Daiichi Sankyo Group Value Report 2016

Daiichi Sankyo Group Value Report 2016 Our Mission Core Values and Commitments（Criteria of the Value Judgment to Fulﬁll Our Mission）

Core Values Notes

To contribute to the enrichment of quality of life around the world Innovation : the introduction of new ideas, methods, or invention through the creation of innovative pharmaceuticals, and through the Integrity : the quality of being honest and of always having high moral principles provision of pharmaceuticals addressing diverse medical needs. Accountability : being responsible for the effects of your actions, and being willing to explain or be criticized for them

Commitments

We have established Core Values and Commitments as the criteria for our business activities 1. To create innovative medicines changing SOC * and decision making. Our global brand is a pledge to our stakeholders of what the * SOC (Standard of Care): Universally applied best treatment practice in today’s medical science Company is capable of delivering, now and in the future. Our corporate slogan succinctly 2. To take a global perspective, and respect regional values states how we make efforts for what and for whom. 3. To foster intellectual curiosity and strategic insight In addition, we have established the DAIICHI SANKYO Group Corporate Conduct Charter * to act with the highest ethical standards and a good social conscience appropriate 4. To provide the highest quality medical information for a company engaged in a business that affects human lives. 5. To provide a stable supply of top-quality pharmaceutical products * The full text of the DAIICHI SANKYO Group Corporate Conduct Charter can be found on page 28. 6. To be an ethical, trusted, and respectful partner 7. To be accountable for achieving our goals 8. To demonstrate professionalism, respect for others, and teamwork

Corporate Slogan

Daiichi Sankyo Group Value Report 2016 01 Contents

Daiichi Sankyo’s Mission Communication Policy Highlights of Value Report 2016

Contents 02 The Daiichi Sankyo Group’s Value Report Business and CSR Activities Pursuing Sustainable Improvement for has been positioned as a communication 04 Corporate Value tool for institutional investors, healthcare Message from the CEO 06 professionals, consumers, Group employees, and other stakeholders. 5-Year Business Plan Path Walked by Daiichi Sankyo 10 (FY2016 - FY2020) Through this report, we aim to communi- Transformation 5-Year Business Plan 12 cate the Group’s management philosophy DS — A Bridge to Tomorrow and strategies to our stakeholders in an Operations and Financial Position 22 easy-to-understand manner and to facili- Organization-Wide Initiatives Pursuing Sustainable tate understanding with regard to the 28 Improvement for Corporate Value Group’s corporate value, growth potential, Global Management Structure 29 and capacity for business continuity. P04-05 P06-09 P12-21 Business Activities 30 Business Units Business and CSR Activities Message from the CEO 5-Year Business Plan Pursuing Sustainable ・Sales & Marketing Unit 32 Relevant Information President Nakayama explains our Under the new 5-year business plan, Improvement for Corporate Value ・Sales & Marketing Unit: Daiichi Sankyo Espha Co., Ltd. 35 policies for realizing the sustainable we will tackle the two challenges of For investor relations and the latest infor- This section explains the Group’s improvement of the Daiichi Sankyo “grow beyond FY2017 LOE” and ・Vaccine Business Unit 36 mation on our responsible corporate vision for the sustainable improve- Group’s corporate value, the “establish a foundation of sustainable activities, please refer to the Company’s ・Daiichi Sankyo Healthcare Co., Ltd. 37 ment for corporate value, together background that led us to deﬁne growth” to further our transformation website, which includes a variety of infor- with an overview of efforts of the our“2025 Vision,” and our goals toward realizing the“2025 Vision.” ・Daiichi Sankyo, Inc.（DSAC） 38 mation, such as account settlement, audio Group to promote the integrated for the future. ・Luitpold Pharmaceuticals, Inc. 40 distribution of brieﬁng sessions for investors, and market data. The PDF and advancement of business activities ・Daiichi Sankyo Europe GmbH 42 e-book version of this Value Report are and CSR activities. ・ASCA Company 44 also available on the website.

Functional Units http://www.daiichisankyo.com ・R&D Unit 46 ・Pharmaceutical Technology Unit 52 ・Supply Chain Unit 54 ・Quality & Safety Management Unit 56 ・Medical Affairs Division 58 CSR Activities ・CSR Management 60 ・Promoting Compliance Management 64 ・Mutual Growth of Employees and the Company 66 ・Enhancement of Communication with Stakeholders 68 P30-58 P59-75 P76-85 ・Promoting Environmental Management 70 ・Improving Access to Healthcare 72 Business Activities CSR Activities Corporate Governance ・Social Contribution Activities 74 This section provides detailed This section details the various In this section, we look at the explanations of the activities of each business activities of the Group as corporate governance systems that Corporate Governance 76 of the Group’s business units and well as the CSR activities incorporated form the foundations for the Group’s Risk Management 86 functional units. into these business activities. pursuit of the sustainable improve- Data Section ment of corporate value. ・Financial Data 88 ・ESG Data (Environmental, Social, and Governance Data) 96

・Major Products 98 Description of Icons ・Corporate Information 100 References (related websites)

02 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Report 2016 03 Business and CSR Activities Pursuing Sustainable Improvement for Corporate Value

This section explains the Group’s vision for sustainable improvement for corporate value, together with an overview of efforts of the Group to promote the integrated advancement of business activities and CSR activities.

Sustainable Improvement for Corporate Value Integration of Business Activities and CSR Activities

The raison d’être of a pharmaceutical company lies in into six domains on which we will concentrate CSR activities. The business activities section of this report explains our initiatives for the advancement of an economic value cycle in the addressing diverse medical needs around the world and Actual activities are based on international CSR initiatives, areas of research and development, pharmaceutical technology, supply chains, quality and safety management and medical helping patients through the creation of pharmaceuticals, such as the United Nations Global Compact*1 and ISO affairs, and marketing and sales. With regard to CSR activities for creating social and environmental value, we will introduce a principle that rests at the core of our business. For a 26000,*2 as well as the type of responsible activities our activities conducted in our six domains that have been integrated into our business activities in line with action policies. pharmaceutical company, the creation and ongoing stakeholders expect of us. Furthermore, we incorporate (See chart below.) improvement of corporate value is based on the sustain- the requests and expectations of society as well as consid- able development of an economic value cycle through its erations of the relationship between issues and our business activities. In this cycle, we create and supply medium-to-long-term business development into the CSR pharmaceuticals with social value and receive economic activities in order to contribute to the realization of a Business Activities rewards based on that value. The rewards gained are sustainable society. We believe that engaging in such delivered to shareholders and other stakeholders and used activities will not only help create social and environmental Research and Pharmaceutical Quality & Safety Marketing & for making investments for further drug discoveries. value but also prevent damage to our corporate value from Supply Chain Development Technology Management Sales Continuing to build upon this economic value cycle is the a risk management standpoint. means through which we create value as a pharmaceutical We feel that both business activities and CSR activities company and also the basis for the sustainable improve- are indispensable, and we conduct these activities in an Promoting As a global pharmaceutical company, Compliance ment for corporate value. integrated manner in order to create sustainable improve- we practice management founded on compliance. Furthermore, from among social, environment, and ments in our corporate value. Management other sustainability issues, we have identiﬁed those issues (See chart below.) that are important for us to address and organized these

Mutual Growth of We consider our people to be the most important asset, Employees and the and pursue long-term growth by practicing innovation, Company integrity, and accountability as described in our Core Values. Sustainable Improvement for Corporate Value

Enhancement of CSR Activities We communicate with our various stakeholders to foster mutual understanding, Communication while pursuing cooperation. Business Activities CSR Activities with Stakeholders (Development based on economic value cycle) (Creation of social and environmental value)

Creation of Promoting We are promoting environmental management in order to reduce our environmental impact, Pharmaceutical Compliance Environmental manage environmental risks, and address climate change issues across the entirety of Management Products Management our business operations.

Mutual Growth Social of Employees and Contribution Provision of the Company Activities Investment Desire to save Pharmaceuticals for Drug people suffering with Discoveries from disease Integrated Improving Access to We are effectively utilizing Daiichi Sankyo’s resources to contribute to the resolution Social Value operation Healthcare of social issues related to health and medicine.

Enhancement of Economic Improving Access Communication Rewards to Healthcare with Stakeholders Appropriate to Value Social Contribution We will voluntarily seek to help resolve the various issues that we recognize as being faced Environmental Activities in ensuring the sound development of society. Management Delivery of economic value to stakeholders, including shareholders, local communities, and employees

*1. A voluntary initiative in which companies and organizations demonstrate responsible and creative leadership and act as upstanding members of society by participating in the creation of global frameworks aimed at realizing sustainable growth *2. International guidance standard not aimed at providing third-party veriﬁcation of the social responsibility of companies and other organizations

04 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Report 2016 05 Message from the CEO 07

” was designed with the aim of ” Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Value Report 2016 informing stakeholders about the Daiichi Sankyo Group’s various business activities, with particular emphasis placed and the 4th mid-term 5-year business Vision” “2025 on its plan, both of which were announced in March 2016. To begin with, I will explain the background that led us to Pharma “Global as being a Vision” “2025 define our Innovator with competitive oncology.” advantage in and also the basis for the sustainable improvement for and also the basis for the sustainable improvement corporate value. In order to continue stable growth over to the diverse respond the long term, we aim to actively fulfill our responsibili- needs of society, and ever-changing and growties together and duties as members of society, In other words, it is important that we simul- with society. systems and taneously strengthen corporate governance conduct CSR activities aimed at promoting compliance management, facilitating the mutual growth of employees and responding to social issues, such as and the Company, access to healthcare, as a pharma- the need to improve These activities must be integrated into ceutical company. the operation of our cycle of economic value to realize for corporate value. sustainable improvement “ in Value Reports aiichi Sankyo aims realize sustainableto aiichi Sankyo The business of the Daiichi Sankyo Group entails connec- The business of the Daiichi Sankyo Group patients,tions healthcare with shareholders, investors, localprofessionals, employees, business partners, believe communities other stakeholders. We and various about our that by keeping our stakeholders informed our stakeholders activitiesdiverse a more formal way, in Based on this can appreciate our true value as a company. belief, we began information compiling on the Group’s activities into the annual, comprehensive growth of its value by corporate contributing of quality to the enrichment aroundof life the world. As a Global Pharma Innovator with with Pharma Innovator a Global As oncology, in competitive advantage D fiscal 2013. The contents of these reports include business strategy and financial infor- management policy, mation, as well as information social on the corporate responsibility (CSR) activities conducts to that the Group contribute to the realization of a sustainable society. pharmaceuticals create innovative via R&D activities We economic rewards for the value we received and have by providing these pharmaceuticals to people deliver around the world. These economic rewards are returned to stakeholders in a balanced manner and are also used to Continuing discoveries. for further drug make investments to build upon this economic value cycle is one of the means through which we create value as pharmaceutical company Joji Nakayama Director Representative President and CEO Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 06 Message from the CEO the from Message Message from the CEO 09

*3 , the Company , the Company olmesartan 2025 Vision business centered on Oncology business as the core business value products aligned with regional market and pipeline changing standard of care (SOC) through highly efﬁcient management To have Specialty area have To enriched regional have To innovative products have To value realize shareholders’ To Global Pharma Innovator withGlobal Pharma Innovator Competitive Advantage in Oncology Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value

In Closing has The 5-year business plan will facilitate the changes needed “transformation” As such, Vision.” “2025 to realize our willwe which under plan, the for keyword as a chosen been and beyond FY2017 LOE” “grow tackle two challenges: With the loss of exclusivity for has been faced with a difficult situation. However, we are has been faced with a difficult situation. However, confident in our ability to continue creating and supplying patients with and useful medicines. And through important that we can increase this undertaking, we are convinced corporate value in the eyes of our stakeholders. are motivated by our simple desire to alleviate We by this desire, we willsuffering from disease. Driven utilize accumulated to date to continue the strengths we have creating new pharmaceuticals. innovative As a Global Pharma Innovator with competitive in oncology advantage in the future, we will focus particularly on developing hope to We specialty products centered on oncology. contribute to society through these efforts. Charged with this proud mission, the Daiichi Sankyo Group is taking its first step forward in its transformation well-poised for sustainable growth into theinto a company future. to ask for the continued In closing, I would like understanding and support of all of our stakeholders. “establish a foundation of sustainable growth.” “establish FY2016-FY2020 Transformation Transformation toward 2025 Vision 5-Year Business Plan 5-Year Business *2

Until FY2015 area *1 CVM PCP focus Global products In-house Sales volume *1. CVM: Cardiovascular - Metabolics *2. Pharmaceuticals mainly prescribed by primary care physicians (PCP) Pharmaceuticals mainly prescribed by hospitals and/or specialists *3. 2025 Vision 2025 Vision and announced it in March Vision” “2025 defined our We resulted from our extensive Vision” “2025 2016. The drug discussions and is based upon our accumulated capabilities as well as the aforementioneddiscovery “2025 decided to define our We operating environment. Pharma Innovator “Global to become a as striving Vision” with competitive advantage in oncology.” the vision for Daiichi Sankyo in 2025 entails Specifically, having specialty area business centered on the Company oncology as its core business, having enriched regional value products aligned with each regional market, and having innovative products and pipelines changing the SOC in each market. At the same time, we will be realizing shareholder value through highly efficient management. we will transform from our Vision,” “2025 realize our To current business structure, which is focused on CVM area such as hypertension treatments, to a global company having the products and pipeline to change SOC in specialty area pertaining to drugs prescribed by specialists and centered on oncology. At the same time, our previous from we will diverge approach of pursuing uniform global expansion, instead adoptingof expanding our range of regional an approach value products suited to the markets of specific countries. Another transformation will be the abandonment of our emphasis on conducting all areas of operations in-house. we will greater utilize degree alliances to an even Rather, going forward as we pursue sustainable profit growth. * Rate Growth ® 30.5 -9% 32.5 0% 41.4 8% 43.1 55% 48.8 8% 79.2 8% 2014 Sales (Billions of yen) Pneumonia Accidents Heart diseases Drug & OTC Sales Senile decay Worldwide Prescription Worldwide Cancer statistics of Health, Labour and Welfare) released by the Ministry 1985 1990 1995 2000 2005 2010 2011 2012 2013 2014 Antihypertensives Bronchodilators Antidiabetics Antivirals Antirheumatics Oncology 0 50 Malignant growths (cancer) Cerebrovascular diseases 300 250 200 150 100 6 5 4 3 2 1 Source: “World Preview 2015, Outlook to 2020”, EvaluatePharma Preview 2015, Outlook to 2020”, “World Source: * Growth rates represent growth from 2013. Leading Causes of Death (Japan) (Deaths per 100,000 people) Source: Office of Pharmaceutical on demographic Industry Research (based Source: Rank Therapeutic Area Growing Unmet Needs in Specialty Area centered on Growing Unmet Needs in Specialty Area Oncology overwhelmingly The mortality rate of cancer has become high among all therapeutic areas, particularly in Japan. in terms of global of drugs that are effec- sales Moreover, the cancer market is incredibly tive in treating cancer, large, with medical of \9.5 trillion. Patient annual sales approaches promising needs remain unmet with many being explored, such as immuno-oncology. that unmet needs in specialty area As such, I believe centered on oncology are expected to increase going forward. to the world’s to be home The United States continues science where cutting-edge market, largest pharmaceutical lays fertile ground for the born out of intense competition and treatment methods. As such, this creation of new drugs see ongoing stable growth into the market is expected to pressures on pricing and insurancefuture, although significant be challenging in this market as well. coverage continue to to limit medical expenses is In Europe, the pressure for a low-growth market. particularly heavy, making does present opportunities for However, this market have been highly evaluated for pharmaceuticals that cost-effectiveness. Worldwide Trends by Therapeutic Area (2014) Trends Worldwide

olmesartan and made progress toward

edoxaban

and Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value prasugrel 08 Stagnant growth is expected for the Japanese market due finances, which has to the worsening of government establishment resulted in trends such as the government’s of a target of 80% for the ratio of generic prescriptions to total prescriptions, as well as the introduction of the special price cut for blockbuster drugs. On the other hand, Japan is also deploying policies for encouraging innovation in the pharmaceutical including the promotion market, of regenerative medicine and cell therapy advancement and the introduction incentives. of new drug discovery Differences between Countries and Regions and Transition to Regional Value the 3rd mid-term business plan in fiscal 2013, which the 3rd mid-term business plan in fiscal toward sustainable of measures “promotion advocated the Our activities (loss of exclusivity).” growth beyond LOE were thus advanced based on these themes. back at our progress Looking with regard to major post- merger initiatives, some distance to go with still we have regard to the launch of an oncology and the business creation of global therapeutic top-class pipelines in core sufficiently accomplished our we have areas. Conversely, goals with regard to the maximization of the foundation.” This plan was followed by the 2nd mid-term This plan was followed by foundation.” 2010, which was centered on the business plan in fiscal Looking Back Looking Since its inception Sankyo Co., Ltd., and the merger of through Daiichi Pharmaceutical Daiichi Sankyo Group has Co., Ltd., the to the enrichment of contribute “To worked to fulfill its mission world through the creationquality of life around the of innovative pharmaceuticals, of pharma- and through the provision medical needs.” ceuticals addressing diverse the 1st to fulfill this mission, we launched Seeking in fiscal 2007 withmid-term business plan the theme of Message from the CEO from the Message best practice operational efficiency. of global hybrid business “realization With regard to the we changed the direction of our strategies during model,” the period mid-term business plan with of the 3rd the Ranbaxy Laboratories Ltd. decision to divest External Environment The for the pharmaceutical industry operating environment is characterized by rising global pressure to limit medical expenses combined with an emphasis on cost effectiveness and the growing influence of payers. In addition, the markets for medicines frequently prescribed at hospitals and by specialists are growing, while innovative medicines changing the standard of care (SOC) are becoming increasingly more prominent. Meanwhile, the differences in market shares of specific drugs by country and region are widening due to differences in regulatory and insurance systems. franchise and the expansion of business foundationsfranchise and the expansion of business in established our thrombosis franchise Japan, and we have with “advancement of global hybrid business model,” and then of global hybrid business model,” “advancement “maximization of synergy and expansion of growth“maximization Path Walked by Daiichi Sankyo

2025 Vision Daiichi Sankyo Group is dedicated to the creation and supply of innovative pharmaceutical products to address diversiﬁed, unmet medical needs of patients in both mature and emerging markets. Global Pharma With over 100 years of scientiﬁc expertise and a presence in more than 20 countries, Daiichi Sankyo and its Innovator with competitive advantage 16,000 employees around the world draw upon a rich legacy of innovation and a robust pipeline of promising new in oncology medicines to help people. In addition to a strong portfolio of medicines for hypertension and thrombotic disorders, under the Group’s

“2025 Vision” to become a“Global Pharma Innovator with Competitive Advantage in Oncology,” Daiichi Sankyo Path Walked by Daiichi Sankyo research and development is primarily focused on bringing forth novel therapies in oncology, including immune- Revenue (left) Operating proﬁt (right) oncology, with additional focus on new horizon areas, such as pain management, neurodegenerative diseases, heart and kidney diseases, and other rare diseases.

(Billions of yen) (Billions of yen)

1,100.0 1,200 986.4 940.0 880.1 899.1 919.4 920.0 200 803.5 805.5 795.5 763.6 813.0 Notes: 900 156.8 165.0 1. Excluding Ranbaxy 150 Laboratories Ltd. 130.4 600 2. Figures for fiscal 2011 107.6 112.9 and prior are based on 95.2 99.8 83.7 81.8 100.0 100 Japanese GAAP, and 300 100.0 figures for fiscal 2012 74.4 and forward are based on IFRS. 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2020 (FY) 50

1st Mid-Term Business Plan 2nd Mid-Term Business Plan 3rd Mid-Term Business Plan 4th Mid-Term 5-Year Business Plan

Maximization of synergies and Advancement of global hybrid Promotion of measures toward Transformation Overview of expansion of growth foundation business model sustainable growth beyond LOE toward 2025 Vision

initiatives under • Focus on thrombosis, cancer, diabetes, and • Focus on thrombosis, cardiovascular-metabolics, • Focus on thrombosis, cardiovascular-metabolics, • Grow beyond FY2017 LOE mid-term other fields and cancer fields and cancer fields • Establish a foundation of sustainable growth business plans • Maximize sales of olmesartan franchise • Expand operating foundations in Japan • Divest and liquidate Ranbaxy over period from • Introduced Ranbaxy into Group in 2008 • Conduct frontline and backyard collaboration with April 2014 to April 2015 Ranbaxy • Return to innovative business

Japan Loxonin Tape Japan Loxonin Gel Japan RANMARK Japan PRALIA US AZOR Japan Rezaltas Japan TENELIA Japan Efient Challenge 1: US Effient Japan Inavir US TRIBENZOR US Injectafer Launches of new Grow beyond FY2017 LOE products Europe Sevikar Japan NEXIUM Europe Sevikar HCT US SAVAYSA Europe Efient Japan Memary US MOVANTIK (1) Measures for recovering revenue

Japan LIXIANA Europe LIXIANA (2) Measures for generating proﬁts

Europe Expansion in Turkey and Ireland Japan Start of generic business Business expansion Regional expansion US Expansion in Puerto Rico Japan Start of vaccine business Challenge 2: Establish a foundation of sustainable growth For more information on Japan US Japan Denosumab NEXIUM CL-108 (1) Business strategies the 5-year business plan, In-licensed Japan US Tivantinib VIMPAT, FluMist products Strategic Target 1 Grow edoxaban see pages 12 to 21. Global TS23 Important Europe Tivantinib Strategic Target 2 Establish oncology business manage- Europe U3 Pharma GmbH US Packaging factory US Ambit Biosciences Corp. Strategic Target 3 Grow as No. 1 company in ment Acquisition US Pharma-Force, Inc. Plexxikon Inc. Japan Im Co., Ltd. Japan decisions Strategic Target 4 Expand U.S. businesses Close of Osaka Plant Sale of Akita Plant Strategic Target 5 Continuously generate Restructuring Sale of Shizuoka Plant Restructuring in Japan, United States, and Europe innovative medicine changing SOC Acquisition of Ranbaxy Divestment of Ranbaxy to Sun Pharmaceutical Industries Ltd. Ranbaxy Strategic Target 6 Enhance proﬁt generation Laboratories Ltd. Completion of sale of Sun Pharmaceutical shares capabilities

*1 • First time for inclusion in FTSE4Good ; inclusion continues • Start of“Daiichi Sankyo Presents Family Tie Theater” • Participation in the Global Health Innovative Technology (2) Policies for growth investment, shareholder program (GHIT) Fund thereafter returns, and cash allocation *3 • First time for inclusion in Dow Jones Sustainability Indices*2 • Revision of Daiichi Sankyo Group Corporate Conduct • Receipt of first-prize UCDA Award 2015 for Daiichi Charter Sankyo’s Value Report 2015 (Asia Pacific); inclusion continues thereafter (3) Shareholder returns policy CSR • Establishment of Daiichi Sankyo Kusuri Museum • Establishment of Daiichi Sankyo Group Individual Conduct • Commencement of mobile healthcare field clinic services Principles in developing countries • Participation in United Nations Global Compact

*1. Index compiled by FTSE Russell recognizing companies that engage in responsible corporate activities *3. Award for communication design *2. Index compiled by S&P Dow Jones Indices LLC and RobecoSAM AG recognizing companies that exhibit sustainability

10 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Report 2016 11 5-Year Business Plan

Challenge 2: Establish a Foundation of Sustainable Growth

Daiichi Sankyo will strive for a target 5-Year Business Plan （Billions of yen) revenue of \1,100.0 billion and FY2015 FY2017 (Target) FY2020 (Target) ( ) FY2016 - FY2020 operating profit of \165.0 billion for Revenue 986.4 940.0 1,100.0 fiscal 2020. In addition, in fiscal Operating profit 130.4 100.0 165.0 2020, we aim to have three to five Transformation late-stage pipelines that can be Increase value of late-stage pipelines launched within the next five years In FY2020, to have three to five late-stage pipelines that can be launched — A Bridge to Tomorrow with the potential to generate annual DS within the next five years with the potential to generate annual revenue revenue exceeding \100.0 billion exceeding \100.0 billion each at peak each at peak. If we can achieve these ROE: More than 8% (FY2020) targets, we will achieve return on Note: Foreign exchange assumptions: US$1 = \120, €1 = \130 equity (ROE) of more than 8% in 5-Year Business Plan fiscal 2020.

The 5-year business plan is designed to transform Daiichi Sankyo toward its“2025 Vision”. Under this plan, To accomplish these targets in fiscal 2020, the following business strategies will be implemented. we will work to tackle two challenges:“grow beyond FY2017 LOE” and“establish a foundation of sustainable (1) Business Strategies growth” for the future. StrategicTarget 1 Grow Edoxaban Strategic Target 4 Expand U.S. Businesses We will strive to accelerate growth of edoxaban to cultivate Daiichi Sankyo, Inc. (DSI), is targeting revenue from its Challenge 1: Grow Beyond FY2017 LOE it into a mainstay product that generates more than \120.0 pain franchise of more than \100.0 billion in fiscal 2020. billion in revenue in fiscal 2020. LPI will work toward a revenue target of \150.0 billion We aim to overcome declines resulting from the loss of exclusivity (LOE) for mainstay products such as olmesartan, an for fiscal 2020. Strategic Target 2 Establish Oncology Business antihypertensive agent, as well as the impacts of National Health Insurance (NHI) drug price revisions in Japan. We will We will establish an oncology business and then strive to Strategic Target 5 Continuously Generate Innovative Medicine target revenue of \940.0 billion and operating profit of \100.0 billion in fiscal 2017. grow this business revenue to over \40.0 billion in fiscal Changing Standard of Care (SOC) 2020 and approximately \300.0 billion in fiscal 2025. We seek to continuously generate innovative medicine with (1) Measures for Recovering the potential to change SOC in oncology, which we call our Growth of edoxaban Strategic Target 3 Grow as No.1 Company in Japan Revenue Accelerate growth of primary focused area, and the other areas which we define as Growth of other mainstay products in Japan We will strive to grow Daiichi Sankyo into the No. 1 By accelerating growth of edoxaban, main products new horizon areas, encompassing pain, central nervous Growth of Luitpold business company in Japan in terms of quality and quantity by lever- an anticoagulant, and other mainstay system diseases, heart and kidney disease, and rare diseases. aging the strength of our innovative pharmaceuticals products for the Japanese market Growth business in combination with our generic business, vaccine Strategic Target 6 Enhance Profit Generation Capabilities of other Growth of and increasing the growth of Luitpold Others mainstay Luitpold FY2017 business, and over-the-counter (OTC) related business. We will push forward with massive cost-reduction and stream- FY2015 Pharmaceuticals, Inc. (LPI), of the products in business (Target) Revenue Japan lining measures on a group-wide basis, reviewing cost of sales, United States, we will strive to Revenue \986.4 billion Growth of selling, general, and administrative (SG&A) expenses, and R&D achieve revenue of \940.0 billion in edoxaban \940.0 billion expenses to enhance profit generation capabilities. fiscal 2017. Decrease due to LOE and NHI price revisions in Japan (2) Policies for Growth Investment, Shareholder Returns and Cash Allocation Under the 5-year business plan, our policy will be to prioritize growth investments while also enhancing shareholder returns. As of March 31, 2016, cash-on-hand totaled roughly \700.0 billion. Our activities over the five years of the plan will be (2) Measures for Generating funded by this cash as well as the approximately \2,200.0 billion to be generated in the form of free cash flow before R&D Benefits of cost-reduction Cost-reduction benefits of Profits expenses (Profit before R&D, depreciation and amortization), and cash recovered through asset downsizing. As for specific measures conducted by FY2015 measures in FY2016 and FY2017 In addition to cost reduction allocations, we plan to conduct growth investments of \900.0 billion in R&D expenses and \500.0 billion in business develop- measures conducted by the end of ment investments. The remainder of the funds will be used for shareholder returns, capital expenditure and working capital. ・Further cost reductions and streamlining fiscal 2015, we will pursue further Realization of ・Optimization of manufacturing systems globally process excellence cost reductions and streamlining to ・Further enhancement of procurement (3) Shareholder Returns Policy achieve operating profit of \100.0 We will seek a total return ratio of 100% or more over the period of * billion in fiscal 2017. Increase in gross +\57.0 billion Total return ratio : 100% or more FY2017 the plan and annual ordinary dividends of more than \70 per share. FY2015 profit by growth * Total return ratio = (Dividends + Total acquisition costs of our of products Cost-reduction (Target) While continuing stable dividend payments, we will conduct flexible own shares) / Profit attributable to owners of the Company Operating profit benefits of Benefits of Operating profit acquisition of our own shares. \130.4 billion cost-reduction measures in Annual ordinary dividends: FY2016 and \100.0 billion measures More than \70 per share conducted by FY2017 Decrease due to LOE and FY2015 More information on each of these six strategic targets can be NHI price revisions in Japan Flexible acquisition of our own shares found in the pages that follow.

