We Create Innovations for the WORLD 2013 –2014 All For Creativity Always striving to take the road less traveled For better health worldwide Disease and health have no national boundaries and Otsuka’s line of thought about how to tackle unaddressed medical needs also takes us far beyond the boundaries of conventional thinking. One of our internal golden rules is ‘All For Creativity.’ We operationalize this by focusing exclusively on products that only Otsuka can imagine and avoiding fast-follower products or copycat generic drugs. It has been 42 years since Otsuka Pharmaceutical established its first research institute for therapeutic drugs in 1971. Today, the company’s researchers are persevering with drug discovery research into much-awaited treatments for difficult diseases that affect people around the world. Building on its blockbuster antipsychotic drug ABILIFY, which took 25 years to research and develop and is now available in 60 countries and regions, in 2013 Otsuka Pharmaceutical launched Abilify Maintena in the U.S. This new product, a oncemonthly, extended-release injection, provides a new treatment to help prevent relapse in patients with schizophrenia, a choice for patients who have difficulty taking pills every day. Tuberculosis is a global public health problem, well-suited to Otsuka’s research on antimicrobial agents underway since the research institute was established, as well as our passion to take on big challenges. Otsuka Pharmaceutical has been grappling with this difficult disease for over 30 years, aiming to develop a drug for difficult-to-treat, multidrug-resistant tuberculosis. The company is also working on the development of a treatment for autosomal dominant polycystic kidney disease (ADPKD), a genetic disease for which there is currently no treatment. Ever since our chairman Akihiko Otsuka established the research institute for in-house development of therapeutic drugs, Otsuka Pharmaceutical’s researchers have continued to embrace their mission with high aspirations, great passion, and steadfast dedication. All of their efforts reflect their commitment to patients. World-class or Not at All Firmly Rooted in Tokushima, Not Tokyo in Japan is always saying, ‘Tokyo, Tokyo.’ We like to go against the ‘‘ Everyone grain. Tokyo is all well and good, but because all the companies there are It has been nearly 50 years since Otsuka Pharmaceutical was established in Tokushima in 1964. swimming in the same pool of information, ultimately, they all end up making the same products. Outlying areas lack convenience, but they give you more room to ponder things. One advantage to Tokushima is that the university has both a faculty of pharmaceutical sciences and a faculty of medicine. Right now we are investing in bringing more people and facilities to Tokushima. To better communicate our Tokushima hometown flavor, we have staff who carefully explain our business and community engagement to visitors from abroad. We have even built a children’s nursery at our factory site. Even today, the company carefully nurtures creativity in Tokushima on the southern Japanese island of Shikoku, far from the bright lights of the big city. Because living in rural areas requires resourcefulness, I always maintained the view that we had to take the hard way. This really challenges people; also, there is less competition when you take the hard way, the road less traveled. Some of the U.S. and European drug makers are located in smaller towns and their employees also work diligently while contributing to their local communities. There aren’t really any problems with locations like these. We can exercise ingenuity and recruit talented people. If we can attract personnel and funds, I think it is preferable to be in an outlying area. My thinking may be a bit contrarian, but I think that’s just fine. ‘‘ Akihiko Otsuka, the champion of drug discovery research (photo taken when he was the Tokushima Factory Manager) 2 3 Interview with Akihiko Otsuka, Chairman of Otsuka Holdings, in Hitto no Keiei-Gaku, Nikkei Publishing Inc. Taro Iwamoto Akihiko Otsuka President, Representative Director Chairman Dreams Are the Energy of Otsuka Pharmaceutical Otsuka Pharmaceutical Is a Big Venture Company Rather Than a Big Pharma Company Otsuka Pharmaceutical Is Engaged in Overall Healthcare In 2010, Otsuka Pharmaceutical Co., Ltd., which started as a small company in Tokushima, listed on the First Section of the Tokyo Stock Exchange. Both the scale of our business and our product line have grown; with Otsuka Pharmaceutical products available to the people of 81 countries around the world and consolidated revenues of more than USD 12 billion* (in fiscal 2012), we have become a large company. But our true nature has not changed from our days as a small company: Otsuka Pharmaceutical continues to nurture the spirit of creativity, curiosity, and perseverance. Looking at examples of major corporations, we can see that mainstream ways of thinking and established approaches are quickly becoming obsolete in a rapidly changing business environment. However, innovation cannot come from bureaucracies or organizations, but from candid, passionate individuals who convert ideas into tangible products. At Otsuka Pharmaceutical, we are committed to the overall health and well-being of people. To accomplish this goal, we have identified four business segments on a global scale: ‘Pharmaceuticals’ based on prescription drugs to make people well again; ‘Nutraceuticals’ based on the concept of nutritional foods and beverages that contribute to wellness; ‘Cosmedics’ for skin care; and ‘Soylution,’ based on the solutions soy can provide to human health and environmental issues. Contributing to the health and quality of life of people around the world is our aspiration and our dream. Children have dreams. People at Otsuka view the world with a childlike gaze, aiming to achieve their dreams together with their colleagues. Our people persevered with an idea that most others ignored, succeeding in commercializing it into an innovative medication 20 years later. We have researchers who followed their passion and visited hospitals on the other side of the globe, seeking dialogues with patients. We are proud to have colleagues who hold on to their dreams and passions, bringing them into our innovation process. Otsuka Pharmaceutical is a big venture company. Brimming with a youthful spirit of innovation, we keep challenging accepted opinions and ideas. We welcome change in the business environment as an opportunity and attract colleagues who are not afraid of changing dynamics. Otsuka Pharmaceutical will continue to deliver innovative products to contribute to global human health and well-being. Taro Iwamoto * 1 USD = 79.80 yen Hiroshi Inaka Tatsuro Watanabe Yoichi Yabuuchi Susumu Tamai Hiroshi Ishikawa Tatsuo Higuchi Tetsuro Kikuchi Senior Managing Director, General Manager, Production Headquarters Managing Director (Human Resources and Legal Affairs) Executive Fellow, Research Executive Director, Executive Operating Offi cer, Pharmaceutical Marketing Headquarters Fellow, Medicinal Chemistry Executive Director Fellow, Qs’ Research Institute, Director as of June 6, 2013 4 5 Taro Iwamoto Akihiko Otsuka Masayuki Umeno President, Representative Director Chairman Vice President, Representative Director Hiroyoshi Umehara Yasuhisa Katsuta Hiroshi Sugawara Standing Audit & Supervisory Board Member Audit & Supervisory Board Member Audit & Supervisory Board Member Business Overview Pharmaceutical Business Providing New Drugs to Help Patients Worldwide Recover from Disease as Quickly as Possible At Otsuka Pharmaceutical, we are committed to a holistic approach to human health and well-being and are striving to create innovative, thoroughly original products based on our corporate philosophy: Otsuka Pharmaceutical is dedicated to the research & development of highly-innovative drugs and diagnostics. Leveraging our research culture of curiosity, determination and unconventional thinking, we strive for solutions that only Otsuka can deliver to improve the health of people across the world. Japan, grew strongly upon the authorized start date of long-term prescribing that occurs after new drug launches. In February 2013, Neupro Patch, the world’s first transdermal dopamine agonist, was launched for the first time in Japan for both Parkinson’s disease and restless legs syndrome. Our R&D philosophy places emphasis on encouraging individual researchers to take the untraveled path, pursuing fresh ideas within a collaborative, accommodating environment. Supported by the global integration of our research and development institutes in Asia, the U.S. and Europe, the result has been epoch-making drugs in the following fields. Cardiovascular: The vasopressin V2 receptor antagonist Samsca, which is now available in 14 countries and regions, has achieved good penetration in medical settings thanks to the new value and utility it provides as an oral aquaretic drug. Pharmaceutical Business Division Oncology: The anticancer agent SPRYCEL, for which Otsuka Pharmaceutical has an alliance with BMS 3 in Japan, the U.S., and Europe, continued to record strong growth globally after it received approval as a firstline treatment for chronic myelogenous leukemia (CML). Busulfex, the only drug approved by the U.S. Food and Drug Administration (FDA) for the conditioning regimen prior to hematopoietic progenitor cell transplantation, is now available in over 50 countries through Otsuka Pharmaceutical and its partners. It has become a standard treatment replacing radiotherapy within the bone marrow transplantation regimen. As of April 2013, Otsuka Pharmaceutical is independently developing the Busulfex business in Japan and Asia, building on its track record in the U.S. and Canada. Central Nervous System (CNS): The antipsychotic drug ABILIFY, which is available in 60 countries and regions, has reached 7th place 1 in the global ranking of drug sales. In the U.S., growing prescriptions for bipolar disorder and as an adjuvant therapy for major depression pushed ABILIFY to the top sales position 2 among prescription drugs. On April 1, 2013, Otsuka began co-promotion of ABILIFY in Europe with Lundbeck. In Japan, the additional indication of adjunctive therapy for major depressive disorder has been granted. Diagnostic Division Nutraceuticals Division Otsuka International Asia / Arab (OIAA) Division * Otsuka International Asia Arab Marketing of Abilify Maintena, a once-monthly extended-release injection, began in the U.S. in March 2013 as a new treatment option for schizophrenia, building on the success of ABILIFY. In December 2012, a new drug application was submitted to the European Medicines Agency (EMA), and in September 2013, an advisory committee to the EMA issued a positive opinion that recommended approval. Sales of the antiepileptic drug E Keppra, which Otsuka Pharmaceutical is co-promoting with UCB in Corporate Profile Financial Performance Company Name: Otsuka Pharmaceutical Co., Ltd. Otsuka Pharmaceutical Reports Growth in Sales and Income for Three Straight Years: Share of Business Outside Japan Reaches 62% Head Office: 2-9, Kanda Tsukasa-machi, Chiyoda-ku, Tokyo 101-8535, Japan Mucous Membranes: The antigastritis and anti-gastric ulcer agent Mucosta, which protects and improves the gastric mucosa, is the 4th-most prescribed drug in Japan.4 In the field of ophthalmology, longterm prescriptions are now available for Mucosta ophthalmic suspension UD2%, a dry eye treatment that repairs the mucous membrane of the eye and promotes mucin production. Osaka Headquarters: 3-2-27, Otedori, Chuo-ku, Osaka 540-0021, Japan FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 $ 10.1 $ 9.6 $ 9.3 1 ©2013 IMS Health World Review Estimated based on ‘Preview2013 (Year 2012 Sales Data)’ Reprinted with permission 2 Top sales out of all drugs in the U.S. from October to December 2012 and again from January to March 2013. ©2013 IMS Health MIDAS Quantum 1Q/2013 Estimated based on ‘Sales data’ Reprinted with permission 3 Bristol-Myers Squibb 4 © 2013 IMS JAPAN K.K. Estimated based on ‘MDI2012 ’ Reprinted with permission 5 Based on US News & World Report Pharmacy Times Survey 6 Pharmavite calculation based in part on data reported by Nielsen through its Scantrack ® service for the Dietary Supplements category in dollar and unit sales, for the 52-week period ending 12/29/2007 and 12/28/2008 in US Food Drug Mass channels; and for the 52week period ending 12/26/2009, 12/25/2010, 12/24/2011 and 12/22/2012 in US xAOC channels. ©2013 The Nielsen Company 7 Cosmedics: cosmetics + medicine 79.80 yen 79.79 yen 87.79 yen 92.10 yen 91.03 yen FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 Operating income $ 1,086 $ 825 $ 883 Net sales Ph 74.9 % / NC 25.1% D 38.0 % / O 62.0 % Ph 73.0 % / NC 27.0 % D 38.4 % / O 61.6 % Ph 71.7 % / NC 28.3 % D 39.8 % / O 60.2% Ph 69.2 % / NC 30.8 % D 42.7 % / O 57.3 % Pharmaceuticals / Nutraceuticals Domestic / Overseas FY 2012 FY 2011 FY 2010 FY 2009 Ph 68.6 % / NC 31.4 % 6 7 D 54.3 % / O 45.7% as of March 3, 2013 FY 2008 28,000 (approximate number of employees of Otsuka Pharmaceutical affiliates around the world) Cosmedics 7 : In our Cosmedics business for healthy skin, Otsuka Pharmaceutical launched an SPF50 sunscreen in the UL•OS brand of men’s skincare products in February 2013. UL•OS is expanding steadily as a familiar skincare brand for the whole body. Sales of InnerSignal, a skincare line for women, doubled after moving to a mail-order model. $ 1,732 million $ 11.4 President: Taro Iwamoto 1 USD = 1 USD = 1 USD = 1 USD = 1 USD = Vitamins, minerals and supplements: The U.S. brand Nature Made has been named the number-one, pharmacist-recommended brand in eight categories.5 Nature Made has also been a favorite with consumers as the number-one national vitamin brand sold in the U.S. for six consecutive years.6 In 2013, Nature Made strengthened its supply system with the construction of a new production site in the state of Alabama. In Japan, sales of Super Vitamin D, launched in October 2012, are growing steadily. $ 1,504 $ 12.1 billion Established: August 10, 1964 Employees: 5,652 Soylution: Otsuka Pharmaceutical has been focusing on developing new soy products and creating new customers based on the concept of ‘Soylution’ – that soy can provide solutions to human health and environmental issues. In April 2012, the company launched the healthy soy snack SoyCarat. Along with the soy bar SOYJOY, which is now available in 11 countries and regions, and the sparkling soy water SOYSH, the company now has a lineup of three Soylution products. In April 2013, the company also launched the new SOYJOY Peanuts in Japan. Foreign currency-denominated sales were converted to yen based on the exchange rate on the last day of the year for figures through fi scal 2009 and on the average annual rate for fi scal 2010 and later. Tokushima Headquarters: 463-10, Kagasuno, Kawauchi-cho, Tokushima 771-0192, Japan Capital: 20 billion yen Rehydration: The water and electrolyte supplement drink POCARI SWEAT is now available in 17 countries and regions, with Vietnam most recently added in 2012. Demand is especially strong in Indonesia. In Japan, in April 2013 the company launched POCARI SWEAT ION WATER, which is suited to modern lifestyles with fewer calories, a light sweetness, and a refreshing aftertaste. In this way, POCARI SWEAT is still creating new markets as a rehydration beverage for everyday use, not just after actively perspiring. Since fi scal 2010, the company has calculated consolidated figures for Otsuka Pharmaceutical and its affiliates. Consolidated figures have not been audited. Otsuka Pharmaceutical is a total healthcare company dedicated to two core businesses: pharmaceuticals and nutraceuticals. In fiscal 2012, the company achieved growth in sales and income for the third consecutive year, with total sales for Otsuka Pharmaceutical and its affiliates about USD 12 billion and operating income exceeding USD 1.7 billion. Tokyo Headquarters: Shinagawa Grand Central Tower 2-16-4, Konan, Minato-ku, Tokyo 108-8242, Japan Nutrition & Sante SAS (N&S): N&S, which has a presence in more than 40 countries mainly in Europe, acquired a gluten-free nutrition company from Lactalis Group, a multinational dairy conglomerate, in December 2012. In Japan, two N&S brands, Gerblé and Gerlinéa, are growing steadily. Otsuka Pharmaceutical develops and delivers innovative products, based on cutting-edge science, to maintain and promote people’s health around