Today there are numerous innovative drugs that have revolutionized medical treatment. However, they can act on only a small fraction of the targets that cause disease. One of the roles we have taken on to help patients still suffering from illness is to create middle molecule drugs.

Small molecule drugs can penetrate into cells, but are unable to block protein-protein interactions. Conversely, therapeutic antibodies are able to act strongly and specifically on targets, but their size prevents them from passing through cell membranes. Combining the advantages of both of these drug categories, middle molecule drugs are next-generation medicines that can approach previously undruggable targets because they can both enter into cells and act strongly and specifically on targets.

Chugai has been conducting basic research on middle molecules for more than a decade. We have accelerated these efforts in the last few years, and are now building a middle molecule compound library and establishing basic drug discovery technologies, including a compound screening method. We have started applying these technologies to various discovery stage projects, which has yielded a steady stream of candidate compounds.

There have been many hurdles, but drug discovery experts in every area, including biotechnology, chemistry, pharmacology, pharmacokinetics and safety, have collaborated to build better compounds and assay methods, which has led to the advances we are seeing today. These advances are the result of the continuous efforts of team members to overcome challenges for the benefit of patients.

However, unprecedented challenges will continue to arise. Chugai is making company-wide efforts to bring this new kind of medicine to patients, and by surmounting the issues faced at every stage – not only in research but in manufacturing, clinical development and regulatory filings – we intend to be a pioneer in creating and developing middle molecule drugs.

Chugai has a rich pipeline of biopharmaceuticals as a result of the continuous creation of new drug candidates made possible through the use of its antibody engineering technologies. The key to making these new drug candidates available to patients as quickly as possible is to increase speed at every stage from development to commercial production and enable the manufacture and supply of multiple products.

The Ukima Plant has been developing therapeutic antibodies using two manufacturing facilities, UK1 and UK2, for the supply of investigational drugs for early development. With the completion of UK3, a new facility for handling late clinical development to initial commercial production, we have established an end-to-end production system from early clinical development to launch that enables rapid development of multiple projects. This integrated system is not only top level in Japan, it is world-class.

Flexibility is the key feature of UK3. By flexibly combining its six 6,000-liter bioreactor tanks with two purification lines, it will be capable of simultaneously producing two products in the amounts required. Its design is also adaptable to the different manufacturing methods specific to engineered antibodies. The flexibility of this innovative facility will enable us to supply our proprietary engineered antibody drug candidates to patients at an unprecedented speed.

The UK3 building is also seismically isolated and contains emergency power generators, making the facility highly disaster resistant and capable of uninterrupted supply of medicines. Moreover, the production lines have a closed system design to the maximum extent possible to preserve a high level of quality and greatly reduce risk of contamination. In addition, the new facility has been designed to incorporate information technology for compiling production records and other data, enabling continuous improvement in terms of quality and cost.

Installation of equipment is complete, and performance testing has begun. Given the sophistication and complexity of this equipment, training of technicians and information sharing among members is essential. Members of the numerous departments concerned are working toward the start of trial production in the third quarter of 2018. We are committed to achieving the stable operation of this advanced production facility so that Chugai's innovative medicines can be delivered to patients as quickly as possible.

Osteoporosis increases the risk of bone fractures even in normal daily life. Fractures of the femoral neck and spine in particular can severely impact patients' quality of life, for example, by causing them to become bedridden. Because of this, osteoporosis has attracted public attention. However, unless a bone density test is done, many people are unaware that they have the disease until they suffer a bone fracture. Consequently, the treatment rate of osteoporosis in Japan is estimated at only about 20 percent.

Kanagawa Prefecture, which my team was in charge of, is Japan's second largest prefecture by population but ranked third lowest in the screening rate. The treatment rate was only average, and the number of qualified osteoporosis managers* was low considering the number of patients requiring diagnosis or treatment. We wanted to do whatever we could to improve conditions for osteoporosis treatment in the region, so we set out to establish a diagnosis and treatment model with the cooperation of various people within and outside the Company.

Our first task was to make it easier for potential patients to get tested and receive treatment. Since the number of facilities with bone density testing equipment is limited, we worked to establish a clinic/hospital referral system by creating a referral list and sharing information on facilities so that patients could receive advice from general practitioners about testing facilities and receive referrals to suitable treatment facilities if diagnosed. At the same time, we held workshops and meetings to share best practices with physicians in specialty areas including orthopedic surgery, gynecology and internal medicine, as well as pharmacists and laboratory and other medical technicians, and actively worked to create a structure for raising awareness. We also promoted long-term treatment and improvement in drug adherence using Chugai products and other medicines.

As a result of these initiatives, there has been a noticeable increase in the number of referrals. Our efforts have also received recognition, and the commitment of Chugai employees to addressing the issues facing patients and healthcare providers has helped to build trust. In 2017, our initiatives were commended at the Liaison Conference, an event for sharing activities within the Company. We plan to spread success stories such as this nationwide, and want to further evolve the clinic/hospital referral system.

* Medical staff who are certified by the Japan Osteoporosis Society as specialists in osteoporosis liaison services

Chugai has issued a “Health Declaration” to accelerate the “health and productivity management” that it has focused on up to now, and announced health management policies and priority agenda targets. Employee health management applies not just to employees who are having problems or are on leave due to illness or injury, but to all employees who need special consideration for their health status, including people with anomalies observed in health checkups, people working long hours, expectant and nursing mothers, and employees with disabilities. Occupational physicians, nurses, psychologists, health officers and other occupational health staff have provided the necessary support in cooperation with human resources staff and workplace managers and supervisors. These measures have produced results to a certain extent, and we plan to continue them while also focusing on prevention, including health and disease education.

One area where Chugai has been in the forefront is enhancement of support systems for mental health and cancer treatment.

To facilitate a smooth return to work for employees on leave due to mental health issues, we conduct an ongoing program tailored to each individual. We have found that this program improves the relapse-free job retention rate one year after the return to work. In addition, as a leader in the field of oncology, Chugai has enhanced its support for employees who are working while undergoing cancer treatment so that they can do both. We continue to maintain and improve the consultation system for carrying out measures in accordance with treatment conditions as well as the support system for working during outpatient treatment.

A new initiative is to use employees' self-evaluation of their performance to quantify and analyze measures for employee health and the work environment. As a result, we will be able to set targets for each measure, which will enable more effective actions.

IBI 18 is a strategic plan designed to raise Chugai's competitiveness to a global level, and requires greater quality and speed in each of its functions. We are also entering fields and specialty areas that cannot be handled with conventional approaches, so we need to identify people who have the necessary capabilities. Ensuring diversity to build a foundation for generating innovation is also becoming more important.

Accordingly, Chugai further upgraded its talent management system in 2017, restructuring it on a global basis. The new system places emphasis on assessing human resources in terms of individual qualities such as ability, experience, aptitude and career orientation. Specifically, we are building a globally shared personnel database, defining global competencies, clarifying key positions for execution of strategies, and identifying candidates for them.

The global competencies we have defined are in the form of seven standards to provide a simpler, more universal framework than we had previously. These clearer evaluation measures will enable employees to identify the gaps between the standards and their own performance, and apply that knowledge to improving their capabilities. At the same time, managers can engage in dialogue with those employees about their improvement actions and career plans, and promote human resource development. These efforts have already begun.

The foundation for evolution is now in place, but the key to assessing human resources and unlocking their full potential is to provide opportunities and environments that make the most of people's talents, allowing each individual to flourish. To realize this objective, we will promote communication on human resources and employee development, and foster an organizational culture in which they are given priority.