External Evaluations (as of June 30,2018) ™ MSCI Japan Empowering Women Select Index THE INCLUSION OF DAIICHI SANKYO CO.,LTD. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CON- STITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF DAIICHI SANKYO CO.,LTD. BY MSCI OR ANY OF ITS AF- FILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROP- ERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES. Daiichi Sankyo Group Value Report 2018 Value Daiichi Sankyo Group Logo given to Certified Health and Productivity Management “Eruboshi” Certification Mark “Kurumin” Certification Mark Organization (White500) Value Report 2018 was printed using environmental-friendly paper, inks, and manufacturing method. This report uses FSC® certified 3-5-1, Nihonbashi-honcho, Chuo-ku, paper, which indicates that the paper used to print this report Tokyo 103-8426, Japan Paper was produced from properly Daiichi Sankyo Group Corporate Communications Department managed forests. Tel: +81-3-6225-1126 Value Report 2018 CSR Department This report was printed using Tel: +81-3-6225-1067 Inks 100% biodegradable printing inks from vegetable oil. https://www.daiichisankyo.com/ The waterless printing method Printing used for this report minimized the use and release of harmful liquid wastes. Printed in Japan 005_7045687913009.indd 1 2018/09/13 13:34:05 Cautionary Note Regarding Forward-Looking Editorial Policy Company’s website https://www.daiichisankyo.com/ Statements Management strategies and plans, financial Daiichi Sankyo began publishing Value Reports, its brand of integrated reports, in fiscal 2013. These reports forecasts, future projections and policies, and R&D have been positioned as communication tools for facilitating understanding with regard to the Group’s information that Daiichi Sankyo discloses are all corporate value, growth potential, and capacity for business continuity. Through these reports, we aim to classified as “Daiichi Sankyo’s future prospects.” These forward-looking statements were determined provide easy-to-understand information on the Company’s management policies, business strategies, and by Daiichi Sankyo based on information obtained as financial performance as well as on the CSR activities we conduct to contribute to the realization of a of today with certain assumptions, premises and sustainable society to patients, their families, healthcare professionals, shareholders, investors, business future forecasts, and thus, there are various inherent partners, local communities, employees, and various other stakeholders. risks as well as uncertainties involved. As such, For investor relations (IR) and the latest information on our CSR activities, please refer to the Company’s please note that actual results of Daiichi Sankyo may diverge materially from Daiichi Sankyo’s outlook or website, which includes a variety of contents, including financial results summaries and videos of briefing the content of this material. sessions for investors. Period Covered April 1, 2017 - March 31, 2018 (fiscal 2017) and also information for the period from April 2018 onward Contents 02 26 58 75 92 102 Daiichi Sankyo's Who we are Growth Strategy Business Activities CSR Activities Corporate Governance Data Section This section provides an overview of This section describes progress made This section provides detailed This section details the various CSR In this section, we will explain the This section provides financial data, Daiichi Sankyo through a CEO interview, toward the 2025 Vision of becoming a explanations of the activities of each of activities incorporated into these business corporate governance structure that non-financial data and the corporate Daiichi Sankyo’s value creation process, “Global Pharma Innovator with the Group’s business units and functional activities. forms the foundations for the Daiichi profile of the Daiichi Sankyo Group. strengths and other articles. competitive advantage in oncology” units. Sankyo Group’s ongoing improvement of including a message from the COO, a corporate value. Messages from special issue on cancer, information on independent directors and auditors are progress in the 5-Year Business Plan, and also provided. a message from the CFO. 2 Our Mission 26 Message from the COO 58 The Daiichi Sankyo Group’s Value 75 CSR Management 92 Corporate Governance 102 10-Year Financial Summary Chain and Organization 3 To Our Stakeholders 30 2025 Vision 80 Promoting Compliance Management 96 Introduction of Members of the 104 Financial Results and Financial Analysis 60 Global Management Structure Board and Members of the Audit CEO Discussion Special Issue Mutual Growth of Employees and the and Supervisory Board 108 Consolidated Financial Statements 4 