the world. Our nutraceutical business has defined and cultivated totally new market segments by communicating the unique value of its products to consumers in person. Here is an overview of recent progress by segment. We keep g r o w i n g Divisions Nutraceutical Business Creating Unprecedented Products That Help People Worldwide to Enjoy Healthier, More Active Lives more information www.otsuka.co.jp/en/product/ Driving on Two Wheels Nutraceutical Business Pharmaceutical Business Pharmaceutical products Nutraceutical Business products Antipsychotic POCARI SWEAT POCARI SWEAT ION WATER ABILIFY Antipsychotic ORONAMIN C DRINK ORONAMIN C ROYALPOLIS Abilify Maintena V2-receptor antagonist Samsca Calorie Mate Calorie Mate BLOCK Calorie Mate JELLY V2-receptor antagonist Physuline Antiepileptic drug Nature Made NATURE’S RESOURCE E Keppra 1 ABILIFY Transdermal Dopamin Agonist Gerblé Gerlinéa Neupro Patch Antiplatelet agent Pletaal POCARI SWEAT ION WATER POCARI SWEAT Anti-gastritis & anti-gastric ulcer agent Mucosta Conditioning agent prior to allogenic hematopoietic progenitor cell transplantation Amino-Value 4000 Amino-Value CONC. Amino-Value SUPPLEMENT STYLE Busulfex Anti-cancer Abilify Maintena SPRYCEL 2 energen energen FAST BREAK jelly Bronchodilator Meptin (for oral administration) Bronchodilator Meptin (for inhalation) Jog Mate Protein Jelly Calorie Mate METROMINT Bronchodilator E Keppra UNIPHYL LA theCALCIUM Levocarnitine preparation The Wise Man’s Dining Double Support L- Cartin Oral nutrient for liver failure Omugi Seikatsu Aminoleban EN powder mix Business alliances in Japan FIBE-MINI FIBE-MINI PLUS FIBE-MINI JELLY Sustained-release ß-blocker Mikelan LA ß-blocker 1 Mikelan Co-promotion with UCB Japan Co., Ltd. Hyperlipidemia agent Lorelco 2 Neupro Patch Co-promotion with Bristol-Myers K.K. Hyperlipidemia agent, climacteric disturbance and irritable bowel syndrome FIBE-MINI ORONAMIN C DRINK AminoValue 4000 Hi-z Therapeutic agent for dry eye 3 Co-marketing with Senju Pharmaceutical Co., Ltd. (developed by Otsuka Pharmaceutical) Soylution ß-blocker ophthalmic solution SOYJOY SOYSH SoyCarat Mikelan LA ophthalmic solution 3 ß-blocker ophthalmic solution Mikelan ophthalmic solution 3 4 Licensed by Toyama Chemical Co., Ltd. Mucosta ophthalmic suspension Nature Made Broad-spectrum antibacterial ophthalmic solution Samsca Cosmedics OZEX ophthalmic solution 4 5 Intraocular irrigating solution Co-marketing with Senju Pharmaceutical Co., Ltd. OPEGUARD NEO KIT 5 UL• OS InnerSignal Topical new quinolone antibacterial agent Acuatim 6 OTC Drugs Anti-mycotic agent Licensed by Denka Seiken Co., Ltd. Palavale Pletaal Oronine H OINTMENT Oronine Solution NEW SARALIN Anti-keratosis agent Urepearl 7 SOYJOY Licensed by Eiken Chemical Co., Ltd. SOYSH SoyCarat Diagnostics & Medical Equipment Diagnostic agent for H. pylori infection UBIT For Infants Rapid test for the detection of anti-H.pylori antibody in urine [Sold by Bean Stalk Snow] RAPIRUN H.pylori antibody STICK Mucosta Mucosta ophthalmic suspension Rapid test for the detection of Streptococcus pneumoniae antigens RAPIRUN S. pneumoniae Gerblé Gerlinéa Rapid test for the detection of influenza A and B viral antigens Quick Navi-Flu 6 Rapid test for the detection of adeno viral antigens UBIT Quick Navi-Adeno 6 Rapid test for the detection of respiratory syncytial virus antigens Quick Navi-RSV 6 Rapid test for the detection of norovirus antigens Omugi Seikatsu Quick Navi-Noro 2 6 Series of urinalysis test strips for compounds / metabolites Buslfex Uropaper III ‘Eiken’ 7 Test kit for the measurement of WT1 mRNA WT1 mRNA Assay Kit II ‘OTSUKA’ RIA kit for sialyl Lex-i antigen in serum SLX ‘OTSUKA’ Infrared spectrophotometer for the measurement of 13 CO2 level in the breath SPRYCEL POCone Fingertip blood sampler Fingraph 8 9 UL• OS InnerSignal BeanStalk POCARI SWEAT BeanStalk Organic Apple BeanStalk Organic Barley tea BeanStalk Feeding bottle & teat BeanStalk Skin Care Series Research and Development Pharmaceutical Business Research policies: – Put patients first and follow the untraveled path – Embrace the challenge of developing pharmaceuticals in a highly original way – Develop pharmaceuticals in fields where treatments are unsatisfactory and patient medical needs remain unfulfilled – Take a tenacious approach to intractable diseases – Insightfully evaluate the outcomes of treatments and clinical trials – Pursue first-in-class and world-first drugs Areas of Focus Nutraceutical Business Development of nutraceutical business products begins with a scientific evaluation of the potential health benefits of the product. New attributes such as taste, appearance and portability are then conceived to appeal to people’s interest in maintaining and improving their health. Research Institutes Central Nervous System, Oncology, Gastrointestinal (GI), Cardiovascular, Respiratory, Infectious Diseases, Ophthalmology, Dermatology In the field of central nervous system disorders, Otsuka is conducting global co-development of the next-generation antipsychotic brexpiprazole (OPC-34712) with H. Lundbeck A/S, a Danish company with which we have entered a global alliance. The two companies believe that brexpiprazole could go well beyond the antipsychotic ABILIFY and treat a wider range of disorders. In March 2013, Otsuka also signed a co-development and co-marketing agreement with Lundbeck for its new compound Lu AE58054, which is currently under development as an adjunct treatment for Alzheimer’s disease. This is one of up to five new compounds that the company has the opportunity to work on with Lundbeck under the global alliance. In June 2012, Otsuka Pharmaceutical also entered into a global license agreement with Proteus Digital Health, Inc., to utilize Proteus digital technology in Otsuka central nervous system drugs. The alliance aims to develop and market a new category of pharmaceuticals, the world’s first ‘digital medicines.’ This technology will enable physicians to propose more insightful treatment methods by providing precise patient information, including when a medication has been taken as well as sleep patterns. In ophthalmology, Otsuka Pharmaceutical has formed an alliance with Acucela Inc. The two companies are carrying out co-development of a dry eye treatment, as well as treatments for glaucoma and dry age-related macular degeneration (dry AMD), which are leading causes of blindness. In 2012, research results on two of Otsuka Pharmaceutical’s drugs were published in the New England Journal of Medicine, one of the world’s leading medical journals. In July 2013, Otsuka Pharmaceutical established Otsuka Europe Development and Commercialization, Ltd. (OEDC) in London, U.K. OEDC will be Otsuka Pharmaceutical’s European clinical development headquarters, collaborating with Otsuka Pharmaceutical Europe Ltd. (OPEL) on the development and commercialization of drugs discovered by Otsuka. Tokushima Tokushima Research Institute First Institute of New Drug Discovery Third Institute of New Drug Discovery Microbiological Research Institute Medical Chemistry Research Institute Qs’ Research Institute Formulation Research Institute Basic Technical Research Institute Diagnostic Division, R&D Department Shiga Fujii Memorial Research Institute Hyogo Ako Research Institute U.S. Otsuka Maryland Medicinal Laboratories, Inc. China Otsuka Shanghai Research Institute Clinical Development Japan Headquarters of New Product Evaluation and Development Diagnostic Division, R&D Department U.S. Otsuka Pharmaceutical Development & Commercialization Inc. U.K. Otsuka Europe Developement & Commercialisation, Ltd. China Otsuka Beijing Research Institute Germany Otsuka Frankfurt Research Institute GmbH South Korea Korea Otsuka Pharmaceutical Co., Ltd. Creating Globally Appealing Products Otsuka Pharmaceutical’s unique, precisionmanufacturing-inspired approach revolves around two essential R&D principles: the pursuit of bold paths rather than worn ones to create value available nowhere else, and the development of globally appealing products. Otsuka Pharmaceutical launched POCARI SWEAT in 1980 based on the concept of a rehydration beverage. Today, it has grown into an international product sold in 17 countries and regions. And now, with the help of one of the researchers who developed POCARI SWEAT – who is currently serving as an advisor – the company has developed POCARI SWEAT ION WATER, after six years of effort, as a beverage suited to the current social environment. The product was launched in April 2013 as a new style of POCARI SWEAT that offers a light sweetness and a refreshing taste with reduced calories while maintaining the functionality of the original POCARI SWEAT. Thirty-three years after the launch of POCARI SWEAT, Otsuka will now promote POCARI SWEAT ION WATER as a product that offers new value for today’s lifestyles. The company is also committed to an intense R&D effort on soy-based products under the concept of Soylution – that soy can provide solutions to human health and environmental issues. The company’s two research institutes in Tokushima are dedicated to soy food product development. Their results led to the launch of the sparkling soy water SOYSH in 2010 and of the healthy soy snack SoyCarat in 2012. Going forward, Otsuka will continue to search for tastes and food forms that put the nutrition of soy within easy reach of people around the world. Nutraceutical Business Products Research Tokushima First Research Institute of New Functional Products Development Second Research Institute of New Functional Products Development Shiga Otsu Nutraceuticals Research Institute Biwako Institute / Otsuka Foods Co., Ltd. Saga Saga Nutraceuticals Research Institute Thailand Otsuka Saha Asia Research Co., Ltd. Adding Value Based on Scientific Evidence Otsuka’s research into nutraceutical products does more than develop products in new categories. Even after a product is launched, the company’s in-house research facilities such as the Saga Nutraceuticals Research Institute and the Otsu Skin Care Research Institute cooperate with third-party research institutes to produce various research results designed to generate new forms of added value related to water and nutrition replenishment and skin health. The goal is always to help people maintain and improve their health. Skin Care Research Institute Shiga Otsu Skin Care Research Institute (Cosmedics) more information www.otsuka.co.jp/en/research/ 10 11 Production Quality, Safety, Production Cost, and the Environment Otsuka Pharmaceutical’s production division works tirelessly to ensure a stable, highquality supply of originally designed products. Manufacturing site safety and protection of the environment are paramount considerations wherever we operate. Technological cooperation and personnel exchanges are implemented across group companies globally, ensuring a stable supply of products for each market. Technology Development Leverages Otsuka’s Two Core Businesses Otsuka Pharmaceutical’s unique products often require new manufacturing methods, which requires behind-the-scenes creativity from the company’s production teams. The people involved in production technology, plants, and quality control work closely together to set up new lines, develop production and supply systems and make continual improvements. Their willingness to take on new challenges is a foundation for Otsuka’s innovative products and growth worldwide. In 2013, Otsuka Pharmaceutical launched in the U.S. the antipsychotic drug Abilify Maintena, a once-monthly, extended release injection. The production process for Abilify Maintena makes use of Otsuka Pharmaceutical’s original aseptic filling technology, which was developed thanks to its dual business model of pharmaceuticals and nutraceuticals. Going forward, Otsuka Pharmaceutical will keep leveraging the results of its own unique brand of technological innovation. Quality Safety Production Cost the Environment World-class Environmental World-class Environmental Initiatives: Global Deployment Initiatives: Global of Eco-friendly PETDeployment Bottles of Eco-friendly PET Bottles Otsuka cherishes a spirit of craftsmanship Otsukaremaining cherishesmindful a spirit of while of craftsmanship the environment while remaining mindfuland of the environment in its product designing manufacturing in its product designing and manufacturing processes. The company’s new eco-friendly processes. company’s eco-friendly PET bottlesThe weigh 30% less,new through use of PET bottles weigh 30% less, through use of the positive-pressure aseptic filling method. thepresent, positive-pressure asepticbottle fillingismethod. At the eco-friendly used for At present, the eco-friendly bottle used for POCARI SWEAT, Amino-Value, andisenergen. POCARI SWEAT, Amino-Value, and energen. Otsuka’s POCARI SWEAT factory in Indonesia has also adopted this filling method, which reduces energy use and greenhouse gas emissions from manufacturing. The switch to eco-friendly bottles also helps save resources, reducing not only raw materials to make containers but also energy for transportation and water required to wash containers. Ingenuity and attention to detail in areas such as labels and weight of outer cases also help Otsuka deliver on its responsibilities to the global environment. Pursuing the Ideal in Environmentally Friendly Production Tokushima Itano Factory The Tokushima Itano Factory displays ecosystem integrity, for instance by ensuring that facilities are in harmony with the original setting and that native trees are protected. At an on-site biotope pond, employees work to protect and propagate endangered species. It also co-sponsors the Asan Earth Festival, a health event organized by the local authorities every autumn. Factory grounds are open for walking events and other initiatives to protect human health and the natural environment. Location of Major Affiliates Which Own Manufacturing Sites Tokushima Tokushima Factory Second Tokushima Factory Tokushima Wajiki Factory Tokushima Itano Factory 12 13 Manufacturing Presence of Otsuka Pharmaceutical Affiliates Production (Japan) Gunma Takasaki Factory Shizuoka Fukuroi Factory Saga Saga Factory 139 Factories 14 Countries and regions 38 companies as of March, 2013 more infomation www.otsuka.co.jp/en/company/production/ Pharmaceutical Business People Make the Company Run; People Do the Thinking a method was developed for modifying the structure of ‘‘ When compounds, and thereby developing pharmaceutical products, using The Untraveled Path to Drug Discovery a computer, I thought about closing down the company completely. If a computer can do the work without human contribution, then it seemed likely that small companies unable to purchase supercomputers would be put out of business. But the nature of research belongs to people. The large multinational corporations that are capable of buying supercomputers are struggling to develop new drugs; they are actually buying compounds and developed products from smaller venture companies. Someone told me that ‘Otsuka Pharmaceutical is a large venture company.’ People make the company run; people do the thinking. Otherwise, we’d be in trouble. Otsuka Pharmaceutical’s drug discovery research began in 1971. The company established its first in-house drug research institute in its hometown of Tokushima based on Akihiko Otsuka’s strong determination to follow the untraveled path as a manufacturer that would develop its own drugs. There were 14 young researchers full of dreams at that original research institute. The essence of research at Otsuka is high-touch human ingenuity. Here, researchers do not depend on computers for insights; on the contrary, they use their own minds to form hypotheses and then test them with their own hands. This approach is what keeps Otsuka Pharmaceutical always on untraveled paths toward new inventions. ‘‘ Comment by Akihiko Otsuka in Hitto no Keiei-Gaku, Nikkei Publishing Inc. Pursuing the Unlimited Potential of a Single Compound Only ten years into drug discovery, Otsuka launched Japan’s first beta blocker Mikelan and the bronchodilator Meptin, which later became the national standard for asthma treatment. Launch of the antiplatelet agent Pletaal, the anti-gastritis and the anti-gastric ulcer agent Mucosta, and other drugs followed. All these drugs are carbostyril-based. The success of drug development based on the unlimited potential of carbostyril is the very basis of Otsuka’s drug research today. Drug discovery at Otsuka Pharmaceutical is picking up speed. In 2009, the company launched Samsca (tolvaptan), a drug that promotes aquaresis (excretion of water without electrolyte loss), in Japan, the U.S., Europe and elsewhere in Asia. Then, in 2012, Otsuka launched Mucosta Ophthalmic Suspension for the treatment of dry eye, an innovative medicine discovered by adapting the mucin production-stimulatory effect of rebamipide, the main ingredient in the anti-gastritis and the anti-gastric ulcer agent Mucosta. 