Growth Strategy

The Chugai Group has formulated a growth strategy, “TOP I 2030” (FY2021-FY2030) to realize our Envisioned Future, and is working on a new stage of transformation based on the strategic alliance with Roche, aiming to achieve further competitive advantage as well as sustainable profit growth and an expansion of corporate value. In July 2024, we reviewed current progress and the outcome of the strategy and made some refinement as needed.

Name

“TOP” expresses our aspiration to become “the world’s top innovator, not just in Japan.” The “I” has two meanings: in addition to “innovator,” it also expresses that “people” are the driving force behind value creation; each and every member of the Chugai Group plays an important role in our efforts to realize TOP I 2030.

TOP I 2030 Logo

Chugai’s Basic Policy

Companies are required to sincerely address underlying social issues and make efforts to solve them for sustainable business growth. Chugai strives to develop hand-in-hand with society by solving social issues through its business activities.

Diagram showing our aim to create shared value with society through “Realizing advanced and sustainable patient-centric healthcare”. It illustrates how we leverage our unique business model, centered on our strategic alliance with Roche and our scientific and technological strengths, to focus on innovation.

Top Innovator 2030

In collaboration with Roche, we will continue to place “innovative new drugs” at the core of our business, while aiming to become a leading innovator in the global healthcare field, where a diverse range of players, not limited to pharmaceutical companies, are taking on the challenge of innovation.

We have set our vision of “Top Innovator 2030” as shown below.

Top Innovator 2030

“Expectation from patients all over the world”
With world-class drug discovery capabilities, patients around the world expect that “Chugai will surely create new treatments.”

“Attracting talent and players from around the world”
Attract passionate talent from all over the world, and inspire players globally to think they can create something new by partnering with Chugai.

“Role model for the world”
With sustainability at the heart of its business activities, Chugai will become a global role model as a leader in resolving social issues.

Growth Strategy to become a Top Innovator 2030

While finishing mid-term business plan “IBI 21” one year earlier than scheduled, we have established a growth strategy toward 2030 – TOP I 2030 – to realize the Envisioned Future stipulated in our Mission Statement.

Growth Strategy to become a Top Innovator 2030

Diagram depicting our 2030 goals: “Double R&D output” and “Annual launch of innovative in-house global products”. It shows two pillars for achievement: “World-class drug discovery” and “Advanced business model”, driven by three key factors: “RED SHIFT”, “DX”, and “Open Innovation”.

The two pillars of “TOP I 2030” are “Global first-class drug discovery” and a “Futuristic business model”.

Having created numerous innovative new drugs by making full use of our proprietary science and technology, we aim to significantly improve our drug discovery capabilities over the next 10 years, and to build and strengthen a system that can continuously deliver solutions that meet the world’s Unmet Medical Needs*. Specifically, we will double the current R&D output in 10 years and aim to become a company that can launch innovative in-house global products every year.

We will also work to build a futuristic business model in light of environmental changes and technological evolution. In particular, we will dramatically improve productivity across all value chains and expand value and product value for patients by dramatically restructuring processes and value creation models centered on digitization.

  • * Medical need that is not adequately met due to a lack of effective treatments

5 Reforms to Realize the Top Innovator Image

In order to realize the two pillars of “TOP I 2030”, we have set forth five reforms along the value chains of “Drug Discovery,” “Development,” “Pharmaceutical Technology ,” and “Value Delivery”, as well as the “Foundation for Growth” that supports them.

5 Reforms to Realize the Top Innovator Image

1. Drug Discovery, 2. Development, 3. Pharmaceutical Technology, 4. Value Delivery, 5. Foundation for Growth

1. Drug Discovery

We will pursue drug discoveries based on the R&D Principles*1 and establish unique technologies and produce output by strengthening open innovation.

3 direction of reforms: 1. Technology-driven drug discoveries 2. Quality-centric drug discoveries 3. Open Innovation / 4 goals: 1. Commit to drug discovery that only Chugai can achieve and double R&D output 2. Establish new proprietary technologies to enable growth for 2030 and beyond 3. Expand drug discovery opportunities by shifting from purely self-reliant research 4. Maintain high productivity
  • Technology-driven drug discoveries
    Chugai has succeeded in providing drugs of high value to patients by achieving what was previously thought to be impossible through our pioneering work in biopharmaceuticals, in addition to the conventional focus on small molecules in drug discovery. We are committed to drug discovery based on our unique ideas and technologies. We target molecules that have been thought to be untargetable. We conduct drug discovery to realize mechanisms of action that are difficult to achieve with current technology. One example is the challenge of mid-size molecule drug discovery. Our focus will continue to be technological development to obtain and maintain our competitive advantage. In response to unmet medical needs*2 for intractable diseases, we are not only strengthening existing modalities, including antibodies, small molecules, and mid-size molecules, but also venturing into new ones. Our goal is to pursue drug discovery that leads to cures, early interventions, and prevention, thereby contributing to a higher quality of life (QOL) for patients.
  • Quality-centric drug discoveries
    By leveraging our unique scientific capabilities and the latest technologies, we aim for development of candidate molecules of the highest quality achievable with current technology without compromising on efficacy, safety, DMPK*3, and physical properties. By maintaining this commitment, we believe we can develop pharmaceuticals that are not only more effective and safer but also suitable for patients’ long-term use. At the same time, we will continue to maintain a high success rate in clinical development.
  • Open Innovation
    We have a history of creating numerous pharmaceuticals through collaboration with domestic academia. We are now expanding this framework to include work with both domestic and international academia and startups. Additionally, we will engage in external collaborations for technological development as needed. In January 2024, we launched Chugai Venture Fund (CVF), a U.S.-based corporate venture capital fund. Rather than focusing solely on in-house drug discovery, we aim to more actively explore external technologies and targets, combining them with our strengths to expand drug discovery opportunities.
  • *1 Chugai R&D Principles [PDF 519KB]
  • *2 Medical needs that are still unmet due to lack of effective treatments
  • *3 The behavior of drugs within the body (drug metabolism/pharmacokinetics)

