Shionogi Announces Revisions to the Second Medium-Term Business Plan
OSAKA, April 4, 2007 – Based on a review of
the first two years of the second medium-term business plan
(covering the period from fiscal 2005 to fiscal 2009), Shionogi
& Co., Ltd. (Head Office: Osaka; President: Motozo Shiono)
announces the following revisions to the goals and targets for the
coming three years.
Status of the Second Medium-Term Business Plan
Under the first medium-term business plan, Shionogi established an
operating structure with a focus on prescription drugs as its base.
The second medium-term business plan was positioned as a period for
aggressively preparing for long-term growth as a pharmaceutical
company under the banner of “preparing for a significant leap
forward.”
In particular, Shionogi has worked to concentrate research,
development, sales and marketing resources in key areas, with the
aim of establishing a second and third target area in addition to
Shionogi’s core antibiotics business. At the same time,
Shionogi has aimed to steadily build a base for full-scale overseas
development.
In research and development, Shionogi is concentrating resources in
the three target areas of infections, pain and metabolic syndrome,
with the aim of advancing at least five new chemical compounds to
Phase II or more advanced stages by the end of fiscal 2009. At
present, three compounds have advanced to the development stage:
S-2367, S-364735 and S-777469. Development of these three compounds
is currently under way, with an eye on future overseas business
development. Shionogi has steadily launched or applied for
manufacturing approval for drugs that are in the final stage of the
development pipeline. In addition, aggressive efforts to establish
a continuous pipeline
stream resulted in the in-licensing of Adapalene (acne) and
Peramivir (influenza).
Initiatives aimed at achieving the Company’s research and
development goals are thus largely proceeding as planned.
In sales and marketing, Shionogi is working to further expand its
presence in the area of antibiotics, and launched Finibax® and
Avelox® in fiscal 2005. In the area of cancer-related pain,
Shionogi is conducting promotional activities focused on improving
quality of life through alleviation of cancer pain and promoting
educational activities regarding the medical use of
narcotics.
In the area of metabolic syndrome, Shionogi shifted to regular
sales of Crestor® in September 2006 after completing
post-marketing surveillance with a scale of 10,000 subjects with
AstraZeneca six months ahead of schedule. This has allowed the
Company to get an early start on full-scale programs to provide
information on Crestor®, which will be a crucial core
product.
Through these efforts, Shionogi has strengthened training of
medical representatives (MRs) and improved their capabilities so
they are constantly aware of medical needs. However, Shionogi must
still improve its sales and marketing organization, such as by
enhancing coordination between marketing functions and sales
divisions. In addition, conditions in the prescription drug market
are becoming more challenging than expected. Consequently, domestic
sales of prescription drugs have not reached target. Moreover,
higher research and development expenses have offset an increase in
royalty revenues, which has kept Shionogi from achieving its income
targets.
Revised Targets
Shionogi has revised its targets for fiscal 2007 and fiscal 2009,
the final year of the second medium-term business plan, after
taking into account factors including the Company’s
performance over the last two years and changes in its operating
environment. The revised targets are as follows.
(Million yen)
|
FY2007 (Year ended March 2008) |
FY2009 (Year ended March 2010) |
|||||
| Original target | Revised target | Increase (decrease) | Original target | Revised target | Increase (decrease) | |
|
Net sales |
246,000 |
215,000 |
(31,000) |
305,000 |
270,000 |
(35,000) |
| Operating Income |
53,200 |
40,000 |
(13,200) |
98,000 |
80,000 |
(18,000) |
| Net Income |
35,000 |
24,000 |
(11,000) |
59,000 |
48,000 |
(11,000) |
| R&D Expenses |
44,000 |
41,000 |
(3,000) |
50,000 |
50,000 |
0 |
Challenges for Fiscal 2007 and Beyond
Shionogi will intensify the efforts below over the three-year
period beginning fiscal 2007, which is the second half of the
second medium-term business plan.
- In research and development, Shionogi will enhance its framework for continuously discovering and developing world-class drugs. In addition to working on compounds currently under development, the Company will focus on building an organizational framework and educating personnel for simultaneous development of internationally competitive drugs in Japan, the United States and the European Union. Shionogi will also concentrate on strategic alliances.
- In sales and marketing, Shionogi will work to expand market
share by concentrating resources on Crestor®, Finibax®,
Avelox® and other new products while enhancing efforts at
advanced treatment hospitals by taking market structure into
account. In addition, the Company will take steps to strengthen its
sales organization. This will include creating positions for
marketing plan promoters who
have a detailed understanding of medical needs. - In “preparing for a significant leap forward,” Shionogi will strengthen drug discovery research for drug “seeds,” aggressively in-license and enhance its organization for overseas business development. In addition, over the next three years the Company plans to make strategic investments totaling more than ¥60 billion in manufacturing, research, development and other areas.
- While aggressively investing for medium-to-long-term growth and working to improve its earnings base, Shionogi will energetically work to increase shareholder returns. The Company is aiming for a payout ratio of 35 percent in fiscal 2009.
“Shionogi strives constantly to provide medicine of the
best possible kind essential for protection of the health of the
people.” By implementing the second medium-term business
plan, the Company is working to realize this mission and further
increase its presence as a pharmaceutical company.
[For further information]
Shionogi & Co., Ltd., Public Relations Unit
Osaka TEL: +81-6-6209-7885 Fax: +81-6-6229-9596
Tokyo TEL: +81-3-3406-8164 Fax: +81-3-3406-8099
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