2013 2013 Akihiko Otsuka and three Otsuka Fellows (research specialists) CI CI • H2 O Abilify Maintena N 2012 O N H N(CH 2 ) 4 O Three Drugs with World-first Mechanisms of Action CNS Once-Monthly Injection of Abilify Maintena Launched in U.S. – Aiming to Reduce Schizophrenia Relapse Otsuka Pharmaceutical is committed to the development of pharmaceuticals with world-first mechanisms of action. World-first compounds hold the seeds of new drugs in completely new categories. Under the leadership of Akihiko Otsuka, the company’s researchers gained experience using a non-drowsy antihistamine to develop dopamine D2 receptor agents in the central nervous system. Taking a hint from this, they developed ABILIFY, which has a worldfirst mechanism of action, and launched it in the U.S. in 2002. Today, ABILIFY is sold in 60 countries and regions for 13 indications. Going a step further, Otsuka Pharmaceutical developed Abilify Maintena, an injection with one month of sustained efficacy, as a new method for improving patient compliance. The product was launched in the U.S. in 2013. Mucosta ophthalmic suspension CH 3 CO N 2009 CONH Samsca OH CH 3 CI 2002 2002 CI Vasopressin CI N ABILIFY N H N(CH 2 ) 4 O O NHCO CI CH 2 CHCOOH 1990 Mucosta N N N H O N N H O 1980 CH 2 CH 2 CH 2 CH 2 O Pletaal 1980 OH C 2 H 5 CH – CHNHCH(CH 3 ) 2 • HCl • 1/2H 2 O Meptin N H MDR-TB O OH OH 1980 Mikelan OCH 2 CHCH 2 NHC(CH 3 ) 3 • HCl 1971 1971 14 15 Oral Vasopressin V2 - Receptor Antagonist Samsca – The Unlimited Potential of a World-first Mechanism of Action Otsuka Pharmaceutical’s research into vasopressin started in 1983, when Akihiko Otsuka, then-president of Otsuka Pharmaceutical, spoke with a physician to find out what doctors really wanted in order to supplement their daily medical practices. Diuretics were conventionally used to treat patients with edema, although this caused excretion of essential electrolytes as well, rather than just the water that causes the swelling. A drug which could do this did not exist. Otsuka Pharmaceutical spent 26 years working on this difficult challenge. The result was the successful development of tolvaptan, a diuretic with a world-first mechanism that promotes the excretion of only water, without forcing electrolytes out of the body. The product was first launched in 2009 in the U.S. as the oral vasopressin V2 -receptor antagonist Samsca and is now available in 14 countries and regions. Making use of another mechanism of tolvaptan other than aquaresis, Otsuka Pharmaceutical is attempting to develop a treatment for autosomal dominant polycystic kidney disease (ADPKD), a genetic kidney disease for which there is currently no treatment. N 1988 Central Nervous System N H O N H O OH Carbostyril-based Drugs A Treatment for Multidrug-Resistant Tuberculosis (MDR-TB) – Never Giving Up About a third of the world’s population, or 2 billion people, is infected with TB bacteria, and each year about 8.7 million people develop multidrug-resistant tuberculosis (MDR-TB), which is particularly difficult to beat. It is estimated that each year about 440,000 people develop MDR-TB, and 150,000 lose their lives. Otsuka Pharmaceutical’s development of antimicrobial agents started through the inspiration of Otsuka’s chairman Akihiko Otsuka, who established a drug research institute in 1971. Few people understood the significance of this development, including at the time when research into a TB drug got underway, and the research involved a high degree of risk. Pursuing research in a field that most ignored at times seemed like a long, solitary and unending road. However, after more than 30 years of R&D, Otsuka Pharmaceutical filed for regulatory approval of Delamanid in Europe and Japan for the treatment of MDR-TB. Pharmaceutical Business The Unlimited Potential of a World-first Mechanism of Action Samsca: The Oral Vasopressin V2 -Receptor Antagonist ‘‘ I believe at least first- in-class drugs are in a sense ‘hand-made.’ The most important thing is trusting in people’s skills and intelligence. ‘‘ The Challenge of Developing a First-in-Class1 Drug: A Diuretic That Promotes Excretion of Only Water Yoichi Yabuuchi Executive Fellow, Research Vasopressin ‘What kind of drug do you want?’ ‘A diuretic that only excretes water.’ One day in 1983, Akihiko Otsuka, the former president of Otsuka Pharmaceutical, spoke with a physician to find out what doctors really wanted in order to supplement their daily medical practices. Diuretics were conventionally used to treat patients with edema, although this caused excretion of essential electrolytes as well, rather than just the water that causes the swelling. A drug which could do this did not exist. Otsuka Pharmaceutical spent 26 years working on this difficult challenge. The result was the successful development of tolvaptan, a diuretic with a worldfirst mechanism that promotes the excretion of only water, without forcing electrolytes out of the body. The product was first launched in 2009 in the U.S. as the oral vasopressin V2 -receptor antagonist Samsca and is now available in 14 countries and regions. Samsca Global Brand Team A Hand-made, World-first Drug from Japan The Unwavering Quest for Discovery: R&D Driven by a Shared Goal and a Freewheeling Exchange of Ideas It was Yoichi Yabuuchi, who today presides over research as a fellow, who led Otsuka Pharmaceutical’s researchers in the development of this groundbreaking compound, which promotes the excretion of only water, without forcing electrolytes – such as sodium – out of the body. The specific development goal was to inhibit vasopressin,2 the anti-diuretic hormone controlling the reabsorption of water from urine back into the blood to maintain body fluid balance. It also had to be available orally, to make it convenient for patients. Research commenced in 1984, and it took three years before a prototype compound was identified following screening and synthesis of several thousand compounds. 16 17 Then-president Akihiko Otsuka suggested casual meetings over a meal in order to encourage the researchers never to give up on their quest and keep their spirits up despite the repeated failures. Bermuda shorts were then in vogue and at a series of ‘Bermuda Meetings,’ everyone from the president to lab assistants wore the same casual shorts and enjoyed the camaraderie of working toward a shared goal that would eventually become Samsca. Stereotypes and hierarchy were set aside to energize and accelerate creativity. In 1989, researchers had successfully synthesized Physuline (mozavaptan), which was the world’s first oral non-peptide V2 - receptor antagonist. It later led to the development of Samsca (tolvaptan). Yoichi Yabuuchi likes to say, ‘First-in-class drugs are in a sense hand-made ’. Drug discovery at Otsuka is artisanal, and it takes time, faith, and immense effort for researchers to create a drug like Samsca, which took 26 years. Samsca was launched initially in 2009 in the U.S., the U.K., Germany and other European countries, followed in 2010 by Japan and in 2011 other Asian countries and extending to a total of 14 countries and regions today. Samsca’s approved indications differ depending on the country or region. The indication in the U.S. and Asian countries is hyponatremia, and in Europe it is hyponatremia caused by the syndrome of inappropriate secretion of antidiuretic hormone (SIADH). In Japan, Samsca has been marketed since December 2010 as the first free water clearance drug (aquaretic) with the world’s first indication for fluid retention in heart failure. An additional efficacy application was approved in September 2013 for fluid retention in liver cirrhosis. Samsca 7.5 mg tablets were launched in Japan in June, adding to the existing 15 mg tablets. Going forward, Otsuka Pharmaceutical will continue development on new potential uses to enable Samsca to benefit patients through optimal treatment, in response to the different needs of each country and region. The company will keep pursuing the limitless potential of this drug attained through pursuing R&D on untraveled paths. The medical profession tentatively explored uses for Samsca when it was first launched, trying to get acquainted with this new, first-in-class drug. As professionals in different countries discussed their experiences, a body of treatment knowledge emerged. Today, Samsca’s uniqueness is appreciated in medical settings and the value of promoting excretion of water without electrolyte loss is gaining recognition around the world. 1 First-in-class: Effi cacious new pharmaceuticals with unprecedented mechanisms of action. 2 Vasopressin: A hormone that suppresses diuresis. It binds to the V2 - receptors in the collecting duct system of the kidneys and reduces the amount of urine by re-absorbing water from the urine and returning it to the bloodstream. The active ingredient in Samsca, tolvaptan, reduces the amount of water re-absorbed in the collecting duct system of the kidneys by blocking vasopressin V2 -receptors. The result is that water alone – not sodium or any other electrolytes – is eliminated from the body. Otsuka Pharmaceutical continues to promote Samsca with the vision of giving the globe a world-first drug made in Tokushima, Japan. Resolutely Unique Research Wins the Pharmaceutical Society of Japan Award for Drug Research and Development 2013 The discovery of the vasopressin V2 -receptor antagonist tolvaptan was chosen for the Pharmaceutical Society of Japan Award for Drug Research and Development 2013, in recognition of the 26 years of effort and enthusiasm that culminated in the creation of this first-in-class drug. Pharmaceutical Business Multidrug-resistant Tuberculosis Taking Up the Fight Against MultidrugResistant Tuberculosis MDR-TB It has been 45 years since the introduction of the last new mainstay anti-TB drug rifampicin. However, multidrug-resistant tuberculosis (MDR-TB), which is resistant to these older mainstay treatments, has become a problem in recent years, further highlighting the worldwide need for new treatments. Otsuka Pharmaceutical has been working on the development of antibiotics and antimicrobial agents since the opening of its original drug research institute in 1971. Aiming especially at the development of an anti-TB drug, today Otsuka is the world’s top private sector investor in the field of anti-TB drug development.1 ‘‘ Mycobacterium tuberculosis is an A Third of the World’s Population Is Infected with TB 1 TAG(Treatment Action Group)2012, Report on Tuberculosis 2 WHO-Global Tuberculosis Report 2012 3 WHO-Multidrug and extensively drug-resistant TB(M/XDR-TB)-2010 Global Report On Surveillance And Response 4 China, Egypt, Estonia, Japan, South Korea, Latvia, Peru, The Philippines, U.S.A. 18 19 TB is sometimes referred to as the ‘forgotten disease.’ In the modern age when so many medical advances have been made, few people are concerned that TB is still a serious infectious disease for the world. ‘‘ Dyed magnifi cation of tuberculosis bacteria (Rights from Otsuka S.A.) Even in today’s world, where medical science is continually advancing, TB is still rampant. Nearly a third of the world’s population is infected with TB bacteria, and each year about 1.4 million people die as a result of developing active TB.2 In addition, there are an estimated 440,000 patients with MDR-TB, and some 150,000 of those are said to lose their lives to the disease each year.3 extremely tenacious pathogen. Driven by a desire to help the large number of patients suffering from TB, Otsuka Pharmaceutical has kept searching for a unique and unconventional approach in order to discover a new drug that fights the disease. New Drug Application Targeting MDR-TB Submitted in Japan in March 2013 after World’s Largest-Ever Clinical Trial for TB Conducted in Nine Countries In June 2012, results of a phase II clinical trial that assessed the efficacy and safety of delamanid in patients with MDR-TB were published in the globally authoritative New England Journal of Medicine. The trial enrolled 481 study subjects at 17 medical institutions in 9 countries.4 Based on the results of clinical trials such as this, Otsuka Pharmaceutical submitted new drug applications for delamanid seeking an indication of treatment of MDR-TB in Europe in 2011 and in Japan in 2013. Otsuka Pharmaceutical is one step closer to a dream it has pursued for more than 30 years. Hiroshi Ishikawa Fellow, Medicinal Chemistry Tuberculosis Global Project Team Fighting Back – Efforts to Beat TB Under the slogan of ‘Fight Back,’ Otsuka Pharmaceutical’s global tuberculosis business exemplifies creative originality while thinking of patients and fighting to give them a cure. Serious about this dream, Otsuka Pharmaceutical centralized its functions related to TB care and management in Otsuka S.A. in Geneva, which is home to many international health organizations. Recently, Otsuka implemented an advance project in the Republic of Moldova in Europe, which has one of the largest MDR-TB epidemics in the world. The program supports TB diagnosis, offers guidance to minimize TB infection within hospitals, and provides support so that patients can complete treatment while maintaining interaction with their families and communities. The company is also working to build awareness about TB. A photo book, produced with the cooperation of the European Respiratory Society, features the status of TB patients around the world. Otsuka is committed to the fight against TB, and it has the global team of knowledgeable and passionate professionals needed to win it. Pharmaceutical Business A Once-Monthly Injection That Delays Schizophrenia Relapse The Antipsychotic Abilify Maintena Launched in the U.S. Aripiprazole, a compound discovered by Otsuka, has led to the creation of another innovative product: the once-monthly, extended-release injection Abilify Maintena. In March 2013, the product was launched in the U.S. through codevelopment with the company’s alliance partner H.Lundbeck A/S. This new drug, which was developed based on the antipsychotic ABILIFY, maintains its therapeutic effect for one month with a single, long-acting injection. Evidence that this can lower the hospitalization rate caused by relapse of psychotic symptoms in patients with schizophrenia was presented at the American Psychological Association (APA) Annual Meeting in May 2013. Abilify Maintena offers a new option to patients who have difficulty taking their medication every day. Otsuka has also made progress in Japan in the central nervous system (CNS) field in new product categories. In February 2013, it launched Neupro Patch, a drug indicated for both Parkinson’s disease and restless legs syndrome, in-licensed from UCB of Belgium. In May 2013, it obtained approval for pediatric epilepsy as an additional indication for the antiepileptic drug E Keppra. The company is pressing ahead to find better treatments for various CNS disorders, including Alzheimer’s disease. CNS Central Nervous System Media Exchange in Tokushima on March 7, 2013 60 Helping Patients by Expanding Treatment into New Categories of Psychiatric Illness Aripiprazole, a compound discovered by Otsuka Pharmaceutical, has undergone R&D for 25 years at a research institute in the company’s hometown of Tokushima. First delivered to patients as the antipsychotic ABILIFY in the U.S. in 2002, today the drug is prescribed in 60 countries and regions worldwide. The product has contributed to the social reintegration of numerous patients with schizophrenia. With a novel mechanism of action as a dopamine D2 receptor partial agonist, it has an excellent efficacy and safety profile. For patients with psychiatric illnesses such as schizophrenia, ABILIFY’s advantageous profile on adverse reactions is an important factor affecting how long patients can keep taking their medication. The product’s high level of safety has facilitated additional indications in new categories not typically treated with an antipsychotic. At present, 13 indications have been approved worldwide. Prescriptions for the additional medical indications of depression and pediatric disorders now account for about 50 % of ABILIFY prescriptions in the U.S. Depression Number of countries and regions where ABILIFY is marketed Backed by the appreciation and confidence of patients and healthcare professionals, ABILIFY, which was created without emulating other antipsychotics or following existing trends in CNS research, attained blockbuster1 status only three years after its launch in the U.S. It subsequently grew to achieve the No. 1 sales position among all drugs in the U.S. from October through December, 2012, and again from January through March, 2013.2 ABILIFY was the No.1 seller among all drugs in the U.S. in the fourth quarter of 2012 and the first quarter of 2013. 