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Chugai’s Seven Strengths

Chugai has identified the “seven strengths” that are the source of its unique value to help stakeholders recognize and understand its efforts to realize its goal of a becoming a top pharmaceutical company. We continue to work on the further evolution of these strengths.

1. High product potential that addresses unmet medical need

35.3%*1	Top share in the Japanese therapeutic antibody market (2015)

22.6%*1	Top share in the Japanese oncology market (2015)

78%	Percentage of product sales qualifying for premium pricing (2015)

*1 Copyright 2016 IMS Health Source: JPM 2015. Reprinted with permission. The scope of the market is defined by Chugai.

Chugai has the number-one market share in the domestic oncology field and in the therapeutic antibody market, and has market-leading products for bone and joint and renal diseases. Chugai also leads the therapeutic antibody field by establishing proprietary antibody engineering technologies based on its experience in discovering and developing Japan’s first therapeutic antibody.

Chugai’s innovation has been highly evaluated for its many products eligible for Japan’s new premium pricing system to promote the development of new drugs and eliminate off-label use.*2

*2 A system implemented on a trial basis as a measure to encourage creation of innovative drugs and development of off-label-use drugs

2. One of the richest pipelines in Japan

9 projects	New products launched and new indications (2013-2015)

34 projects	Pipeline projects (as of January 28, 2016)

19 projects	Multinational clinical studies in which Chugai is participating (as of January 28, 2016)

The pipeline – drug candidates currently being developed – is the source of value that leads to the creation of new medicines. Having a rich development pipeline is a major strength, and with in-house projects and others in-licensed from Roche, Chugai’s pipeline is one of the richest in Japan and supports the continuous generation of products that address unmet medical need. In addition, Chugai leads the domestic pharmaceutical industry in participating in multinational clinical studies*3 to expand the value of its medicines globally.

*3. Clinical studies conducted concurrently in multiple countries or regions

3. Strategic alliance with the Roche Group

10 products	Projects in-licensed from Roche (2013-2015)

27 projects	Projects co-developed with the Roche Group (as of January 28, 2016)

Over 90 countries	Countries where Chugai products are sold utilizing the Roche Group’s network

The strategic alliance with Roche, one of the world’s leading pharmaceutical companies, allows Chugai to in-license Roche’s therapies in Japan while utilizing the Roche Group’s powerful research infrastructure and network to deliver Chugai products to patients worldwide. Furthermore, Chugai is cooperating with Roche in global development and in simultaneous development of personalized healthcare (PHC)*4-based medicines and companion diagnostics. Through these initiatives, Chugai is creating best practices in development and filing in Japan.

*4. An approach of selecting the most appropriate treatment by using biomarkers and diagnostic tests to identify patients most likely to show a significant response to a particular drug

4. Cutting-edge drug discovery technologies, especially biotechnology

11 projects	In-house projects in pipeline (as of January 28, 2016)

40	Academic papers and presentations at scientific conferences regarding Chugai’s innovative proprietary technologies (2013-2015)

164 patents	New patents granted (2015)

In addition to more than three decades of experience in biopharmaceutical research and development, Chugai has also developed small-molecule drugs, including anti-cancer agents that have become standards of care around the world. Its development technologies in these fields are highly regarded. Chugai discovered and developed Japan’s first therapeutic antibody, which is now sold in over 90 countries. Through that experience, Chugai has continued to evolve its expertise in creating antibodies, including joint research with academia. In recent years, Chugai has developed a series of innovative antibody engineering technologies, and has increased its patent portfolio in addition to its publications in academic papers and presentations at scientific conferences. It has also made structural improvements, such as establishing a subsidiary in Singapore, Chugai Pharmabody Research, to conduct research focused on antibody discovery. Moreover, we have selected drug discovery technologies for middle molecules*5 as a candidate for our next-generation core technology in addition to antibody engineering and small-molecule technologies, and aim to build a strong base for this new technology and quickly generate projects.

*5. Middle molecules are technology of significant potential which enable approaching the target of diseases that are difficult to target with antibodies and small molecules.

Antibody Therapeutics

Mechanisms of antibody therapeutics and an introduction to Chugai’s next-generation antibody engineering technologies

5. Knowledge and experience as a pioneer in personalized healthcare (PHC)

50%	Ratio of PHC*6-based projects to total development projects (as of January 28, 2016)

Over 15 years	Years of experience in PHC (years of providing PHC-based medicines)

17 projects	PHC-based development projects (as of January 28, 2016)

Chugai is an active player in PHC, where optimal treatment is planned for each patient, according to the patient’s unique molecular and genetic profiles. In addition to its strong therapeutic effect and reduced side effects, PHC is also considered beneficial from an economic (medical cost) perspective because it allows treatment to be avoided in cases where it is unlikely to be effective.

Chugai is also partnering with Roche’s Diagnostics Division, which has the top global market share in diagnostics, in promoting simultaneous development of therapies and companion biomarker diagnostics.

*6. An approach of selecting the most appropriate treatment by using biomarkers and diagnostic tests to identify patients most likely to show a significant response to a particular drug

6. Commitment to safety management

Approx. 186,000 cases	Cases for which safety information was collected in clinical trials and post-marketing studies (January – December 2015)

9 products	New RMPs prepared and carried out (as of February 2016)

27	Papers and conference presentations on safety (2015)

In Japan and overseas, Chugai practices comprehensive safety management to promote the safe and appropriate use of its medicines. We have also established a global-level safety information collection, evaluation and analysis system based on our experience with over 20,000 all-case registration surveillance studies and safety management for products in the fields of oncology and bone and joint diseases. Our reputation for safety evaluation is first-class among healthcare providers in Japan. Moreover, to establish a plan – do – check cycle in our post-marketing pharmacovigilance activities, we collect and analyze information consistently from the preclinical and clinical trial stages, and have drawn up and carried out risk management plans (RMPs) for nine of our products since 2012, ahead of our competitors.

7. Support for healthcare delivery

21 studies	Contract-based post-marketing studies*7 (as of December 31, 2015)

213 employees  	Staff handling regional medical affairs*8 (as of December 32, 2015)

157 employees	Staff with GCP Passport (JSCTR certification)*9 (as of January 31, 2016)

With their high level of expertise, Chugai’s oncology and other medical representatives (MRs) focus on consultation-based promotions that involve the provision of information and treatment proposals based on scientific data on therapies and side effect management. Chugai also provides a variety of information and holds seminars to promote multidisciplinary team care – cooperative treatment and care by doctors and other healthcare providers – and regional healthcare coordination, which has been emphasized in recent years. These efforts have earned a high evaluation and strong support from healthcare providers.

*7. A post-marketing clinical study scheme to guarantee the independence and transparency of research

*8. Activities to contribute to healthcare from a scientific standpoint

*9. Staff certified by Japan Society of Clinical Trials and Research (JSCTR) as having adequate understanding of the good clinical practice (GCP) guidelines of the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) and Japanese GCP (J-GCP).

The Process of Identifying Our Seven Strengths

Visualization

In our project to become a top pharmaceutical company, which started in 2009, we visualized the intangible strengths that Chugai has built, and shared 96 examples of those strengths within the Company.

Analysis of Value and
Advantage

Based on those 96 examples, in 2013 we evaluated and analyzed Chugai’s strengths from the standpoints of value to patients and competitive advantage, resulting in 25 categories.

Distillation Down to
Seven Strengths

We organized these 25 categories through outside analysis and other means and distilled them down to seven strengths, establishing a basic message for communications.