12 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Report 2016 13 5-Year Business Plan 15 pexid- is being evaluated in combination with will generate peak itor). We expect the TLR of expect the itor). We this study in the latter half of that believe 2019. We as a treatment for head and neck cancer in a phase 2 In the preceding phase study. we collected 1b study, promising data from an analysis of a limited number of cases, and this data was announced at the American annual revenue in the range of annual revenue \100.0 billion by expanding the indications. Patritumab artinib pexidartinib Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value was discovered by Plexxikon Inc., and has was discovered (phase 1/2a) Patritumab tumor (phase 3) Pexidartinib sion of indications) TLR: 1st half of 2018 TLR: 2nd half of 2019 Other studies: Solid tumors Merck’s anti-PD-1 antibody (immune checkpoint inhib- been granted Therapy Designation Breakthrough by the Foodtreat- for the Administration and Drug (FDA) U.S. It is being evaluated ment of tenosynovial giant tumor. cell the first half in a phase 3 study and we expect TLR during of 2018. In addition, we are currently engaged in a study (phase 1/2a study) withcollaborative U.S.-based Merck & Co. to investigate Society of Clinical Oncology together with our design for the phase 2 study in June 2016. Pexidartinib Expected peak annual revenue: Expected peak annual revenue: Head and neck cancer (phase 2) \100.0 billion (including expan- Indication: Tenosynovial giantIndication: cell Tenosynovial pipeline products organization ・ Establish oncology late-stage business by launching current ・ development Accelerate early-stage pipeline ・ pipeline by acquisitionEnrich of external assets ・ by a new oncologyAccelerate research and development ・ prior to fiscal 2020, we will target revenue contributions prior to fiscal 2020, we will of \40.0 billion target revenue billion \30.0 billion Tivantinib \100.0 billion Quizartinib Approx. FY2025 pexidartinib carcinoma (phase 3) TLR: 1st half of 2018 TLR: 1st half of 2017 Indication: AML (phase 3) Indication: Hepatocellular 300.0 Expected peak annual revenue: Expected peak annual revenue: Expected peak annual revenue: Expected peak annual revenue: \ , and Revenue tivantinib , billion quizartinib is approved for newly-diagnosed and is approved to is expected generate peak annual revenue to is expected generate peak annual revenue FY2020 is currently in phase 3 studies for newly- More than is being developed is being developed 40.0 \ of the phase 3 study for relapsed / refractory AML of the phase 3 study for relapsed / refractory *1 quizartinib Strategic Target 2: Establish Oncology 2: Establish Business StrategicTarget patients study) during the first half of 2018. (QuANTUM-R If (1) Establish Oncology Late-Stage Pipeline Products Business by Launching Current *1. TLR: Anticipated initialstudies results for By launching in partnership with ArQule Inc. in the United States and Europe for the treatment of refractory hepatocellular carcinoma. In March 2016, the independent data monitoring committee of the phase 3 study (METIV-HCC study) conducted the planned interim assessment, and it was determined the study will continueanalysis. to its final expect TLR during the first half of 2017. We of around \30.0 billion. diagnosed and relapsed/refractory FLT3-ITD-positive diagnosed and relapsed/refractory FLT3-ITD-positive duplication)(FMS-like tyrosine kinase 3 internal tandem expect top-line results acute myeloid leukemia (AML). We (TLR) relapsed/refractory treatment, we believe it will generate relapsed/refractory treatment, we believe of approximately \100.0 billion. peak annual revenue by fiscal 2020. We will establish an oncology business by launching several drugs currently in late-stage development. Concurrently, we will Concurrently, will in late-stage development. drugs currently establish an oncologyWe business by launching several in oncology and evaluate further enrichment through the acquisition pipeline development accelerate early-stage of the accelerationexternal assets. Through we aim to grow of oncology our oncology research and development, business 2025. fiscal 2020 and \300.0 billion in fiscal to more than \40.0 billion in revenue Tivantinib Tivantinib Quizartinib （Year）（Year） 25% and 2015 2015 18 \1,100.0 billion Warfarin 2014 2014 748.5 11 2013 2013 431.2 5 2012 2012 214.3 2 2011 2011 100.8 0 0 40 80 60 20 600 900 300 100 1,200 Non-vitamin K antagonist oral anticoagulants (NOAC) DOACs Warfarin Note: Translated at rate of US$1 = \120 Note: Translated ©2016 IMS Health 2011‒2015 data Created based on MIDAS Reprinted with permission DOAC Market Trend DOAC (Billions of yen) Ratio of Prescription of Numbers DOACs （%） *1. DOAC: Another term commonly used to refer to novel oral anticoagulants or Another term commonly used to refer to novel DOAC: *1.

for Ability to adjust dosage amounts based on patient condition Advance global launch strategies Continue to appeal product profile Generate new evidence High safety and convenience Strategies Characteristics edoxaban SAVAYSA rivaroxaban , the current in other SAVAYSA , (FY） market, which warfarin *1 into the No. 1 DOAC into the No. 1 DOAC edoxaban dabigatran , Edoxaban into a pillar supporting \120.0 billion LIXIANA edoxaban LIXIANA in Japan and Europe, and in Japan and Europe, into a Pillar Supporting Medium-to-Long-Term Growth into a Pillar Supporting Medium-to-Long-Term throughout all of Europe, as Daiichi ̶is growing reached the and has already LIXIANA 2015 2017 2020 ( billion LIXIANA \15.0 billion coupled with the convenience of once daily doses, of once coupled with convenience the Edoxaban Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value more than in FY2020 revenue to revenue Others Japan / Europe 120.0 apixaban \ Increase global Edoxaban Grow Strategic Target 1: Grow 1: Grow StrategicTarget standard treatment. 14 The direct oral anticoagulant (DOAC) 5-Year Business Plan 5-Year scale of \1,100.0 billion on a globalscale of \1,100.0 billion basis. Looking at the ratio of prescription it is clear that substantial numbers, to overtake room still exists for DOACs Sankyo markets it in Western Europe and Merck Sharp & Sankyo markets it in Western Dohme focuses and Central Eastern Europe. In on Northern the United States, we will continue market to medium-to-long-term growth, we commit to advance steadily global strategies launch and generate new product.evidence to strengthen the appeal of this In Japan, we aim to grow in the domestic market through our high-quality marketing capabilities. we established a marketing In Europe, alliance with & Dohme Corp., a European subsidiary of Merck Sharp willMerck & Co., Inc., in February 2016. We the accelerate growth of regions who we can collaborate while seeking best partners full-fledged promotionalwith activities to develop in those new markets. By advancing these initiatives, to grow we aim comprises 4 products̶ in the US) has superior bleeding safety compared to in the US) has superior and appropriate patients and seek to implement measures to to we will Meanwhile, strive access environment. improve realize early approval and launch of into a product with of more than annual global revenue \120.0 billion. has significant evidence on its efficacy and safety backed has significant evidence on its efficacy and needs of atrialby robust clinical trial results, and addresses fibrillation thromboembolism (AF) patients and venous (VTE) patients. its unique characteristics In order to solicit to grow and endeavor warfarin 5-Year Business Plan , 17

*1 RANMARK ), and (epilepsy treat- , *1 Generic background OTC Related through the Internet VIMPAT PRALIA Become No. 1 generic , company withinnovation company Grow business through core Grow business through products and direct marketing Memary (opioid analgesic , inhibitor for the treatment of moderate- *2 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Make Comprehensive Make Comprehensive NEXIUM Vaccines new products Contributions to Medical Needs in Japan hydromorphone Aim to be trusted as medical partner Continually introduce Innovative PharmaceuticalsInnovative (treatment for bone complications caused by bone (type 2 diabetes mellitus inhibitor) (ulcer treatment: proton pump inhibitor) (Alzheimer’s disease treatment) (treatment for osteoporosis) (antiplatelet agent) treatment Memary PRALIA RANMARK Eﬁent TENELIA NEXIUM metastasis from tumors) bone metastasis from tumors for brain area become ﬁrst-line treatment for diabetes and expand market share to-severe Alzheimer’s disease by provision of clinical evidence to-severe

*1. GERD: Gastroesophageal reflux disease *2. ChE: Cholinesterase Product Strategies ・ Standardize combination therapy with ChE ・ Increase market penetration by promoting in guidelines high evaluations received ・ Grow by getting additional indication for rheumatoid arthritis ・ Maintain position as standard of care (SOC) for treating bone complications caused by ・ Grow by getting additional indication for breast cancer ・ Maintain No. 1 share in heart area by promoting ideal dosage for Japanese people ・ Lead next generation of antiplatelet treatment in Japan by getting additional indication ・ efficacy and ease of use for seniors and patientsAdvertise with renal impairment to ・・ Maintain No. 1 share by establishing position as “first choice” drug for GERD choice” “first Maintain No. 1 share by establishing position as ・ , a treatment for rheumatoid arthritis). Through this constant reinforce- （FY） etanercept More than \243.0 billion , including seeking additional indications thereby aim to increase total for some of these products. We \226.0 billion (intradermal HA vaccine injection syringe for influenza), (biosimilar biogeneric of billion 2015 2017 2020 TENELIA \171.1 billion more than in FY2020 VN-100 243.0 \ , and Increase revenue to Increase revenue Growth of Major Products Strategic Target 3: Grow as No.1 Company in Japan as No.1 Company 3: Grow StrategicTarget We are striving to grow Daiichi Sankyo into the No. 1 We To and quantity. in Japan in terms of quality company willaccomplish this objective, the Company address a wide related to areas such as preven- range of medical needs the leveraging tion,through self-medicationtreatment and pharmaceuticalsstrength of its innovative business in combination with business, vaccine business its generic and OTC related business. and pharmaceuticalsIn our innovative sales capabilities business, we boast top-class in terms of both quality and quantity, we will the strong reputation utilize of these sales capabilities these capabilities ongoing growth. outside to drive Moreover, will opportunities. has resulted in successful in-licensing continue We of the Company to grow our own in-house products as well as in-licensed products in domestic operations, which in turn builds a stronger reputation capabilities. for our sales The resulting a source of our ongoing growth. cycle is With regard to major domestic products, will we of pursue growth in revenue *1. Opioid analgesic: Narcotic analgesic ment), revenue from these six products from these more than \243.0 billion. to revenue In fiscal 2016 and beyond, we will proceed with the sequential launches of such new products as ment of our product line, we will grow No. 1 pharmaceutical Daiichi Sankyo into Japan’s company. Efient Etanercept BS is DS-3201 with the goal of approach. *2 is Daiichi Sankyo’s first DS-8201 antibody drug conjugate (ADC) and was created using innovative ADC technologies. This drug displays the potential for significant efficacy in patients for which the efficacy of currently marketed anti-HER2 antibodiesand effective treatment. We aim to effective treatment. We complete the phase 1 study in fiscal 2018. DS-8201 is the first compound studied by the is the first compound

is an EZH 1/2 dual inhibitor discovered through inhibitor discovered is an EZH 1/2 dual DS-3201 leukemia) Indication: Indication: Solid tumor (HER2-ADC) DS-3201 DS-8201 (EZH1/2 inhibitor) (including adult T-cell (including adult T-cell anti-HER2 are currently ADCs is insufﬁcient. We performing a phase 1 study for expected to be a promising treatment option for adult leukemia, which, to date, lacks a consistently T-cell joint research with the National Cancer Center and the that commenced in March In studies of Tokyo. University 2016, Company to target an epigeneticsCompany acquiring study results during ﬁscal 2017. DS-3201 Non-Hodgkin’s lymphoma Non-Hodgkin’s lymphoma

and Indication: Indication: logic tumor DS-6051 DS-3032 (MDM2 inhibitor) (NTRK / ROS1 inhibitor) Solid tumor and hemato- Solid tumor (lung cancer) crizotinib exhibited tumor reduc- , a ROS1 inhibitor, with , a ROS1 inhibitor, DS-6051 *1 DS-6051 is an inhibitor of MDM2, . The interim analysis that Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value a protein that is related to regulation of the p53 tumor suppressor. It is currently in phase 1 studies for the treatment of solid tumors and hematological tumors. For a subgroup of patients, MDM2 gene amplification has of solid tumor. been confirmed inside liposarcoma, a type anticipate high efficacy in patientsWe in this subgroup. 16 With the aim of accelerating research and development in the oncologyWith the aim of accelerating area, Daiichi Sankyo reformed its organizational research and development structure. This reorganization the 2016 establishment of the Oncology R&D Sub Unit, which oversees the April included functionsglobal in the oncology development research and clinical area. will enable us to consolidate our oncology This move R&D expertise and seamless decision- and also facilitate flexible making in oncology in this area. objectives in order to accelerate meeting our research and development Yver 2016. Dr. MSc, who was appointed to this position in April MD, The Oncology R&D Sub Unit is led by Antoine Yver, previously led oncology of research at global pharma companies, and he has a wealth of experience in the development oncology his leadership, we will drugs. Under accelerate oncology research and development. (4) Accelerate Oncology into a New Organization Research and Development (3) Enrich Pipeline by Acquisition of External Assets Daiichi Sankyo has continued to pursue the expansion of products and pipelines by acquiring external assets via M&A or alliances. Going forward, we will continue pipeline acquisition, to explore prioritizing those that will contribute to the growth of our oncology franchise. *1. SCRUM-Japan: National project led by the National Cancer Center to screen for oncogenic abnormality of cancer patients in order to provide the best-fit medicines to them *2. Epigenetics: Chemical modification or histone leading to acquired change in gene expression without modification of DNA sequence of DNA We are currently performing phase 1 studies in Japan and are currently performing phase We the United States for We have focused on drug discovery in oncology focused and Sankyo in 2007 and allocated since the merger of Daiichi on drug discovery have additionalWe with molecules pipeline early-stage many advancing now are we result, a As 2009. since area this to resources management contributionsthe aim of innovating of \300.0 billion expect revenue of care (SOC). Going forward, we the current standard total oncologyin fiscal 2025 from the portfolio. compounds with the following different modes development are four promising early-stage of action. Additionally, (2) Accelerate Early-Stage Pipeline Development Early-Stage (2) Accelerate 5-Year Business Plan 5-Year revealed this finding was publicly this finding revealed 2016. In Japan, reported in April we are recruiting patients with similar mutations the through SCRUM-Japan project. tion in a patient that was resistant to regard mutation to lung cancer in which the ROS1 gene has been identified, and we are targeting completion of we study, these studies in fiscal 2017. In the U.S. a case where observed DS-3032 ceritinib 5-Year Business Plan

19 Injectafer Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value into a flagship product and a market leader Injectafer (Compound annual growth rate: 20%‒30%) ologists, cardiologists and obstetrician-gynecologists that treat iron- deficiency anemia market Expand and maximize product portfolio generic injectable Become a top 4 supplier in the U.S. Iron Franchise Generic Injectable Franchise ・ Execute lifecycle management ・ Expand the target scope of promotion activities to include gastroenter- ・ 40% in the hematologyGain a share of more than and oncology segment ・・ Build ・ Focus on high-market-value products (e.g. anticancer drugs) ・ Shirley Plant ・ operations: Consolidate Plant and expand capacity New Albany ・ : Upgrade existing manufacturing infrastructure Hilliard Plant ・ : Maximize space use and expand capacity （FY） \150.0 billion and the generic injectable franchise, we will aim to achieve revenue of \150.0 billion in of revenue franchise, we will and the generic injectable aim to achieve Injectafer \120.0 billion as its flagship product, LPI will expand the target scope of its sales teams’ coverage to include to include coverage as its flagship product, LPI will the target scope of its sales teams’ expand 2015 2017 2020 \91.0 billion Injectafer billion \18.6 billion more than in FY2020 150.0 \ Injectafer Generic injectable franchise, etc. Generic Increase revenue to Increase revenue Growth of Luitpold Business iron injectionfranchise. and its generic injectable Positioning (2) Growth of Luitpold Business (2) Growth of is achieving rapid growth by increasing revenue subsidiary, Luitpold Pharmaceuticals, Inc. (LPI), another U.S. gastroenterologists,cardiologists and obstetrician-gynecologists anemia. LPI that treat iron-deficiency seeks to acquire a in the hematologyshare of more than 40% and oncology market. Through these efforts, LPI will realize annual revenue growth of 20% to 30%. In regard LPI to its generic injectable franchise, will become a top 4 supplier in expand capacity for plants and the United States. the growth Through of the Luitpold business. , and hydroco- MOVANTIK has a majority of promethazine Pregabalin . A combination of based on phase 3 clinical trial data promethazine pregabalin (treatment for pain associated with (treatment for opioid-induced constipation) in fiscal 2019, and we will endeavor to grow in fiscal 2019, and we will endeavor (treatment for pain and opioid-induced nausea and vomiting, targeted launch in FY2017) Mirogabalin fibromyalgia, targeted launch in FY2019) induced nausea and vomiting MOVANTIK CL-108

Key Success Factors and Main Strategies Key ・ Raise awareness regarding opioid-induced constipation ・ about opioid-induced constipationInspire a conversation ・ affordable access Deliver ・ Raise awareness among healthcare professionals regarding opioid- ・ Engage the medical community ・ Differentiate from ・ mirogabalin , which releases after each make up approximately 25% of the total market and repre- each make up approximately （FY） mirogabalin acetaminophen in fiscal 2017 and and and CL-108 CL-108 More than \100.0 billion , in terms of ease of use, efficacy and safety, and we anticipate and we the acquisition of top-line results in terms of ease of use, efficacy and safety, hydrocodone . external injury or surgery, and this combination is external injury or surgery, is the standard treatment for pain after MOVANTIK 2015 2017 2020 pregabalin \2.0 billion is a new, oralα2δ-ligand undergoing development for the treatment of pain associated pain of with treatment the fibromyalgia for in development oralα2δ-ligand undergoing new, a is CL-108 is the first once-daily oral treatment for opioid-induced constipation approved by the FDA. It is primarily for opioid-induced constipation is the first once-daily oral treatment for by the FDA. approved mirogabalin billion / from can address substantial unmet medical needs. is a novel fixed-dose, immediate-release bi-layered tablet with fixed-dose, immediate-release is a novel a rapid release layer containing acetaminophen , and more than in FY2020 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 100.0 \ and MOVANTIK Mirogabalin

Increase revenue to Increase revenue Business Expansion for Pain Franchise (DSI) Business Expansion for Pain Mirogabalin CL-108 MOVANTIK Strategic Target 4: Expand U.S. Businesses U.S. 4: Expand StrategicTarget revenue from the pain franchise to more than \100.0 billion in fiscal 2020. from the revenue the United States. The U.S.α2δ-ligand market has a scale of 50 million annual prescriptions.the United States. The U.S.α2δ-ligand revenue in this market and achieved sales totaling US$2.7 billion in 2015. However, more than 50% of patients prescribed However, sales totaling US$2.7 billion in 2015. and achieved in this market revenue we feel that there are this drug stop using it within as insufficient pain relief. Accordingly, 12 months for reasons such substantial with unmet needs currently underway will hope that the phase 3 study this regard. allow us to differentiate We in the first half of 2017. launches of DSI is targeting U.S. (1) Business Expansion in Pain Franchise (DSI) Franchise in Pain (1) Business Expansion 18 Daiichi Sankyo, Inc. (DSI), of the United States, willDaiichi Sankyo, Inc. in its pain franchise through pursue business expansion 5-Year Business Plan 5-Year

adults that have also been prescribed opioids for treating chronic non-cancer pain. We commenced co-promotion also been prescribed opioids for treating of this chronic non-cancer pain. We adults that have drug together with in fiscal 2015. AstraZeneca 40% of patients that taking opioids for non-cancer pain experience constipation. Approximately therefore believe We prescribed to approximately 53 million patients each year. Data show that approximately 40% of opioid patients opioid of 40% experience approximately that show Data patientsmillion 53 year. each approximately to prescribed enough severe pain of (OINV). management vomiting the and for nausea reviewing opioid-induced NDA the currently is FDA action undertarget a date set has FDA The associated the OINV. reducing or preventing while analgesic, opioid an require to 31, 2017. of January the Prescription User Fee Act (PDUFA) Drug 40% of this market is \3,360.0 billion, and approximately pain market in the United States is approximately The countries. from the markets of Japan and other analgesics, which is significantly different accounted for by opioid The segments of this year. pain market exceeds 330 million per US The total number of prescriptions the overall written in market targeted by sent more than 80 million prescriptions.sent more than 80 million a second layer containing done mirogabalin MOVANTIK CL-108 5-Year Business Plan 21 edoxaban ） company in Japan company nesses erate innovative erate innovative medicine changing standard of care (SOC) Grow Grow as No.1 Expand U.S. busi- Expand U.S. Continuously gen- Restructuring in R&D Top priority Top R&D expenses Strategic Target 2 Strategic Target Establish oncology business Elsewhere, invest in following Elsewhere, invest strategic targets 1: Strategic Target Strategic Target 3: Strategic Target Strategic Target 4: Strategic Target Strategic Target 5: Strategic Target （ Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Growth investment Restructuring in EU Enhancement of procurement functions SG&A expenses Restructuring in Japan capital Working Working investments R&D expenses tures Capital expendi- returns own shares) (Dividends + Business development Business development Approx. \500.0 billion Approx. Approx. \900.0 billion Approx. Shareholder Acquisitions of Restructuring in U.S. Further cost reductionsthe Group and streamlining across funds billion Approx. Approx. Cost of sales \2,200.0 cash allocation 5-year aggregated * systems globally Sale of Akita Plant Free of assets cash flow expenses before R&D Optimization of manufacturing Streamlining billion period \700.0 Approx. Approx. Achieve Achieve Profit generation ～ FY2015 Cash-on-hand during plan March 31, 2016 * Calculation method: Profit for the year + R&D expenses + Depreciation and amortization Strategic Target 6: Enhance Profit Generation 6: Enhance CapabilitiesStrategicTarget for Advancing Strategic Targets Growth Investments To enhance our profit generation enhance our capabilities, we willTo measures conducted by fiscal build upon the business restructuring the period2015. Efforts during business plan will of this 5-year include optimizing manufacturing systems globally and further enhancing procurement. In addition, we will further cost reductions pursue advancing a and streamlining across the Group, our ability to generate profit. R&D expenses to boost cost of sales, SG&A expenses, and concerted effort to review to facilitate the advancement of these strategicDaiichi Sankyo will targets. conduct growth actively investments \2,200.0 approximately the as well as 2016, 31, March of as billion will \700.0 roughly of utilize hand on cash Company The in period of \900.0 billion billion in cash to be generated during the plan to conduct growth of this 5-year business investments our top priority will be to acquire In conducting investments, these development. R&D expenses and \500.0 billion in business willoncology be made for advancing other growth products strategies and pipelines, and investments as necessary. Rare diseases , an allogeneic cell therapeutic agent for disease Heart and Kidney Heartcel erify the therapeutic effect and realize practical we are advancing research and preclinical studies we are advancing research and preclinical *5 , a treatment for Duchenne muscular dystrophy that went into phase Central Nervous Central Nervous System diseases System and cell therapies, Oncology (including Immuno-oncology) *4 DS-5141 Pain we will strive to continuously we will medicine changing innovative generate strive SOC. *2 Continuously medicine changing generate innovative SOC in Japan. Preparations for a domestic phase 1 study are currently being made. Heartcel Areas Primary New Horizon Focused Area Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value and translation research, technologies. bispecific technologies As for *1 *3 tion in everyday medical practicetion in everyday administered to the patient to treat various diseases Strategic Target 5: Continuously Changing Innovative Medicine Generate Strategic of Care (SOC) Standard Target ischemic heart failure currently in development. Under this agreement, Daiichi Sankyo willischemic heart failure currently in development. be responsible for development and sales of on compounds that may be the next candidates to proceed on to the clinical phase. acid drugs is One example of our nucleic (2) Realize Clinical Application of Innovative Technology (2) Realize Clinical Application of 20 *1. Open innovation: Development method in which external development capabilities and ideas are used to overcome internal development challenges and create innovative new value Open innovation: method capabilities internal development Development in which external development and ideas are used to overcome *1. - and applica research: Integrated of new medical innovations, research processTranslation testing encompassing development safety and efficacy, in clinical settings to verify *2. *3. Nucleic acid drugs: Drugs utilizing nucleic acids comprised of genes for simultaneously inhibiting*4. Bispecific technologies: the functions Technologies of two antigens methods in which cells are extracted from a patient therapies: Treatment Cell and then selected, activated, multiplied, differentiated, or otherwise manipulated before being *5. In regard fundamental bio technologies, to our advanced several already commenced phase 1 studies for we will have compounds that utilize antibody dependent cellular cytotoxicity (ADCC), antibody drug conjugate (ADC) and nucleic acid drug Our target therapeutic areas include oncology, which will be positionedOur target therapeutic as a primary focusedoncology, areas include area, as well as pain, central and we define as new horizon areas. Research kidney disease, and rare diseases, which system diseases, heart and nervous of treatments in these areas willdevelopment - advantage of partnering, open innova be a priority going forward. By taking tion, (1) Create New Drugs in Oncology(1) Create New Drugs Horizon Areas and New 5-Year Business Plan 5-Year targeting commenced joint research with the creation Asahikawa Medical University Furthermore, we have of cell therapies using capillary stem cells. Research is currently moving forward to v application of these cells for the treatment of patients with a wide range of diseases, including lower leg ischemia and ischemic heart disease. organization areas, we transformed our research efforts in new horizon 2016 to facilitate drug discovery in April To model.transition small organizations created this model, Under to a bioventure the Company pharma- that possess either cology and medicinal chemistry functions or pharmacology and biologics functions. These organizations will be granted resource allocationsdecision-making authority in relation to research themes and receive based on the results they to expedite decision making. expect that this change will mind-set and serve generate. We give rise to an innovative, venture we anticipate in research speed and productivity. a rise Consequently, 1/2 studies in Japan in February 2016. Committed to providing a treatment option for patients suffering from serious cases of this disease, we are working in close coordination with specialists with the aim of acquiring domestic manufacturing and marketing this drug in 2020. approval for At the same time, we are stepping up initiatives clinical application to realize of our cell therapy technologies. Through 2016 and Asubio Pharma Co., Ltd., which has been efforts out of the Cell Therapy Laboratories established in April advancing research for regeneration and cell therapy with academia, we will lead the advancement of cell therapy in Japan as an industry representative. Cell Therapy Ltd. (Celixir at present), where an in-licensing agreement In May 2016, we concluded with U.K.-based for Nobel Laureate Professor Martin Evans works as chief science officer, Operations and Financial Position ,

