CHUGAI PHARMACEUTICAL CO., LTD.

Translation  
  July 22, 2008
 
Name of listed company:   Chugai Pharmaceutical Co., Ltd.
Code number: 4519 (1st Section of Tokyo Stock Exchange)
Head office: 1-1, Nihonbashi-Muromachi 2-Chome, Chuo-ku, Tokyo
President & CEO: Osamu Nagayama
Inquiries to: Mamoru Togashi,
General Manager, Corporate Communications Dept.
  Tel:+81-(0)3-3273-0881

Flash Report of the Interim Financial Results
for the Fiscal Term ended June 30, 2008


   

On July 21, 2008 (Central European Time), the Roche Group, which incorporates Roche Pharmholding B.V., the parent company of Chugai Pharmaceutical Co., Ltd. ("Chugai"), announced its half year results for fiscal year 2008 based on International Financial Reporting Standards. As some financial information on Chugai is included in the announcement, Chugai hereby announces its flash report of the interim financial results for the fiscal term ending in December 2008 (January 1, 2008 to December 31, 2008) in pursuit of timely and fair disclosure to its shareholders and investors, promptly following the announcement of its parent company.
The announcement of full financial statements is scheduled on July 31, 2008.

  1. Interim Financial Results for the fiscal term ended June 2008 (January to June 2008)
    (Consolidated) (Millions of yen)
    Figures are rounded to the nearest 100 million.
      Revenues Operating Income Recurring Profit Net Income
    Results for Jan. - Jun. 2008 (A) 145,900 23,100 24,300 18,900
    Results for Jan. - Jun. 2007 (B) 170,900 35,800 36,800 21,100
    Difference (A-B) -25,000 -12,700 -12,500 -2,200
    Rate of Change -14.6% -35.5% -34.0% -10.4%

    (Non-consolidated) (Millions of yen)
    Figures are rounded to the nearest 100 million.
      Net Sales Operating Income Recurring Profit Net Income
    Results for Jan. - Jun. 2008 (A) 138,300 16,700 17,600 15,000
    Results for Jan. - Jun. 2007 (B) 163,200 30,500 32,100 19,600
    Difference (A-B) -24,900 -13,800 -14,500 -4,600
    Rate of Change -15.3% -45.2% -45.2% -23.5%

    2. (1) Summary of Business Activities

    During the period under review, the operating environment surrounding the pharmaceuticals industry in Japan remained extremely challenging as the government continued its policies to reduce medical expenditures through the reduction of NHI reimbursement prices and promote the use of generic medicines.

    In this business climate, the Company endeavored to engage in aggressive product research and development (R&D) activities to achieve the continued development and acquisition of innovative new drugs, in addition to implementing marketing campaigns based on sound ethical and scientific principles that promote appropriate drug use as well as consumer confidence.

    As a result of the above, the Company's consolidated revenues for the interim period under review amounted to ¥145.9 billion, down 14.6% compared to the same period last year. Reasons for this decline were the drop in sales of anti-influenza agent Tamiflu and the termination of the marketing agreement with sanofi-aventis at the end of last year. However, excluding these special factors, revenues were higher than for the previous interim period. Other factors accounting for the decline in revenues were the change in the price for recombinant human erythropoietin Epogin and the decline in royalties and other operating income (mainly milestone income). On the other hand, sales of our products that are our mid-term sales drivers continued to be favorable. These products included anti-cancer agent Tarceva, a human epidermal growth factor receptor (EGFR) tyrosine kinase inhibitor launched in December 2007, and anti-cancer agent Avastin, an anti-vascular endothelial growth factor (VEGF) humanized monoclonal antibody launched in June 2007. In addition, major increases were reported in sales of anti-viral agent Copegus and peginterferon alfa-2a Pegasys, which are used in combination; Actemra, a humanized anti-human IL-6 receptor monoclonal antibody; anti-cancer agent Herceptin, an anti-HER2 monoclonal antibody; and anti-cancer agent Xeloda.

    Overseas revenues totaled ¥15.7 billion, which was down 15.6% compared to the same period last year, mainly reflecting the decline in royalties and other operating income, principally milestone income. Export sales of Actemra are also included in overseas revenues.

    (2) Financial Results

    Operating income for the interim period under review declined 35.5% from the same period last year, to ¥23.1 billion, mainly as a result of the decline in revenues. Recurring profit was ¥24.3 billion, down 34.0% from the same period last year. Net income amounted to ¥18.9 billion, a decline of 10.4%, and included extraordinary gains of ¥6.3 billion resulting from a new agreement with F. Hoffmann-La Roche Ltd. (Head Office: Switzerland) related to the sharing of co-development costs for Actemra.


  2. Consolidated Statements of Revenues for January 1 - June 30, 2008
    (Millions of Yen)
    Figures are rounded to the nearest 100 million.
      Jan.-Jun. 2007 Jan.-Jun. 2008
    Epogin 28,200 21,700
    Neutrogin 18,700 18,700
    Herceptin 7,900 9,800
    Rituxan 8,500 9,500
    Sigmart 8,600 8,500
    Evista 7,200 7,500
    Avastin 300 7,100
    Alfarol 6,800 6,700
    Suvenyl 5,000 5,600
    Kytril 6,300 5,400
    Oxarol 3,900 4,700
    Pegasys 2,400 4,100
    Rocephin 2,700 2,800
    Renagel 2,600 2,800
    Xeloda 1,300 2,000
    Tarceva － 2,000
    Cellcept 1,600 1,900
    Copegus 600 1,800
    Tamiflu 23,800 1,600
    Actemra 200 900
    Femara 400 700
    Others *1, 2 33,900 20,100
    Total 170,900 145,900
    Notes:*
    1. Sales of the products for which the marketing collaboration in Japan with sanofi-aventis K.K. ended on December 31, 2007, totaled 5,900 million yen and are included in the figure for Jan.-Jun. 2007.
    2. Royalties and other operating income are included in the figures (7,500 million yen for Jan.-Jun. 2007; 1,000 million yen for Jan.-Jun. 2008.)
   

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