32 Business Units 82 — Challenges of Daiichi Sankyo — Cancer (Antibody Drug Conjugate: ADC) 61 Company Messages from Members of the ESG (Environmental, Social, and To Continue to Address Social Issues Sales & Marketing Unit 98 112 Enhancement of Communication with Board (Outside) and Members of Governance) Data as a Pharmaceutical Company Overview of 5-Year Business Plan Sales & Marketing Unit: Daiichi Sankyo 84 42 Stakeholders Espha Co., Ltd. the Audit and Supervisory Board 114 Major Products Progress of 5-Year Business Plan (Outside) (Independent Directors) History of Daiichi Sankyo 44 Vaccine Business Unit Promoting Environmental Management 10 86 Corporate Profile / Main Group Companies Daiichi Sankyo Healthcare Co., Ltd. 116 Grow Edoxaban 100 Risk Management At a glance 44 Improving Access to Healthcare 14 Daiichi Sankyo, Inc. (DSAC) 88 118 Shareholders’ Information Grow as the No.1 Company in Japan Luitpold Pharmaceuticals, Inc. Daiichi Sankyo’s Value Creation Process 46 Social Contribution Activities 18 Daiichi Sankyo Europe GmbH 91 48 Expand U.S. Businesses 20 Daiichi Sankyo’s Strengths ASCA Company 50 Establish Oncology Business 20 Science & Technology 69 Functional Units 54 Continuously Generate Innovative Medicine R&D Unit 22 Global Organization & Talent Changing SOC (Standard of Care) Biologics Unit Pharmaceutical Technology Unit 24 Presence in Japan 56 Message from the CFO Supply Chain Unit Medical Affairs Unit Quality & Safety Management Unit Daiichi Sankyo Group Value Report 2018 1 Who we are Who we are Our Mission To Our Stakeholders The Core Values and Commitments serve as the criteria for business activities and decision-making used by executive officers and employees in working to fulfill Our Mission. Our Corporate Slogan succinctly explains the spirit of our mission and our Core Values and Commitments. Who we are In addition, we have established the DAIICHI SANKYO Group Corporate Conduct Charter*. This charter calls on us to fulfill our social responsibilities by acting with the highest ethical standards and a good social conscience appropriate for a company engaged in business that affects human lives, and we model our business activities accordingly. * The full text of the DAIICHI SANKYO Group Corporate Conduct Charter can be found on page 75. Our Mission To contribute to the enrichment of quality of life around the world through the creation of innovative pharmaceuticals, and through the provision of pharmaceuticals addressing diverse medical needs. The Daiichi Sankyo Group delivers wide-ranging value created through its business activities to patients and their families, healthcare professionals, shareholders, Core Values Commitments investors, business partners, local communities, employees and various other Innovation 1. To create innovative medicines changing SOC* stakeholders. the introduction of new ideas, methods, * SOC (Standard of Care): Universally applied best treatment practice in today’s medical science or invention 2. To take a global perspective, and respect regional values Integrity The Group uses financial assets, intellectual assets and human assets and 3. To foster intellectual curiosity and strategic insight the quality of being honest and of always 4. To provide the highest quality medical leverages its strengths in Science & Technology, Global Organization & Talent, and having high moral principles information Presence in Japan, to continuously create and deliver innovative pharmaceuticals to Accountability 5. To provide a stable supply of top-quality pharmaceutical products being responsible for the effects of your people around the world. Through the sustainable process of returning the rewards 6. To be an ethical, trusted, and respectful partner actions, and being willing to explain or 7. To be accountable for achieving our goals of our business activities to the stakeholders as well as reinvesting the rewards in be criticized for them 8. To demonstrate professionalism, respect for further drug discoveries and developments, we address social and environmental others, and teamwork problems and other ESG issues together with our business activities. Corporate Slogan We hope through this Value Report, you will come to appreciate the efforts of Daiichi Sankyo Group in resolving social issues, in other words how we deliver wide-ranging ™ value to society. George Nakayama Representative Director, Chairman and CEO 2 Daiichi Sankyo Group Value Report 2018 Daiichi Sankyo Group Value Report 2018 3 web010_7045687913009.indd 2 2018/09/18 17:04:24 web010_7045687913009.indd 3 2018/09/18 17:04:24 Who we are Pharmaceutical companies have continued to explore solutions to the social challenge of Who we are conquering disease. However, there