(1.4) 2.8% (1.3%) (1.9%) (3.2%) (2.8%) 22.0% 18.8% 15.3% 70.1% 23 (34.0%) (16.8%) (15.4%) (16.9%) Benicar 118.9% 262.6% 613.5% (Billions of yen) and Injectafer TRIBENZOR 48.1 [31.8] FY2015 change YoY Benicar . 7.6 16.5 9.0 3.67.3 13.0 12.5 9.4 5.1 0.7 4.9 4.2 27.818.4 18.417.2 18.2 (9.5) 16.9 (0.2) 18.1 (0.3) 15.116.616.2 14.0 (3.0) 13.4 (2.6) (2.7) 10.2 12.411.5 11.8 2.2 0.3 69.376.3 82.449.5 73.9 13.1 36.8 (2.5) 42.4 5.6 [31.1] FY2014 SAVAYSA ] . remained unchanged. , for which co-promotion started in Tape

, and Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Loxonin Venofer Welchol MOVANTIK , Ulcer treatment agent Antihypertensive Anti-inflammatory analgesic [of which Alzheimer’s disease treatment Synthetic antibacterial agent agent Antihypertensive Contrast medium mellitus 2 diabetes Type inhibitor for hypertension, Treatment angina pectoris and chronic heart failure Anti-influenza treatment Antihyperlipidemic agent Anticoagulant for osteoporosis Treatment for bone complica- Treatment tions caused by bone metastases from tumors for dysuria Treatment Antiplatelet agent , and AZOR , Revenue: ¥275.4 billion (increased 19.8% year on year); ¥275.4 billion (increased Revenue: CompositionRevenue Ratio: 27.9% North America Domestic revenue from mainstay prescription from mainstay Domestic drugs revenue Product name Revenue in North America increased 19.8% year on year, in North America increased 19.8% year on year, Revenue in local currency terms rose by to ¥275.4 billion. Revenue 9.6%, to US$2,292 million. sales increased (DSI), overall At Daiichi Sankyo, Inc. thanks to contributions from higher sales of In addition, DSI decided to reorganize its commercial structure to prepare for the launch of new products in the including the pain, market in highly specialized areas U.S. fields. As part of its and cardiovascular-metabolic oncology, aim of transitioninga more efficient and flexible organi to - zation, workforce by around 1,000 people. DSI reduced its April 2015 despite a decline in sales of April At Luitpold Pharmaceuticals, of Inc., sales contributed significantly to the increase in revenue, though revenue, in increase the to significantly contributed performance of NEXIUM Olmetec Loxonin Memary Cravit Rezaltas Omnipaque TENELIA Artist Inavir Mevalotin LIXIANA PRALIA RANMARK Urief Efient Effient HCT , 5.5 (2.8) 22.1 4.6% 11.6% (13.1%) and (Billions of yen） PRALIA , 18.7 53.4 Other regions 6.3% ¥61.8 billion Revenue (increased 0.5% year on year) Japan 58.2% ¥574.5 billion Revenue (increased 4.6% year on year) LIXIANA FY2015 change YoY , TENELIA 21.5 47.8 , 477.0 499.1 FY2014 , which offset the impact of a rise in ¥986.4 billion Memary , Efient , a synthetic antibacterial agent, decreased , a tetravalent combination vaccine (DPT-IPV) , and Olmetec orally disintegrating (OD) tablets NEXIUM Reports by Segment Revenue: ¥574.5 billion (increased 4.6% year on year); ¥574.5 billion (increased Revenue: CompositionRevenue Ratio: 58.2% Japan Europe 7.6% ¥74.7 billion Revenue (decreased 5.2% year on year) North America 27.9% ¥275.4 billion Revenue (increased 19.8% year on year) Primary revenue composition in Japan Primary revenue Category Prescription drugs Royalty and exports Healthcare (OTC) products Revenue by Geographic Area Revenue to ¥574.5 increased 4.6% year on year, in Japan Revenue billion. from prescription drugs in Japan increased Revenue This increase was to ¥499.1 billion. 4.6% year on year, attributable to factors including growth in sales of products such as 13.1% year on year, to ¥18.7 billion. 13.1% year on year, from the OTC related business of Daiichi Sankyo Revenue to Healthcare Co., Ltd., increased 11.6% year on year, 2015, Daiichi Sankyo ¥53.4 billion. In November Healthcare Co., Ltd. acquired all of the shares of Im Co., Ltd., in order to reinforce foundations for the direct marketingthe skincare field. business in for the prevention of diphtheria, pertussis, tetanus, and for the prevention poliomyelitis, were launched in December 2015. from royalty and exports, which centered on Revenue pharmaceuticalexports of the active ingredients of prescriptions drugs. This segment also includes of generic by Daiichi Sankyo Espha Co., Ltd., generated revenue which engages mainly in the generic business, and revenue Kitasato Daiichi generated from the vaccine business of In Co., Ltd. Japan Vaccine Co., Ltd., and Sankyo Vaccine addition, levofloxacin RANMARK Squarekids (Yen) ̶ (3.2%) 67.1 56.0 42.5 36.8 7.3% 29.4% 75.2% 53.1% 84.5% 251.1% (74.5%) YoY change YoY FY2015 FY2015 (Billions of yen) (Billions of yen) (Billions of yen) ) ̶ (275.4) FY2015 down 82.3 (239.8) 80.4

109.94138.78 120.14 132.57 FY2015 change YoY 20.7% 21.2% FY2014 FY2014 % 24.9 32.2 7.3 293.5 284.1 (9.4) FY2014 74.5 74.479.9 130.4 43.6 122.4 ) 322.1 275.4 919.4 986.4 FY2014 up billion ( % Antihypertensive Antihypertensive agent Antiplatelet agent Anticoagulant 4.3 15.0 10.7 82.3 84.5 ) ) up up (“Ranbaxy”) was merged into Sun Pharmaceutical Industries Ltd. (“Sun into Sun Pharmaceutical was merged Industries Ltd. (“Sun (“Ranbaxy”) from the cope of consolidation. the Ranbaxy Group was excluded Pharma”), In fiscal 2014, the Ranbaxy Group was classified as a discontinued operation. operating profit and profit before for the amounts of revenue, Consequently, tax, only the figures for continuing operations the Ranbaxy Group are excluding presented. billion ( % % ) expenses to revenue owners of the Company operations discontinued operations P rofit attributable to P Product name Consolidated financial results Revenue Operating profit Profit before tax rofit from continuing P rofit (loss) from P USD / JPY EUR / JPY Note: During fiscal 2014, following Laboratories Ltd. the fact that Ranbaxy Note: from global mainstay productsRevenue expenses Research and development expensesResearch and development atio of research and development R 190.7 rate for year) exchange rates for major currencies (average Yen 208.7 Olmesartan Prasugrel Edoxaban up 80.4 53.1 75.2 % 7.3 billion ( billion ( billion ( 122.4 130.4 986.4 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value • Operating profit up ¥56.0 billion, to ¥ • Profit from continuing operations up ¥36.8 billion, to ¥ Profit before tax up ¥42.5 billion, to ¥ • Profit before tax up Revenue up ¥67.1 billion, to ¥ • Revenue Profit attributable to owners of the Company down ¥239.8 billion, to ¥ down ¥239.8 billion, to owners of the Company • Profit attributable to Fiscal 2015 Consolidated Financial Results for 22 Profit Attributable to Owners of the Company declined Profit attributable to owners of the Company to ¥82.3 billion. ¥239.8 billion, or 74.5% year on year, declined owners of the Company Profit attributable to substantially because the gain of a subsidiary from merger of ¥278.7 billion (after tax effect) resulting from Ranbaxy Laboratories Ltd.’s merger with Sun Pharmaceutical Industries Ltd. was included in fiscal 2014. Profit from Continuing Operations Profit from continuing operations ¥36.8 billion, increased to ¥80.4 billion. or 84.5% year on year, Profit before Tax on year 53.1% or billion, ¥42.5 increased tax before Profit to ¥122.4 billion. year, before tax was not as substantial The increase in profit as the increase in operating profit due to foreign exchange coupled with a rise in financial expenses rate movements regarding the sale of Sun related to payments Pharmaceutical Industries Ltd.’s shares. Operating Profit Operating profit increased ¥56.0 billion, or 75.2% year on to ¥130.4 billion. year, Operating higher gross profit increased largely due to profit combined with lower selling, general and adminis- and develop- trative expenses despite a rise in research ment expenses. Revenue fiscal 2015 increased ¥67.1 billion, or in Group revenue to ¥986.4 billion. 7.3% year on year, due to growth was mainly in The increase in revenue sales of mainstay products in Japan, the United States, and Asia, combined with impact of foreign the positive by which boosted revenue exchange rate movements, approximately ¥12.9 billion.

Summary of Financial Results in Fiscal 2015 Results in of Financial Summary Operations and Financial Position Financial and Operations Operations and Financial Position 25 ― FY2016 from June 50.0 limit (Implementing through October) (sold under 10 50.0 August) FY2015 (Implemented from May through Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value olmesartan medoxomil Ordinary dividend Commemorative 60dividend 70 (plan) or other brand names in the United States). Trends to Limit Healthcare Expenditures to Limit Healthcare Trends Acquisition of treasury shares (billion yen) to Laws, Regulations,Risks Related and Regulatory 3) Prescription drugs in Japan are subject to a variety of laws, regulatory changes or regulations, and ordinances. Any associated to the medical treatment system trends related and national health insurance (NHI)̶most notably NHI a negative impact on the price revisions̶could have sales of Group’s earnings and financial position. Similarly, markets are also subject to prescription drugs in overseas various legal and regulatory constraints; the Group’s affected performance in these markets could be adversely by regulatory trends. Department of Following an investigation by the U.S. Justice Opinion & Discussion programs into the Physician Shareholder returns Annual dividends per share (yen) Although the Company and the Company’s consolidated and the Company’s Although the Company - subsidiaries could incur damages as a result of the above mentioned litigation, at it would be difficult or impossible present to reasonably estimate the monetary amount of such damages. any LLC (head office: New York, United States), and the New York, (head office: LLC state and federal U.S. in thereof affiliates and subsidiaries experienced sprue-likecourts by claimants alleging to have diarrhea) include severe enteropathy (primary symptoms and other complications as a result of taking pharmaceuticals containing duration of the plan (total return ratio = (dividends + total acquisition attributable to costs of own shares) / profit Daiichi this policy, On the basis of owners of the Company). a regular dividend of ¥70 per share Sankyo intends to pay per share increase from fiscal 2015.for fiscal 2016, a ¥10 period the In addition, 21 to October 28, from June over will acquire its own shares from the 2016, the Company limit for this acquisitionopen market. The upper will be shares). \50.0 billion (28 million Benicar olmes- accounted for 28.8% of olmesartan or other factors could adversely affect Daiichi Sankyo’s Daiichi affect adversely could factors other or Shareholder Returns Shareholder Business Risks 1) Risks Related to Dependence on Specific Products Risks Related 1) In fiscal 2015, sales of Litigation-Related Risks 2) Besides potential fair transaction the Group could issues, face litigation of various forms concerning its business activities, including without limitation lawsuits related to or labor disputes. Any drug side effects, product liability, such litigation effect on the Group’s an adverse could have business results and financial position. been filed against Multiple Daiichi Sankyo lawsuits have Limited; Daiichi Sankyo, Inc. (DSI); and Daiichi Company, Holdings, Inc., as well as Forest Laboratories, Sankyo U.S. In order to achieve sustainable growthvalue, in corporate In order to achieve is to decide profit distribu- the basic policy of management considerationtions of the based on a comprehensive essential for implementinginvestments the growth strategy shareholders. and profit returns to approxi- Daiichi Sankyo acquired Under this basic policy, of its own shares for approximately 20,650 thousand the period on the open market over mately ¥50.0 billion 2015. from May to August Daiichi Sankyo celebrated its 10th founding anniversary the commemorate this event, on September 28, 2015. To dividend of ¥10 per paid a commemorative Company share, in addition the ordinary dividend of ¥30 to all to Accordingly, shareholders as of September 30, 2015. to ¥70 per shareannual dividends in fiscal 2015 amounted dividend of \10(regular dividend of \60 + commemorative per share). The 5-year business plan, which was announced in policy that March 2016, sets forth a shareholder return calls for a total return ratio of 100% or more for the The following of the principal section provides an overview risks that could negatively affect the business results and forward-looking financial condition the Group. Any of statements or projections repre- contained in this overview based on informa- sent the best judgment of management tion 31, 2016. Actual results may available as of March differ from the forecasts due to a range of factors. business results and financial position (the patent protection remains in effect until 2016 in the United States, October and until in Japan and Europe). February 2017 consolidated revenue. A decrease in revenue resulting A decrease in revenue from consolidated revenue. expiration of the patent protection with respect to artan (6.7%) FY2016 (23.3%) (18.3%) (21.0%) (Billions of yen) , expanding FY2015 FY2016 change YoY edoxaban 82.3 65.0 (17.3) , which will occur first in 986.4 920.0318.6328.8 320.0 (66.4) 310.0208.7 1.4 130.4 (18.8) 190.0 100.0122.4 (18.7) 100.0 (30.4) (22.4) FY2015 USD / JPY 120.14EUR / JPY 132.57 110 125 * olmesartan * * by U.S.-based Luitpold Pharmaceuticals. by U.S.-based Fiscal 2016 ¥20.0 billion associated with restructuring costs. Financial Results Forecasts for Financial Results sales of mainstay products in Japan, and growing sales of Daiichi Sankyo Group Revenue Cost of sales Selling, general and expenses administrative expenses Research and development Operating profit Profit before tax Profit attributable to owners of the Company These expenses in fiscal 2016 include one-time expenses of approximately * Foreign exchange rates billion year on decreased ¥7.9 in Venezuela Revenue due to changes in the exchange rates to ¥0.2 billion, year, which bolivar), currency (Venezuelan for Venezuela’s resulted from the deterioration conditions of economic in this country. decrease 6.7% year in fiscal 2016 is expected to Revenue to \920.0 billion, partially because of the loss of on year, patent protection for In addition, operating Daiichi Sankyo expects to secure from fiscal profit of ¥100.0 billion, a decrease of 23.3% 2015. Operating will profit be affected by one-time associatedexpenses of approximately \20.0 billion with 2016. restructuring costs to be carried out in fiscal is expected to owners of the Company Profit attributable year. to be ¥65.0 billion, down 21.0% year on an assumption Forecasts are based on of foreign exchange to the euro. dollar and ¥125 rates at ¥110 to the U.S. the United States, as well as the adverse effects of the NHI the United States, as well as the adverse foreign exchange price revisions in Japan and unfavorable influences. This decrease will occur despite Daiichi Sankyo’s efforts focusing of on increasing sales Injectafer . 1 6 1 (2) (2) (3) (0) 12 ̶% ―%

1.9% 0.5% 8.0% (9.0%) (1.9%) (6.6%) (5.6%) (1.1%) (0.1%) 18.3% (41.1%) 123.2% Sevikar (Millions of US$) (Millions of US$) (Millions of euro) LIXIANA FY2015 change YoY FY2015 change YoY FY2015 change YoY as well as , and 6 4 ― 17 17 ― 12 69 155 86 34 41 71 73 103431 103 160 403 173 (29) 13 700166 661 164 (39) 260 260 Efient 272127 248 124 (24) FY2014 FY2014 FY2014 , Olmetec Plus and Sevikar HCT Anticoagulant agent Antihypertensive Antihypertensive agent Antiplatelet agent (co-promotion revenue) Antihypertensive Antihypertensive agent Antihypertensive Antihypertensive agent Treatment for iron Treatment deficiency anemia for iron Treatment deficiency anemia Opioid-induced constipation treatment (co-promotion revenue) Anticoagulant Antihypertensive agent Antihypertensive Hypercholesterolemia treatment / type 2 diabetes mellitus inhibitor Antiplatelet agent (co-promotion revenue) Antihypertensive agent Antihypertensive agent Antihypertensive Olmetec Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value / / Revenue: ¥61.8 billion (increased 0.5% year on year); Revenue: CompositionRevenue Ratio: 6.3% Revenue: ¥74.7 billion (decreased 5.2% year on year); ¥74.7 billion (decreased Revenue: CompositionRevenue Ratio: 7.6% Other regions Europe Revenue of Luitpold Pharmaceuticals, Inc.’s mainstay products of Luitpold Pharmaceuticals, Inc.’s Revenue In other regions, revenue rose 0.5% year on year, to ¥61.8 In other regions, rose 0.5% year on year, revenue billion. Sales of mainstay products grew in China, South Korea, and other countries. Revenue of Daiichi Sankyo Europe GmbH’s mainstay products of Daiichi Sankyo Europe GmbH’s Revenue Product name Revenue in Europe decreased 5.2% year on year, to ¥74.7 in Europe decreased 5.2% year on year, Revenue in local declined 0.7%, to currency terms billion. Revenue €564 million. Although sales of Product name 24 Product name Benicar HCT Revenue of Daiichi Sankyo, Inc.’s mainstay products Inc.’s of Daiichi Sankyo, Revenue Operations and Financial Position and Financial Operations (launched in fiscal 2015) rose, this increase was offset by (launched in fiscal 2015) rose, this increase lower sales of LIXIANA Sevikar HCT Efient Olmetec Olmetec Plus Sevikar Injectafer Venofer SAVAYSA MOVANTIK Welchol Effient AZOR TRIBENZOR Benicar Operations and Financial Position 27 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Fluctuation Risks 13) Other Risks 13) a that could have Other risks besides those noted above negative impact on the Group’s business results and financial position include an interruption of the Group’s computer systems due to a network-mediated virus or other causes; unauthorized disclosures of confidential information; illegal or improper actions by officers or employees; and changes in share prices or interest rates and other risks related to funding procurement. 11) Environmental Risks Environmental 11) Certain chemicals used in pharmaceutical research and manufacturing processes include substances with the potential to exert a negative impact on human health and that to ensure natural ecosystems. While the Group strives properly the management of these substances is conducted Group operations judgment that at all times, pose a risk any impact due to soil contamination, of serious environmental air pollution, or water pollution affect the could adversely Group’s business results and financial position. Financial Market and Foreign Exchange Rate 12) or lossesDeclines in share prices could lead to write-downs on disposal related to stocks owned by the Group. The Group’s retirement benefit expenses could increase depending on trends in interest rates. In addition, fluctua- an adverse tions rates could have in foreign exchange effect on the Group’s financial position. The Group conducts business, including production, sales, import, and export activities, on a global basis, and foreign rate a material could therefore have exchange movements impact on its business results and financial position. an ability to maintain reliable supplies of high-quality supplies of high-quality maintain reliable an ability to system. medical Japan’s of benefit the pharmaceuticals for prioritizationThe BCP revises the of actions from the the continuity of ensuring perspectives of operations, products,especially for mainstay the rapid restoration and use and supplies of medicines for emergency of any medicines with no substitutes, of which are categories both with high social significance. risks associated The supply chain with the time required also were emergency an of event the in supplies restore to period the recovery required after evaluated, based on Earthquake and the probability of the Great East Japan further earthquakes. In addition, the Group has appropri- measures for natural disas- ately updated its preventative contingency its measures including emergencies, and ters switches or substi restorationto supplies the of - enable to tute products. Disasters 10) Operational Risks Related to Occurrence of 10) Group production, damage to Any research, or other facili- related suspension or cessationties of business or any activities as a result of earthquakes, floods, typhoons, storms, or other natural disasters or due to conflicts, acts of terrorism, fire, or other man-made causes, including other occur- incidents at nuclear power stations or any rences resulting in long-term damage to electricity supply a networks or other social infrastructure, could have negative impact on the Group’s business results and financial position. with Based on our experience East Japan the Great Earthquake that occurred in March 2011, the Group continuityformulated a new business (BCP) to support plan swift restoration of operations in an emergency and ensure 8) Intellectual Property Risks 8) Intellectual Property intellectual property infringement of patents or other Any rights of other parties business arising from the Group’s activities could result in legal restraints being placed on such activities litigation. or prompt related commercial an infringement of the intellectual property Conversely, rights of the Group by third parties could lead to legal action by the Group to protect such rights. In either case, material impact on the a the resulting could have outcome Group’s business results and financial position. to the increasing use of generic due In particular, and other products countries, lawsuits in developed property could challenges to Group-owned intellectual increase in prevalence. Business Overseas Risks Related to Developing 9) Daiichi Sankyo faces risks with respect to operations its business expanding abroad in the course of actively pharmaceutical product development, involving overseas sales, and other such activities. Such risks include the possibility of violating laws and regulations of respective regions as well as those pertaining to local labor- management relations, particularly when faced with geopoliticaladverse factors, including political instability and deteriorating conditions economic in a particular Daiichi Sankyo’s business results and region. Accordingly, financial position should any affected be adversely could such risk materialize. addition, any new productaddition,generate not necessarily may any in its withprofits commensurate sales and the investment due to growingresearch and development use of generic products in the United States and other developed is possible to file for the approval of countries in which it generic pharmaceutical before patent products even results emergingexpiration from or due to unfavorable negotiations with public and private insurers. of Rival Products 6) Manufacturing and Procurement Risks 6) The Group manufactures some of its products at its own production facilities original using technology but is also of some dependent on specific suppliers for the supply finished products, materials, and production raw interme- suspension, or termination of manufac- delay, diates. Any a turing or supply activities reason could have for any material impact on the Group’s business results and financial position. of pharmaceuticals The manufacture in Japan is subject to strict regulation as stipulated in the quality Pharmaceuticals and Medical Device Act. Any assurance problem necessitating a product recall or other effect on the Group’s an adverse action could have business results and financial position. to Emergence of Side Effects or Sales Risks Related 7) Daiichi Sankyo’s business results and financial position affected by a decline in sales of its could be adversely pharmaceutical products due to situations such as those the emergence of unanticipated of a side effects involving drug or due to competition against rival products or the entry of generic products upon expiration of a patent within the same therapeutic area, particularlyin situations where low-priced generic pharmaceuticals go on sale upon changes in the terms of sales or patent expiration. Any technology transfer agreements, expiration or the or affect Daiichi cancellation thereof, could also adversely Sankyo’s business results and financial position. In terminated due to failure to demonstrate the expected the expected due to failure to demonstrate terminated in results are obtained if favorable Even clinical efficacy. in the regulatory approval criteria clinical trials, changes gainto failure in result may addition, In approval. drug any of agreementschanges in the terms related to R&D-related alliances with third parties, or the cancellation thereof, R&D programs. affect the outcomes of may adversely Co., Vaccine subsidiary Kitasato Daiichi Sankyo Group Ltd. (KDSV), a grant from in 2011 to receive was selected (MHLW) Labour and Welfare the Ministry of Health, in vaccine productionJapan for a cell culture facility as part second initiative to build up Japan’s of the MHLW’s capacity for producing vaccines. Under the H5N1 influenza terms of the grant, supply KDSV planned to build a vaccine chain capable of producing sufficient amounts of vaccine for 40 million people within months by the end of March six was not able to establish the company 2014. However, to declines in yieldsufficient capacity to attain this goal due experienced in the viral antigen purification process. yields by subsequently After taking steps to improve revamping production processes, is expected to the project continue until supply chain the establishment of a vaccine capable of producing sufficient amounts of vaccine for 40 million people. Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Such Initiatives 26 5) Risks Related to R&D and Alliances Risks Related 5) of new drug candidates is a Research and development years to complete costly process that requires many during which time there is a continual risk that successfully, R&D activities concerning a particular compound may be Daiichi Sankyo engages in corporate acquisitions, capital alliances, and other such initiatives as part of its efforts to other operational R&D and areas. When acquiring develop a corporation other such action, or taking Daiichi Sankyo’s conducting in relation due diligence to the efforts involve entity being considered for acquisition or the potential potentialalliance counterparty and determining the effects anticipated corporate acquisitionof the as a result or other situation a such action could develop taken. Nevertheless, an unanticipatedof outcome as a consequence involving such an acquisition or other actions, amid factors including business operations and a changing environment business or the emergence of information of the target company, course of conducting in the due diligence. not revealed affect Daiichi Sankyo’s Such circumstances could adversely business results and financial position. 2014 that it had Daiichi Sankyo announced in April concluded an agreement with Sun Pharmaceutical Industries Ltd. (Sun Pharma), under which the latter would acquire Ranbaxy Laboratories Ltd. (Ranbaxy) via a merger in exchange for receipt by Daiichi Sankyo of shares in Sun Pharma. This merger was completed on March 24, 2015 (the closing date). Sun Pharma and Daiichi As per the contract between Sankyo regarding of Ranbaxy into Sun Pharma, the merger Pharma Sun indemnify to required be could Sankyo Daiichi for 63.5% of penalties and damages, etc., arising from quality issues of Ranbaxy prior to the closing date, which federal or state governmental are to be paid to U.S. with a maximum authorities by Sun Pharma or Ranbaxy, cap amount of US$325 million. This obligation lasts for 2015, Daiichi years from the closing date. In April seven Sankyo sold all of the acquired Sun Pharma shares, but the aforementioned agreement remains in effect. 4) Risks Related to Corporate Acquisitions and Other 4) related to the mainstay products,related to a legal DSI concluded withsettlement of Justice the Department other and DSI agreed agencies. Under the settlement, government in US$39 million, while alsofiscal 2014 to pay approximately Integrityentering into a Corporate with Agreement the of Department of the U.S. Office of Inspector General Health and Human Services. to efforts concerted making is Group Sankyo Daiichi The greater thoroughness withensure even respect to compliance with the laws and regulations of various countries around the world. Operations and Financial Position and Financial Operations Organization-Wide Initiatives Pursuing Sustainable Improvement for Corporate Value

The Daiichi Sankyo Group has deﬁned the DAIICHI SANKYO Group Corporate Conduct Charter to act with the Global Management Structure (As of July 1, 2016) highest ethical standards and good social conscience appropriate for a company engaged in a business that affects human lives to fulﬁll its corporate mission. Based on this charter, we advance corporate activities in a socially responsible manner to meet the diverse expectations of society and improve corporate value.