13 Number of indications worldwide for ABILIFY (as of June 2013) 1 Blockbuster: A new drug that revolutionizes existing treatments and generates enormous sales and profi ts. The defining milestone is peak annual sales of over USD 1 billion. 2 © 2013 IMS Health MIDAS Quantum 1Q/2013 Estimated based on ‘Sales date’ Reprinted with permission Next Step Pediatric Bipolar disorder Schizophrenia ‘Creativity’ and ‘Proof through Execution’ Based on its corporate philosophy, Otsuka Pharmaceutical aims to contribute to the better health of people worldwide by creating innovative products and then executing on the hard work it takes to demonstrate their value. During the exchange with the media held in Tokushima on March 7, 2013, Taro Iwamoto, President, Otsuka Pharmaceutical Co., Ltd. (at left in photo) and Ulf Wiinberg, CEO, H. Lundbeck A/S, described the latest accomplishments of ‘creativity’ and ‘proof through execution’ against the backdrop of calligraphy featuring the first characters in the Japanese terms for these two concepts. 20 21 No.1 Pharmaceutical Business Two Innovative Approaches to Tackling the Challenges of Central Nervous System Disease about 60 % 1. Development of Drugs in New Categories The central nervous system is one of the most challenging research areas for drug discovery and development, even for companies with extensive experience in this area. In order to create new value through innovation, Otsuka believes that it must complement its independent efforts with horizontal collaborations with alliance partners. Otsuka and alliance partners think through challenges in an atmosphere of equality, idea sharing and friendly competition, and this leads to new breakthroughs. Seeking to help even more patients, Otsuka Pharmaceutical entered into an alliance with U.S.-based BristolMyers Squibb (BMS), which started marketing ABILIFY in the U.S. in 2002. In joint research with Lundbeck, Otsuka is undertaking a phase III clinical trial on the next-generation antipsychotic brexpiprazole (OPC-34712), which is hypothesized to have a safety profile even better than ABILIFY and is expected to provide benefits for a wide range of CNS diseases. The two companies have also agreed to pursue phase III codevelopment of a compound developed by Lundbeck as a treatment for Alzheimer’s disease. Additionally, the antiepileptic drug E Keppra, which Otsuka Pharmaceutical is working on together with the Belgian company UCB, received approval in Japan in May 2013 for a pediatric indication. Backed by a pediatric record in over 80 countries and regions around the world, E Keppra offers a new, lessworrisome treatment option. In 2012, Otsuka also began marketing in Japan for Neupro Patch, which maintains a constant effect for 24 hours, for patients with diseases such as Parkinson’s disease. By listening to the voices of Parkinson’s patients before launching Neupro Patch, Otsuka identified where the unmet treatment needs were. Otsuka offers Neupro Patch as a drug in a new category aimed at alleviation of Parkinson’s disease symptoms that occur at night and in the early morning. 2. Helping Patients Who Cannot Keep Taking Their Medication Uninterrupted adherence to medication is a main predictor of symptom relapse in patients. That is why pharmaceutical companies have developed many formulations that are easy for patients to take, such as pills and liquids. The fact is, however, that patients with schizophrenia still achieve poor drug adherence compared to patients with other diseases. This is a serious challenge, as it is related to an increased rate of symptom relapse. Approximately 80% of patients with schizophrenia who do not adhere to their drug regimen are said to suffer a relapse of symptoms within five years. To counter this, Otsuka took aripiprazole, a compound it had developed, and used it to develop an injection that would maintain the drug’s effect with a oncemonthly administration instead of daily dosing, seeking to introduce a new method for increasing treatment compliance. In 2011, after forming a co-development and co-marketing alliance with Lundbeck, the companies stepped up research into a depot injection, which obtained regulatory approval as Abilify Maintena in the U.S. in 2013. Now Otsuka has established a new marketing system in horizontal collaboration with Lundbeck. Development of the Antipsychotic ABILIFY (Aripiprazole) – Pursuing the Unlimited Potential of a True Original to imitate leads to creativity. And researchers are encouraged to continue until they obtain results. This element of the Otsuka Group’s corporate culture led to the discovery of the compound aripiprazole. Inheriting the results of their predecessors, the research team of Yasuo Oshiro, who was responsible for synthesis, and Tetsuro Kikuchi, who was responsible for pharmaceutics, spent 25 years engaged in research without giving up hope. Their committed efforts led to the creation of aripiprazole as the world’s first antipsychotic that acts as a dopamine D 2 receptor partial agonist and its successful commercialization as ABILIFY. ‘‘ Through its experience developing a drug that stimulates dopamine autoreceptors in the presynaptic region of the brain, Otsuka Pharmaceutical went against worldwide conventional wisdom in research and continued pursuing the potential of a new compound with a revolutionary mechanism of action. Aiming to further increase treatment adherence, Otsuka Pharmaceutical is also working to introduce a groundbreaking combination of a central nervous system drug with an ingestible sensor system that applies technology developed by U.S.-based Proteus Digital Health, Inc., to monitor patients’ drug-taking patterns. Knowing precisely when patients take their medication and when they sleep will enable medical professionals to propose the most suitable treatment methods for patient recovery. ‘‘ A uniqueness that refuses Searching for an Original Mechanism of Action Drug development for CNS diseases is challenging, and the success rate is said to be extremely low. While groundbreaking new drugs appeared one after another for other diseases, patients with schizophrenia suffered from the adverse drug reactions of their only option: drugs which completely block dopamine receptors in the brain, often referred to as first-generation drugs. Development of secondgeneration drugs followed. Percentage of patients found not to be taking their antipsychotic medication: 61.9% Compliance verifi cation using a device that counts the number of times a microchip-embedded bottle cap has been removed (data from outside Japan) Byerly, M.: The 41st Annual Meeting of the American College of Neuropsychopharmacology, Dec. 10, 2002 Tetsuro Kikuchi Fellow-Qs’ Research Institute, Director Three Aripiprazole Synthesis Researchers Win Fiscal 2013 Imperial Invention Prize at the National Commendation for Invention Yasuo Oshiro, Ph.D., Corporate Advisor, Intellectual Property Department (center) 22 23 In June 2013, an award ceremony was held in Tokyo for the National Commendation for Invention, which has been presented since 1919 for outstanding reseach-driven inventions that contribute to the progress of science and technology and the development of industry in Japan. In 2013, the invention of aripiprazole was selected for the Imperial Invention Prize, which is presented for the most outstanding invention. This prize recognizes the resolutely original R&D of Yasuo Oshiro and his colleagues, who discovered and succeeded in synthesizing a compound characterized by few adverse drug reactions that can be used safely. “Receiving the Imperial Invention Prize is the highest honor. I never imagined being awarded this prize. As someone working in drug research and development, it is extremely gratifying to receive this award. I am fortunate to be surrounded by colleagues who have offered me their unwavering support and encouragement. None of what I have achieved would have been possible without the help of such exceptional coworkers in the fields of drug synthesis and pharmaceutics.” Seiji Sato, Ph.D., Senior Researcher, First Institute of New Drug Discovery, Medicinal Chemistry Group (left) “Failure is common in our field, drug synthesis. The hard work is tackled first. You are constantly aware of the obstacles that you have not been able to overcome in the past, and you keep trying over and over again to overcome those challenges because beyond them lies success and you will discover new findings along the way. Partial agonists are at first glance a difficult concept to believe in. I think Dr. Oshiro’s courage in taking that first step to tackle this concept, as well as the strength of his conviction, were the driving forces behind this achievement.” Nobuyuki Kurahashi, Vice President, Global CNS Business, Otsuka America Pharmaceutical, Inc. (right) “Dr. Oshiro incorporated ‘safety’ in the drug design from the very beginning. When aripiprazole was introduced to the market, these excellent ‘safety’ properties earned widespread praise from doctors, families, and patients. Also because of this feature, aripiprazole has been used for so many patients and so many diseases beyond the conventional drug category. Ever since I joined the company, it has brought me great honor to be involved with this drug, from its initial discovery through to its market launch worldwide.” Nutraceutical Business Nutrition + Pharmaceuticals 2013 POCARI SWEAT ION WATER = NUTRACEUTICALS The History of Nutraceuticals The seeds of today’s successful pharmaceutical business were planted in 1971, when Otsuka Pharmaceutical launched its first independent drug discovery effort. Even then, the company recognized that pharmaceuticals alone would not be enough to make the kind of broad contribution to people’s health it envisioned. Medicines help restore health to the sick, but the company also wanted to see healthy people become even healthier. This implied the need to combine pharmaceutical knowledge with nutrition to help people maintain daily health. This idea eventually became a reality as the company developed category-defining consumer and nutraceutical products. This is how nutraceuticals became Otsuka’s second core business, alongside pharmaceuticals, for supporting the health of people around the world. 2010 2012 SOYSH SoyCarat 2006 SOYJOY 1997 Jog Mate Protain Today, the Nutraceuticals Division is focused on supporting people’s day-to-day well-being. The term ‘nutraceuticals,’ a portmanteau of nutrition and pharmaceuticals, was coined in 1989 by the American physician Stephen L. DeFelice, who proposed using this word to describe foods and beverages with scientific evidence for their benefit in day-to-day health maintenance. Otsuka Pharmaceutical soon saw that the products it had been creating since the 1970s to help people maintain and even improve their health fit this definition, and renamed its consumer products business accordingly. energen FIBE-MINI 1983 POCARI SWEAT ‘‘ We simply oncentrated ORONAMIN C DRINK Otsuka’s businesses into two categories. One would help restore health to the sick. The other would help the healthy stay healthy. ‘‘ Akihiko Otsuka (then president of Otsuka Pharmaceutical) From a New Year’s message in 1982. Akihiko Otsuka 24 25 1991 No Consumer Surveys: Let the Flavor Genius Decide Calorie Mate 1965 Rokuro Harima (then staff member of Otsuka Foods Research Department, Subsequently chairman of Otsuka Foods) Rokuro Harima, who invented ORONAMIN C DRINK and presided over the developement of POCARI SWEAT and Calorie Mate, often said, ‘Taste is at the center of everything.’ Chairman Akihiko Otsuka called him ‘The flavor genius’. Amino-Value 1993 1988 1980 2003 Starting with the I.V. solution business it entered in 1946, the Otsuka Group took on the challenge of starting businesses in one field after another through the 1960s. First it started a successful beverage business with the launch of ORONAMIN C DRINK in 1965. Next, it created a new market category with retort-pouch BON CURRY (a product of Otsuka Foods Co., Ltd.) in 1968. Then, in 1980 it launched POCARI SWEAT. One man was involved in the development of many products that established new fields (including ORONAMIN C, BON CURRY, and POCARI SWEAT): Rokuro Harima. Harima joined Otsuka Pharmaceutical Factory as an engineer in 1951. Later, in the course of his involvement with the I.V. solution business, he made a prototype syrup using vitamin C, which was a raw material in I.V. solutions. Otsuka Pharmaceutical did not conduct consumer surveys when deciding on flavors. Instead, as Akihiko Otsuka later said, the company relied on Harima, ‘the genius of taste.’ Harima was able to apply his genius across Otsuka’s diverse businesses, from I.V. solutions to beverages, and his syrup led to the development of ORONAMIN C, a delicious carbonated nutritional drink. theCalcium Application of Otsuka’s I.V. Solution Aseptic Technology Leads to the World’s First Curry Retort Pouch for Consumer Use The Otsuka Group’s processed foods business got its start with the launch of BON CURRY in 1968. Akihiko Otsuka and Rokuro Harima, who were participating in the management of a company called CBC Foods Industry in which the Otsuka Group had invested at that time, were aiming to develop a retort curry that would store well and could be eaten just by heating. By applying know-how gained in various areas, including sterilization technology developed for its I.V. solution business, and seeking intentionally to create a previously unheard-of product, the Otsuka Group succeeded in developing the world’s first available ‘off-theshelf’ curry in retort pouches. By applying the knowledge gained by working with pharmaceuticals, the company’s efforts all along naturally led to the creation of today’s Nutraceuticals Division and its ongoing development of trailblazing products. From Water to Food: Pioneering New Markets That Contribute to the Maintenance of Health After becoming president in 1976, Akihiko Otsuka shared with Harima a conceptual map for the development of consumer products. On the left was ‘food,’ on the right was ‘water,’ and in the middle was ORONAMIN C, the product that established Otsuka’s consumer products business. The idea was to develop new products to cover more of the map, and it didn’t take long. In 1980 the company launched the beverage POCARI SWEAT designed for situations where people perspire, and in 1983 it released the nutritionally balanced food, Calorie Mate. The market did not easily accept these new products at first. A light-tasting beverage in an unusual blue can with a taste unlike any other drink? A balanced nutritional food that hardly even looked like food and came in a radical yellow package? At least one thing was clear: these products were based on revolutionary concepts. What gradually dispelled consumers’ worries about these forward-looking products was the collective efforts of Otsuka Pharmaceutical’s employees. Filled with the determination to give the world epoch-making products for supporting day-to-day wellbeing, they tirelessly proposed new ideas that people had never considered before, and won the public over day by day. Their approach blazed the trail for other groundbreaking products such as the drinkable fiber FIBE-MINI and Amino-Value, which supplies several essential amino acids for humans. Confident that its products were based on completely new concepts and solid science, Otsuka Pharmaceutical went on to create one new market after another on the world stage. Nutraceutical Business A New Choice for Modern Lifestyles POCARI SWEAT ION WATER: Refreshingly Sweet, Clean Taste, Low in Calories Otsuka Pharmaceutical launched POCARI SWEAT in 1980, based on the concept of quickly replenishing the water and electrolytes (ions) lost while perspiring during daily activities. The idea was to make a drinkable I.V. solution. With this inspiration, Otsuka leveraged its strengths as a leading company in the I.V. solutions business in Japan to develop the product. Today, POCARI SWEAT is loved not only in Japan; it is a favorite in 17 countries and regions worldwide. Meanwhile, changes in people’s tastes and lifestyles led to the need for a less sweet ion beverage that consumers would find easier to drink in everyday life. Otsuka has always been mindful of the critical importance of taste in order for more consumers to enjoy its beverages and foods. As people’s tastes changed, the company set about to perfect another POCARI SWEAT with a light sweetness and refreshing taste suited to modern life while preserving all the health functions of the original POCARI SWEAT. The new product, POCARI SWEAT ION WATER, was launched in April 2013. Masayuki Umeno, Vice President and Representative Director speaking at the April 2013 launch announcement meeting 2013 Akihisa Takaichi Corporate Adviser, Manufacturing Process Development Department A Water and Electrolyte Replenishment Beverage That Is Best for Today’s Lifestyles It has been 33 years since POCARI SWEAT was launched. People’s tastes and attitude about caloric intake have evolved with the changing times and social environment. But water and electrolyte replenishment remain essential for people’s health. Otsuka Pharmaceutical believes that the mission of POCARI SWEAT is to provide what people need most for today’s lifestyles. 