top pharmaceutical company—company that provides every stakeholder with great satisfaction and receives their support. To this end, we will strive to achieve the goals of the Sunrise 2012 mid-term business plan, while generating high levels of satisfaction for stakeholders—including patients, healthcare professionals, shareholders, investors, society, business partners and employees.

Direction of the Company