Joji Nakayama The Principles of Our Corporate Activities to Fulﬁll Our Mission President and CEO

DAIICHI SANKYO Group Corporate Conduct Charter

The DAIICHI SANKYO Group fulﬁlls its mission to“ 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.” Business Units Corporate Units We comply with laws, regulations and rules regarding global corporate activities, and act with the highest ethical standards and a good social conscience appropriate for a company engaged in a business that affects Satoru Kimura Toshiaki Sai human lives based on the following principles. We fulﬁll our corporate social responsibility (CSR) by actively Sales & Marketing Unit (Japan) Corporate Strategy Unit responding to an ever-changing society and enacting improvements for corporate value.

Toshiaki Tojo, Kazunori Hirokawa, Article 1 We diligently address medical needs by providing beneﬁcial, safe, and reliable pharmaceuticals and Ph.D. MD., Ph.D. services. Vaccine Business Unit Corporate Management Unit

Article 2 We conduct business in an ethical, fair and competitive manner, and maintain a healthy and professional relationship with our stakeholders, which include medical professionals and governments. Sunao Manabe Ken Keller DVM, Ph.D. Article 3 We actively communicate with our stakeholders by disclosing corporate information in a timely and Daiichi Sankyo, Inc. (DSAC) General Affairs & Human Resources Unit appropriate manner in accordance with the principles of corporate accountability. We take appropriate measures to manage and protect personal and customer information and the conﬁdential information of our and other companies. Jan Van Ruymbeke, MD. Article 4 The globalization of business activities requires that we operate by being compliant with the laws of each Daiichi Sankyo Europe GmbH Functional Units country and region, and by being respectful to all international norms including human rights, various cultures and customs. As a result, we contribute to the development of the local economy and society. Glenn Gormley, Shuji Handa MD., Ph.D. Article 5 We respect diversity in the personal values, qualities and individuality of our employees, and ensure a ASCA Company R&D Unit safe and working environment that does not tolerate inappropriate treatment such as discrimination or harassment. We provide employees the opportunity to develop their skills and abilities for the mutual development of the employee and the corporation. Naoyuki Kishi, Ken Keller Ph.D. Article 6 We responsibly manage the environmental impact of our operations as environmental issues are common Luitpold Pharmaceutical Technology Unit challenges for mankind and such concerns are integral to our corporate activities and our very survival. Pharmaceuticals, Inc.

Article 7 We actively engage in community activities and philanthropic programs focused on social causes. Katsumi Fujimoto, Yoshiki Nishii Ph.D. Article 8 We do not support or conduct our business with antisocial forces, prohibited entities or groups that may Daiichi Sankyo Healthcare Co., Ltd. Supply Chain Unit threaten the order or safety of civil society.

Article 9 Executives of the DAIICHI SANKYO Group actively build and maintain effective systems to implement this Charter, ensure it is understood by all Group companies and make this Charter known to our business Hirosumi Izawa partners. Quality & Safety Management Unit Stuart Mackey Article 10 If the Charter is violated, executives of DAIICHI SANKYO Group Companies ensure that there is a commitment to determine the cause of infringement, take corrective action as necessary and make efforts Business Development to prevent similar violations in the future. Executives are accountable for promptly making required disclosures and upon discerning responsibility regarding the infringement, impose appropriate disciplinary action, including upon Executives themselves.

Yoshihiro Aoyagi General Counsel

28 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Report 2016 29 Business Activities 31 ） ASCA （ Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value ASCA Company （Generic Business）（Generic （OTC Related Business）（OTC Luitpold Pharmaceuticals, Inc. Daiichi Sankyo Espha Co., Ltd. Daiichi Sankyo Healthcare Co., Ltd. Daiichi Sankyo Healthcare Co., Ltd. The ASCA Company advances a business that brings value to patients value that brings a business advances Company The ASCA in the ASCA region, with a particular focus on China and Brazil, where and Taiwan, it holds manufacturing and sales bases, and South Korea, Thailand, where it employs sales professionals. Luitpold Pharmaceuticals, Inc., is leading the growth of the IV iron to become a top 4 supplier of generics in the small market and strives injectable market. volume Asia, South & Central America Daiichi Sankyo seeks to leverage the public trust in its ability to manufac- Daiichi Sankyo seeks to leverage ture quality generic drug products, and thereby contribute to the health and wellness of patients, and contribute to national medicine in Japan in this era of rapidly aging societies. As a consumer healthcare company, we will promote the safe and effective use As a consumer healthcare company, manage their health. of OTC medicines, empowering individuals to actively ）） * ） Japan Overseas （（（Vaccine Business）（Vaccine Daiichi Sankyo, Inc. （DSAC Daiichi Sankyo, Inc. Daiichi Sankyo Europe GmbH Sales & Marketing Unit （Japan） Sales & Marketing Unit （Innovative Pharmaceuticals Business）（Innovative Vaccine Co., Ltd., Japan Vaccine Co., Ltd. Co., Ltd., Japan Vaccine Vaccine Daiichi Sankyo, Inc., is branching out from the cardiovascular field, which centers on physicians in private practices, to transform into a and other with productcompany portfolios for pain, oncology, specialty fields. Daiichi Sankyo Europe GmbH is evolving into a specialty care and Daiichi Sankyo Europe GmbH is evolving that complements the manufacturing and hospital focused company sales foundations it has established in the cardiovascular field with capabilities in specialty fields. Vaccine Business Unit: Kitasato Daiichi Sankyo Vaccine Europe United States * Daiichi Sankyo, Inc. Administrative & Commercial Operations* Daiichi Sankyo, Inc. Administrative

We willWe contribute to progress in the advanced medicine ﬁeld by continually providing information on new drug treatment methods as an ethical, trusted and respectful partner. are committed to contributing to public health by creatingWe innovative vaccines and reliably supplying high-quality vaccines. Business Units Business Social Trends through Four Businesses to Medical Needs and Accurate Response Business Units Business Units Business Units Group willThe Daiichi Sankyo pharmaceuticals its innovative strengthen and enhance business as the core of （OTC） its operations steadily growing while business, generic business, and over-the-counter its vaccine will accurate responses to a wide furnish these four businesses, the Company business. Through range of socialmedical needs and such as prevention, trends related to areas self-medication, thereby and treatment, contributions medicine in Japan. to making comprehensive Business Activities

CSR Activities 32 46 58 66 68 70 72 74 60 64 38 52 54 56

）

） Japan Overseas （（

Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value ･ Improving Access to Healthcare ･ Social Contribution Activities ･ Enhancement of Communication with Stakeholders ･ Promoting Environmental Management ･ Promoting Compliance Management ･ Mutual Growth of Employees and the Company ･ CSR Management Medical Affairs Division • Medical Affairs Division Supply Chain Unit • Supply Chain Unit • Quality & Safety Management Unit R&D Unit • R&D Unit • Pharmaceutical Technology Unit • Business Units Functional Units Business Units • Business Units 30 This section provides detailed explanations of the activities and of each of the Group’s business units functional units. Business Activities 33 and strengthened Daiichi Sankyo Reorganized structure functions in April 2016 functions April in Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value and the rapid changes occurring in the * Enhance area marketing systems community medical collaboration medical functions agencies and local government at-home care services and various medical professions collaboration corporations by the Ministry of Health, Labour and Welfare Appoint staff responsible for supporting Appoint Construction of Systems and FunctionsConstruction Compatible of Systems with Changes Operating Environment the medical field Looking ahead, it can be expected that will transition its traditional away from facility-housed form medical which in form community-encompassing a toward functions throughout regions are segmented adopting the medical community concept. This shift will clarify the community division of areas. The spread of this medical concept and the associated integrated community medical system will the importance of conducting increase marketing activities that target entire areas. In view of the scheduled creationof integrated community medical systems in 2025 year for the creation of integrated community medical systems set 2025: Target * industry, we will strengthen and evolve our area marketing we will strengthen and evolve industry, systems to cater to the needs of community-encompassing medical spheres. deploying our new “Bright Days Together” or “BRIDGE” “BRIDGE” or our information In advancing provision activities, we are Days Together” “Bright deploying our new goal of bridgingconcept based on our the gap between and patientshealthcare professionals and their families. who treat patientsFor healthcare professionals with and diseases, information will provision various symptoms we willnot be limited to a single particular drug. Rather, of information range in provide a more comprehensive consideration also offer of all areas of patient care. We necessary information the rapidly for responding to changing to aid healthcare profes- healthcare environment to provide safe and reliable sionals in their daily endeavor healthcare. ・ Align with segmentation of ・ Engage with home doctors ・ Support medical associations ・ Facilitate coordination between ・ Assist community medical ・ , an Efient , an anticoagulant, and Community medical LIXIANA collaboration corporations partner provision activities (BRIDGE) changes environment Medical Community Area (Extended Medical Sphere) 5-Year Business Plan 5-Year Business ・ Enhance our reputationEnhance and respectful as an ethical, trusted ・ product and field strategies̶conduct Advance information ・ functionsConstruct systems and compatible with operating ・ Promote multichannel approach ・ Sales & Marketing Unit (Japan) Marketing Unit Sales & Enhance necessary roles and systems to respond to the promotion of integrated community medical systems through the medical community concept and community medical collaboration corporations Quest to Be Recognized as an Ethical, Trusted and and as an Ethical,Quest to Be Recognized Trusted Respectful Partner it is important Our greatest believe MRs. We assets are our their skills, an area in which they for our MRs to leverage are particularly evaluated, to build strong, trusting highly relationships the become with healthcare professionals. To profes- type of MR that is truly in demand by healthcare information to provide sionals, our MRs strive that matches needs of these professionals and form a the ever-changing thereby area, same the in individuals different between link and respectful becoming established as ethical, trusted, partners. Field and Product Strategies̶Information Provision Activities (BRIDGE) lineup of One of Daiichi Sankyo’s strengths is its robust range of fields. Going forward, we willproducts in a diverse step up information provision activities in relation to the nervous thrombosis, lifestyle-related disease, central system (dementia, and osteoporosis fields. In the epilepsy) our historical thrombosis field, we are also leveraging expertise to pursue the quick maximization and strengths of sales of antiplatelet agent. , RANMARK , PRALIA , We have maintained the top maintained the have We * LIXIANA , TENELIA , . Memary , Efient (Japan) Despite the impacts of increased prescriptions of generic pharmaceuticals, sales grew for new products, such as * Survey conducted by ANTERIO Inc. * Survey In fiscal 2015, Daiichi Sankyo was ranked in Japan as No.1 In fiscal 2015, Daiichi Sankyo was ranked in Japan physicians among pharmaceutical companies by all surveyed MR activities, assessment on in an overall and it was also ranked as No.1 by cardiologists. and ranking in both categories for four consecutive years begin-ranking in both categories for four consecutive ning with fiscal 2012. In regard passed the certifi to new MR training, all MRs have - years since cate test held in December for six consecutive fiscal 2010. NEXIUM ・ Revenue of \439.4 billion (up 1.4% year on year) Revenue ・・ MRs ranked No.1 ・・ All MRs pass certificate years test for six consecutive ・ Major Achievements in Fiscal 2015 Satoru Kimura （FY） Head of Sales & Marketing (Japan) Unit 439.4 433.4 2013 2014 2015 436.0 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 300 200 100 500 400 Sales & Marketing Unit 32 Sales & Marketing Unit Revenue The Sales & Marketing Unit is responsible for the innovative the for Marketingresponsible & is Sales Unit The pharmaceuticals that forms the core of domestic business years, pharmaceutical the past several operations. Over this unit has launched numerous products that will be increasingly to Japan as its population important ages. Focused product on new lineups, this unit will, in large part, the growthdrive of the Daiichi Sankyo Group going forward. more important to collect, provide It is becoming ever and transmit information regarding the appropriate use of pharmaceuticalsphysicians, pharmacists and other to is entrusted to healthcare professionals. This crucial task (MRs), our approximately 2,200 medical representatives who provide information on pharmaceuticals throughout top-quality Japan on a daily basis. These MRs supply pharmaceutical appropriate medical products and deliver information to ensure that patients to enable physicians appropriate treatment with peace of mind. Through receive these efforts, we hope to help foster strong relationships between patients families and healthcare profes- and their to be viewed as an ethical, trusted and sionals, and we strive respectful partner to healthcare professionals.

Japan Marketing Unit Sales & (Innovative Pharmaceuticals Business) Pharmaceuticals (Innovative （Billions of yen）（Billions Business Activities 35 and * : Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value President (Japan) generic is possible. * Day-one generics: Generic drugs launched on the ﬁrst day that sale of a Day-one generics: * secure market shares launch of major generic drugs Daiichi Sankyo Espha 5-Year Business Plan Daiichi Sankyo Espha 5-Year Business ・ Strengthen AG lineup Strengthen AG ・ Step up coordination with partners in Japan and overseas ・・ Strengthen operating foundations and prepare for the ・・ Steadily launch AGs and other day-one generics Steadily launch AGs ・ Initiatives for Fiscal 2016

major generic drugs are expected to In fiscal 2017, several prepared fully are we that ensure To market. the on appear these giants, of we willfor the advent further strengthen our marketing systems and other operating foundations during fiscal 2016. Daiichi Sankyo Espha has defined its corporate vision of Daiichi Sankyo Espha has defined its corporate becoming a leader in the domestic generic drug market in order to contribute to national medicine in this era of rapidly aging societies. As a step toward this vision, we aim lineup and revenue. to be No. 1 in Japan in terms of AG has set the goal of raising the The Japanese government portion of the pharmaceutical market represented by accomplish this lofty generic drugs to more than 80%. To goal, it will to eliminate the firmly rooted be necessary concerns held by medical institutions and patients with regard reliability of generic drugs in to the quality and to help maintain Japan. At Daiichi Sankyo Espha, we strive the current national health insurance systems while responding to various pharmaceutical-related needs, particularly to AGs. those pertaining Daiichi Sankyo Espha Co., Ltd. Ltd. Daiichi Sankyo Espha Co., Hiroto Yoshiwaka （FY） in * 18.5 14.9 , an Alzheimer’s disease treatment, by , another new drug that treats this disease. 12.5 2013 2014 2015 , the Group’s first authorized generic (AG) donepezil Memary from the manufacturer of the original drug through receipt of patent rights or other means. 5 * Authorized generic (AG): Generic drug manufactured after receiving consent receiving after manufactured drug Generic (AG): generic Authorized * We launched generic drugs with ingredients three new active We new one and ingredients December, new in five 2015, June in ingredient March 2016, bringing in our total portfolio to 147 products with ingredients. 60 active coordinating which Daiichi Sankyo, with our parent company markets Japan, has maintained a share of approximately 50% of its Japan, has maintained a share of approximately growthmarket. In addition, been realizing ongoing in we have the sales of Levofloxacin 20 15 10 ・ Revenue of \18.5 billion (up 23.9% year on year) Revenue ・・ Expansion of Product Portfolio ・ Daiichi Sankyo Espha Co., Ltd. Major Achievements in Fiscal 2015 Daiichi Sankyo Espha Revenue Japan its generic Daiichi Sankyo Espha Co., Ltd., advances withbusiness through a system of 14 sales divisions to the system of approximately 150 MRs, which is similar 14 sales branches used by Daiichi Sankyo. With an emphasis on quality control, stable supply, we will contribute to national education, and affordability, healthcare in a rapidly aging Japan. Sales & Marketing Unit Marketing Unit Sales & Espha Co., Ltd. Daiichi Sankyo (Generic Business) （Billions of yen）（Billions and , anticoagu- LIXIANA , type 2 diabetes NEXIUM , osteoporosis treat- , Alzheimer’s disease , Alzheimer’s disease Efient - metas bone for treatment a , CANAGLU Rezaltas and and , ulcer treatment RANMARK , an epilepsy treatment in-licensed from , an epilepsy treatment in-licensed from , and and , , antiplatelet agent Olmetec TENELIA Memary by fully capitalizing on the industry-leading by fully capitalizing on the industry-leading VIMPAT , we have positioned fiscal 2016 as the year in which , we have PRALIA LIXIANA Strengthening of Information Provision Activities through Multichannel Approach By incorporating a multichannel approach utilizing in informationlectures, e-promotions, and other venues provision activities one of the by MRs, which represents will strengths, we to provide informa- Company’s endeavor more valuable in greatertion quantities. that is even Thorough Compliance In recent years, society more demanding has become ever of the pharmaceutical industry and the companies operating therein, expecting to ensure such companies exercise of transparency in their actions.greater We levels thorough compliance with a strong focus on acting with the ethics and social of consciousness, which is highest level in order to essential for a life science-oriented company, increase the trust of society in Daiichi Sankyo. Rapid Expansion of Sales of Major Innovative Products of Sales of Rapid Expansion sales of new products to rapidly expand the will We strive years, positioning these the past several launched over products ongoing develop- to fuel the as growth drivers Major innovative productsment of Daiichi Sankyo. that will antihyperten include expansion sales such of target - the be agents sive we wage war on thrombosis. During the year, we aim to year, we wage war on thrombosis. During the cultivate these products into new earnings pillars alongside capabilities in the cardiovascular field, an area of our MRs of strength, to provide highly valuable information on these drugs to rapidly expand their sales. As for new products, able to commence we expect to be sales of UCB Biopharma SPRL, in Japan during fiscal 2016. UCB Biopharma SPRL, in Japan during fiscal tasis associated with cancer. With regard to thrombosis field products ment ment treatment lant treatments Efient Olmetec Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value multichannel approach ・ Ensure thorough compliance ・・ Advance and enhance area marketing activities ・ productsRapidly expand sales of major innovative ・ Strengthen information provision activities through ・ Initiatives for Fiscal 2016 34 Fiscal 2016 will be the first year of the 5-year business plan, making it an important year toward accomplishing we will enhance our the goals of the plan. During this year, area marketing activities in order to become No. 1 in terms of marketing capabilities and thereby continue growing as an ethical, trusted, and respectful partner. this end, we will advance and strengthen area To marketing activities to respond to the promotion of integratedmedical systems through the community medical community concept and community medical we willcollaboration reorganize corporations. Specifically, sales offices and teams within medical community areas and appoint staff responsible for supporting community medical collaboration. Advancement and Enhancement of Area MarketingAdvancement and Enhancement of Area Activities

During the period plan, we will of the 5-year business utilize the in 1 No. ranked are capabilities the which MRs, these of of the domestic to capture the top share market. industry, the growth of the Daiichi to drive willWe thereby strive and income. Sankyo Group and stably generate sales All members of the Sales & Marketing Unit will unite on our quest to continue growing as an ethical, trusted, and on both a respectful partner that contributes to medicine we will countrywide As such a partner, and regional level. pursue the leading domestic share, the top MR rating, of trust so that we may move and unparalleled levels domestictoward our vision of becoming the No. 1 pharmaceutical company. We will adopt a multichannel approach to fully leverage the will multichannel a adopt We leverage fully to approach and strength, capabilities of our MRs, an area of Company informationthereby enhance our activities. provision The as the foundationinformation for provided by MRs serves these activities, which include collaboration with marketing encompass channels such as specialists (MSs) and lectures, e-promotions, and disease education campaigns. Multichannel Approach Business Activities Lulu 37 , as well as Lulu and Loxonin S brand in the OTC business Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Loxonin S President synergies with Im Strengthen operating foundations to ensure responsiveness changes to market environment marketingbusiness 5-Year Business Plan ・ Expand the ・・ Improve product brand value in OTC business Improve ・ Accelerate growth of direct marketing business through ・ businesses independence in overseas Achieve ・・・ Establish new systems incorporating Im in the direct ・ businesses ・Enter into the Chinese market in overseas Initiatives for Fiscal 2016 Daiichi Sankyo Healthcare Fiscal 2016, the first year of the 5-year business plan, will at Daiichi Sankyo be a year of transition for everyone Healthcare. In addition to the measures listed above, important themes will include maximizing sales of the brand and accelerating growth new additions through to willour lineups of skincare and oral care products. also We new sales channels and address step up efforts to develop demand from inbound travelers. Daiichi Sankyo Healthcare has unveiled Vision 2020̶The Vision Daiichi Sankyo Healthcare has unveiled to willNext Stage of DSHC̶based on which it strive with the ability tobecome a consumer healthcare company dramatic sales growthachieve and sustainable income we will focus expanding the on Specifically, improvements. OTC business, centered on operations in the functional skincare and oral care fields. we were joined by new ally Im, a direct 2015, In November specializing in skincare products.marketing Our company going forward willgrowth be the direct marketing drivers synergiesbusiness leveraging our with Im and developing businesses focused on participationoverseas in the Chinese market. Furthermore, we are striving to realize efficient operations and strong structures that will allow us to respond to changes in the operating environment. Yoshiki Nishii （FY） Daiichi Sankyo Healthcare Co., Ltd. Daiichi Sankyo Healthcare Lulu , series of brand ( Lulu , a new addition to Transino 53.4 , Clean Dental MINON Loxonin S plus 47.8 48.1 2013 2014 2015 brand. ). We also launched ). We series), skincare brands ( Loxonin S the Smooth sales growth was registered for the skin enhancers), and oral care brands ( enhanced lineup subsidiary to strengthen direct marketing business CITEETH Attack 60 40 20 ・ Revenue of \53.4 billion (up 11.6% year on year) Revenue ・ Higher sales realized through increased brand value and ・・ Conversion of direct marketing company Im Co., Ltd., to a of direct marketing company Conversion ・ Daiichi Sankyo Healthcare Co., Ltd. Major Achievements in Fiscal 2015 Daiichi Sankyo Healthcare Revenue Japan Japan is advancing policies aimed at extending Currently, the healthy lifespans of its citizens, drawing attention to the concepts of self-medication and self-care. Daiichi Sankyo consumer healthcare Healthcare Co., Ltd., develops products such as OTC medicines as well as skincare and oral care products. and marketing our product Leveraging development up based on our deep been built capabilities, which have understanding of consumer needs, we will pursue sustain- our operationsable growth with as we develop a marketing system consisting of three sales divisions and 12 branches. Daiichi Sankyo Daiichi Co., Ltd. Healthcare Business) (OTC Related （Billions of yen）（Billions * , a 4-valent combination vaccine and maintain production systems in * Squarekids diphtheria, tetanus, and poliomyelitis (polio) vaccines: Open application project spearheaded by the Ministry of Health, and production to establish development systems for Labour and Welfare for swift supply in the case of new influenza vaccines and secure venues influenza outbreaks or pandemics * 4-valent combination vaccine: Vaccine for the prevention of pertussis, of pertussis, for the prevention 4-valent combination vaccine: Vaccine * * Project on the establishment of a production system for new influenza * preparation for future pandemics Complete construction of supply systems under project on the establishment of a production system for new influenza vaccines and alliances vaccines boasting potential for high efficacy and new, vaccines boasting potential new, for high efficacy and combination vaccines exceptionally convenient influenza vaccines 5-Year Business Plan ・ Establish stable and low-cost supply systems ・・ activitiesPromote and strengthen business development ・ Advance R&D projects on schedule ・ Ensure supply of existing products ・・ Revenue of \36.8 billion (up 14.2% year on year) Revenue ・ Launch of influenza vaccine with strains four protective ・ Release of ・・ Develop and encourage early adoption of new influenza Develop ・ of a productionComplete the establishment for new system ・ Vaccine Business Unit Initiatives for Fiscal 2016 Major Achievements in Fiscal 2015 In fiscal 2016, we will advance R&D projects to guarantee the release of new products. In addition, we will endeavor to ensure a stable supply of high-quality vaccines that are compatible with the global Good Manufacturing Practices (GMP) standards of the Pharmaceutical Inspection and Pharmaceutical InspectionConvention Co-operation Scheme (jointly referred to as PIC/S). Furthermore, preparations will be advanced for the start of manufacturing at a new building equipped with state-of-the-art facilities to productionimprove efficiency.