26 27 “Products do not lie; they express a company’s ideas just as they are. Presenting ‘health’ as an appealing concept to people through a product and making the product enticing – including through flavor and aroma – are vital aims. We also must have the conviction to carry through until the end.” The clear-cut concept of POCARI SWEAT is an ‘ion supply and refreshment beverage.’ The product’s sweetness had to be toned down while maintaining its functionality. Akihisa Takaichi, who was in charge of developing the new product, commented that the work of adjusting the flavor was even more painstaking than when the original POCARI SWEAT was developed. The development team repeatedly adjusted the ingredients one by one in the slightest of amounts. It took six years to come up with a satisfying flavor. This is how the new product POCARI SWEAT ION WATER was perfected. Inspired by I.V. Solutions: POCARI SWEAT, a Beverage for Situations Where People Perspire 1980 The Birth of POCARI SWEAT 1973 The Idea for a Drinkable I.V. Solution Research underway on POCARI SWEAT by Rokuro Harima (right) and Akihisa Takaichi About 40 years ago, an Otsuka researcher named Rokuro Harima was on a business trip to Mexico, when he was hospitalized due to diarrhea. The doctor told him to get enough water and nutrition, and handed him a carbonated beverage. The researcher, who already had the dream of developing an unprecedented new beverage, thought that it would be nice to have a drink that could supply both water and the nutrients he needed. Later, in 1973, Harima saw a doctor drinking an I.V. solution to rehydrate himself after finishing a surgery. This was the moment of inspiration for a drinkable I.V. solution. With this idea, Otsuka researchers began to develop a rehydration beverage that could replenish the water and electrolytes (ions) lost while sweating during daily activities. Pursuing this idea came naturally for a leading company in the I.V. solutions business. Three years later in 1976, society had become more health conscious. Situations in which people perspire on a regular basis had increased, as had the importance of water and electrolyte replenishment. However, rather than developing a sports drink, the researchers, led by Harima and Takaichi, sought to create a health beverage for everyone in situations where they sweat, so that it would appeal to more people. Otsuka researchers continued R&D on health beverages that could be enjoyed during daily activities. Through this work, the Otsuka researchers found that there are different kinds of sweat. They also found that the concentration of salt in everyday sweat is lower than in sweat that occurs during sports activity. Based on these findings, the researchers came up with over 1,000 prototype beverages that recreated the components of everyday perspiration. However, Harima and his team were having trouble overcoming the saltiness and bitterness of the constituents of sweat. One day, then-president Akihiko Otsuka suggested they try combining some of the rejected drinks. So they mixed a trial rehydration drink with a citrus powder juice that was also being developed in the lab at the same time. Suddenly the bitter taste was gone, and a great tasting beverage was born. Through this combination that no one had ever considered before, the development of this unprecedented drink took a big leap forward. The research continued, and finally two test products were prepared: one with high and one with low sugar content. At that time sweet, juice-style beverages were the norm. However, in order to test the product concept to develop a drink that tastes great especially after sweating and that goes down so smoothly you don’t recall that you even drank it, the researchers did not rely on common sense. In fact, they actually climbed a mountain overlooking Tokushima to try out the test products for themselves. Then, they realized that the lightly sweetened test product was easier to drink and went down smoothly. With that, the unprecedented water and electrolyte replenishment beverage POCARI SWEAT was launched in 1980. Building Awareness about Heat Stroke for 22 Years In 1984, Otsuka Pharmaceutical established the Saga Nutraceuticals Research Institute. Even after the launch of POCARI SWEAT, the company carried on with research into beverages that quickly replenish water and electrolytes lost through perspiration, discovering scientific evidence in a range of different situations. This effort was propelled by the idea that POCARI SWEAT could make the maximum contribution to people’s health by targeting situations in which ordinary people perspire in everyday life, not just during sports. Based on this scientific evidence, and stimulated further by the establishment of the Study Group for Prevention of Heat Stroke in Sports Activities by the Japan Sports Association in 1991, Otsuka Pharmaceutical has on its own and in cooperation with various organizations worked strenuously to educate the public about the importance of water and electrolyte replenishment in many different situations, including measures to counter heat stroke in school, the workplace, during exercise, and among the elderly. Thanks to efforts like these, understanding of the original concept behind POCARI SWEAT spread slowly but surely, creating a whole new market category. China Global Expansion to 17 Countries and Regions POCARI SWEAT has moved onto the world stage. Today it is available in 17 countries and regions, and sales outside Japan now exceed those inside Japan. Sales in Indonesia, South Korea, and China have experienced especially marked growth and the launch in Vietnam in 2012 is poised to add further growth in Asia. By adapting to each diverse culture around the world while staying true to the unchanging, sciencebased concept of a beverage for situations where people perspire, POCARI SWEAT has won a special place in people’s hearts for helping them stay healthy. 17 Hong Kong South Korea Middle East 48 million Thailand Otsuka Website Page ‘Rehydration’ www.otsuka.co.jp/en/company/ business/rehydration/ 28 29 The number of countries and regions where POCARI SWEAT is marketed 1980 Japan 1982 Taiwan 1983 Singapore 1983 Bahrain 1983 Saudi Arabia 1983 Oman 1984 United Arab Emirates 1987 South Korea 1989 Indonesia 1998 Thailand 1999 Malaysia 2003 China 2003 Kuwait 2003 Qatar 2007 The Philippines 2008 Egypt 2012 Vietnam Taiwan The number of cases sold around the world in FY 2012 Nutraceutical Business ORONAMIN C DRINK: ‘Full of Vitality!’ ‘Genki Hatsuratsu!’ For decades ORONAMIN C DRINK has been an iconic beverage in Japan with the widely recognized advertising catch copy ‘Genki Hatsuratsu!’ (‘Full of Vitality’). The product’s development dates back over half a century to 1961. The pursuit of a great-tasting nutritional drink, the development idea of which was to add carbonation, resulted in the creation of the enduringly popular ORONAMIN C DRINK. Today, 48 years on from its 1965 launch, ORONAMIN C DRINK is still contributing to the maintenance and improvement of people’s health across generations and oceans. This has been the outcome of continuous innovative initiatives since the product was created nearly half a century ago. Aiming for a GreatTasting Carbonated Nutritional Drink When ORONAMIN C DRINK (ORONAMIN C below) was created in the 1960s, medicinal drinks had established a large market in Japan. Into that market, Otsuka Pharmaceutical launched a series of medicinal drinks (Glucuronic Acid Vitamin Drink, King Shiro, and Queen Shiro) but they faced an uphill battle. And so, the company considered developing a new product – a great-tasting, carbonated nutritional drink. The addition of carbonation was the key to being innovative at that time. Further, it developed the product as a soft drink that could be sold in general retail shops instead of as a medicinal drink. With the hope of making it popular among a broad audience, it was named in part after one of Otsuka’s first flagship products: Oronine Ointment. ‘Oron’ from Oronine Ointment was combined with ‘amin C’ from vitamin C, of which there is a lot in the product, to create the name ORONAMIN C. The aspiration to create a great-tasting nutritional drink was reflected in the label design. With the circular, bright red symbol mark printed on the label to make it stand out, the product was designed to bring the concept of nutrition into everyday life in Japan, which at that time was experiencing rapid economic growth. Full of Vitality across the Generations Commitment to Safety While the originally developed taste has remained the same, the bottles have been continually improved so that customers can enjoy the drink more safely and conveniently. For example, the original crown cap was changed to a screw cap so that the bottle could be opened without a bottle opener. In April 1986, out of consideration for customers’ safety and health, it was changed to a maxi cap so that the bottle could not be recapped once opened. This change was completed in about six months. Distributors and customers have praised the company for its customer-first approach and the way it takes action quickly. The maxi cap itself has changed: from tin plate, to soft aluminum, to the current version in which the ring is made of 3D plastic, evolving to be safer and easier to open. Otsuka Pharmaceutical was the first to adopt the cap with a ring made out of plastic. While carrying out safety and reliability initiatives for ORONAMIN C, Otsuka Pharmaceutical has also developed numerous ad campaigns in step with the times. This has always kept the brand fresh: cumulative sales in Japan since 1965 reached 30 billion bottles in 2011. Every year the company sells over 500 million bottles of ORONAMIN C, one of Japan’s iconic beverages. Even now, 48 years after its launch, ORONAMIN C is a national drink that enjoys wide popularity. It has grown into a brand that wins new customers by being handed down as a familiar beverage from parent to child and from child to grandchild across the generations. ORONAMIN C has been developed by the Otsuka Group, including Otsuka Chemical Co., Ltd., over many years. From here on, Otsuka Pharmaceutical will continue to develop the product with consistent initiatives from production through marketing to deliver the energy boost of ORONAMIN C to as many people as possible, both in and outside Japan. July 3: ORONAMIN C Day Otsuka Pharmaceutical has designated July 3 as ‘Nami Day’ (a word play on the product name and also on the pronunciation of July 3 in Japanese) to celebrate ORONAMIN C. On this day all employees across Japan in the Nutraceuticals Division focus on delivering the energy boost of ORONAMIN C. Á Full of Vitality across the Oceans ORONAMIN C has been sold since 1985 in six Middle Eastern countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE.) In the UAE, the drink’s popularity has grown to the point where it is practically a national drink. Supermarket shelves are packed with ORONAMIN C in cities across the Middle East. A poster for ORONAMIN C DRINK in Middle Eastern countries 30 31 Nutraceutical Business Baked Soy Bar SOYJOY SOYJOY is a new type of nutritional food that contains no wheat and is baked using whole soybean flour along with several other ingredients. SOYJOY provides all the nutrition of soybeans including vegetable protein and soy isoflavones in a great-tasting snack. It is also has a low glycemic index (GI), which means the sugars are absorbed slowly, making weight gain less likely. Not crumbly, SOYJOY is a smart and delicious way to enjoy the nutritional benefi ts of soy. New Soy Products, New Solutions: Soylution Based on the concept of ‘Soylution’ – that soy can provide solutions to human health and environmental issues – Otsuka Pharmaceutical has been developing new forms of soy products that offer delicious new ways for people around the world to enjoy benefits from whole soy nutrition.1 The first Soylution product was the baked soy bar SOYJOY. Launched in 2006, it is now sold in 11 countries and regions around the world, including in the U.S., Asia, and Europe. Two research institutes in Tokushima have also developed the sparkling soy water SOYSH and the healthy soy snack SoyCarat for global markets. Otsuka is committed to contributing to the health of people worldwide by inventing new ways to enjoy soy and working to raise awareness of the high nutritional value and potential of soy. Healthy Soy Snack SoyCarat SoyCarat is a snack food made mainly of whole soy. Each packet of SoyCarat is made with approximately 50 soybeans. SoyCarat provides the nutrition of soy with the enjoyment of a fun rattling sound when shaken. Calories have been kept down to about 120 calories per bag as the snack is baked, not fried. Everyone from children to adults can enjoy SoyCarat. SOYJOY Peanuts Wins Great Popularity In April 2013, Otsuka Pharmaceutical launched a new product: SOYJOY Peanuts. The first product to be made without dried fruit, SOYJOY Peanuts combines the satisfying flavor and texture of crunchy peanuts with a delicate sweetness. SOYJOY Peanuts quickly became a hit among a wide range of customers, especially business people. The brand concept behind SOYJOY is ‘ to enable customers to enjoy choosing soy.’ SOYJOY products make the nutrition of soy easily accessible even for busy people, with tasty flavors for everyone. The market is enthusiastically welcoming this concept. Sparkling Soy Water SOYSH SOYSH contains the nutrition of whole soybeans (excluding the thin outer peel), including the okara (or soybean fiber) which gets lost in soy milk. It is a refreshing carbonated beverage with no unpleasant soy aftertaste. One bottle contains a single serving of 100 ml, which is just right for a daily health boost. Tamaura Settlement, Okushiri Island, Hokkaido In the early 20th century, 25 brides came to this island. Most of the islanders ate fish. In one community, a settlement called Tamaura, the women who came as brides cultivated the land and ate soybeans. Soon this community was the longest lived on the island. Eating soy, a vegetable protein led to long life. Eating Soy – Nutrition for Longevity 1 Excluding the thin outer peel World’s Longest Life Expectancy World’s Highest Consumption of Soy The life expectancy in Japan is 83 years, the longest of the world’s 194 countries. Japanese people have the highest annual per capita consumption of soy. 2 FAOSTAT Food Supply 3 National Health and Nutrition Survey, Ministry of Health, Labor and Welfare 4 According to Prof. David Pimentel of Cornell University (the U.S.) 32 33 To live a long life in good health is a basic human hope. Soy, an integral part of Japan’s traditional food culture, has potential as a solution for the world’s health and environmental issues. Today, the high nutritional value and potential of soy is attracting the attention of the world’s researchers. One finding is that soy may promote longevity, as shown in the WHO-CARDIAC Study, an international collaborative research study on cardiovascular disease and nutrition that the World Health Organization conducted. Japanese people, who have the longest life expectancy in the world, eat the greatest amount of soy, at 8.19kg annually per capita.2 Most Japanese bean consumption comes from processed soy products (e.g., tofu and natto). In recent years, however, soy consumption by people aged 40 or younger has tended to be below the average consumption due to skipping breakfast and the westernization of diets.3 No more than 6% of soybeans grown worldwide are eaten directly by people. It takes 10kg of soybeans or other grains to produce 1 kg of beef, which is one source of protein. The production of soybeans only needs 1/50th of the water and 1/20th of the energy that is consumed in the production of beef.4 If more people could eat soy directly, with the world population expected to top nine billion by the year 2040, it would represent a major step toward the resolution of both health and environmental issues. Nutraceutical Business Nature Made, the No. 1 National Vitamin Brand in the U.S., Keeps Growing Nature Made Pharmavite LLC, founded in California in the U.S. in 1971, started marketing Nature Made products in 1972 when the vitamin, mineral and supplements market was in its infancy. More than 40 years later, the original Nature Made commitment is unchanged: ‘to provide highquality vitamin and mineral supplements at an affordable price.’ The United States Pharmacopeia (USP), which is a globally used quality standard, certifies the quality of many of the Nature Made products. Today, Nature Made is the number one vitamin brand in the U.S.1 Pharmavite has been a leader in the U.S. supplement industry by pioneering new segments such as for vitamin D and fish oil and releasing timely research results on the health improvement effects of vitamins and other supplements. Pharmavite has also strengthened the Nature Made brand by providing pharmacists, nutritionists, and consumers with the latest nutrition-related information. Nature Made has been the number-one national vitamin brand sold in U.S. stores for six consecutive years1 and has recently been chosen as the number-one, pharmacistrecommended brand in eight categories.2 At present, Nature Made is available in 10 countries and regions.3 Japan Launch of Super Vitamin D, Containing the Daily Optimum Dose of Vitamin D in a Single Tablet United States New Plant Established in Alabama Americans today recognize the need to take good care of themselves, and they seek to stay well and be as healthy as they can. This has driven growth in the vitamin, mineral, and supplements market, which has nearly tripled since 1995.4 In this context, Pharmavite built a new dietary supplement plant in Opelika, Alabama in the Southeastern U.S. as a second production base, adding to the California plant in the west. The new plant started operations in January 2013. In June 2013, an opening ceremony was held at the new plant with the local U.S. congressman, the governor of Alabama and other dignitaries in attendance. Pharmavite is positioned for future growth by expanding production and providing even more consumers with high-quality products. Contributing to Health through Japan-France Collaboration Nutrition & Sante SAS Nutrition & Sante SAS (N&S) is a health and nutritional food company headquartered in the south of France whose products are available in over 40 countries, mainly in Europe. N&S, whose name literally means ‘nutrition and health,’ oversees 25 brands in the health food field. It has an approximately 60% share of the French market for functional foods and nutritional foods. N&S joined the Otsuka Group in 2009 as the production and marketing base of nutraceutical products in Europe. Otsuka Pharmaceutical is currently introducing N&S’s leading brands – Gerblé, the top health food brand in supermarkets in France, and Gerlinéa, the top diet brand in French supermarkets1 – to Japan. Meanwhile, N&S has started marketing SOYJOY in four European countries. Capitalizing on their respective strengths, the two companies are making the most of their Japan-France business collaboration. France Japan Strengthening Position in Gluten-free Foods Bringing French Health Foods to Japanese Tables In December 2012, N&S acquired Valpiform from the multinational dairy conglomerate, Lactalis Group. Established in 1990, Valpiform is a pioneer and French leader in gluten-free and allergen-free nutrition. N&S has commissioned Valpiform to manufacture gluten-free products since 2007, and its acquisition now gives N&S an integrated organization for the development, production, and sale of gluten-free products. In Japan, Otsuka Pharmaceutical markets the Gerblé and Gerlinéa brands under the concept of the ‘French Dietetic Secret’ for consumers to maintain health while enjoying eating. The French marketing method has been adopted in Japan for N&S products – the entire Gerblé and Gerlinéa series are displayed on their own shelves separate from competitor products, rather than sharing a shelf with other products within the same category. This unique retailing technique invites customers to select from a delightful range of products, as well as expanding brand recognition. In October 2012, the company launched a new item from Gerblé, Poppy Seed & Lemon Biscuits, and in March 2013 it launched Gerlinéa meal replacement bars in white chocolate and orange chocolate flavors. France 1 IRI Value Share of market – nov 2012 34 35 Japan Pharmavite joined the Otsuka Group in 1989, and it has been 20 years since Otsuka Pharmaceutical introduced the Nature Made brand in Japan in 1993. The company has gradually expanded the lineup on offer in Japan; today it markets 61 products in 36 categories. In October 2012, it launched Super Vitamin D, making it easy for people to get the optimum dose with a single daily tablet. Going forward, Nature Made products will continue to support the health of the public by making good nutrition easy to obtain for people enjoying today’s diverse lifestyles. 1 Pharmavite calculation based in part on data reported by Nielsen through its Scantrack® service for the Dietary Supplements category in dollar and unit sales, for the 52-week period ending 12/29/2007 and 12/28/2008 in US Food Drug Mass channels; and for the 52-week period ending 12/26/2009, 12/25/2010, 12/24/2011 and 12/22/2012 in US xAOC channels. ©2013 The Nielsen Company 2 Based on US News & World Report Pharmacy Times Survey 3 U.S., Japan, Mexico, South Korea, Taiwan, Hong-Kong, Iran, UAE, Iraq, Kuwait 4 “Supplement Business Report” (2004 and 2012 editions), Nutrition Business Journal Nutraceutical Business Helping People Around the World to Realize the Dream of Healthy, Beautiful Skin Cosmedics – A Breakthrough Business Cosmetics + Medicine = Human skin comprises approximately 16 % of a person’s total body weight and is the largest organ of the human body. Committed to contributing to overall health, Otsuka Pharmaceutical took on the new challenge of skin health in 1990, leveraging its expertise in pharmaceutical research. To do so, it established the Otsu Skin Care Research Institute on the shores of Lake Biwa and started original research on skin physiology using equipment that can simulate global weather conditions throughout the seasons. The results of that research led to the launch of two brands: InnerSignal in 2005 and UL•OS in 2008. Each of these brands offers a line of innovative products shaped by sincere caring for customers. They use new methods to reach new markets and are rapidly providing new satisfaction. The cosmedics business is led by a young female senior operating offi cer Otsu Nutraceuticals Research Institute 16% 2 UL • OS Total Skincare Brand for Men Creates New Market among Middle-aged Men The UL• OS brand is a total body skincare line-up for men with products to vitalize everything from head to toe. Since its launch in 2008, the lineup has been expanded, with sales and recognition also increasing. With the provision of samples and product explanations when and where users actually want to use them, the brand is now driving the burgeoning men’s cosmetics market. 36 37 As a part of its constant effort to reach new consumers, Otsuka Pharmaceutical released a new sunscreen in February 2013. In South Korea, where the UL• OS brand debuted in 2012, the company is trying to improve recognition through unique approaches such as promotions using social media. A major Korean drugstore chain has picked up the brand, and expectations are very high. InnerSignal Achieves High Rate of Repeat Users: Brand Loyalty Grows Via Direct Marketing Energy Signal AMP (adenosine monophosphate), has obtained approval in Japan as a quasi-drug with new effects and efficacy for skin lightening. InnerSignal, which contains Energy Signal AMP as an active ingredient, was launched in 2005 and ever since has been responsive to many women’s concerns about their skin. After Otsuka Pharmaceutical switched to a new distribution channel, adopting a direct marketing strategy, InnerSignal sales have continued to grow strongly as the brand earns new fans. Aspiring to create a brand that is an integral part of women’s daily lives, Otsuka Pharmaceutical will work on building trust with customers through careful communication. The goal is to make InnerSignal a brand loved by as many women as possible. Direct marketing business leader International OIAA: Otsuka’s Integrated Organization for Asia and the Middle East From East to West: Global Expansion from Asia The Otsuka Group has business locations in 26 countries and regions around the world, and Otsuka Pharmaceutical’s products are available in more than 80 countries. Starting in the wind-swept Pacific coast of Tokushima, Otsuka’s presence gradually spread throughout Japan, then to Asia, and then worldwide. With a gaze on the horizon and business practices influenced by Tokushima’s artisanry and respect for diversity, Otsuka Pharmaceutical aims to help people everywhere to lead healthier lives. In 2001, Otsuka Pharmaceutical created the Otsuka International Asia / Arab (OIAA) Division to establish a more scalable business in Asia and the Middle East by operating Otsuka Group companies across the regions in an integrated fashion. Today, the OIAA Division manages over 30 companies in 15 Asian and Middle Eastern countries and regions, where it offers pharmaceuticals, medical devices, nutraceuticals, cosmedics, and other highly original products. The expansion of Otsuka’s pharmaceutical business into Asia and the Middle East began in 1973, with the establishment of Thai Otsuka Pharmaceutical Co., Ltd. and its I.V. business. Then in 1974, P.T. Otsuka Indonesia and Taiwan Otsuka Pharmaceutical Co., Ltd. were established, followed by Arab Otsuka Pharmaceutical Co., S.A.E. (currently Egypt Otsuka Pharmaceutical Co., S.A.E.) in 1977. In 1981, China’s Ministry of Health decided the country needed a production base for quality I.V. solutions. Subsequently, Otsuka was invited to fulfill this need and became the first Japanese pharmaceutical company to establish a joint venture in China – China Otsuka Pharmaceutical Co., Ltd. Today, Otsuka (China) Investment Co., Ltd., which oversees Otsuka’s pharmaceutical business in China, is investing for a vibrant, long-term presence, which already includes pharmaceutical research institutes in Beijing and Shanghai. Staff members of Otsuka (China) Investment Co., Ltd. The 2nd POCARI SWEAT plant, P. T. Amerta Indah Otsuka (Kejayan Factory) Otsuka Pharmaceutical Affiliates around the World Number of Employees 28,000 Outside of Japan 20,000 Asia / Arab 12,300 North America 4,200 Europe 3,600 (70 % of total employees) as of March 2013, numbers are approximate The 2013 OIAA Area Managers Meeting 38 39 Otsuka Welfare Clinic: A Decade of Free Medical Care for Afghan Refugees in Pakistan Otsuka Group companies across Asia and the Middle East established the Otsuka Welfare Clinic in 2003 to provide free medical care for Afghan refugees in Peshawar, Pakistan. These refugees faced critical shortages of food, clothing and housing in refugee camps in the city of Peshawar near the Afghanistan-Pakistan border. The need for a medical clinic was clear. More than 700,000 people have visited the clinic since its establishment 10 years ago, and approximately 150 patients still visit every day. The clinic also sees nearby residents in addition to people from the refugee camps, helping to lighten the load on medical facilities in the area. 10th A nni ver s ar y In 2011, the Japanese Ambassador to Pakistan bestowed a certificate of commendation on the Otsuka Group, citing its outstanding contributions to community welfare and goodwill between Japan and Pakistan through medical activities. A doctor and patient at the Otsuka Welfare Clinic 700,000 Number of patients in 10 years New Pharmaceutical Sales Venture Established in Turkey, Where Eastern and Western Cultures Meet A New Challenger in the Growing Vietnamese Market Ceremony to mark the establishment of Abdi Ibrahim Otsuka Pharmaceutical Company 40 41 In October 2012, Otsuka Pharmaceutical and the leading Turkish pharmaceutical company Abdi Ibrahim each invested a 50 % stake to establish a new joint venture, Abdi Ibrahim Otsuka Pharmaceutical Company, in Istanbul, Turkey, a nation known as a meeting place of European and Asian cultures through the ages. The new company will market Otsuka Pharmaceutical’s innovative pharmaceuticals in Turkey, one of the world’s top-20 drug markets. Abdi Ibrahim has been in the healthcare business for more than a century and the joint venture is built on the licensing partnership for Otsuka products the two firms forged over the last decade, reflecting a shared, long-term orientation. The venture will introduce to patients and physicians throughout Turkey a wider range of first-in-class Otsuka pharmaceuticals that have been well-received elsewhere in the world. The two companies will leverage their unique abilities and experience while collaborating as equal partners, a defining feature of all Otsuka partnerships. In 2012, Otsuka Pharmaceutical established Otsuka Thang Nutrition Co., Ltd., a joint venture tasked with marketing POCARI SWEAT and other consumer products in Vietnam. Marketing of POCARI SWEAT began in earnest in 2013 in supermarkets, convenience stores, local markets, and other locations. Vietnam is experiencing rapid economic growth, with one of the largest populations in Southeast Asia and more than 60% of Vietnamese in their 30’s or younger. The company is aiming to build product recognition and understanding of the POCARI SWEAT concept and to encourage people to try it in order to increase repeat users. Otsuka Pharmaceutical is positioning POCARI SWEAT as a beverage that can contribute to the health of the Vietnamese people, seeking to see the country become another pillar of Otsuka’s presence in Southeast Asia. Diversity Leading the Way on Diversity Otsuka Pharmaceutical embraces diversity as a core element of our dynamism. Fully engaging female and male employees of different nationalities is one of the factors in our innovation and success on the global stage. Beanstalk Kids Center: Offering On-site Daycare to Help Employees Raise Children and Grandchildren with Boundless Curiosity In 2011, Otsuka Pharmaceutical opened an on-site daycare facility, called the Beanstalk Kids Center Tokushima, at the birthplace of the company in Japan. The facility, which has a capacity of 100 children from infancy to 6 years old, is for the children and grandchildren of employees. The name was taken from the English folktale, ‘Jack and the Beanstalk,’ based on a desire to help children grow up strong and energetic, just like the fabled beanstalk. Tokushima cedar is used in the central court called Jack’s Hall, from which the surrounding rooms branch out, an arrangement that brings to mind the branches of a beanstalk. The center is currently building an extension to accommodate up to 150 children. The company is also constructing a second on-site daycare facility at its Osaka Headquarters that is scheduled for completion in 2014. ‘ Facilitating the growth of children by letting their wonderful talents and individuality shine…’ Age 0 – 6 An image of the Beanstalk Kids Center Osaka Jack’s Hall The Beanstalk Kids Center Tokushima Five Female Operating Officers: A Top-tier Rate of 11.4% Women in Senior Management Aiming to actively promote women, Otsuka Pharmaceutical started the Women’s Forum (now called the Diversity Forum) in 1990. The company has been a pioneer of programs that support women’s diverse life stages, such as childcare leave, which is taken by 100% of female employees following childbirth. At present, Otsuka Pharmaceutical has five female operating officers, out of a total of 44 executive directors and operating officers.2 That is 11.4%, which greatly exceeds Japan’s 1.2%3 national average. These women operarting officers manage operations as diverse as human resources, public relations, international pharmaceuticals, ophthalmology and dermatology, and cosmedics. Otsuka Pharmaceutical President Says Women and Young People Bring Innovation ‘What can we do in Japan in order to stimulate the economy through the promotion of gender equality in the workplace?’ This was a topic that drew attention at the Health Policy Summit 2013 held by the Health and Global Policy Institute. Otsuka Pharmaceutical President Taro Iwamoto, who participated in the panel discussion, said that gender empowerment1 would not be realized just by waiting for systems to change. 42 43 He said, ‘Women and young people can facilitate change in Japanese corporate culture. Precisely because they are not constrained by the existing system, they can come up with ideas that men would not.’ He also explained that, ‘What is lacking in Japan is leadership. Rather than endless debate on specific women’s issues, we need to address the overall problem of how to recruit and develop global leaders – whether women or men – who can pursue the innovation needed to drive social and business growth.’ Panelists in the Health Policy Summit 2013 February 2013 From left: Hiromi Murakami Assistant Professor, National Graduate Institute for Policy Studies and Executive Director, Health and Global Policy Institute Susan H. Roos Wife of the U.S. Ambassador to Japan and employment attorney Kimie Iwata President, Japan Institute of Workers’ Empowerment and advisor to Shiseido Co., Ltd. Taro Iwamoto President, Otsuka Pharmaceutical Co., Ltd. Affiliations and titles as of the time of the Summit. 1 Women becoming involved with decision making through participation in politics and economic activities. 2 Seven executive directors, three auditors, and 34 operating offi cers (as of June 6, 2013). 3 Based on data in White Paper on Gender Equality 2011. Five female operating offi cers Hometown Tokushima Tokushima, Japan: Otsuka Pharmaceutical’s Birthplace A Workplace That Nurtures Creativity and Inspires Diversity and Change Today, Otsuka Pharmaceutical’s products are used in more than 80 countries, while the figurative center for employees working around the world is still in Tokushima, the birthplace of the company. As a manufacturer born and bred in Tokushima, Otsuka Pharmaceutical works hand in hand with the people of Tokushima to preserve its natural environment, hand down its traditional culture, and spur community development. Supported by Tokushima, the company and its people learn and grow locally, but have a global-scale aspiration to contribute to the health of people everywhere. Otsuka Pharmaceutical will always value its hometown of Tokushima. Human Resource Development Institute: A Place For Learning to Question Common Knowledge Three monuments that overturn stereotypes adorn Otsuka Pharmaceutical’s employee training center, the Human Resource Development Institute established in 1988. These monuments were created to encourage employees to study diligently, make great leaps in the future and reach their full potential. Human Resource Development Institute In the Tomato Hall at the Human Resource Development Institute, thousands of plump, red tomatoes grow on only a few tomato plants overlooking visitors. Each tomato ‘tree’ grows stalks stretching over 10 meters. However, these tomatoes are not a special variety; they are a common variety, merely grown using hydroponic cultivation. Tomato plants are usually grown in the ground. This variety, planted in the ground, would be no more than normal size. In other words, the ground (soil cultivation) seems to have many growth-inhibiting factors, limiting the tomatoes’ growth from reaching their full potential. Our Hometown TOKU SHIMA ‘In order to change preconceptions, we planted the giant tomato tree. Normally, a tomato plant produces only 50 to 60 tomatoes, but if you alter the way you cultivate it, it has the potential to produce 10,000. Likewise, if people think a little differently, they could unlock their enormous potential.’ Located inside the entrance to Vega Hall is a bent giant cedar with another cedar lying atop it, appearing unsteady at first glance, but maintaining magnifi cent balance. Here, a giant cedar, which is not supposed to be bent, is bent, and two logs that should not be stable with one atop the other are holding steady at a single point. This untitled work conveys a constant message about breaking down stereotypes and changing our thinking. In this stone garden, large, heavy stones that should not float do appear to float on the water. One is even floating above strong fountain waters. The gently curved stones represent Otsuka Pharmaceutical’s spirit — its love of humanity and its wish for people’s well-being. This garden, which grabs people’s interest, enriching the heart and giving them the ability to think about things, encourages them to come up with new ideas. Tatsuya Ishii 24th Free Rock Concert Held at Otsuka’s Factory Contributing to the Community through Soccer Every year since 1990, the year after it was established, the Tokushima Wajiki Factory, which manufactures Calorie Mate and pharmaceutical products, plans and holds a free outdoor concert with the cooperation of local authorities. The concert is held during the Awa-Odori Dance Festival every summer. In 2013, five musicians including Tatsuya Ishii and BENI gave inspiring performances for the many families and young people who gathered on the lawn in front of the stage. The concert has become a major annual event, and about 200 Otsuka Pharmaceutical employees volunteer for it each year. The Awa Dance – Employees Help Hand Down Tokushima’s Traditional Culture and Share It with the World Artwork by Mexican sculptor Sergio Bustamante There are a number of works of art created by artists both in and outside of Japan exhibited on the premises of the Tokushima Wajiki Factory, inspiring employees of Otsuka Pharmaceutical to greater daily creativity. 44 45 Awa-Odori (Awa-Dance), a choreographed dance festival that draws well over one million spectators per year, has been a part of Tokushima’s traditional culture for over 400 years. Otsuka Pharmaceutical, established in Tokushima, helps to hand down this tradition. The company’s employees participate in ren (dance groups), a tradition started in 1988 with the formation of the Otsuka Ren, showing off their dance moves every year during the festival. Employees in Tokushima, Osaka, and Tokyo train strenuously under instructors from famous ren, and those who excel at dancing and playing musical instruments are selected to perform at the festival. The Otsuka Ren’s activities are not limited to Japan. Sparked by the global alliance formed with Denmark’s H. Lundbeck A/S in 2011, in April 2013, 44 members of the Otsuka Ren performed at the 6th Copenhagen Sakura Festival (held in Copenhagen, the capital of Denmark) at the request of the Japanese Embassy in Denmark. Tokushima Vortis is a soccer club in Japan’s professional league, J. League. The club, which emerged from a soccer club at Otsuka, was established in 2004 in cooperation with Tokushima city and prefectural authorities, aiming to bring new vibrancy to the region. It has been playing in the J2 league since 2005. The club is actively involved in community contribution activities in cooperation with the Prefectural Board of Education, including helping to create the J. League’s first supplementary reader for a physical fitness textbook and a food education program. Sistine Hall Otsuka Museum of Art: Showcasing the World’s Art in Tokushima The Otsuka Museum of Art, an engaging museum exhibiting masterpieces reproduced on ceramic panels, was opened in Naruto, Tokushima Prefecture, Japan in 1998 on the 75th anniversary of the founding of Otsuka. The museum displays many masterpieces of Western art, from ancient murals to modern works, from more than 190 museums in 25 countries. Rendered with special technology developed by Otsuka Ohmi Ceramics Co., Ltd., more than 1,000 pieces of art are now reproduced in original size, and their colors, which will virtually never fade, faithfully convey the artistic essence of the original works. In addition, the museum conducts a variety of activities in cooperation with the community, such as concerts and lectures, to foster local culture and encourage people to visit the museum. First-of-Its-Kind Museum in the World Works of art cannot avoid color fading and deterioration over time, and in some cases they are damaged by pollution, earthquakes, or fire. One of the inspirations for the creation of the museum was the recognition that ceramic panel reproductions, with the ability to keep colors and shapes unchanged for more than 2,000 years, could contribute to the recording and preservation of cultural assets. The efforts include groundbreaking attempts such as recreations of El Greco’s high altar paintings, which were dispersed in the Napoleonic wars, and the reproduction of the closely-guarded treasure Guernica by Pablo Full-size Reproduction of the Sistine Chapel Ceiling Picasso, which has received praise from Picasso’s son, curators and museum staff from around the world who have visited Japan to view the 1,000-plus works. The museum displays, opposite each other, reproductions of Leonardo da Vinci’s The Last Supper before and after its restoration. In this and other ways, the museum has made numerous exhibits that make the most of the special qualities of ceramic panels to create wonders that can only be seen at the Otsuka Museum of Art in Tokushima. The Otsuka Museum of Art is proud to have created the world’s first museum of its kind, which remains unique in its conception and use of technology. Beginning in May 1508 and finishing in only four years, Michelangelo painted large frescos on the ceiling of the Sistine Chapel in the Vatican at the behest of Pope Julius II. Various scenes from the Old Testament such as the creation narrative from the Book of Genesis are masterfully depicted across the ceiling and onto the walls on both sides. Even today countless visitors from around the world make the pilgrimage to the chapel to look up in wonder at these masterpieces. The Sistine Hall in the Otsuka Museum of Art is a full reproduction of Michelangelo’s great work. However, the ceiling spandrels that transition from the walls to the ceiling in complicated curves 46 47 Reproductions of The Last Supper – before and after its restoration. This is a photograph exhibited works at the Otsuka Museum of Art. and other intricate curvatures could not be reproduced on ceramic panels when the museum was first opened in 1998. Ahead of the museum’s 10-year anniversary, the museum and Otsuka Ohmi Ceramics set about using the latest technological capabilities to create curved ceramic boards, making it possible to display the entire chapel ceiling and wall paintings for art lovers. The Otsuka Museum of Art allows visitors to appreciate the world’s art in the original sizes without leaving Japan. And within the museum, the Sistine Hall, which enables visitors to experience the actual vastness of the real chapel, has become a central, popular space. Since 2009, the Sistine Hall has hosted new performances of kabuki based on the concepts of collaboration between Japan and the West and the application of new creativity to traditional kabuki works. These groundbreaking attempts at fusion art have been very well received. In March 2013, the Otsuka Museum of Art marked its 15th anniversary. The museum devises ways to bring Otsuka’s hometown of Tokushima into greater contact with the wonders of art and is determined to continue popularizing art culture and contributing to the local community. Otsuka Holdings Generates Robust Growth for Four Years Running The Otsuka Group is a group of global healthcare companies that aim to contribute to the well-being of people worldwide by creating original, innovative products recognizable as uniquely Otsuka’s. The Group seeks out the biggest challenges in a wide range of health-related fields to deliver on the promise of its corporate philosophy, ‘Otsuka-people creating new products for better health worldwide.’ Otsuka originated as a manufacturer of raw chemical materials established in Naruto, Tokushima Prefecture in 1921. It later entered the pharmaceutical business with I.V. solutions. In the 1970s it embarked on drug discovery and also began its business outside Japan, in Asia. Today, Otsuka operates a global healthcare business that provides diagnostics and treatments for diseases and consumer products for the maintenance of everyday health in two core businesses: pharmaceuticals and nutraceuticals. Following the establishment of Otsuka Holdings Co., Ltd. in 2008, the company has achieved growth in both consolidated sales and operating income for four straight years. The Otsuka Group marked its 90th anniversary in 2011. Going forward, the Group will continue to pursue continuous growth by developing innovative products and creating and expanding new market categories, true to Otsuka’s mottos of jissho (‘proof through execution’), which describes how the group tenaciously converts original ideas into successful products, and sozosei (‘creativity’), which it practices by questioning preconceived ideas. Otsuka Holdings Business Overview Group Structure Otsuka Holdings Co., Ltd. Company name Otsuka Holdings Co., Ltd. Established July 8, 2008 President and Representative Director, CEO Tatsuo Higuchi Otsuka Pharmaceutical Co., Ltd. Otsuka Pharmaceutical Factory, Inc. Taiho Pharmaceutical Co., Ltd. Otsuka Warehouse Co., Ltd. Otsuka Chemical Co., Ltd. Otsuka Medical Devices Co., Ltd. Pharmaceutical Business Clinical Nutrition Business Nutraceutical Business Soy Business Capital JPY 81.69 billion Medical Device Business Distribution Other Business Registered address 2-9, Kanda Tsukasa-machi, Chiyoda-ku, Tokyo 101-0048 Japan Tokyo Headquarters Shinagawa Grand Central Tower, 2-16-4, Konan, Minato-ku, Tokyo 108-8241, Japan Financial Information Chemical FY 2012 Net sales 1,218 Billion yen FY 2012 Number of employees 70 (Consolidated: 25,330) Operating income 170 Billion yen FY 2011 Group Companies 71 consolidated subsidiaries and 14 affiliates accounted for under the equity method Net sales 1,155 Billion yen FY 2011 Operating income 149 Billion yen FY 2010 Business description Control, management and related activities with respect to the company’s subsidiaries and affiliates active in the pharmaceutical business, nutraceutical business, consumer products and other areas Net sales 1,128 Billion yen Net sales 1,084 Billion yen Net sales 126 Billion yen FY 2009 Operating income 98 Billion yen FY 2008 956 Billion yen 48 49 Operating income FY 2009 FY 2008 as of March 31, 2013 FY 2010 Operating income 92 Billion yen FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 USD in millions USD in millions Net sales Operating income ¥/$ 12,951 14,048 13,561 11,654 9,755 1,804 1,809 1,519 1,058 934 94.05 82.19 83.15 93.04 98.00 Exchange rate Otsuka Group celebrated its 90th anniversary at the Otsuka Museum of Art in September 2011 90-year History of the Otsuka Group 1 2 3 13 14 15 1 Busaburo Otsuka, the Founder of Otsuka, Riding a Cow The Otsuka family was a farming family for generations. Busaburo Otsuka, who would go on to start the Otsuka Pharmaceutical Kougyo-bu in 1921, used to help his father Daitaro on the farm. He is shown here breaking tradition already, riding a sacred cow. 2 Company Founder Busaburo Otsuka (right) and his eldest son Masahito Otsuka. Masahito went beyond his father’s wishes by expanding the business nationwide and starting the I.V. solution business. 4 16 5 6 7 8 9 10 11 12 17 18 19 20 21 22 23 24 5 Otsuka Pharmaceutical Factory launched Otsuka’s first over-the-counter drug Oronine Ointment in 1953. This long-seller, still available today, made its mark using innovative advertisements on vehicles, TV and radio, as well as free samples. 6 Taiho Pharmaceutical Co., Ltd., was established in 1963, following the Otsuka Chemical Co., Ltd. It in-licensed an anti-cancer agent from the former Soviet Union and developed the world’s first oral anti-cancer drug, making Otsuka a leader in cancer treatment. 