2. Development

Especially in early development, we will pursue strengthened Go/No-Go decision-making and early maximization of project value, along with continuous transformation of our operational model.

3 direction of reforms: 1. Appropriate and rapid Go/No-Go decisions by integrating clinical development and human predictive capabilities 2. Creation of unprecedented added value resulting from early-stage clinical trials 3. Transformation of operational model / 3 goals: 1. Set highly reliable standards for Go/No-Go decisions and rapid execution 2. Early estimation of overall project value 3. Maximize project value and increase productivity
  • Appropriate and rapid Go/No-Go decisions by integrating clinical development and human predictive capabilities
    As we advance toward TOP I 2030, an increasing number of projects will move to clinical development. While maintaining our commitment to science, we will thoroughly pursue the value of each project. Meanwhile, we aim to acquire the ability to quickly and appropriately assess whether research outcomes can be put to practical use as pharmaceuticals, leading to more efficient drug development. Using our sophisticated understanding of the biological response of the human body based on human predictions*4 and internal and external insights, we will reflect and implement highly reliable Go/No-Go criteria in our development plans. This allows us to see the value of a project earlier and allocate resources according to the specific needs of each project, ensuring optimal resource distribution.
  • Creation of unprecedented added value from early-stage clinical trials
    We will identify candidate diseases for development projects with speed based on scientific evidence we generate ourselves, such as non-clinical and translational research. If it is determined that there is a high probability of commercialization as a pharmaceutical through appropriate Go/No-Go decisions, we will proceed with simultaneous development for multiple indications to maximize the overall project value as early as possible. In addition, we will maximize the value provided to patients by demonstrating the True Endpoint*5 at an earlier stage, leading to late-stage development.
  • Transformation of operational model
    In late-stage development, we will not only improve the efficiency of monitoring and management operations through the active use of digital technologies, but also re-evaluate the very nature of clinical trials, including the use of RWD, in order to create new value that will lead the industry as a whole and further improve productivity. In collaboration with Roche, we will contribute to maximizing global product value by improving the success rate through speed and in-depth collaboration from a scientific perspective (providing input into development strategies and study plans).
  • *4 Modeling and simulating the pharmacokinetics and biological responses of drugs within the human body
  • *5 The true value that contributes to improving patients’ quality of life (QOL)

3. Pharmaceutical Technology

We will pursue world-class technologies to deliver drug discovery ideas to patients as pharmaceutical products and realize highly competitive drug manufacturing technologies in terms of quality, speed, and cost.

2 direction of reforms: 1. Pursuit of world-class technologies 2. Establishment of robust and competitive supply systems / 4 goals: 1. Establish competitive pharmaceutical technologies 2. World-class development speed 3. Apply production technologies and achieve world-class productivity and quality 4. Establish supply systems that ensure both stable supply and high quality
  • Pursuit of world-class technologies
    The projects that Chugai is working on are all extremely challenging compounds to be commercialized as drugs. That is why there is significant value in Chugai raising the level of its pharmaceutical technology function. In the area of mid-size molecule drugs, we will strengthen our collaboration with drug discovery more than ever, establish technologies in API, formulation, and analysis for highly active compounds that are extremely difficult to turn into drugs and establish a production system. Next, in the field of antibodies, which is one of our strengths, we will shorten the period from the selection of projects for clinical development to the application for clinical trials and speed up the development process by further deepening our technologies in response to the evolution of antibody engineering technology. We will also take the risk of making the necessary capital investments to realize the above.
  • Establish a robust and competitive supply system
    To ensure a stable supply of high-quality medicines, which is the mission of a pharmaceutical company, we need to strengthen our in-house technical capabilities and collaborate with external partners such as raw material suppliers and CMOs*6 to build a robust and competitive supply system in the face of increasing natural disasters and geopolitical risks. We will enhance our production technology, including the use of digital and robotics technologies in anticipation of smart factories, to further improve productivity. We will also pursue a dual-site strategy that will allow us to supply from multiple sites, including CMOs, after launch to ensure a stable supply and global quality standards.
  • *6 CMO: Contract Manufacturing Organization

4. Value Delivery

We will pursue rapid evidence generation that contributes to optimal patient-centric treatment selection and provide advanced value with high productivity through the establishment of a customer engagement model.