- （FY） Head of of Vaccine Business Unit Business Head of of Vaccine Toshiaki Tojo, Ph.D. Toshiaki Tojo, 36.8 32.2 37.5 2013 2014 2015 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 20 10 40 30 Vaccine Business Unit 36 Vaccine Business Unit Revenue Vaccine tant in Japanese society. Business Unit advances its vaccine business The Vaccine through organic collaboration between Kitasato Daiichi Co., Ltd. (KDSV),which is responsible for Sankyo Vaccine productionthe research, development, and sales of Co., Ltd., which conducts vaccines, and Japan Vaccine and sales. late-phase clinical development 2015, the strategy and corporate planning In April functions business, with of the vaccine the exception of further certain processes, transferred to KDSV, were integrated structure encom- reinforcing this company’s passing functions ranging to sales. from research are committed to contributing to public health by We creating vaccines that address social innovative needs and reliably supplying high-quality vaccines. Japan has gradually been catching up with the United in terms of vacci- States and principal European countries nations, an area where Japan had been lagging behind for are growing increasingly more impor some time. Vaccines

(Vaccine Business) (Vaccine Japan Business Unit Vaccine （Billions of yen）（Billions Business Activities - （FY） 39 Pain Oncology franchise through flawless projects * demand New products productsCurrent olmesartan CL-108 2020 Tivantinib Pexidartinib CL-108 Tivantinib Quizartinib Pexidartinib Mirogabalin ・・ MOVANTIK and Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 2019 SAVAYSA Mirogabalin Quizartinib 2018 FY2018 and beyond ・・ * LCM: Life cycle management * LCM: realize the benefits of our newlyrealize the benefits of agile, efficient, and organizationcustomer-centric execution activities of pre-launch ・ Develop a master plan for our oncology franchise Develop ・ the organizationalAccelerate transformation and begin to ・・ Maximize the full potentialMaximize of ・・ Optimally manage LOE for our Optimally manage LOE ・・ Increase ・ multi-channel marketingFully leverage capabilities ・ critical milestones for LCM Achieve ・ Initiatives for Fiscal 2016 Initiatives For the US organization, in today’s market, understanding and helping to manage the needs of patients and their Only then willproviders̶as well as payers̶is paramount. be able to reach our fiscal 2016 goals, by the company flawlessly executing the strategies mentioned above. fiscal 2016 will springboard the US commer Ultimately, cial organization of the Daiichi toward fulfilling our share Sankyo Group’s 5-year business plan. 2017 CL-108 ・ 2016 2015 2014 cular New Product Launches Even with to build, and pride upon which this past success Even The US evolving. is dynamic and ever the US marketplace organization our global joins all of in working to affiliates upcoming patent expirationsovercome and positioning the US commercial for success. This required the Company from a maturing primary care team to transform itself product portfolio to a differentiated specialty portfolio. Our new areas of focus, management and such as pain great hold opportunity. oncology, first step in this transformation Our included putting in and highly targeted smaller, place a new structure̶a operating efficient model, with high greater a on emphasis roles. While the reorganizationimpact customer-facing led to a reduction actual number of sales positions in the at roles are now Daiichi Sankyo, Inc. to about 750, the sales more focused and hospital settings, on specialty in addition patientsto primary care physicians who also see with specialty conditions. Future success in the US market rests not only on bringing longer, that help patients new medicines live compared withstandard treatments, higher quality lives value, but also on offering proof of a new medicine’s data. Daiichi through high quality clinical and outcomes positioned well is now Inc. Sankyo, with goal this to realize a new focus, structure, and renewed energy. the right Shift in Product Portfolio Cardiovas-

* CL-108 performance Welchol mirogabalin , opioid μ-receptor growth, maximizing , and CL-108 Effient , , a treatment for opioid-induced MOVANTIK olmesartan MOVANTIK packaging. President potential successfully launching and To achieve continued achieve To * LOE: Loss of exclusivity Loss of * LOE: The second most successful US launch in 2015 in terms of The second most successful US launch in 2015 and uptake. monthly prescription volume Launch planning and campaigns with focus on raising (OINV)opioid-induced nausea and vomiting awareness, and and DEA inspections related to successfully passing FDA operating model, while energizing employees toward success new options can be put in the hands of patients and their providers timeframe constipation agonist combination product offset anticipated revenue pressures in fiscal 2016 and pressures offset anticipated revenue beyond CL-108 ・ Continue to progress the transformation into a low-cost ・ Grow the pain franchise ・ Build and grow oncology capabilities as data matures and ・ Maximize profit for the mature products through LOE ・・ Revenue of US$1,540 million (down 2.1% year on year) Revenue ・ Launching ・・ Preparation for launching ・・ Maximizing ・・ Creating operationaland organizational efficiencies to help ・ Ken Keller Daiichi Sankyo, Inc. 5-Year Business Plan Daiichi Sankyo, Inc. 5-Year Business Major Achievements in Fiscal 2015

Daiichi Sankyo, Inc. (DSAC) Daiichi Sankyo, Inc. (DSAC) （FY） , (antiplatelet AZOR , Efﬁent 1,540 Benicar HCT , 1,574 Benicar (a treatment for both hypercholester- 2013 2014 2015 1,714 (antihypertensive agents), (antihypertensive Welchol Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 500 Daiichi Sankyo, Inc. 1,500 1,000 2,000 38 Daiichi Sankyo, Inc. Revenue On April 2016, the sales and marketing 2016, the division of Daiichi On April & Inc. Administrative Daiichi Sankyo, Sankyo, Inc. (DSAC: of Commercial Operations) marked the 10th anniversary organizationsthe merger between the Daiichi and Sankyo commercial in the United States. In that decade, the success. of history a created Inc. Sankyo, Daiichi of division Our core franchises of

(DSAC) United States United Sankyo, Inc. Daiichi olemia and type 2 diabetes mellitus) have contributed over contributed over olemia and type 2 diabetes mellitus) have to frame this in trillion) ￥1.4 (approximately billion US$13 global for our organization.the revenue agent) and TRIBENZOR （Millions of USD）（Millions Business Activities 41 changes Injectafer Raise awareness of IDA International expansion International expansion and therapeutic areas for IDA Rapid response to market Market expansion into new Strong relationships quickly identify market opportunities and generic injectables Venofer from and strengthen its market and strengthen its market Strategic Imperatives Injectafer Injectafer Maximize / expand existing portfolio leadership Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Injectafer differentiation quality products Portfolio expansion Portfolio Education on product Build on market share other treatment options Consistent supply of high Differentiate High product differentiation efficient operating model including oncology field the capital project plan position in existing and prepare for entry into new markets educationmarket segments through of iron and awareness deficiency anemia our iron franchise products ̶ ・ Continue to grow ・ financial marginsMaintain healthy lean, by fostering a ・ Continue portfolio of high value products to build our ・ Continue manufacturing capacity and execute to increase ・・ Maintain leading position leading Maintain withsegment iron market the IV in ・ Initiatives for Fiscal 2016 Initiatives opportunities to grow many Luitpold continues our to have organization. In fiscal 2016, we will focus executing on our in our organiza-capital expansion program and investing tion. the new filling equipment at our Hilliard As a first step, We site in Ohio will be put into commercial use this year. will be serialization ready by 2017. All of our business units are poised for growth; are looking to have an especially strong year. Luitpold will an especially strong year. are looking to have launch its first oncology product in fiscal 2016 with additional products to follow. Indications IDA in patients withIDA CKD and of various non-CKD etiologies where oral iron failed Real Challenges in Current Iron Therapies ・ Intolerance / unsatisfactory response ・ Safety concerns ・ issues Dosing and compliance ・ into our Business Outline 2013 2000 in patients with IDA CKD Launch Injectafer Provide practical solutions Venofer Injectafer Product name and ensure consistent supply More than 50% share of non-HD segment Animal health Dental device ・ Focused on small volume vials and ampules Focused on small volume ・ 50 products production in active Over ・ Additional 25 in various phases of development ・ across 3 manufacturing sites to support portfolio growthExpanding capacity ・ business in key markets. Iron Other Generic Business Domains Franchise Franchise Franchise Injectable I am genuinely excited about the prospects for Luitpold’s prospects for Luitpold’s excited about the I am genuinely Fiscal 2015 was a record years. the next five business over is poised to use and Luitpold company breaking year for the years. success in the next five it as a springboard for company vision is to be a top performing branded Our with supplier of our iron franchise as well as a top four will market. We injectable volume generics in the small by building accomplish this vision Business Expansion of Luitpold Pharmaceuticals looking at opportunities are also actively to add We complementary products to this franchise. Our strategy in and differentiatethe generic injectable market is to expand our product including introducing portfolio, oncology willproducts. execute a significant capital invest- also We and Ohio to ment plan at our locations in New York provide back-up redundancy and increase capacity, increase our flexibility to respond to critical market needs. through the of our plan is only possible The achievement hard work and dedication of the talented employees at Luitpold. Luitpold looks forward to contributing to the growth and success of Daiichi Sankyo throughout this business cycle. flagship product by launching and the iron market leader where iron deficiency anemia is it in new specialty areas new indicationsprevalent, and seeking while maintaining Venofer to the gastroenterology Injectafer into our flagship product and market leader President & CEO Ken Keller Injectafer Strong performance by all four commercial business units Strong performance by all four commercial business prior fiscal year growth 45% over of revenue with overall support customer needs in the US specialist community Ohio, commenced commercial operations manufacturing capacity at Luitpold production facilities in and Ohio New York compliance systems 5-Year Business Plan ・ Expand our generic portfolio with a variety of products to ・ injectables generic volume small of suppler 4 top a Become ・・ Revenue of US$758 million (up 45.2% year on year) Revenue ・ Successful expansion of ・・ Grow our business to exceed US$1 billion in annual revenue ・ Build ・・ New, state of the art manufacturing facility in New Albany, the art manufacturing facility in New Albany, state of New, ・ Secured approval of capital project plan to further increase ・ quality and to Successfully implemented improvements ・ Luitpold Pharmaceuticals, Inc. Luitpold Pharmaceuticals Major Achievements in Fiscal 2015

) (FY) Injectafer and 758 Venofer 522 395 2013 2014 2015 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 500 250 750 Luitpold Pharmaceuticals, Inc. 1,000 40 Luitpold Pharmaceuticals Revenue (Millions of USD) Luitpold Pharmaceuticals, Inc., is a diversiﬁed specialty Luitpold Pharmaceuticals, Inc., is a diversiﬁed that manufactures high value pharmaceutical company branded and generic injectable medications which are States. The marketed primarily throughout the United branded human health products (

United States United Inc. Pharmaceuticals, Luitpold are leading therapies in the IV iron market for the treat- are leading therapies in the IV iron market The other main ment of iron deficiency anemia (IDA). is our growing of the business driver generic injectable 50 products. In portfolio which currently consists of over addition to its human pharmaceuticals business, Luitpold products. device dental and health animal specialty markets and manufac- two development maintains The company which also the latter turing sites in Ohio and New York, location, as the headquarters serves and a clinical opera- Of its about 920 tions office in Norristown, Pennsylvania. employees approximately 120 are customer facing, field based personnel. Business Activities .

43 ) in LIXIANA LIXIANA edoxaban ( LIXIANA Istanbul （Turkey） Istanbul in Northern and Central Eastern in Northern and Central in Europe, for example, in important Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value LIXIANA LIXIANA Amsterdam （Netherlands） Amsterdam （Germany） Pfaffenhofen （Germany） Munich （Austria） Vienna （Switzerland） Zurich European countries covered by the agreement withEuropean countries covered MSD operating model of European and conclude alignment organizational structure with strategy go-to market further European countries such as Italy or Spain further European countries Rome （Italy） Rome ・ Successful launch of once-daily Successful ・・ Evolution into a specialty care player: finalize a new into a specialty care player: finalize a Evolution ・ Continue preparations for first launches in oncology ・・ First launches of First launches ・ Initiatives for Fiscal 2016 Initiatives Fiscal 2016 is an important year for us. We will see further year for us. We Fiscal 2016 is an important launches of

markets such as Italy and Spain. In addition, we are that having one of the biggest pharma companies convinced in of confidence vote is a partner our as world the in We are therefore also looking forward to making are therefore We available as a viable treatment option for even more available as a viable treatment option for even patients across Europe this year and beyond. will We also conclude our organizational alignment into a specialty care provider and process to further evolve focus on our preparations for oncology launches. The first launch might be possible as early as 2017. ’s growth building while in 2020 and thousands of , we also have exciting , we also have LIXIANA LIXIANA LIXIANA 12 Affiliates 2 Production sites DSE Headquarters Dublin （Ireland） Dublin （Belgium） Brussels （France） Paris （France） Altkirch （Spain） Madrid （Portugal） Lisbon London （Great Britain）（Great London years ahead of us. More specifically our 5-year business years ahead of us. More and hospital focused into a specialty plan is about evolving capable of generating sustainable profitable company growth a focus through on Business Locations of DSE oncology as a core area. into a specialty important step in our development One rich oncologycare provider is the R&D portfolio and the opportunities market place. this represents for us in the see a large market potential for our productsWe and have first launches from 2017. started to prepare for When it comes to prospects ahead of us: Our vision is to have one million one million prospects ahead of us: Our vision is to have patients treated with strokes prevented and lives saved. and lives strokes prevented Our organization at Daiichi Sankyo Europe has evolved further even years and it has to evolve the past three over to product and our of portfolio needs the reflect to order in environment. meet the challenges of the pharma market is characterized by fierce competition,This environment medical highly regulated markets and the most unmet needs in specialty care areas. This is a demanding process but will be rewarding at the our goals. same time to achieve if we manage “Be brave and do it”̶this is our leading principle for the is our leading and do it”̶this brave “Be from Eli DSE Efient *2 in 13 Northern in EU portfolio challenge Efient LIXIANA in Germany olmesartan sales alliance in Europe LIXIANA received market authorization for the received ’s potential ) in 13 European countries. LIXIANA for the exclusive rights to market once-daily rights to for the exclusive *1 LIXIANA LIXIANA edoxaban ( has been launched in five European countries in European has been launched in five Norway, Poland, Romania, Slovakia, Slovenia and Sweden Romania, Slovakia, Slovenia Poland, Norway, *1. Merck Sharp & Dohme Corp.: a European subsidiary of Merck & Co., Inc. Iceland, Bulgaria, Croatia, Czech Republic, Denmark, Finland, Hungary, *2. Rapid penetration through a focused account strategy. A very Rapid penetration A very focused through a account strategy. important element is the sales partnership agreement with MSD for the distribution rights for Lilly to DSE in December 2015 as a prerequisite to take over Lilly to DSE in December 2015 as a prerequisite to take over the promotional lead in Europe from January 2016. fiscal 2015 (Germany, United Kingdom, Netherlands, fiscal 2015 (Germany, Switzerland, and Ireland). Agreement in February 2016 with Sharp & Dohme Merck Corp. (MSD) Daiichi Sankyo Germany’s resource-focusing strategy, i.e. resource-focusing strategy, Daiichi Sankyo Germany’s a strong to have winning account by account, has proven impact. Maximize profit from established brands and manage revenue revenue manage and brands established from profit Maximize decline through focused investment. The transfer of the marketing authorization for and Central Eastern European countries. Measures Reduce risk related to single product dependency. among others are the expansion of geographical reach and / or the acquisition of late stage / in-market opportunities. into specialty care player and align structure with Evolve go-to market strategy. currently has no affiliated companies in these countries. currently has no affiliated companies in these Managing Director, CEO Managing Director, European Union in June 2015 LIXIANA LIXIANA ・ Successfully overcome the Successfully overcome ・・ Revenue of €587 million (down 2.5% year on year) Revenue ・ Once-daily ・・ Successful launch of ・・ Agreement of ・・ Maximize ・・ Diversify portfolio Diversify ・ Prepare for launch success in oncology ・ Organizational development ・・ Start to take promotional lead of ・ Daiichi Sankyo Europe 5-Year Business Plan Major Achievements in Fiscal 2015

Daiichi Sankyo Europe GmbH Daiichi Sankyo Europe GmbH (FY) Jan Van Ruymbeke, MD. Jan Van Ruymbeke, 587 602 624 2013 2014 2015 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 400 200 800 600 Daiichi Sankyo Europe 42 Daiichi Sankyo Europe Revenue (Millions of euro) Daiichi Sankyo Europe (DSE) currently does business in 12 Daiichi Sankyo Europe (DSE) currently does sales agree-European countries. Through licensing and ments, our products European in almost every are available are one of the strongest Japanese pharma- We country. ceutical companies located in Europe, which is the third Group most important market for the Daiichi Sankyo following Japan and the United States. Our European in and close by, headquarters is in Munich, Germany, Pfaffenhofen, is one of our global production plants.

Europe GmbH Sankyo Europe Daiichi Business Activities 45 China 55% Korea 15% Korea Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Caracas (Venezuela) Sao Paulo (Brazil) Sao Paulo Venezuela 0.3% Venezuela 1% Hong Kong Thailand 7% 9% Taiwan Brazil 13% Beijing Factory, Daiichi Sankyo (China) Holdings Co., Ltd. Beijing Factory, Sales Ratios of ASCA Company Subsidiaries Sales Ratios of ASCA Company in , LIXIANA Seoul (Korea) Beijing, Shanghai (China) (Taiwan)Taipei (Hong Kong) Hong Kong Bangkok (Thailand) Olmetec LIXIANA , while utilizing external resources Mevalotin made its ASCA debut in South Korea in fiscal made its ASCA debut in South Korea directly. , and in-licensing LIXIANA ・ Maximize sales of mainstay productsMaximize ・ Utilize acquired through alliances and external resources ・ rapidly expand sales of Launch and ・ Initiatives for Fiscal 2016 Initiatives ASCA markets and undertake other initiatives for realizing plan. the vision set out in the 5-year business Shanghai Factory, Daiichi Sankyo (China) Holdings Co., Ltd. Shanghai Factory, Subsidiaries of ASCA Company Deployment will continue Company In fiscal 2016, the ASCA to products,maximize sales of mainstay such as 2015, and Daiichi Sankyo plans to directly launch this 2015, and Daiichi Sankyo plans to directly in fiscal Thailand and Brazil Hong Kong, product in Taiwan, will seek to maximize the value of this product2016. We by and seeking out ensuring the success of these launches will not sell partners in countries where the Company acquired through alliances and in-licensing. At the same acquired through alliances time, we will launch and rapidly expand sales of Cravit LIXIANA , an atypical lurasidone needs of respective regionsneeds of respective and countries targeting growth markets with and an eye to fiscal 2021 beyond ・Maintain and expand sales of existing products products new of sales expand and launch, develop, Quickly ・ Enhance portfolio of products matched to the specific ・ China in Advance swift project development and proactive ・ Strengthen the business capability and implement measures ・ ASCA Company 5-Year Business Plan We aim to accomplish the five tasks listed above by 2020. tasks listed above the five aim to accomplish We In the ASCA region, the social trends, economic conditions, market characteristics health insurance systems, and For this reason, swiftly regulationscountry. vary by responding to the changing while operating environment is crucial to success. In remaining respectful of diversity this region, we are committed to achieving sustainable our business withgrowth an emphasis on by developing of the region.value and always respecting the diversity to quickly encourage widespread Our goal in China is this end, we are deploying a usage of our products. To market by of this massive strategy of achieving coverage allying with will local further partners in certain areas. We build upon this strategy going forward. our product In Brazil, we are expanding portfolio by advancing the introduction of antipsychotic agent licensed from Sumitomo Dainippon Pharma Co., Ltd., as well as other products that meet local needs. President ASCA Company ASCA Company

（FY） , Shuji Handa Cravit LIXIANA 75.3 , while utilizing external . Cravit 67.5 and Mevalotin , and Olmetec 58.8 2013 2014 2015 was launched in China in July 2015, while Olmetec , was introduced to the ASCA region for the ﬁrst time Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value region. In addition conducting to sales activities out of *1 The ASCA Company worked to maximize sales of mainstay The ASCA Company products, as such with its February 2016 debut in South Korea. The ASCA with 2016 debut in South Korea. its February and its partners will focusCompany on developing resources acquired through alliances and in-licensing. In sales growth was primarily thanks to China, overall into a highly successful product. Asmeton Loxonin Tape LIXIANA 40 20 80 60 ・ Revenue of \75.3 billion (up 11.6% year on year) of \75.3 billion Revenue ・・ Launch of new products ・ Major Achievements in Fiscal 2015 ASCA Company 44 ASCA Company Revenue ASCA Company

*1. Asia, South & Central America The ASCA Company is responsible for operations in the The ASCA Company ASCA

Asia, South & Central America (ASCA) Central America South & Asia, Company ASCA its seven individual sales subsidiaries (located individual sales subsidiaries its seven in China, South Brazil, and Venezuela), Thailand, Hong Kong, Taiwan, Korea, export operations develops targeting the ASCA Company manufacturing licensees around the world. It also conducts China and Brazil. This business unit in factories at activities stable growthhas continued by maximizing sales to achieve of its mainstay products in China, Brazil and other countries of markets and through accurate responses to the needs customers in each country of operation. （Billions of yen）（Billions Business Activities , 47 and ) U3-1784 , Asubio Pharma DS-9001 DS-5141 *5 as well as drug , and *4 PLX51107 , DS-2969 , ) PLX73086 ): Jointly applied with the Institute of , a treatment for rheumatoid arthritis Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value DS-7080 hydrochloride oral formulation, narcotic G47Δ DS-1123 biosimilar : Phase 3 clinical trial as a ﬁrst-line treatment of

, and ) : Phase 2b clinical trial for the treatment of diabetes , novel, opioid-containing formulation opioid-containing for the , novel, , an anti-influenza treatment Inavir management of pain while preventing or reducing the associ- (OINV)ated opioid-induced nausea and vomiting (US) analgesic (JP) acute myeloid leukemia and other autoimmune diseases: Achievement of primary and other autoimmune diseases: Achievement endpoint in Phase 3 clinical trial Medical Science of the University of Tokyo and received and received of Tokyo Medical Science of the University designation under the SAKIGAKE Designation for System regenerative medicine products in Europe and the been approved ceuticals that have United｠States Quizartinib DS-8500 DS-8201 CL-108 Hydromorphone DS-2330 Etanercept (JP : a partial revision of the usage method and dosages) ・・・ 5 in the oncology field ( ・・・・・ 3 in other fields ( ・・・ Oncolytic ( Virus ・・ 2 in the cardiovascular and metabolic field ( ・・ Expanding access to clinical trial data related to pharma- Expanding access to clinical trial data related ・ to the efficacy and safety of a new drug through clinical trials targets discovery ・ Other accomplishments ・・ Submitted applications for three drugs ・・ Began 10 phase 1 clinical trials ・・ Commenced two late-phase clinical trials ・ Major Achievements in Fiscal 2015 strengthening R&D capabilitiesstrengthening policies based on uniform and strategies. Other Research Functions Co., Ltd. (DSRDN), Venture Daiichi Sankyo RD Novare (VSL),Science Laboratories Plexxikon Inc., and Asubio advancing research activitiesPharma Co., Ltd., are while of each organization.leveraging the strengths These organizations R&D global directly by the are overseen Inc. are conductinghead. VSL and Plexxikon early-stage until confirming POC, development Abbreviation for proof of concept. Identification of predicted features relating *4. A technology various drug used to efficiently create lead compounds for *5. targets the nervous system, the immune system, and targets the nervous efforts. medicine in its drug discovery regenerative discovery. DSRDN acts as a pharmaceutical technology platform. start-up VSL, which was established as an in-house drugs for neuro- organization to discover in 2013, strives diseases and a widedegenerative range of other diseases. Plexxikon, located the United States, is conducting in drug molecule medicine field using the in the small discovery platform. Scaffold-Based Drug Discovery and cell *1 As one of the organizations included *2 *3 indications, adding new dosage forms, and/or improving dosage and so on. antibody-drug conjugate acid etc as a therapeutics or nucleic collaborates with the aim of making use of human tissue and cells under this function, the Tissue and Cell Research Center research utilizing advances Munich (TCRM), in Germany, human tissue through joint efforts with and cells a human tissue consortium. Oncology Function Daiichi Sankyo has positioned oncology as a primary focus area. The Oncology Function research and consolidates functions for oncology-relatedclinical development small molecule medicine and biologics as well as immuno- Through the creation of an integrated globaloncology. structure encompassing activitiesresearch to devel- from opment, we are accelerating decision making and Research FunctionResearch The Research Function on conducts research non-oncologyneurosciences, areas including pain and end-organLCM, diseases, rare diseases and extend products lifetime expanding through Life cycle management. To LCM: *1. Function Research Technology Function seeks to expedite The Research Technology R&D activitiesoverall by unifying the laboratories that spearhead the creation of fundamental research technologies related to drug metabolism and pharmacokinetics, and modality. safety, drug format, e.g. small molecule compound, monoclonalA type of antibody, *2. A consortium of academic institutions and private-sector companies that *3. Function Development products to deliver Function strives The Development created for the global market to medical institutions this end, we are To around the world as quickly as possible. extending our global reach by utilizing network among our Daiichi Japan, the United States, and Asia. Moreover, in companies Group other and Ltd., Co., Novare RD Sankyo Japan maintain close coordination with Group companies processes in the United States and Asia, and development Daiichi Sankyo are advancing in an integrated manner. the (DSPD), located in New Jersey, Pharma Development United States, manages clinical trials across the globe. The is also responsible for clinical trials Japan Development as well as those in Japan and Asia. conducted globally, Clinical trials in Asia are handled by the Asian Development in cooperation with Daiichi Sankyo (China) Holdings Co., Co., Ltd., Daiichi Sankyo Ltd., Daiichi Sankyo Korea Pharma Private Ltd. Ltd., and Daiichi Sankyo India Taiwan therapy. All laboratories contain small-scale organizations All laboratories contain therapy. that possess both pharmacology synthesis functions, and allowing model for a transition of capable to a bio-venture Daiichi Sankyo Life Science rapid decision-making. (RCI) is affiliated withResearch Centre in India the Research Function and and is researching respiratory infectious diseases. Asian Development Asian Group Companies Development Development Function Development 〔Until confirming POC〕 Daiichi Sankyo Pharma Development Development Daiichi Sankyo Pharma Development Head of R&D Unit R&D Structure and Locations Under Daiichi Sankyo’s R&D structure, the head of the R&DUnder Daiichi Sankyo’s R&D structure, the as the R&D Global Head, below which four Unit serves the unit’s four Global Heads are appointed for each of functions: Function, the Research Research the Function, Function, and the the Development Technology Oncology Function. Coordination is pursued among these heads as R&D activities are advanced on a global scale. In addition, assigned for R&D a Global Head is respectively the functionsplanning and project management to provide for the R&D Unit. that support globalgovernance the road to this goal is not an easy one. However, in our ongoing drug Nonetheless, we remain devoted efforts withdevelopment our focus on the day when a drug globally willdeveloped provide hope to people worldwide. R&D Unit Daiichi Sankyo RD Novare Co., Ltd. Plexxikon Inc. Oncology Function Glenn Gormley, MD., Ph.D. Glenn Gormley, TCRM RCI Research Research Function Research Technology Function Research Technology Venture Science Laboratories (VSL) Venture Asubio Pharma Co., Ltd. Oncology Research Research Technology Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value R&D Unit R&D Structure and Locations 46 The role of the R&D Unit is to further develop a range of a range The role of the R&D Unit is to further develop high-quality pharmaceuticals.innovative, The R&D Unit to become a brings life to the vision of Daiichi Sankyo new, Global Pharma Innovator to, by developing treat- to develop high-value-added drugs. Our passion is of life and quality patients’ ments that can improve standard of care in medicine today. upon the improve The inquiring minds of our researchers and their desire the forces driving to contribute to human health issues are new medicines us in our R&D efforts. Our goal is to create therapy to patients effective as quickly as that can deliver of our challenge possible. This passion is the driving force towards that goal.