3 A saltpan of the time. Initially, Otsuka produced chemical feedstock from saltpan residue. This business was taken over by Otsuka Chemical, established in 1950, and provided the world with quality chemical feedstock and pharmaceutical intermediary material. 7 Otsuka Chemical Co., Ltd. launched Oranamin C Drink in 1965. It virtually became Japan’s national beverage thanks to high-impact ads like those featuring Japanese comedian and actor Kon Omura and other unceasing marketing efforts. In 2011, the 30-billionth bottle was sold. 4 Busaburo Otsuka had to deal with many defective products, pushing his family to the brink of ruin. He overcame the crisis and left behind these thoughts: ‘Quality is the lifeblood of the factory. Packaging is a part of quality. Make and sell products as if you were the buyer.’ 8 In 1968, Otsuka Pharmaceutical Factory, Inc. introduced plastic bottles as containers for I.V. solutions, a first for Japan. The company went on to become a best partner in clinical nutrition through a series of container innovations and the development of new I.V. solutions. 9 Inspired by the ready-to-eat meals carried by soldiers, in 1968 Akihiko Otsuka launched BON CURRY, the world’s first commercially available food in retort pouches, through Otsuka Foods Co., Ltd. 10 In 1970, Otsuka acquired capital in Earth Chemical Co., Ltd. This company accelerated development of a cockroach trap Gokiburi Hoy Hoy and other new products and went on to become Japan’s largest pesticide manufacturer. 11 Otsuka Pharmaceutical Co., Ltd. established its own factory to produce non-I.V. end pharmaceutical products in 1970 and its own drug research institute in 1971. 12 In 1976, Akihiko Otsuka was appointed president of Otsuka Pharmaceutical Co., Ltd. and Otsuka Foods Co., Ltd. He greatly developed the pharmaceutical, nutraceutical and foods businesses by focusing on original products. 13 The boundless potential of the carbostyril structure was recognizable at a glance to an Otsuka researcher. In 1980, Otsuka Pharmaceutical Co., Ltd. launched its first new, originally-developed drug. 14 POCARI SWEAT was launched in 1980. Unconventional features such as the barely-sweet taste and blue package (a taboo for beverages at the time), created a huge market for electrolyte replenishment beverages in Japan. 15 Rokuro Harima invented Oranamin C Drink and presided over the development of POCARI SWEAT and Calorie Mate. 16 Hi-Z Tower (the central research building) was constructed in 1983. The ceramic panel mural on the front of the building was created by painter Taro Okamoto and named Inochi Odoru (Life Leaping) by Buddhist nun and writer Jakucho Setouchi. 17 ‘We planted giant tomato trees to get people to notice the obstinacy of preconceptions... Please dispel your preconceptions about the people around you.’ Akihiko Otsuka at the opening ceremony for the Human Resource Development Institute, 1988. 18 In 1998, a one-of-a-kind museum displaying masterpieces on ceramic panels was opened to commemorate the Otsuka Group’s 75th anniversary. On the occasion of the museum’s 10th anniversary, Pope Benedict XVI bestowed the Pontifi cal Order of Pope St. Sylvester on Akihiko Otsuka, director general of the museum. 19 Otsuka Pharmaceutical’s best-in-class antipsychotic drug ABILIFY has received wide praise for its effi cacy and safety. 20 Globalization of the I.V.solution business, which achieved initial success in Asia, accelerated around the beginning of the 21st century. Ichiro Otsuka (right), the president of Otsuka Pharmaceutical Factory, Inc. in negotiations on a business alliance. 21 Otsuka is venturing into the rapidly-innovating medical device field. 22 Otsuka Pharmaceutical Co., Ltd. is developing globally appealing soy products based on the concept of ‘Soylution’ – that soy can provide solutions to human health and environmental problems. 23 Otsuka Holdings was listed on the First Section of the Tokyo Stock Exchange in December, 2010. There were ten employees when the company was founded in 1921. Today, the Otsuka Group employs approximately 42,000 people1 in 158 companies around the world (as of March 2013). 24 In November 2011 the company signed a global alliance agreement with the Danish company H. Lundbeck A/S in order to provide patients with a new generation of CNS drugs refl ecting the latest science. In 2013, the first drug to emerge from this alliance, Abilify Maintena, was launched in the U.S. 1 Number of Otsuka Group employees (including at non-consolidated companies) Entering Another New Field Otsuka Medical Devices Achieva Medical Limited (Shanghai, China) Development and marketing of coils to treat cerebral aneurysm More integrative approaches to healthcare have become necessary as societies age. This is evidenced by growing demand for minimally invasive disease treatments and diagnostics, often combining a drug treatment and a physical device. In February 2011, the Otsuka Group established Otsuka Medical Devices Co., Ltd., to aggressively pursue business expansion by developing innovative medical devices and business tie-ups in this area, thus adding to its mainstay pharmaceutical business. Specifically, Otsuka Medical Devices is pursuing the development of treatments and diagnostic tools. In the first area, the company is working on various therapeutic instruments for the fields of cardiovascular and gastrointestinal disease and orthopedics. In the second, it is developing a self-propelled colonoscope with a light burden on patients. Otsuka Medical Devices is committed to contributing to the health of people worldwide through the development of innovative medical devices. MicroPort Scientific Corporation (Shanghai, China) Development and marketing in China of intervention products, focusing on drug-eluting stents KiSCO Co., Ltd. (Kobe, Japan and Lyon, France) Development and marketing of products in the field of orthopedics JIMRO Co., Ltd. (Takasaki, Japan) Manufacture and marketing of Adacolumn, an adsorptive granulocyte apheresis column used for treating inflammatory bowel disease and refractory skin diseases in 14 countries Era Endoscopy S.r.l. (Pisa, Italy) Development of the Endotics self-propelled colonoscope 50 51 A California Winery Known for Some of the World’s Top Wines Ridge Vineyards Ridge Vineyards, a pioneering California winery in the noninterventionist approach to winemaking, has offered exceptional, single-vineyard wines under the Ridge name since 1962. However, the winery has a longer history that started with a San Francisco physician purchasing land near the top of Monte Bello Ridge and then planting vines and building the historic winery in 1886. Ridge’s winemaking approach emphasizes traditional methods, drawing on natural processes as much as possible in both grape cultivation and winemaking. Paul Draper, Ridge’s extraordinarily talented chief winemaker, learned traditional winemaking in Italy and France. Since then, for over 40 years he has continued to craft standout wines that are extremely well-balanced and age superbly. Ridge’s renown is not limited to the U.S.; it is well known in Europe and elsewhere. Ridge has continued to win praise as a winery that consistently produces some of the top wines in the world. In Fate led to Ridge Vineyards coming under the umbrella of the Otsuka Group in 1986. One anecdote tells the story like this: When the up-and-coming executive Akihiko Otsuka told his father Masahito that he wanted to purchase Ridge Vineyards, his father was outraged, saying ‘It is absurd for a company in the health business to buy a company that sells alcohol!’ But Akihiko quoted the old saying, ‘sake (alcohol) is the chief of all medicines,’ and persuaded his father to approve the deal. 2000, Draper was selected as Man of the Year by the UK’s Decanter magazine, one of the wine world’s authoritative awards. Another spectacular achievement came in 2006. In that year a rematch was held for the legendary Judgment of Paris, which rocked the world of wine in 1976 and pushed California wine into the world limelight. The same as 30 years earlier, American reds were pitted against French Bordeaux reds, all made in the early 1970s, in blind tastings by leading wine authori- ties held simultaneously on both sides of the Atlantic. Shining in first place, far ahead of a distant second, was Ridge’s flagship wine, the Monte Bello 1971. After aging beautifully, Ridge wine showed the world that it could surpass the five best Boudeaux Châteaux. At present, Ridge wines are exported to 45 countries and widely recognized as wines with world-class quality and a top record as leading American wines. This is why they frequently appear in diplomatic banquets for heads of state. In June 2013, the Geyserville 2008, a zinfandel red wine, was served at a dinner party hosted by U.S. President Obama for Chinese President Xi Jinping at the White House. Since 2008, Ridge has been expanding its Monte Bello vineyards, which will add approximately 10 hectares when all the vines are planted. The new vineyard is called Rousten Ranch, named after a man who used to grow grapes at that location. Paul Draper Otsuka main brands supported by 42,000 * Otsuka-people Number of Otsuka Group employees (including at non-consolidated companies) Otsuka Group 158 companies (including at non-consolidated companies) in 26 countries and regions U.S.: Otsuka Pharmaceutical Development & Commercialization, Inc. Otsuka Maryland Medicinal Laboratories, Inc. Otsuka America, Inc. Otsuka America Pharmaceutical, Inc. Pharmavite, LLC Ridge Vineyards, Inc. Cambridge Isotope Laboratories, Inc. Crystal Geyser Water Company Otsuka America Manufacturing, LLC CIL Isotope Separations, LLC Soma Beverage Company, LLC Membrane Receptor Technologies, LLC Otsuka Global Insurance, Inc. Oncomembrane, Inc. CG Roxane, LLC Crystal Geyser Brand Holdings, LLC Galenea Corp. Taiho Pharma U.S.A., Inc. Otsuka America Foods, Inc. American Peptide Company, Inc. Graceland Fruit, Inc. U.K.: Otsuka Pharmaceutical Europe Ltd. Otsuka Pharmaceuticals (U.K.) Ltd. Taiho Pharma Europe, Limited Sweden: Otsuka Pharma Scandinavia AB Germany: Advanced Biochemical Compounds GmbH Cambridge Isotope Laboratories (Europe) GmbH Euriso-Top GmbH Otsuka Pharma GmbH Otsuka Frankfurt Research Institute GmbH Otsuka Novel Products GmbH Canada: Otsuka Canada Pharmaceutical, Inc. 2768691 Canada, Inc. France: Nardobel SAS Nutrition & Sante SAS Nutrition & Nature SAS Laboratoires Dietetique et Sante SAS Euriso-Top SAS Valpiform Compiegne SNC Valpiform SAS Otsuka Pharmaceutical France SAS ALMA S. A. Kisco International SAS Brazil: Otsuka Chemical do Brasil Ltda. Belgium: Nutrition & Sante Benelux S. A. Switzerland: Nutrinat AG Otsuka S. A. Italy: Nutrition & Sante Italia SpA Otsuka Pharmaceutical Italy S.r.l. Era Endoscopy S.r.l. Spain: Otsuka Pharmaceutical, S. A. Nutrition & Sante Iberia SL Hebron S. A. Trocellen Iberica S. A. Czech: Interpharma Praha, a.s. as of March 2013 52 53 Turkey: Abdi Ibrahim Otsuka Pharmaceutical Company Editor’s Note China: Sichuan Otsuka Pharmaceutical Co., Ltd. Guangdong Otsuka Pharmaceutical Co., Ltd. Otsuka (China) Investment Co., Ltd. Zhejiang Otsuka Pharmaceutical Co., Ltd. Tianjin Otsuka Beverage Co., Ltd. Otsuka Pharmaceutical (H.K.) Ltd. Hangzhou Linan Kangle Pharmaceutical Co., Ltd. Otsuka Beijing Research Institute Otsuka Shanghai Research Institute Otsuka Electronics Shanghai Co., Ltd. Otsuka Sims (Guangdong) Beverage Co., Ltd. Otsuka Electronics (Suzhou) Co., Ltd. China Otsuka Pharmaceutical Co., Ltd. Shanghai MicroPort Medical (Group) Co., Ltd. VV Food & Beverage Co., Ltd. Xiamen United Medical Instruments Co., Ltd. Giant Harvest, Ltd. Microport Scientific Corporation Taiho Pharmaceutical of Beijing Co., Ltd. Suzhou Otsuka Pharmaceutical Co., Ltd. Leshan Otsuka Techno Co., Ltd. Nanjing Otsuka Techbond Techno Co., Ltd. Shanghai Otsuka Foods Co., Ltd. Dalian Otsuka Furniture Co., Ltd. Zhangjiagang Otsuka Chemical Co., Ltd. Otsuka (Shanghai) Foods Safety Research & Development Co., Ltd. MOC Chemicals Trading (Shanghai) Co., Ltd. Otsuka Material Science & Technology (Shanghai) Co., Ltd. Chongqing Otsuka Huayi Chemical Co., Ltd. Achieva Medical Limited South Korea: Korea Otsuka Pharmaceutical Co., Ltd. Korea OIAA Co., Ltd. Otsuka Electronics Korea Co., Ltd. Dong-A Otsuka Co., Ltd. KOC Co.,Ltd. Taiwan: Taiwan Otsuka Pharmaceutical Co., Ltd. Otsuka Tech Electronics Co., Ltd. King Car Otsuka Co., Ltd. India: Otsuka Chemical (India) Private Limited Indonesia: P.T. Otsuka Jaya Indah P.T. Merapi Utama Pharma P.T. Amerta Indah Otsuka P.T. Widatra Bhakti P.T. Otsuka Indonesia P.T. Lautan Otsuka Chemical Thailand: Otsuka Saha Asia Research Co., Ltd. Thai Otsuka Pharmaceutical Co., Ltd. Philippines: Otsuka (Philippines) Pharmaceutical, Inc. Pakistan: Otsuka Pakistan Ltd. Vietnam: Otsuka OPV Joint Stock Company Otsuka Thang Nutrition Co., Ltd. Egypt: Egypt Otsuka Pharmaceutical Co., S.A.E. Otsuka Trading Africa Co., S.A.E. Otsuka Import Export, LLC Singapore: Taiho Pharma Singapore Pte. Ltd. New Zealand: Diatranz Otsuka Limited Japan: Otsuka Holdings Co., Ltd. Otsuka Pharmaceutical Co., Ltd. Otsuka Pharmaceutical Factory, Inc. Taiho Pharmaceutical Co., Ltd. Otsuka Warehouse Co., Ltd. Otsuka Chemical Co., Ltd. Otsuka Medical Devices Co., Ltd. Otsuka Electronics Co., Ltd. EN Otsuka Pharmaceutical Co., Ltd. Naruto Cruise Service Co., Ltd. Heartful Kawauchi Co., Ltd. Otsuka Ridge Co., Ltd. Nippon Pharmaceutical Chemicals Co., Ltd. Chuo Electronic Measurement Co., Ltd. Earth Chemical Co., Ltd. Earth Environmental Service Co., Ltd. Kitasato-Otsuka Biomedical Assay Laboratories Co., Ltd. Ribomic, Inc. Tokushima Vortis Co., Ltd. Bean Stalk Snow Co., Ltd. Okayama Taiho Pharmaceutical Co., Ltd. Nichiban Co., Ltd. Otsuka Techno Corporation J.O.Pharma Co., Ltd. Otsuka Naruto Development Co., Ltd. Naruto Salt Mfg. Co., Ltd. Tokushima Air Terminal Building Co., Ltd. Otsuka Packaging Industries Co., Ltd. Dairin Integrated Transportation Co., Ltd. HAIESU Service Co., Ltd. Big Bell Co., Ltd. Awa Union transportation Co., Ltd. Otsuka Foods Co., Ltd. Otsuka Chilled Foods Co., Ltd. Otsuka-MGC Chemical Company, Inc. Otsuka Turftech Co., Ltd. ILS, Inc. Otsuka Furniture Manufacturing and Sales Co., Ltd. Agri Best Co., Ltd. Otsuka Ohmi Ceramics Co., Ltd. Marukita Furniture Center (tentative) Yoshino Farm (tentative) NEOS Corporation Earth Biochemical Co., Ltd. JIMRO Co., Ltd. KiSCO Co., Ltd. It has been a challenge to produce a corporate brochure for a constantly changing, dynamic organization like Otsuka Pharmaceutical. It was almost like trying to describe a living thing, and we learned a great deal in the process. First, we came to appreciate how diffi cult it is to select the most important information, while still adhering to the schedule of an annual publication. Meanwhile, we had to embrace the challenge of conveying a proper understanding of business and product developments that have been underway for many years. Finally, we saw clearly how even slight differences in the nuance conveyed by tone of voice, photos, and illustrations can completely alter what is conveyed. In all of these ways, we felt the signifi cance of this corporate brochure and rediscovered how important it is to pay very close attention to every detail. What stood out more than anything else was that Otsuka Pharmaceutical is truly sustained by and grows because of its people. We would like to take this opportunity to express our heartfelt thanks to everyone in and outside Japan who provided guidance during the process of creating this corporate brochure. Public Relations Department: Hidehiko Hirabayashi Keiko Tashiro Reiko Nakajima Mai Yamada Jeffrey Gilbert Akiko Ryu Innes-Taylor, Head of Public Relations Published by: Public Relations Department, Otsuka Pharmaceutical Co., Ltd. Shinagawa Grand Central Tower 2-16-4, Konan, Minato-ku, Tokyo 108-8242, Japan Tel: +81-3-6717-1400 www.otsuka.co.jp (Japanese) www.otsuka.co.jp/en (English) Design: Helmut Schmid Design Illustration: Jean-Paul Buquet Production: Nippon International Agency In 1971 a camphor tree seedling was planted in front of the newly-established Otsuka Pharmaceutical Drug Research Institute. Across the subsequent 40-plus years, the tree has grown into an imposing presence and for the researchers at Otsuka it is the perfect metaphor and inspiration to be creative always and take on the most daunting challenges. The words ‘Otsuka-people creating new products for better health worldwide,’ which are carved in a stone monument at the base of the commemorative tree were first penned as the motto for the research department and later became the corporate philosophy for the Otsuka Group. 1311E