3 direction of reforms: 1. Achieving Personalized Medical & Safety Care 2. Establishing a new customer engagement model 3. Resource shift/digital utilization / 5 goals: 1. Early generation of high-value evidence after product launch 2. Risk prediction and prevention of aggravation in actual clinical practice 3. Highest global market share for the strategic products 4. Industry-leading activities for patient-centric information provision 5. Maintaining and improving industry-leading productivity
  • Achieving Personalized Medical & Safety Care
    The first initiative is to generate evidence that will enable optimal treatment selections for individual patients.
    We will collaborate with Roche and academia to design high-quality clinical studies and post-marketing surveillance to provide high-value evidence at the earliest possible post-marketing stage. In addition, from a safety perspective, we will utilize clinical and translational research findings to predict human risk of adverse events and avoid their increased severity in clinical trials, thereby evolving our efforts to provide value to individual patients.
  • Establishing a new customer engagement model
    Second is the evolution of a new information provision system for all customers (stakeholders), including not only physicians, pharmacists, and nurses, but also social workers and government officials. In an environment where customer interactions have changed dramatically due to COVID-19 and work style reforms, multi-channel strategies combining real, remote, and digital channels are becoming increasingly important. It is essential to have a system that allows us to select the most appropriate approach for each individual customer as well as for patients. Chugai will continue to build a flexible system that is sensitive and responsive to the increasingly diverse needs of customers.
  • Resource shifting/digital utilization
    Third is resource shifting and digital utilization.
    The Value Delivery function will identify operations in which investments should be prioritized and further promote the shift of resources to growth and new areas. To achieve this, we will also continue to consider streamlining our operations, such as transferring mature products to third parties. In back-office functions, we will promote fundamental reforms that are not bound by conventional practices and processes, such as digitalization, outsourcing, and business consolidation.

5. Foundation for Growth

New Challenges for PHC Solutions and building a foundation worthy of a Top Innovator.

  • People and organization
    We will strengthen our human capital by thoroughly implementing a human resources management policy based on our management strategy. In addition to fully operating an HR system that encourages employees to take on new challenges regardless of their age or other attributes, we will support each employee’s autonomous learning and growth, including career development, and focus on the acquisition and development of highly specialized human resources who will be key in implementing our business strategies. We will also foster an organizational culture that generates innovation through the promotion of D&I and aim for a higher level of measures and policies to promote the health of all employees.
    People & Culture Report
  • Digital
    Under CHUGAI DIGITAL VISION 2030, we aim to transform our business by using digital technologies to make Chugai a Top Innovator in the provision of society-changing healthcare solutions. Specifically, we are working together with each organization to create innovative new drugs and optimize all value chains through the use of various digital technologies. Additionally, we will continue to promote the development of digital human resources and the enhancement of IT infrastructure that will lead to increased business value, with the aim of building a company-wide infrastructure that supports the creation of innovation.
    CHUGAI DIGITAL VISION 2030
  • Sustainability/Environment
    With sustainability at the core of our business activities, we aim to reduce our environmental impact on society through the continuation of our initiatives to achieve the challenging targets of Chugai’s Mid-Term Environmental Goals 2030. Specifically, we will continue to work on climate change countermeasures by reducing CO2 and energy emissions and CFC usage, reduce waste and water consumption through the use of renewable and recycled resources, and protect biodiversity by reducing the use of hazardous waste. In addition to environmental initiatives, we will improve governance and enhance transparency through increased information disclosure.
    Mid-Term Environmental Goals 2030
  • Quality
    In terms of quality, we will lead the world with the quality of our products, information, and processes and the human resources to realize them, and we will promote and spread Chugai quality outside the company. To this end, we will ensure that our products and services meet the expectations of patients, acquire advanced methods that combine quality and efficiency, and promote collaboration with our partners. Additionally, we will instill a “quality culture,” which is the basis for all of these activities, in all of our value chains.
  • PHC Solutions
    Patient needs are becoming increasingly diverse and complex. In the creation and provision of innovative drugs, efforts to precisely diagnose pathologies and measure therapeutic effects will become increasingly important in order to show proof of value and maximize their efficacy. Based on the knowledge gained through the Insight Business initiative, PHC Solutions aims to establish a global delivery system that will advance and maximize the verification of values of pharmaceuticals.

Basic Principles of Increasing Corporate Value and Shareholder Returns

Chugai will target a Core EPS payout ratio of 45 percent on average while maintaining stable dividends

Chugai‘s basic strategy is to continuously generate profits and increase its corporate value by focusing on innovation and realizing advanced and sustainable patient-centric healthcare. The results will then be returned to shareholders through higher valuation in the capital markets and stable dividends.
In TOP I 2030, we will target a Core EPS payout ratio of 45 percent on average while maintaining stable dividends. We remain committed to generating steady profit growth and maintaining appropriate returns to shareholders.

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