We will continue to create innovative drugs, to create innovative drugs, We will continue inquisitive minds of our researchers driven by the contribute to humanity. and a desire to Functional Units Functional R&D Unit Business Activities 49 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Global Head of Development Development Marielle Cohard-Radice, MD. Marielle Cohard-Radice, organizationThe Daiichi Sankyo Development provides a enginecritical and the delivery our discovery interface between of medicines to patients. Progressing medicines through human testing faces significant challenges including cost, execution time, and a high risk of attrition. organization that end, the Daiichi Sankyo Development To more initiativeshas identified to facilitate faster, several efficient execution address unmet medical of projects that needs. Those initiatives are focusedprocess on structure, and appropriate selection mechanisms. of innovative Organizational Structures With the goal of simplifying our clinical structure, we have re-aligned our clinical groups and created Global Therapeutic an enhanced Areas. The structure is intended to provide mechanism for optimal clinical designs and generate phases from first- integrated approaches to the development expect the model to in-human studies to final approval. We timelinesoptimize costs, as well as deliver and development clear results necessary for prudent decisions. Processes Process identified that areas of our Drug Development have We efficiency and productivity, can be enhanced to improve planning including but not limited to the clinical development and protocol development. Selection of Innovative Mechanisms Appropriate Consistent with and the R&D goal of simplifying governance has partnered with Research to decision points, Development create a shared view on the therapeutic area strategy and selection process of projects that should progress into clinical testing. is now a joint accountability between This decision with goal of the common and Development Discovery progressing projects with innovative the highest potential to change the standard of care. This is a great step forward in achieving alignment between the scientists working in clinical and the clinical members that oversee discovery testing. With the planning phase complete and endorsed, our mission at this point is to ensure the successful implementation of the medicines to innovative 5-year business plan and deliver patients to our organization. and value We are committed to contributing to We *2 Junichi Koga, Ph.D. Global Head of Research Technology Research Technology pharmaceutical products *2. Standard to secure reliability about the safety of the non-clinical trial of Standard to secure reliability about the safety of the non-clinical *2. the further development of our medicinal chemistry founda- of our medicinal the further development tions the quality and reliability of Daiichi and to improving research activities.Sankyo’s overall The recent restructuring of our research organizationsThe recent restructuring has to specific therapeuticaimed to tailor resources to be areas utilized therapeutic more flexibly and to accelerate area- specific research activities. of the I feel that the mission Function is to offer cross-functionalResearch Technology support for such activities and to provide leadership with its specialties and technologies in fundamental research required for modern drug discovery. In new modality research activities, our original technologies are applied to create antibody-drug conjugates (ADCs) and nucleic acid drugs with global competitiveness supported by already drugs have superb performance. Clinical trials of these begun. Going forward, we will continue to push forward with our research to provide optimal forms of modality for various ADCs,target treatments, including small molecules, antisense oligonucleotides, peptides/proteins, and cell therapies, as we seek to build more-robust pipeline changing SOC. drug metabolism and Another axis of our activities involves pharmacokinetics and medicinal safety (DMPK) research research. By predicting verifying and the efficacy and safety of late-phase clinicaldrugs on humans from preclinical studies to establishing a position and quickly of competi-development play a crucial tiveness, DMPK and medicinal safety research productivityrole in increasing the overall of research and development. In conducting non-clinical DMPK research and biomarker research, we will efficiency while formulating emphasize highly accurate predictions of the pharmacological actions and side effects that will appear at clinical stages. At the same time, we will make contributions to planning clinical trial strategies by building upon biomarker hypotheses and providing biomarkers. Furthermore, coordination will be pursued with function, DSRDN and TCRM to advance development biomarker research and cultivate its technology platforms. It is estimated that more than 50% of compounds at the non-clinical research phase are dropped due to safety issues in success the development improve phase 1 clinical trials. To rate, we will enhance both exploration of safety biomarkers and initial toxicity evaluation of compounds. Function Another important role of the Research Technology is the provision of cross-divisional functions, such as the reinforcement of medicinal chemistry foundations, manage- of animal experi- ment of research compliance, oversight ments, and operation of facilities compliant with Good Laboratory Practices. Global Head of Research Research Masahiko Ohtsuki, Ph.D. Masahiko Ohtsuki, Initiatives for Fiscal 2016 Initiatives Fiscal 2016 will the new laboratory be the first year under diseases / targets as pain & neurosci- system classified by the ence, end-organ meaning we disease and rare disease & LCM, will need to propose and advance research themes and make from the previ- decisions based on a mind-set that is different ously adopted system. A key representation of this mind-set is By this, I refer to an model”. bio-venture “a the concept of in which we company approach similar to that of a venture actively collaborate with organizations, external advance research themes based on openly produced ideas, and make decisions within the organization. This approach should enable us to create results using less time investment. and effective conducting “chemistry”, and of our been prone to limit the range In the past, we may have “pharmacology” activities to we are research within these scientific disciplines. However, these boundaries, actively beyond now expected to move exchanging information and having discussion between pharmacologists propose new themes and and chemists to advance each of the research themes with speed and decision making authority at empowered the I have efficiency. and this has empow- the research phase to each laboratory, and ered laboratories to take reasonable accountability responsibility for results. - Indian subsidiaries RCI has been created a number of devel is partici- opment candidate compounds, and this company of pharmaceuticalspating for developing in the development countries with the support of the Global Health Innovative Fund. Technology time- is an incredibly Pharmaceutical development consuming process with an exceptionally low success rate. Nonetheless, our researchers continue to go about their duties while remaining passionate and highly motivated. This commitment comes from all researchers carrying close to their for Innovation. “Passion hearts our corporate slogan of Global Head of Research, I As the Compassion for Patients.” am dedicated to supporting these passionate researchers to the best of my abilities. to treat rare *1 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value antibody-drug conjugate or nucleic acid etc as a therapeutics Vision Targets ment of acute and chronic pain) neurodegenerative diseases) disease) development Oncology R&D subunit development both pharmacology and synthesis functions, allowing for modela transition characterized by to a bioventure management resource allocations on delegated based decision-making authority and productivity levels diseases) ・ Create a competitive pipeline ・ products innovative patients to Deliver ・ Change the standard of care (SOC) ・ indications for launch at least two major per year Develop ・ Proceed to phase 3, at least four major indications per year ・ Enter phase 1 with entities at least 9 new molecular per year ・ R&D Unit 5-Year Business Plan 5-Year Business R&D Unit 48 *1. A type of drug format, e.g. small molecule compound, monoclonal antibody, A type of drug format, e.g. small molecule compound, monoclonal antibody, *1. New Horizon Areas: In oncology, we are focusing on securing and development In oncology, lead assets, while accelerating for our perfect development applying critical efforts and planning for success on the best compounds. Focus of emergingof our next wave on disease development franchises contributes to this effort. Business activities are informed by the emerging newly refreshed which including the fields of immuno-oncology, strategy, and immune system to attack the cancer, uses the patients’ which uses genetically modified T cells, as a cell therapy, drug to target and destroy cancer cells. Primary Focused Area: Oncology R&D has adopted a new therapeuticR&D has adopted a new focused to ensure area years. success in the next five These fundamental changes to the R&D organization will with entire the targets, together allow organizationclear to work together with a single vision to make a difference in patients of so many who are counting on us to the lives change the practice of medicine and either extend their lives in a meaningful way. or extend the quality of their lives our goals, R&D has introduced important achieve To 2016 in structure including: changes in April ・ Pain (Develop therapies that will (Develop change SOC in the treat- Pain ・ drugs for diseases (Develop system nervous Central ・ End-organ disease (Mainly focusing and kidney on heart ・ Rare diseases (Optimize modalities new ・・ Creation of a fully integrated and and global discovery ・ organizations research possess small-scale that to Shifted ・ Business Activities (JP) 51 etc.) etc.) (JP) *2 *2 (JP) MEDI3250 (ASCA (ASCA / (US) / Prefilled i.d. vaccine Application VN-100 (DU-176b / AF / oral factor Xa inhibitor) Edoxaban (DU-176b / VTE / oral factor Xa inhibitor) (DS-7113 / Cancer pain / Opioid μ-receptor agonist) (Acute pain / Opioid μ-receptor agonist) ( VN-0107 (Nasal spray flu vaccine) for seasonal flu) Influenza Vaccine Edoxaban Hydromorphone CL-108 Intradermal Seasonal

, a novel in-house , a novel Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value mirogabalin (JP) Phase 3 (JP) (US/EU) / Rheumatoid arthritis / (JP) (JP) (US/EU) (JP/Asia) (JP/Asia) (US/EU) (JP) (US/EU/Asia) (US) (JP) (US/EU) (JP) Etanercept BS (CS-747 / Ischemic stroke / Anti platelet agent) (DS-5565 / Fibromyalgia / α2δ ligand) (DS-5565 / DPNP/ α2δ ligand) Mirogabalin (DS-5565 / PHN / α2δ ligand) Denosumab (AMG 162 / Rheumatoid arthritis / Anti-RANKL antibody) (DS-7113 / Cancer pain / Opioid μ-receptor regulator) ( VN-0105 / Hib vaccine) (DPT-IPV (ARQ 197 / HCC / MET inhibitor) (AMG 162 / Breast cancer adjuvant / Anti-RANKL antibody) (DE-766 / Gastric cancer / Anti-EGFR antibody) (PLX4032 / Melanoma adjuvant / BRAF inhibitor) inhibitor) / FLT3-ITD / AML-2nd (AC220 inhibitor) / FLT3-ITD / AML-1st (AC220 Pexidartinib (PLX3397 / TGCT / CSF-1R/KIT/ inhibitor) FLT3-ITD TNFα inhibitor) Prasugrel Mirogabalin Mirogabalin Hydromorphone CHS-0214 Tivantinib Denosumab Nimotuzumab Vemurafenib Quizartinib Quizartinib

Conduct trials on a large number of patient to assess safety volunteers and efﬁcacy in comparison with existing drugs compound developed by Daiichi Sankyo, is being submitted by Daiichi Sankyo, is being compound developed in Japan, the United States, for phase 3 clinical trials Europe, and Asia. the Review Committee on Unapproved Drugs and Drugs Committee on Unapproved the Review Indications with of under the Ministry High Medical Needs a are also advancing We Welfare. Health, Labour and for the injectionphase 3 clinical trial form of this drug in Japan. Meanwhile, , (US) (US/EU) Phase 2 (EU) (JP/US) (JP) (JP) (Hypertension ･ DM nephropathy / MR antagonist) (Diabetes / GPR119 agonist) (CS-8958 / Anti-inﬂuenza / out-licensing with Biota) (U3-1287 / Anti-HER3 antibody) (PLX3397 / CSF-1R/KIT/ inhibitor) FLT3-ITD (Glioblastoma / G47Δ virus) CS-3150 DS-8500 Laninamivir Patritumab Pexidartinib DS-1647

hydrocodone , an innovative , an innovative Conduct trials on a small group of patient volunteers efﬁcacy, to assess safety, dosage and administration regimen was submitted to the was submitted to the CL-108 (JP)

to assess safety Phase 1 (US) (US) *1 JVC-001 TS23 / (EU) / (US) (JP) (US/JP) (US/JP) (JP) (JP) (US) (JP) (JP) (JP) promethazine (US) (US) (US) hydrochloride oral formulation. This was , and (Acute ischemic stroke / inhibitor) TAFIa (Hyperphosphatemia) (Thrombosis / α2-PI inactivating antibody) (Dyslipidemia / Anti-PCSK9 Anticalin-Albumod) (Chronic pain) (Osteoporosis / Anti-Siglec-15 antibody) (AMD / Angiogenesis inhibitor) DS-2969 (Clostridium difﬁcile infection / inhibitor) GyrB oligonucleotide) (DMD / ENA (MMR vaccine) (MDM2 inhibitor) (FMS / TRK inhibitor) (BRAF inhibitor) (NTRK/ROS1 inhibitor) (KIT inhibitor) DS-3201 (EZH1/2 inhibitor) (CSF-1R inhibitor) (BRD4 inhibitor) DS-8895 (Anti-EPHA2 antibody) DS-8273 (Anti-DR5 antibody) (Anti-B7-H3 antibody) (Anti-HER2 ADC) (Anti-FGFR4 antibody) (Anti-FGFR2 antibody) DS-2330 DS-9231 DS-9001 DS-1501 DS-7080 DS-5141 VN-0102 DS-3032 PLX7486 PLX8394 DS-6051 PLX9486 PLX73086 PLX51107 DS-5573 DS-8201 U3-1784 DS-1123 DS-1040 DS-1971

Conduct trials on healthy volunteers of drug, including side effects area Others Cardio- vascular Oncology Metabolics Therapeutic *1. Patient volunteers may be included depending on the tests volunteers *1. Patient Asia, South & Central America *2. Pain Field Pain for States, an NDA In the United July 2016) Projects, as of (In-House Development Major R&D Pipelines one of the agents publicly offered for the development by offered for the development one of the agents publicly FDA for marketing approval. In Japan, Daiichi Sankyo has FDA filed an application and sales of for the manufacture two-layer combination tablet containing acetaminophen hydromorphone , an , a MR , a GPR119 , an NTRK/ROS1 prasugrel , are currently in has suggested effec- CS-3150 and DS-8500 and aim to realize a DS-6051 tivantinib DS-3032 , an EZH1/2 dual inhibitor, , an EZH1/2 dual inhibitor, , our proprietary oral anticoagu- edoxaban and DS-9231 and DS-3201 edoxaban , a groundbreaking conjugate combining an quizartinib , , in particular, has been designated as a break- has been designated as , in particular, DS-1040 DS-8201 Development Pipeline Development Cardiovascular and Metabolic Field In fiscal 2015, The Daiichi Sankyo Group develops and expands pipelines develops The Daiichi Sankyo Group medical needs. unmet with a constant focus on patients’ The R&D Unit has positioned oncology as the Primary Focused therapeutic and has also categorized pain area diseases, heart and system treatment, central nervous rare diseases as the New Horizon area.kidney disease, and targetingBy advancing efforts in these areas, we diseases medicines that bring about aim to create advanced treatments. changes in standard Oncology Field tiveness in patients with liposarcoma (LPS). In the biologics field, anti-HER2 antibody with an anticancer drug is in phase 1 clinical trials. lant, was approved in the United States and Europe and is lant, was approved expected to grow into one of Daiichi Sankyo’s flagship products. In addition to targeting an epigenetics, which is one of our attracting targets of next-generation oncology field. Based on the phase 1 study in the US for complete lineup of thrombosis treatments. As for the phase 2 and later stage projects, inhibitor that is designed to overcome resistance to existinginhibitor that is designed to overcome treatment in a rare genetically-defined subtype of started a phase 1 have We non-small-cell lung cancer. clinical trial for agonist, is under phase 2b clinical trial in type 2 diabetes. In addition, phase 2 clinical trials of through treatment for tenosynovial giant cell tumor (TGCT) also Of early-stage projects, we have by the FDA. commenced clinical trials for late-phase development, and all of these drugs have been and all of these drugs have late-phase development, Food Drug and designated as orphan drugs by the U.S. Medicines Agency. and the European Administration (FDA) antiplatelet agent, we are developing thrombus dissolving antiplateletare developing agent, we agents antagonist, for hypertension and diabetic nephropathy are being conducted in Japan. Pexidartinib Pexidartinib Global Head of R&D Oncology Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Oncology Antoine Yver, MD., MSc. Antoine Yver, 50 Daiichi Sankyo is committed to the fight against cancer, which which to the fight againstDaiichi Sankyo is committed cancer, continues world-wide. to be a leading cause of death of new cancer treatments, we have our delivery enhance To created a new global Oncology The integration R&D subunit. under a singleof｠oncology leader research and development making, agilityfosters faster and disciplined portfolio decision the full value of our portfolio through a focus on in delivering key and promising assets, aiming for perfection, and nurturing of valuable candidates in early clinical stage the next waves Using sciencethrough targeted efforts planning for full success. our strategies, withand rigor to drive a sharp alignment between well identified unmet medical needs with a unique and differentiated engine science, we will enhance our discovery from internal identification treatments as well as of novel that fit with our external investments pursuing aggressively emerging refreshed strategy around key franchises or mecha- an external view of our refreshed aim at providing nisms. We strategy 2016. by the second half of fiscal as a single global team, the Oncology together, R&D Working treat- and develop subunit will transform how we discover be successful in bringing and valuable innovative ments. To treatments to patients, we will ensure swift and competitive approval where the medical aiming at early development, use smart needs and our science warrants the opportunity, translational strategies development to develop development stage projects and continuously supply our pipeline with and relevant projects. innovative The quality of our science makes it our upmost obligation to unmet medical transform it into valuable options to serve needs and make these new options accessible to patients with cancer. Business Activities 53 hydro- were submitted submitted were can be used as guidelines for the treat- *5 hydromorphone hydromorphone

*4 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value during fiscal 2016 to help manage the pain of to contribute to growth in corporate earnings ment to expand product pipeline technology advance CMC strategy platform and technologies ・ Quickly and steadily launch products under development Quickly and steadily launch products development under ・ efficiency of oncology develop- and improve Accelerate ・ Enhance key technology of biologics manufacturing ・ utilize, manage cutting-edge and effectively Develop, ・ Initiatives for Fiscal 2016 Initiatives in March 2016. We hope to deliver these pharmaceuticals hope to deliver in March 2016. We to patients in Japan as soon as possible. Furthermore, we form of plan to apply for approval of an injectable *4. Narcotic analgesics Health Organization *5. World Fiscal 2016 will first year of the 5-year business be the to Unit is devoted plan. The Pharmaceutical Technology contributing to the progress of this plan by submitting approval applications on schedule and transferring technologies the launch of new drugs with to ensure efficiency and speed. The opioid analgesic patients or those unable to ingest needing immediate relief tablets. and applying developing we are actively In this manner, new technologies to contribute to pharmaceutical devel- needs for pharmaceu- opment and respond to the diverse tical products. Going forward, we will continuemission our to provide various pharmaceuticals that meet the needs of patients professionals. and healthcare The operating surrounding the pharmaceu- environment tical the past several changing business has been over years. Seeking to respond to these changes, the will Unit Pharmaceutical continue Technology to grow as a flexible organization by heightening creativity with the organization of its people. and increasing the diversity example of our development of pharmaceutical example of our development This drug has been positioned as a standard technology. drug for pain control in the WHO ment of cancer pain. Daiichi Sankyo has stepped up to ment of cancer pain. Daiichi Sankyo has to government respond to the request of the Japanese in the consideration this drug of the high medical develop two oral formu- simultaneously developed need for it. We lations for this drug (extended-release tablet and fast- types of cancer dissolving tablet) to treat the two different pain faced by patients: ongoing pain and sudden pain. Marketing applications for morphone (see the *2 Cytotoxic agent Linker products under which *3 *1 Antibody Enhance antitumor activity Target cell Target (Drug delivery system utilizing system antibodies)(Drug delivery Selectively deliver a cytotoxic agent to target deliver Selectively Accelerate and improve efficiency of oncology improve Accelerate and development Enhance key technology of biologics manufacturing platforms establish new production methods quality that aims to maximize the value of pharmaceuticals ADCs pharmaceutical are complex molecules composed of antibodies to cytotoxic linked (anticancer) agents via a synthetic linker. 5-Year Business Plan 5-Year Business ・・ high-value-added formulations, costs and Develop reduce ・ Pharmaceutical Technology Unit Technology Pharmaceutical *1. CMC strategy: R&D strategy pertaining to drug substances, formulations, and *1. Antibody-drug conjugates *2. Lifecycle management *3. ADCs: Armed Antibodies through Chemistry In order to accelerate and improve the efficiency of and improve In order to accelerate we willoncology a chemistry, execute development, manufacturing and controls (CMC) strategy, illustration below). In regard high-value-added to initiatives to develop formulations, costs and establish new production reduce methods, we utilize Daiichi Sankyo’s original technologies to continually create high-value-added LCM that satisfy of patients the needs and healthcare professionals. At the same time, we will establish new manufacturing methods to optimize manufacturing processes while pursuing continually cost reductions. we willstarts to clinical trials and flexible target quick measures with regard to these trials while also striving to timelines. shorten development enhance biologics manufacturing platforms, the To been Research Laboratories have Biologics Technology organized begin Unit into the Pharmaceutical- Technology Unit ning in fiscal 2016. The Pharmaceutical Technology will our entire cover portfolio, from the small molecule field to the biologics through a flexible allocation field, of anticipate that this new organizationresources. We will contribute to increased coordination with regard to the processes of commercial for ADCsdevelopment

and edoxaban Fast saliva Orally (OD) tablets disintegrating when exposed to OD Tablet

Quickly disintegrate Urief principles. Easy to take ( *1 *2

and extended-release *3 Immediate release tablets tablets in water Quickly dissolve Quickly dissolve Fast-dissolving and involved the alternative regula- the alternative and involved *5 Dissolving speed ), which can be taken without water. OD Tablet

tablets *4 location Slow Low number of administrations Controlled active Controlled active speed, time, and chemistry in consideration of impacts on ecosystems active ingredient from the formulation location Requirements for Registrationon Harmonisation of of Technical Pharmaceuticals for Human Use ingredient release Extended-release We established a low-cost manufacturing process established a low-cost manufacturing that We applied green sustainable chemistry We participatedWe in ICH *1. Environmental initiative that proposes an approach toward sustainable Environmental *1. quickly that dissolve Tablets *2. designed to control the release speed, time, and locationTablets the for *3. ingredient designed to control active speed, time, release and Tablets *4. coalition known as the International Conference The Japan-U.S.-Europe *5. In addition, applications for marketing approval were other products, including OD submitted for a total of ﬁve tablets, fast-dissolving tablets, tions in advance. tablets. We obtained marketing for two products approval We in the form of orally disintegrating (OD) tablets drug substances technologies and application to products Olmetec ・ Prospective applicationProspective of new global regulations ・・ Innovative manufacturing processInnovative manufacturing established for ・・ Development and establishment of formulation platform Development ・ Major Achievements in Fiscal 2015 Response to Needs for Various Response to Needs for Various Pharmaceutical Forms

Naoyuki Kishi, Ph.D. Naoyuki Kishi, Head of Pharmaceutical Technology Unit Head of Pharmaceutical Technology & Sales Marketing together with ate information pharmaceuticals Provide appropri- products into pharmaceutical Develop compounds Develop Chain Supply Produce and supply pharmaceuticals Develop Develop Technology Pharmaceutical pharmaceuticals

and Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Create evaluation technology

Research Development ・ Process technology ・ Biotechnology ・ Formulation technology ・ Analytical and quality ・ pharmaceuticals Pharmaceutical Technology Unit Pharmaceutical Technology 52 Pharmaceutical processes technology is used to develop pharmaceutifor consistent manufacturing of high-quality - parameters, the cals that meet desired efﬁcacy and safety fundamental values provided by pharmaceuticals. In addition, pharmaceutical technologies help improve product value in terms of use and customer satisfaction. Unit deﬁnes its mission The Pharmaceutical Technology as providing new technology that are compatible platforms with the product Sankyo, portfolios sought by Daiichi adding extra value to pharmaceuticals. It thus works to realize a timely of the new drug candidates discov- supply ered by the R&D Unit in the form of investigational drugs. The unit also designs manufacturing processes for realizing pharmaceuticalsconsistent manufacturing of high-quality analyticaland transfers related manufacturing and technologies to the Supply Chain Unit.

Technology Unit Technology com- for developing candidate We are responsible into commercial pharmaceutical pounds for drugs products. Functional Units Functional Pharmaceutical Business Activities 55 in Europe and emerging Future Product Mix production items • High-variety, low-volume low-volume High-variety, • Large molecule compounds • Injectable formulations • edoxaban business expansion to all over the world all over business expansion to Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value edoxaban’s of oncology products and maintain stable supply and maintain stable supply ・ Establish high-variety, low-volume manufacturing system low-volume Establish high-variety, ・ for future biologicsFuture planning manufacturing systems ・ optimalEstablish region manufacturing systems for each ・ Support ・・ Advance cost reduction global measures on a level ・ Initiatives for Fiscal 2016 Initiatives Fiscal 2016 will of the 5-year not only be the first year Supply Chain Unitbusiness plan but also a year in which the rebuilding takes a large first step in transforming and beyond global supply chain structures looking ahead even years. the next five will start taking actions We systems for high- to establish manufacturing targeting oncology low-volume variety, products and future planning for biologics manufacturing systems, while optimizing manufacturing systems for each region. Specific measures will include boosting manufac- Plants to turing capacity at the Beijing and Shanghai willmanage business expansion in China. We also prepare Chemical to close the Hiratsuka Plant of Daiichi Sankyo Pharma as part of the aggregation of API manufacturing sites in Japan. At the same time, we will take steps to respond to the business expansion of countries in order to maintain stable supply. Furthermore, countries in order to maintain stable supply. we will advance cost reduction activities on a global to level contribute to increase the foundation of Daiichi Sankyo Group’s future growth. and *1 Transformation Transform supply chain system adapted supply chain system adapted Transform to the shift to oncology products and biologics . Such changes will include a olmesartan Current Product Mix • Mass-production items • Small molecule compounds • Solid formulations projected medium-to-long-term productionprojected medium-to-long-term and volumes changes in product variety technologies to deal with Group pipeline and lifecycle DS management strategies by enhancing globalon a global management level long-term strategies these and planning cost reduction measures to achieve targets ・ Transform and rebuild supply chain structures to match and rebuild Transform ・ cost reductionAdvance global measures on a scale ・ new new manufacturing systems and obtain Establish ・ expenditure and capital of inventory optimal level Achieve ・ Supply Chain Unit 5-Year Business Plan Chain Unit 5-Year Supply Transformation and Rebuilding of Supply Chain Structures for the Future Transformation During the period the 5-year business plan, we will of face addition changes in loss of to the environmental several exclusivity for Cost planning: Setting cost targets based on product lifecycles and medium-to- *1. decline in production volume over the medium-to-long decline in production over volume term as well as alterations in our product mix due to the toward oncologyshift in the Daiichi Sankyo Group pipeline products and biologics (mass production items→high- production low-volume items; small molecule variety, compounds →large molecule compounds; solid formula- respond swiftlytions and → injectable formulations). To to keep ahead of the flexibly to these changes, we strive and rebuild supply chain structures. to transform curve we will aggregate sites manufacturing Specifically, on a for system global and establish a manufacturing level productionbiologics and high-variety low-volume variety. Cost reduction activities, meanwhile, will include refining supply chain technologies, advancing cost planning cost reduction products, for major and achieving low-cost operations. By carrying reduction out such various cost activities on a global basis, we will contribute to overall Group profits. and realized a Alphaville Plant to ensure quality Farmaceutica LTDA. Daiichi Sankyo Brasil *2 edoxaban and GDP *1 Bethlehem Plant Daiichi Sankyo, Inc. Onahama Plant Hiratsuka Plant Co-operation Scheme (PIC/S): Unofficial framework for cooperation between inspection authorities targeting the international development, implementation, and maintenance of inspection authority quality systems and Good Manufacturing Practices (GMP) standards appropriate for the pharmaceutical field quality of pharmaceuticals during transportation and storage processes *1. Pharmaceutical Inspection and Pharmaceutical Inspection Convention *1. Good Distribution Practices (GDP): Standards designed to maintain the *2. consistent supply of the product Japan aimed at consolidating Supply and strengthening Chain function in line with global standards measures and low-cost operations decrease in inventories ・ Steadfast response to PIC/S ・・ Established new supply chain organizationalin structure ・ Established global supply chain for ・・ Contribution to entire Group profit through cost-reduction ・ optimization activitiesGlobal inventory resulting in massive ・ Major Achievements in Fiscal 2015

Head of Supply Chain Unit Odawara Plant Tatebayashi Plant Tatebayashi Daiichi Sankyo Chemical Pharma Co., Ltd. Shanghai Plant Katsumi Fujimoto, Ph.D. Katsumi Fujimoto, Beijing Plant Daiichi Sankyo (China) Holdings Co., Ltd. Daiichi Sankyo Hiratsuka Plant Takatsuki Plant Takatsuki Propharma Co., Ltd. Overseas staff: Approx. 1,000 people Domestic staff: Approx. 1,800 people 1,000 people Domestic staff: Approx. staff: Approx. Overseas Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Europe GmbH Daiichi Sankyo Pfaffenhofen Plant packaging, logistics Packaging, logistics Packaging, API, intermediates Formulations, Supply Chain Unit 54 Contributing to Daiichi Sankyo’s innovative pharmaceutical innovative Sankyo’s ContributingDaiichi to business, the Supply Chain Unit is an organization that conducts optimal along the global management supply chain functionwhich crosses regional axis, and national boundaries. The global organization is responsible for chain functions supply and manufacturing sites overseeing and China. in Japan, the United States, Europe, Brazil The mission of the Supply Chain Unit is 1) providing a to patientsconsistent supply of our high quality drugs around the world using our advanced technological capabilities supply chain system and 2) and efﬁcient supporting early launch of new products and business our actionsexpansion of existing believe products. We value of the directly contribute to enhance corporate Daiichi Sankyo Group.

We consistently supply our high quality drugs to patients supply our high quality drugs We consistently using our advanced technological around the world efficient supply chain system. capabilities and Functional Units Functional Chain Unit Supply Global Production Sites of the Supply Chain Unit Business Activities 57 , and other Efient/Effient , Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value LIXIANA/SAVAYSA surveillance for innovative pharmaceuticals for innovative surveillance Sankyo Group (adhere to manufactured by the Daiichi GMP) and application materials product lifecycle management ・ Steadily advance safety measures and post-marketingSteadily advance ・ reliability withContinue regard to improve to products ・ affairs measures that contribute to Realize regulatory ・ Initiatives for Fiscal 2016 Initiatives Post-Marketing Regulatory Affairs Post-Marketing The Quality & Safety Management Unit will determine the organizationaloptimal form for its overall structure and strengthen functions to better exercise its strategic regulatory affairs functions and thereby supporting the launch of new products and, at the same time, and expand maintain sales of existing products. stricter eye to Society has recently been turning an even Under this increased scrutiny, the pharmaceutical industry. the Quality and Safety Management Unit will ensure effective regulatory affairs management and stringent compliance, and we will flexibly respond to changes in the while advancing our dutiesoperating without environment hesitance to implement reforms when necessary. Quality Assurance and Audits In preparation for production increases and new volume product assurance functions launches, quality will be reinforced at the production companies in sites of Group order to contribute to the expansion of operations by achieving a stable supply of high-quality pharmaceuticals. will We also continue to ensure the reliability of R&D activities in consideration of global regional standards and characteristics. to furthering effort will Particular be devoted our expertise in establishing audit systems in China given our operations country. this research in clinical enhance to plans Safety Information Management willThe Quality & Safety Management Unit strengthen global systems through an initiative spear- governance headed by offices in Japan, thereby positioning itself to conduct more sophisticated drug evaluations of adverse reactions for drugs and promote related safety measures. In Japan, the information contained in package inserts is expected to undergo substantial revisions based on the policies Because Daiichi Sankyo of the applicable regulatory authority. provides numerous products, we will steadily advance these revisions while exercising our integrated functions. At the same time, the Quality & Safety Management Unit will research medical information databases aimed at further strengthening foundations and formulating safety measures for mainstay products based on the perspective of patients. forward with Furthermore, we will post- steadily move regardingmarketing mainstay products surveillance to create new information and promote appropriate use. - and affairs regulatory Post-market Post-market regulatory affairs functions are in the • Provide strategic • edoxaban Audits of data • Guarantee reliability Guarantee reliability • Efient/Effient Assure reliability and Quality assurance to create information Safety LIXIANA/SAVAYSA information management create and provide information and post-market drugs new fields and new technologies tiveness of safety measures prasugrel • Secure safety • Collect safety data and • usage Promote appropriate • • Ensure quality of investigational • 5-Year Business Plan 5-Year Business ・ Continue on post-marketing surveillance ・・ Introduce quality risk analysis and evaluation for systems ・ effec- verify safety monitoring measures and Strengthen ・ Quality & Safety Management Unit & Safety Management Quality Functions Underpinning Reliability The Quality & Safety Management Unit has established a The Quality & Safety measures vision for fiscal 2020 and formulated concrete for realizing this vision. As post-marketing in the phase and clinical development oncology field is being accelerated, there will be a need to shift toward a product mix withrespond to the Company’s drug reactions.a different set of potential To adverse address this need, the unit will advance post-marketing information to create for strengthening safety surveillance measures and promoting appropriate use of Daiichi Sankyo’s oncology products. The unit willintroduce also and quality risk analysis evaluation systems that are compatible with the changes emerging productin the Company’s portfolio. At the same time, we will advance the utilization of new medical infor mation databases, a new initiative, to help us better understand the circumstances regardingour the use of products based on data from actual clinical settings and This existing of measures. safety effectiveness the confirm will allow us to create swift and sophisticated new safety measures as needed. as our business expands, we will further Moreover, strengthen quality assurance and regulatory assurance functions forward with the creation and move of robust quality and safety management systems that can respond to increases in production and changes in regulations. volumes , and other innovative , and other innovative Marketing & Sales Efient/Effient , Supply Chain pharmaceuticals database regulatory affairs strategies for mainstay products companies LIXIANA/SAVAYSA and value improvement for post-market pharmaceuti- and value improvement cals through post-marketing surveillance regulatory of management tionscomprehensive through affairs functions ・ Appropriate steps taken to ensure safety of Appropriate ・・ Foundations formed for utilizing medical information ・ Change management approaches to reduce costs based on ・ Reliability assurance functions strengthened for Group ・ Major Achievements in Fiscal 2015

4. Information creation by utilizing post-marketing data 4. compliance withStringent applicable laws and regula- 5. functions support the value chains for R&D, These ﬁve supply chain, and marketing pharmaceutical technology, and sales, which are major areas of activity for a pharmaceutical company. Hirosumi Izawa Technology Quality & Safety Management Unit Pharmaceutical Head of Quality & Safety Management Unit Head of Quality & Safety Management

Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Research and Development functions

・ Focus on quality of pharmaceuticals in phases from clinical trials to post-marketing ・ Focus on safety of pharmaceuticals used by patients ・ Assure reliability of data (efficacy and safety information) in areas ranging from clinical trial results during R&D to post-marketing ・ Create information for post-market pharmaceuticals through post-marketing to respond to medical needs surveillance ・ Promote stringent compliance with management of regulatory affairs applicable laws and regulations through comprehensive ・ world through manufacturing and analytical data reviews related to areas ranging from clinical trials to post-marketing based on analyses and evaluations of data on adverse of use ranging from all stages drug reactions received from clinical trials to post-marketing tion) in areas ranging during R&D to from clinical trials post-marketing Quality & Safety Management Unit 56 Support for Value Chain to Ensure Quality, Safety, and Reliability Safety, Chain to Ensure Quality, Support for Value 2. Promotion of patient safety through safety measures 2. informa- Quality assurance of data (efficacy and safety 3. 1. Quality assurance of a steady supply of medicines to the 1. The ability for pharmaceuticals to fulfill their purpose as developing depends on quality manufacturing as well and providing information, as appropriate. to developed was Unit Management Safety & Quality The reliable medicines to patients and healthcare help deliver the world. This unit focuses on the professionals all over functionsfollowing in its activities. five

Management Unit Management reli- quality and safety to deliver We will secure able medicines. Functional Units Functional & Safety Quality Business Activities CSR Activities 59 Business Activities Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value

CSR Activities 60 64 66 68 70 72 74 52 54 56 58 32 38 46

）

） Japan Overseas （（ CSR Management Promoting Compliance Management Mutual Growth of Employees and the Company Enhancement of Communication with Stakeholders Promoting Environmental Management Improving Access to Healthcare Social Contribution Activities Pharmaceutical Technology Unit Pharmaceutical Technology Unit Supply Chain Unit Quality & Safety Management Unit Medical Affairs Division Business Units Business Units R&D Unit

････ • • • • Business Units ･･ Functional Units ･ • • • This section details the various business activities well as the CSR activities of the Group as incorporated into these business activities.

prasugrel and collect clinical evidence edoxaban and and enhance medical information new products based on the Medical Strategies changes corresponding to environment 5-Year Business Plan ・ Formulate and implement medical strategies ・ Ensure strict compliance ・ Increase quality of response to medical inquiries ・ Promote coordination within the Medical Affairs Division ・ Increase information distribution activities ・・ Conduct large-scale observational studies for ・・ Create and distribute information on priority drugs and ・ more sophisticated medical affairs systems Develop ・ customer loyalty to improve Strive ・ Enhance medical information ・ of Customer (VOC)Entrench practice of utilizing Voice ・ Initiatives for Fiscal 2016 Medical Affairs Division For priority drugs, the Medical Affairs Division will formulate and implement medical strategies for collecting, evaluating anticipate and to information order in analyzing, and respond to important clinical questions. At the same time, of corporate we will contribute to the improvement value and to advances in medicine by maximizing product value, all while practicing strict compliance with applicable laws and regulations. The division has deﬁned the slogan of respond to medical inquiries, and we are working to increase the quality of such responses in order to improve At the same time, we coordinate within customer loyalty. specialized expertise and the division to further develop enhance medical information. By compiling and analyzing to communicate information on inquiries, we endeavor unmet needs to relevant internal divisions as well to assist in implementing and necessary product improvements continuing information to increase about our products.

“Trust built with every word of thanks” for its efforts to word of thanks” built with every “Trust - Head of Medical Affairs Division - Sunao Manabe, DVM, Ph.D. Sunao Manabe, el of compliance. research measures) information strategy formulation ment policies Information Collection Information Analysis and Evaluation ・ Respond to key opinion leaders (clinical ・ Consolidate academic events and thesis ・ Compile Voice of Customer (VOC) ・ Support development strategy drafting ・ Assist lifecycle management and product ・ Identify clinical questions ・ Aid in formation of product risk manage- ・ Medical Strategies Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value clinical research clinical research economic outcomes of marketed products Medical Affairs materials mation (DI) Center and other divisions Affairs Division Information Creation Information Distribution ・ Promote company sponsored ・ Support investigator sponsored ・ Perform non-clinical research on health ・・ Hold academic events held as a part of ・ Conduct pre-inspection of promotional ・ Provide academic support to Drug Infor- ・ Role of the Medical Affairs Division Background for Establishment of Medical 58 Value Linkage Scheme Targeted through Medical Affairs Linkage Scheme Targeted Value tives of both healthcare professionals and patients. create and distribute high quality information in the We based disease areas in which Daiichi Sankyo is involved on scientiﬁc and medical judgment in a responsible way. adopted a value linkage scheme Furthermore, we have (see the illustration below) to maximize product value evaluated as contribution to treatment in the medical ﬁeld. corporate value and to improve thereby endeavor We contribute to advancements in medicine.

Guided by this mission, we will enhance activities to create information about our pharmaceutical products through clinical research and other methods that respond to the needs of the medical ﬁeld and distribute information based on the perspec The ability for pharmaceuticals to fulﬁll their purpose depends data on quality manufacturing as well as appropriate management. we are expected to a life science-oriented company, As information,create and distribute high-quality medical always adhering to high ethical standards. 2016 to The Medical Affairs Division was established in April our key stake enhance how and what we communicate to

holders regarding our products and the diseases they treat, while ensuring transparency and a high lev The Medical Affairs Division in Japan will contribute to Division in Japan will The Medical Affairs coordi- of product value by enhancing the maximization infor- functions from pharmaceutical nation between to distribution. mation collection Functional Units Functional Affairs Division Medical CSR Activities 61 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value emissions target: 5.6% reduction from 2 ment system certification pharmaceutical company ・ Identify, respond to, and disclose material CSR issues respond to, and disclose Identify, ・ satisfaction customer ・Improve ・Respond to complaints ・Stakeholder engagement for CSR reports ・External verification ・Address climate change ・Manage chemical substances ・Control water usage volumes ・Manage waste biodiversity ・Preserve manage- ISO 14001 and other environmental Receive ・・Address global health issues ・Measures to combat counterfeit medicines ・Addressing cost burden ・Health outcome contribution Conduct social contribution activities suited to a ・ ing climate change fiscal 2015) and global health Health and hygiene training to the localdevelopment, in the regions face a lack of medical infrastructure Enhancement of Communication of with Enhancement Issues) (5 Stakeholders (6 Issues) Management Promoting Environmental Improving Access to Healthcare (4 Issues) Social Contribution Activities (1 Issue) Promoting Environmental Management Promoting Environmental and risks and address- impacts Reducing environmental • (Fiscal 2020 CO Improving Access to Healthcare Promoting R&D for intractable disease, orphan disease • Mobile healthcare field clinics, Healthcare professionals • ・Observe Group-wide codes・Observe of conduct ・Anti-corruption of corporate activities・Ensure transparency in accordance with・Conduct clinical trials ICH-GCP ・Ensure product safety quality and ・Ethical marketing practices genetic・Consider bioethics and resources ・CSR procurement ・Report on critical recalls ・Report on breach of laws and legal cases ・Respect human rights in business activities strategy ・Tax human resources ・Develop ・Acquire and retain talented individuals ・Promote diversity ・Communication between labor and management ・Respect human rights in labor practices equal wages to men and women ・Pay ・Promote work-life balance occupational・Prevent accidents the Daiichi Sankyo Group Individual Conduct Principles and secure competitive advantage through our core and accountability, values of innovation, integrity, respect for diversity CSR & ESG Promoting Issues) Compliance Management (12 (8 Issues) Mutual Growth of Employees and the Company Promoting Management Compliance Dissemination of global compliance policies, such as • Mutual Growth of Employees and the Company to realize value creation Human resources development • Enhancement of Communication with Stakeholders of Effective disclosure and performance improvement • Based on the above CSR issues, we have defined the following five areas of focus defined the following for CSR activity five CSR issues, we have domains in the fourth Based on the above mid-term business plan. Business Plan) (5-Year CSR Targets Issues to Be Addressed as Part of Responsible Corporate Activities Corporate of Responsible Part Be Addressed as Issues to 1 2 stakeholders, Step ActivitiesArrange CSR Issues into Domains for CSR The 36 CSR issues related to CSR activities were further organized and arranged into six domains for activities: promoting compliance management, 1. mutual growth of employees and the Company, 2. of communicationenhancement with 3. management, promoting environmental 4. to healthcare, and improving access 5. social contribution activities. 6. CSR Activities” of to Be Addressed as Part “Issues (See on page 61.) Step Identify CSR Issues identified 36 CSR issues that pharmaceu- have We tical companies generally need to address by refer- encing the inspection criteria of international CSR initiatives (Ten Principles of the United Nations Global Compact, ISO 26000, etc.) and socially (Dow Jones (SRI) indices responsible investment Sustainability Indices, FTSE4Good, Access to and Medicine Index, etc.) as well as the policies organizationsvisions of pharmaceutical company (International Federation of Pharmaceutical Manufacturers & Associations, Japan Pharmaceutical Manufacturers Association, etc.). s CSR Activities CSR s ’ Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value The Daiichi Sankyo Group Sankyo Daiichi The 60 We must respond to a diverse range of sustainability issues, to a diverse must respond We including those related to human rights, gender equality, preservationcorruption and prevention, environmental global to sustainability needs, we health. In responding clarified the CSR issues that the Group will focushave on based on their medium-to-long-term relationship with our business and arranged these into six domains for CSR activities (see steps 1 and 2 to the right). CSR Activities and Changing for Addressing Diverse Sustainability Issues CSR ActivitiesSankyo Group Based on the Daiichi Corporate Conduct Charter Conduct Based on the Daiichi Sankyo Group Corporate conducting are we activities CSR 28), page (see Charter as part of all our corporate activities. The Daiichi Sankyo principles to be Group Corporate Conduct Charter defines activitiespracticed Company’s the of all in fulfill to order in each of these principles very its corporate mission. Taking and complying with legal regulationsseriously, and rules, we act with ethical standards and good the highest social engaged in a conscience appropriate for a company Through this commit- business that affects human lives. requirements and to meet the diverse ment, we strive expectations corporate value and of society to improve thereby fulfill our Corporate Social Responsibility (CSR).

We endeavor to conduct CSR activities endeavor are integrated that We into our business activities and that are based on the our commitment to social, In order to facilitate environ- Corporate Conduct Charter. Daiichi Sankyo Group identiﬁedsustainability issues, we have mental and other and organized on which CSR issues into six domains willCSR management activities concentrate its resources. Actual through a system of commit- are promoted tees with cross-organizational will also engage We membership. in active communication with our various their evaluationsstakeholders, taking heart and reﬂecting of the Group to these evaluations in CSR activities. CSR Management CSR CSR Management

Promotion of CSR Activities CSR Communication We engage in active communication with the institutions supporting CSR initiatives, SRI investigation firms, institutional Initiatives related to compliance management, environmental management and social contribution activities are promoted investors that emphasize CSR and ESG, and CSR experts. In addition to explaining the Group’s CSR activities (see the“CSR by specific committees set up for each area (Corporate Ethics Committee, Environmental Management Committee, and Issues and Initiatives” table below), we use such communications as an opportunity to understand requests and expectations Social Contributions Committee). Relevant Company divisions serve as the secretariat for each of these committees, which of our various stakeholders for the Group to keep them current and to reflect this understanding in CSR activities. are membered by individuals from across the organization. In addition, important matters related to CSR are reported to and discussed by the Management Executive Meeting. CSR Issues and Initiatives Corporate Ethics Committee (Secretariat: Legal Affairs Department) CSR Issues Topics Covered in Value Report Page Topics Covered on Corporate Website ・ Continued operation of the compliance system 64 The Corporate Ethics Committee promotes management that complies with domestic and international laws and regulations as well as corporate ・ Compliance training and educational activities Observe Group-wide codes of conduct ・ Dissemination of the ICP 64 ・ Information security ethics and fulfills corporate social responsibility. ・ Approach to clinical research support 65 Chairperson: Compliance officer (Head of General Affairs & Human Resources Division) Anti-corruption ・ Initiatives for anti-corruption 65 Ensure transparency of corporate ・ Measures for ensuring the transparency of corporate 65 Members: The Committee consists of 11 members including 10 members internally assigned by the chairperson and an outside lawyer for activities activities ensuring transparency and confidence of the Committee Conduct clinical trials in accordance ・ GCP training with ICH-GCP Ensure product quality and safety ・ Product safety training Promoting Environmental Management Committee (Secretariat: CSR Department) Ethical marketing practices ・ MR accreditation test results 32 ・ Ethical promotional activity Compliance Consider bioethics and genetic ・ R&D ethics The Environmental Management Committee promotes environment-friendly and balanced management which contributes to sustainable Management resources ・ Fair utilization of genetic resources society throughout its overall corporate activities. ・ CSR procurement CSR procurement ・ Promotion of compliance in procurement 65 Chairperson: Chief executive officer of environmental management (Head of Corporate Management Division) ・ CSR Procurement Outline Members: The Committee consists of 10 members including Environmental Management Officer (vice president of CSR Department) Report on critical recalls ・ Product recall information Report on breach of laws and legal ・ Business risks 25 cases Respect human rights in business ・ Training related to the Ten Principles of the UN Global 96 Social Contributions Committee (Secretariat: CSR Department) activities Compact The Social Contributions Committee promotes social contribution activities from the perspective of fulfilling corporate social responsibili- Tax strategy ・ Our Approach to Tax ties as a good corporate citizen. ・ Cultivation of leaders 66 Develop human resources ・ Development of entry- and mid-level employees 66 Chairperson: Head of Corporate Management Division ・ Cultivation of line managers (organization heads) 66 Members: 6 members appointed by the chairperson Acquire and retain talented individuals ・ Basic policy 66 ・ Daiichi Sankyo Human Resources Management Philosophy ・ Support for the career development and work styles of diverse employees ・ Promotion of Diversity and Inclusion 66 ・ Support for the career development of female employees ・ Promotion of the employment of individuals with 67 Promote diversity (Japan) disabilities ・ Employment of seniors (Japan) The CSR Department works to identify sustainability issues and, based on the global management structure (see page 29), Mutual Growth of ・ Building of a dynamic corporate culture 67 ・ Systems and measures to support diverse work styles collaborates with relevant divisions to support and promote the Group’s CSR activities. Employees and the (Japan) Company Communication between labor and ・ Communication with labor unions 67 management Respect human rights in labor practices ・ Initiatives promoting respect for human rights 67 ・ Policy for respecting human rights ・ Training related to the Ten Principles of the UN Global Pay equal wages to men and women External CSR and ESG Evaluations and CSR Communication Compact Promote work-life balance ・ Promotion of the“Work-Life Cycle” (Japan) ・ Systems and initiatives for supporting occupational health Prevent occupational accidents ・ Promotion of occupational health and safety 67 and safety (Japan) Inclusion in SRI Indexes in Reflection of External CSR and ESG Evaluations Identify, respond to, and disclose ・ CSR management 60 material CSR issues We pursue ongoing improvements in corporate value by integrating our CSR activities for addressing sustainability issues ・ Communication with healthcare professionals and Improve customer satisfaction 68 into our business activities. These efforts have been highly evaluated, resulting in the Company being included in four patients Enhancement of Respond to complaints ・ Compliance reporting system CSR Activities socially responsible investment (SRI) : Dow Jones Sustainability Indices (DJSI), RobecoSAM AG Sustainability Award Communication ・ Provision of valuable information to healthcare with Stakeholders ・ Communication with shareholders and investors 68 professionals Industry Mover, FTSE4Good Global Index, and Morningstar Socially Responsible Investment Index. Overviews of each index Stakeholder engagement ・ Communication with employees 69 ・ Collection and communication of input from healthcare ・ Communication with SRI/ESG rating agencies 69 professionals and the status of the Company’s inclusion are as follows (as of September 30, 2016). ・ Operation of the Daiichi Sankyo Kusuri Museum External verification for CSR reports ・ External verification of environmental reports

・ Climate change and global warming response measures 71 ・ CO2 emissions reduction targets and performance Address climate change ・ Energy saving measures 70 ・ CO2 emissions reduction initiatives ・ Usage reduction and emission and transfer control of RobecoSAM AG, of Switzerland, published Manage chemical substances chemical substances The DJSI is managed cooperatively by S&P Dow RobecoSAM Sustainability Yearbook 2016, in Jones Indices LLC, of the United States, and which it recognized companies that exhibited Promoting Control water usage volumes ・ Appropriate use of water resources RobecoSAM AG, of Switzerland. This SRI index excellence in terms of initiatives and disclosure Environmental ・ Waste reduction targets and performance Manage waste ・ Environmental audits 70 evaluates the sustainability of a company from from the perspectives of economic, environmen- Management ・ Promotion of waste compliance the perspectives of economic, environmental, tal, and social factors. In this report, the Preserve biodiversity ・ Biodiversity initiatives and social factors and provides important Company was selected as an Industry Mover Receive ISO 14001 and other criterion for the selection of investment targets because, among the 55 pharmaceutical environmental management system ・ ISO 14001 certification acquisition by investors. The Company has been included in companies worldwide, Daiichi Sankyo’s score certification DJSI Asia Pacific for seven consecutive years. showed the greatest year-on-year improvement ・ Mobile healthcare field clinic services in India and Africa 72 ・ Basic policy for Intellectual properties of all the companies in the top 15%. ・ Cultivation of healthcare workers in China 72 Address global health issues ・ Participation in the GHIT Fund 73 ・ Initiatives targeting rare diseases 73 ・ Technical cooperation for MR vaccine production 73 The FTSE4Good Index is created by FTSE Russell, Improving Access to Healthcare Measures to combat counterfeit a part of London Stock Exchange Group plc. The Morningstar Japan K.K. selects 150 companies ・ Measures to combat counterfeit medicines FTSE4Good index is designed to measure the each year for inclusion in the Morningstar Socially medicines performance of companies demonstrating strong Responsible Investment Index. Chosen from Addressing cost burden ・ Patient Assistance Programs (United States) Environmental, Social, and Governance (ESG) among Japanese listed companies, this index Health outcome contribution ・ Expanding access to clinical trial data practices. The FTSE4Good indices are used by a includes those companies that have been ・ Advancement of medicine and pharmacology wide variety of market participants to create and assessed from the perspectives of governance, (scholarships, etc.) assess responsible investment funds and other environmental, social and human resources ・ Daiichi Sankyo Presents Family Tie Theater 74 ・ Social welfare (TABLE FOR TWO, etc.) products. The Company has been included in the development. The Company has been included in ・ Health camps in India 75 ・ Environmental preservation activities FTSE4Good Index for eight consecutive years. this index for eight consecutive years. Social Contribution Conduct social contribution activities ・ Activities to consider the healthcare of elderly people in 75 (cleanup activities around operating sites, etc.) suited to a pharmaceutical company an aging society in Taiwan ・ Disaster relief (disaster relief support, etc.) http://www.ftse.com/products/indices/FTSE4Good Activities ・ Reconstruction support following the Great East Japan 75 ・ Youth development (science and pharmacology Earthquake seminars for high school students, etc.) ・ Promotion of culture and the arts (sponsorship of a cherry blossom festival in Rome, etc.)

62 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Report 2016 63 CSR Activities - 65 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value The Company updates its corporate website with updates informationThe Company on the following initiatives. http://www.daiichisankyo.com/about_us/responsibility/csr/ business/fair/index.html Kasumi Fujii Compliance Group Legal Affairs Department General Affairs & Human Resources Division Daiichi Sankyo Co., Ltd. Voice Promotion of Compliance as a Team One of the duties of the Legal of the Compliance Group Affairs Department is to advance initiatives for promoting compliance on a Group-wide for basis. I am personally responsible conducting training spearheaded by the Legal Affairs Department at domestic Group companies and formulating form global policies related to compliance for the Group. We contribute to I would like to teams to work in for each activity. my teams by calling on the knowledge and experience I gained as a lawyer. For example, the content of materials and the methods used in conducting in a collaborative compliance training are decided violationsprocess. include case studies of compliance and We training activities.incorporate interactive In formulating global collect infor policies for the Daiichi Sankyo Group, the teams legalmation systems and trends in activities on overseas of regulatory authorities discus- overseas and conduct exhaustive sion with Group compliance representatives from overseas companies. Through this process, into account we always take the future direction of the companies within the Group. continue We to advance activities higher targeting even all of skills the combining by management compliance of levels team members. ・R&D ethics ・Information security ・CSR procurement Other Initiatives Approach to Clinical Research Support Approach In supporting clinical research, Daiichi Sankyo adheres to the Japan Pharmaceutical Manufacturers Association’s Guidelines for Supporting Clinical Research Projects headed by External Researchers with Pharmaceuticals. support research only after identifying possible We any conflicts of interest among researchers and examining issues with an eye to the potential implementation of a clinical research law currently in the drafting phase. scholarship donations. Daiichi Sankyo also provides To transparency with regardimprove to these scholarships, we introduced the Daiichi Sankyo Scholarship Program 2016. In this program, and other universities in April research institutions submit applications for scholarships corporate website, and directly through the Company’s by an these applications and approved are investigated organization that is independent from the Sales & Marketing Division. Initiatives for Anti-Corruption their operations on a globalFor companies developing officials to bribery of government scale, the risks related are growing with each coming year. our states ICP the in defined Norms Individual the of One To corruptioncommitment to preventing and bribery. we continueuphold this commitment, efforts to actively into compliance training incorporate such topics programs. Promotion of Compliance in Procurement a globalThe Daiichi Sankyo Group has established procure- we base Acting in accordance with this policy, ment policy. our global procurement activities on good compliance. In and Group companies in Japan have addition, the Company positioned among their procurement compliance missions, declaring that strict compliance must be practiced regarding procurement-related laws enacted in Japan, such as the of Antimonopoly against Act, Act Delay in Payment Subcontract Proceeds, Etc., to Subcontractors, and others. of Measures for Ensuring the Transparency Corporate Activities the transparency of our relationships work to ensure We with healthcare professionals, medical institutions and patient defined groups in Japan based on the Company’s to such policies, and we disclose information on payments weentities corporate website. Overseas, on the Company’s healthcare profes- to disclose information on payments sionals and medical institutions by calendar year based on including for instance, Physician the applicable law, States in the United Sunshine Act for payments Payments and EFPIA HCP/HCO Disclosure Code payments for also comply with applicable conducted in Europe. We regulations and codes of each country. Dissemination of the ICP recently come to be expected to Global companies have establish broad-ranging globalregarding policies the requirements for the behavior of individuals across their this policy must be adhered to and organization. Moreover, its to demonstrate that disclosed outside of the company global business activities are being conducted with integ- a the ICP, In light of this expectation, we developed rity. shared, Group-wide policy regarding behavior of the officers and employees established as individual executive a supplement to the Daiichi Sankyo Group Corporate The ICP was put into effect at Group Conduct Charter. 2015. in April companies in Japan and overseas promote understanding of the ICP among all Group To trans- employees, the president of each Group company mitted messages regarding the implementation of this Other measures were used to promote under- policy. programs training standing, including interactive conducted at all Group companies and departments as well as training sessions in which members of the Legal Affairs Department are dispatched to provide direct support on-site for certain Group companies. on page 65.) “Voice” (See the chairperson of the Company’s Corporate Ethics the chairperson of the Company’s a deliberationCommittee in Japan. This committee is and decision-making body for compliance that meets twice per including members, 11 of up made is and principle, in year, as representatives, the chairperson and nine other internal the that ensures who attorney, external appointed an as well reliable manner. committee operates in transparent and In addition, at each a compliance officer is appointed compli- in Japan to promote and oversee Group company ance programs company. respective at their Compliance 2016, we established the Global In April Advisory Committee as an advisory organ to the Corporate its global compliance Ethics Committee to further evolve system. Full-time of the new committee include members Europe and the compliance officers from subsidiaries in for United States, and the committee is responsible examining global policies and annual targets for the Group. Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value monitoring at domestic Group companies corporate activities ・ Appropriate operation of the globalAppropriate compliance system ・ Enhance compliance education and conduct effective ・ for ensuring transparency of Steadily implement measures ・ Examples of Initiatives Basic Policy 64 The vice president of the Legal Affairs Department of the plays a central role in promoting compliance Company throughout the Daiichi Sankyo Group. the head of the General At Daiichi Sankyo in Japan, as the compli- Affairs & Human Resources Division serves a position that entails managing our entireance officer, compliance program, which includes the Daiichi Sankyo Code and related rules and of Conduct for Compliance as The compliance officer also serves annual objectives. Continued Operation of the Compliance System Directives for Initiatives In conducting its global business operations, the Daiichi Sankyo Group is committed to practicing good corporate ethics and views compliance as the foundation for its remain compliant with all corporate management. We relevant laws and regulations and conduct compliance management with strong focus a on ensuring the highest social of ethics and which is essential consciousness, level for a life science-oriented company. established the efforts, we have guide us in these To Charter and the Daiichi Sankyo Group Corporate Conduct Principles (ICP), Daiichi Sankyo Group Individual Conduct the operations. on our Based throughout applied are which other and Company the ICP, the and Charter the of essence compliance conduct developed Group companies have standards appropriate to their respective regions and social regarding these standards is requirements. Awareness officers and being entrenched among all executive employees. No matter how successful or strongly performing a company may be, it will be unable successful or strongly performing No matter how a global not practice good compliance. As within society if it does to continue growing management Sankyo Group therefore practices Daiichi company, the pharmaceutical founded on compliance. Promoting Compliance Management Compliance Promoting CSR Activities 67 ial, (From left) Christi Rowley, Mika Yoshida, Kiyoshi Kaneko and Organization People Group Development Human Resources Department General Affairs & Human Resources Division Daiichi Sankyo Co., Ltd. Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value The Company updates its corporate website with informationThe Company on the following initiatives. http://www.daiichisankyo.com/about_us/responsibility/csr/ business/human/index.html Safety (Japan) Transitioning from Empowering Female Employees to Promoting D&I Transitioning In 2010, Daiichi Sankyo took its first step in promoting D&I in Japan by pursuing coordination among domesticGroup companies to implement a wide range of measures for empowering female employees. These measures included holding various training sessions and enhancing work-life balance support systems. Our second step is to implement measures that promote D&I in Japan and are aimed enabling all employees to realize their full potent bolstering organizational and thereby maximizing the value strength, three These measures are based on created by the Company. approaches: (1) eliminating bias, (2) facilitating inclusion to help all employees express their individuality and fully exercise their talents, and (3) encouraging healthy conflict to create new value. The goal of these measures is to change how all employees think and act in order to entrench a corporate culture that makes use of the value of diversity. Voice ・Promotion of the “Work-Life Cycle” (Japan) Cycle” “Work-Life ・Promotion of the (Japan) of Female Employees ・Support for the Career Development and initiatives for SupportingSystems Occupational Health and ・ Promotion of Occupationaland Safety Health In Japan, while collaborating with occupational physicians, we advance occupational programs health and safety that are focused occupational on preventing accidents and ensuring employees are in good physical and mental health. In addition,we coordinate with the Daiichi Sankyo Group Health Insurance Association and an external Employee Assistance Program (EAP) to provide health employees of themanagement and counseling systems for and their families. in Japan company Other Initiatives Based on the results of an Employee Engagement Survey of an Employee EngagementBased on the results Survey 2014, we are taking steps to build that took place in fiscal have we end, this To Japan. in culture corporate dynamic a own to their team members, in their line managers convey words, their organization’s vision as well as communicate the same direction. in In everyone their intent and align addition, we are implementing training programs to relationships among employees in the workplace improve in Japan. ・Building of a Dynamic Corporate Culture of a Dynamic Corporate ・Building Disabilities In Japan, through Group companies including Daiichi In Japan, through Group company subsidiary special Ltd.̶a Co., Happiness Sankyo of the Act on the Promotionthat meets the terms of the promote the of Disabled Persons̶we Employment of individuals with disabilities.employment In fiscal 2015, these activities by the Ministry of Health, were recognized an award received when the Company Labour and Welfare of for promotingas a superior workplace the employment individuals with disabilities. Fostering of Our Corporate Culture all employee In Japan, we conduct ongoing training for groups̶from newly hired employees to management̶ relating to human rights, and we promote an environment range of employees can readily and in which a diverse Besides striving to raise respectfully work with one another. on a daily awareness about harassment in the workplace implemented training that uses case studies basis, we have the counseling skills of the and is designed to improve is stationedHarassment Call Center staff. This staff at the Japan head office, at each work location within Japan, and alleged violation is at the labor union. Each and every behavior and treated seriously; we emphasize appropriate including legalseek the opinions of external individuals, Ethics then report the matter to the Corporate counsel. We measures in Committee, and put necessary preventative In addition, a recurrence. as a measure to place to avoid Group support individuals seeking assistance, individual for consulta- hotlines available as venues companies have tion rights and labor issues. These and reports on human hotlines can be accessed 24 hours a day and are available to individuals both inside and outside of the various have member companies of the Daiichi Sankyo Group. We also created tools to help facilitate understanding with Principles of the United Nations Global regard to the Ten Compact, and these tools are deployed at domestic and Group companies. overseas In Japan, we value trusting relationships with labor unions, and we protect the rights of our employees by engaging in dialogue between labor and management, through which discuss resolutionswe constructively to problems and We disclose information in a highly transparent manner. established the Labor Management Committee to have handle matters related to occupationalhealth and safety and work-hour management in Japan, and we are faithfully implementing labor management practices based on a plan-do-check-act (PDCA) cycle. ・ Promotion of the Employment of Individuals with of Promotion Employment of the ・・Initiatives promoting Rights Respect for Human ・Communication with Labor Unions - Promotion and Inclusion (D&I) of Diversity that the most important The Daiichi Sankyo Group believes its global business and factor behind its ability to develop of its employees. The foster innovation is the diversity population of individuals in Group must employ a diverse age, ways of thinking and gender, terms of nationality, lifestyles. All employees must be accepted and able to fully exercise their talents. For this reason, we continue to culti- at all sites in which employees under- vate environments stand D&I and respect one another. on page 67.) “Voice” (See with mind-set of doing what is best for the the professional leaders on an individual develop We as a whole. Company basis through a combination of rotational work assignments, on-the-job training and evaluations, while linking these activities self-study and training. At the to dedicated same time, management candidates we select executive management employees to receive and from mid-level opportunities, such as internal and external development training and chances to take on new challenges. employees in Japan, we provide training, For entry-level promo upon and employment of year third their in usually tion to a manager-level position, aimed at developing position, at developing aimed tion to a manager-level growth own their of and ownership take can that individuals In addition to providing opportuni- personal development. we seek to place mid-level ties for personal development, employees in positions based on their abilities to help them acquire the practical knowledge and experience essential to progress as a leader in the organization. cultivate line managers by increasing the range of We opportunities through which they can engage in an ongoing cycle of exercising and improving their skills. The aim of create a workplace that develops “to these efforts is individuals capable of consistently providing results, while independently adapting to a changing environment.” ・Development of Entry- and Mid-level Employees Entry- and Mid-level of ・Development ・Cultivation of Line Managers (Organization Heads) Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value workforce strategies withinorganization the and increase success based on our Core Values ・ Promote diversity and inclusion (D&I) to foster creativity Promote diversity ・ organizational and culture corporate atmospherea Develop ・・ Cultivate employees with highly competitive skills based on ・ Examples of Initiatives Basic Policy 66 It is our fundamental practice to help our employees through their work and to cultivate all employees develop Develop Human Resources Develop Directives for Initiatives At Daiichi Sankyo, we believe that employees, through At Daiichi Sankyo, we believe their embodiment the Daiichi Sankyo Group’s Core of efforts to carry out our and their diligent daily Values will be a strong Commitments in and outside the Company, and fulfilling our driving force behind realizing our vision mission. The Daiichi Sankyo Human Resources Management development, Philosophy was designed to support the that, empowerment and fair treatment of employees of their locationirrespective in the world, share in the the At innovation, of integrity accountability. principles and same time, we expect employees to uphold the ethics and and work toward the realization defined standards we have of our corporate vision. the speed and quality of the Daiichi Sankyo improve To Group’s global operations, it is essential that businesses in different regions and collaborate closely with coordinate are further expanding our global We business one another. by providing rotational opportunities our employees for among our locations in different countries and regions, thus enabling employees to experience different cultures which in creating and thinking environment of an ways and is respected. diversity

The Daiichi Sankyo Group considers its people to be its most important asset, Group considers its people The Daiichi Sankyo innovation, integrity and growth by practicing and pursues long-term as described in our Core Values. accountability Mutual Growth of Employees and the Company and of Employees Growth Mutual ・Cultivation of Leaders CSR Activities 69

PATIO Receives Receives features articles on a are not limited to the (Japanese edition) PATIO PATIO Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Value Report 2015 Value Report 2015 (right) (left) The Company updates its corporate website with informationThe Company on the following initiatives. http://www.daiichisankyo.com/about_us/responsibility/csr/ business/communication/index.html Takashi Osanai Akiko Ito Voice Active Communication Stimulated the As a patio is a place where visitors gather engage to in free word as the name for our we chose this conversation, newsletter with for the aim of providing a similar opportunity communication. Each edition of Public Relations Group Public Corporate Communications Department, Corporate Management Division Daiichi Sankyo Co., Ltd. wide variety of subjects, ranging from information on management and Daiichi Sankyo’s global activities close- to at various to-home topics such as the employees working operating sites. The contents of articles included in the pages of its published version; we also we articles in the pages of its published version; included try to provide more direct messages through early posting of articles willthe intranet and distribution on of videos. We continue efforts to present the words of the people we our real manner to provide interview to all employees in a very communicationopportunities livelier for simulating even within the Company. Internal Newsletter ・ Provision of valuable information to healthcare professionals ・ Museum Operation of the Daiichi Sankyo Kusuri ・ Daiichi Sankyo’s Daiichi Sankyo’s Daiichi Sankyo’s Other Initiatives received the first prize in the newly established CSR Reportreceived integratedcategory (which includes of the reports) Communication Design Association’sUniversal UCDA receipt for the Company’s 2015. The major reasons Award to the ability to explain our pharma- of this award was due business modelceutical simple and clear in company’s public and the consistency of the terms to the general booklet. design throughout the UCDA Award UCDA ’s receipt PATIO (our internal newsletter) was presented with the PATIO Meeting with the Access to Medicine Foundation Communication with Employees steps to ensure active internal commu- Daiichi Sankyo takes nication with promoting the aims of and an understanding corporate a fostering and insights management of awareness culture in which the organization and its employees act as one objectives. to pursue the Company’s we issue internal newsletters for Group Specifically, and for Group companies overseas companies in Japan In addition, a variety of informationfour times is per year. intranet, including articlesposted on Daiichi Sankyo’s divisions, videos messages from submitted from various employee management, and other content detailing and and outside of the Company inside achievements to their work. explaining the passion our employees devote The Communication with ESG Rating Agencies communicate with actively agencies addressing sociallyWe social, (SRI) and environmental, and responsible investment indices, such as the Dow Jones (ESG) governance Sustainability Indices and FTSE4Good, as well as organizations related to the United Nations Global Compact and other stake- social of understanding an develop to seek thereby We holders. issues and expectations of the Company. from the Access to For example, when representatives Medicine Foundation visited Japan in January 2016, we arranged a meeting with President Daiichi Sankyo Nakayama. The Access to Medicine Foundation is a global non-profit organization (NPO) based in the Netherlands. global organization to This access improve to efforts ranks medicine of 20 research-based major global pharmaceutical the meeting, companies. During explained our we initiatives on this front and shared information on issues regarding faced around the world. access to medicine overall excellence award for annual company newsletters for award for annual company excellence overall KEIDANREN fiscal 2015 for three consecutive years by Business Services in Japan. The reasons for of this award included the strong sense of management’s of this award included the strong sense of the editorial commitment exuding from the pages and manner what approach of tackling in a forward-looking right.) to the “Voice” external experts pointed out to us.(See of Japan pharmacies conducted in fiscal 2015. of Japan pharmacies conducted in fiscal *1 Please visit the following site for the section “Minasama-no-Koe wo “Minasama-no-Koe Please visit the following site for the section into reality): Our Customers’ Voice ni”(Turning Katachi http://www.daiichisankyo.co.jp/healthy/customer/index.html Communication withand Investors Shareholders engages in timelyThe Company disclosure of and proactive and other market information investors, for shareholders, impar- players based on the principles of transparency, and continuity and in compliance with disclosure tiality, regulations. relations activities In fiscal 2015, our investor included the General Meeting of Shareholders, quarterly financial results presentations R&D calls by the CEO, and conference and an explanatory forum on the 5-year business Day, plan. In addition, we participated held by in conferences securities companies, visited and held teleconferences with These activitiesinstitutional were conducted on investors. approximately 300 occasions both in and outside of Japan. relations e-mail In addition, we issued an investor magazine topics related to the Group to containing recent twice per month, and a video message from the investors Thirteen brief- CEO was distributed twice during the year. were held at locations across ings for private investors Japan, with roughly 600 in total participants. analyze, examine and share customer actively We feedback in-house with relevant sections or departments This activity imple- has resulted in the of the Company. in drug formulationsmentation and of improvements packaging. In fiscal 2015, we began placing information on the about some examples of these improvements Our ni”(Turning wo Katachi “Minasama-no-Koe section into reality) of our corporate website (in Customers’ Voice Japanese). Daiichi Sankyo’s Medical Information Center was ranked pharmaceutical companies in terms No. 1 among several satisfaction customer of overall based on a questionnaire survey Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value communication with market players “Transformation” based on the key message of evaluations improve ・ Promote changes to employee attitudes and behaviors ・ from ESG ratingUnderstand requirements agencies and ・・ Become a trusted medical partner ・ relations activitiesStep up investor based on interactive ・ Examples of Initiatives Basic Policy 68 *1. A survey we conducted through an outside private research company *1. A survey The activities (MRs) in of our medical representatives Japan were ranked No. 1 among pharmaceutical compa- conducted by physicians (in a survey nies by all surveyed ANTERIO Inc.) on their proposal of treatment options of healthcare professionals and based on the perspectives patients. patients to serve Our Medical Information Center strives and healthcare professionals respectfully and empatheti- accurate informationcally by delivering in response to their inquiries. The Center puts into practice its four commitments: providing highly specialized information, making consistent and great quality responses, addressing customers cordially and utilizing customer feedback. Communication with Healthcare Professionals and Patients Directives for Initiatives We believe that sustainable growth and the medium-to- believe We long-term growth corporate value are made possible of from various by the resources and support we obtain stakeholders such as patients, healthcare professionals, business partners, employees, shareholders, investors, and communities. communicating By with these various their demands andstakeholders, we are able to learn about by explaining the Group’s expectations for us. Moreover, initiatives, we will and facili- foster mutual understanding tate cooperation realizing a sustainable society. for

Responding to the social demands and expectations for Daiichi Sankyo Group the social demands and expectations Responding to activities. We therefore communi- sustainability of corporate is crucial to the mutual understanding, while stakeholders to foster cate with our various pursuing cooperation. Enhancement of Communication with Stakeholders of Communication Enhancement CSR Activities 71 we *1 emission 2 Michiyo Morisawa CDP Japan Director emission reduction 2 , in order to facilitate *2 emissions 2 , which is available on the following website. Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value emission reduction targets using globally 2 The Company updates its corporate website with updates informationThe Company on the following initiatives. http://www.daiichisankyo.com/about_us/responsibility/csr/ business/environment/index.html nies and cities in measuring, disclosing, managing, and sharing important data environmental compared to pre-industrial temperatures. Detailed environmental data can be found in Daiichi Sankyo’s Detailed environmental http://www.daiichisankyo.com/about_us/responsibility/csr/ business/environment/databook/index.html Environmental Data Book biphenyls *1. CDP: An international NPO that provides global systems for use by compa- *1. based on science: to limit global warming to less than 2°C Targets *2. External Voice Initiative for Contributing to Science-Based Targets Goal Agreement Paris have decisions, institutional investors In making investment recently been increasingly data and compa- considering ESG expectations efforts to respond to requirements and with nies’ regard such as those issues, to social and environmental Goals. related to the Sustainable Development Agreement, a new international frame- In 2015, the Paris work targeting greenhouse gas emission reductions after increase in global2020, was adopted and keeping the average was set as a target. At CDP, temperature below 2°C recognized methodology. In the future, I would like Daiichi Sankyo to encourage suppliers across its value chain to set CO efforts to work toward this goal. praise for its pioneering I think Daiichi Sankyo deserves Targets efforts in endorsing the approach of Science Based and setting CO targets. In addition, Based I hope that the efforts of Science will spread throughout the pharmaceutical industry. Targets collaborated with the United Nations and Global Compact other organizations to establish the Science Based Targets initiative, which encourages companies to set CO reduction targets based on science ・ Appropriate disposable of waste containing polychlorinated disposable of waste containing polychlorinated Appropriate ・ effluent toxicity tests Management of wastewater through whole ・ evaluations based on ecological・Environmental footprint ・ Third-party verification of CO Third-party verification ・ Other Initiatives （FY） *1 A poster for raising 2020 232,233 and Target and Target environmental awareness environmental *3 245,998 emission target for 2 2014 2015 247,792 Transition *2 2013 241,974 emission target for fiscal 2030 and the emission target for fiscal 2030 and the 2 2012 238,677 reduction targets based on scientific evidence in order to help accomplish accomplish help to order scientific in on reduction based evidence targets 2 0 emissions from electricity consumption. emissions data collected only from operating sites applicable under the fiscal ） 2 2 2 Emission Volumes, 2 2020 target the goal of the Paris Agreement of keeping the average increase in global of keeping the average Agreement the goal of the Paris temperature below 2°C CO set CO set *2. Adjusted emissions coefficients from each fiscal year were used for calculatingAdjusted emissions coefficients from each fiscal year were used *2. CO An international initiative that encourages companies to Science-Based Targets: *1. Climate Change and Global Warming Response Measures Global Warming Climate Change and Management Environmental The Fourth Medium-Term the environmental “Lower we should states that Policy impact of all operations by conserving energy and resources, or reducing greenhouse gas emissions and Acting in accordance with this policy statement, we waste.” are working to use resources and energy more efficiently. facilitate responsible corporate activities To that address set a CO climate change, we have to the right.) Voice” “External (See Communication Environmental With the aim of fostering environmental awareness, we hold an annual contest for artwork, which helps our employees express their views on the conducted environ- and environment, mental e-learning programs. Winning submissions in the art contest have been used to construct posters, which are displayed at Group companies and operating sites. Environmental audit being conducted at a U.S. production site audit being conducted at a U.S. Environmental *3. CO *3. approach of the Science Based Targets initiative. approach of the Science Based Targets fiscal 2020, the final year of 5-year business plan, of fiscal 2020, the final year of 5-year business pursuing a 5.6% reduction from fiscal 2015 based on our long-term CO (Group-wide) 300,000 200,000 100,000 （t-CO Training session on global warming countermeasures Training Environmental Audits Environmental during fiscal 2015, compliance, enhance environmental To audits were conducted at four productionenvironmental sites in Japan and one site outside of Japan as part of an ongoing series of audits. Energy Measures Saving instituted energy have saving measures, including We the installation equipment, with of high-efficiency the climate change and aim of doing our part to prevent global warming. management. As for the Group’s environmental manage- management. As for the Group’s environmental environmental ment promotion set up system, we have management units based on the corporations and internal environmental companies that manage businesses. Each management management unit defines environmental sites as necessary out of consideration for their region and function. established an Environmental In addition, we have chief executive Management Committee chaired by the management as part of our officer of environmental structure (see page 77). This corporate governance committee discusses the formulation of environmental matters. management policies and other important Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Basic Environment Management Policy Basic Environment waste emissions management systems improving environmental make changes to business operations, such as climate change and water risks ecosystem services communication and enhance environmental Safeguarding the environment is the foundation of all Safeguarding the environment pursue environ- Group operational We management. sustainable mental management that contributes to a society and enhances our good corporate citizenship. ・ Ensure stringent environmental compliance and continue Ensure stringent environmental ・ potential the to us force to have that risks external Manage ・ biodiversity and practice sustainable use of Preserve ・ information disclosure reliability of environmental Improve ・・ Reduce energy usage, greenhouse and resource gas and ・ Examples of Initiatives Basic Policy 70 Environmental Management PromotionEnvironmental System The head of the Corporate Management Division of Daiichi officer of environ- as the chief executive Sankyo serves environmental mental management and oversees management on a Group basis, while the vice president of the CSR Department promotes environmental Directives for Initiatives Environmental issues such as globalsuch issues and extreme warming Environmental closely related to our weather could be seen as very are practicing lifestyles and work. We environmental management on a global scale in accordance with the Charter and the Daiichi Sankyo Group Corporate Conduct which sets forth Management Policy, Basic Environment rules for these management practices. aim to thereby We issues through responsible address such environmental corporate activities.

As the impact of various environmental factors increases, we will need to realizeof various environmental factors As the impact our corporate activities. Accordingly, if we are to continue a sustainable society in order to reduce our environ- environmental management we are promoting and address climate change issues manage environment risks mental impact, of our business operations. across the entirety Promoting Environmental Management Environmental Promoting CSR Activities - - -

- 73 in Hanoi, Miki Tamura Business Performance Management Group Corporate Business Management Department Corporate Management Division Kitasato Daiichi Sankyo Co., Ltd. Vaccine *5 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value ions. In November 2015, Vietnam’s Ministry of Health 2015, Vietnam’s ions. In November ing the award, the vice minister stated that they were The Company updates its corporate website with informationThe Company on the following initiatives. http://www.daiichisankyo.com/about_us/responsibility/csr/ business/medical/index.html ietnam as soon as possible echnical cooperation with began after a 1987 request Vietnam Corporation of Japan, a fund operated by Mitsubishi UFJ Capital Co., Ltd., and Daiichi Sankyo spasms by directly injecting baclofen into areas surrounding the spinal cord, the site of action tions peace of mind in receiving enabled various citizens to have vaccinat award to recog Health” the People’s “For presented KDSV with the beginnize the role KDSV played in helping Vietnam manufacturing measles vaccines and in containing the measles outbreak. When present medical systems and the citizens of Vietnam.” The project for transferring MR vaccine manufacturing technolo giestrial phase. As a currently underway is now in the clinical member of this project, I am committed to helping realize the manufacturing of this vaccine in V in order to contribute to in further improvements healthcare and open more possibilities for the future of children. Vietnamese Voice through Stable Contribution to Healthcare in Vietnam Manufacturing of High-Quality MR Vaccine T Health Organizationfrom the World to transfer technologies this to this request, we began After technical cooperation with country. regard to the measles vaccine and then later the MR vaccine, and these efforts continue today. both POLYVAC in Vietnam, During the 2014 measles outbreak Health Organization the importance and the World spread word of measles vaccines, which were of being vaccinated by POLYVAC as they were manufactured using superior both safe and effective Japanese technologies.these two organiza The endorsement of ・Daiichi Sankyo Open Care Program (United States) ・Disclosure of clinical data to researchers “greatly appreciative for KDSV’s enduring contributions enduring to the appreciative for KDSV’s “greatly *1. Company established through joint investment by Innovation Network established through joint investment Company *1. Naturally derived tetrahydrobiopterin formulation *2. Treatment for toxic methemoglobinemia *3. for easing Drug used in intrathecal baclofen therapy, a therapeutic method *4. Technical Cooperation for MR Vaccine Production Cooperation for MR Vaccine Technical Co., Ltd. (KDSV), Vaccine provided Kitasato Daiichi Sankyo technical cooperation capacity for for strengthening the measles vaccine production to POLYVAC, Vietnam Center for Research and Production of Vaccines and Biologicals in *5. Other Initiatives Vietnam, from March 2006 to March 2010 as part of inter from March 2006 to March 2010 Vietnam, national cooperation between the Japanese and Vietnamese national Vietnamese and cooperationJapanese the between Following this effort, KDSV has been governments. providing technical cooperation utilizing the production technology for the measles-rubella combined vaccine (MR contract starting in May 2013. vaccine) under a ﬁve-year will the establishment of MR vaccine We contribute to production and support a decrease in the infec- in Vietnam below.) “Voice” tion rate of measles and rubella. (See -

ion to Gabalon

*3 , Injection

, a nucleic acid treatment drug for and other orphan drugs. *4 , Methylene Blue

*2 , DS-5141 for *1 Biopten Initiatives Targeting Rare Diseases Initiatives Targeting countries face issues with regardDeveloped to preventive address medicine and the treatment of rare diseases. To some of these issues, in 2015, Daiichi Sankyo commenced a joint clinical trial with the Orphan Disease Treatment Institute target area. This area has a particularlytarget area. number of children high and, through this disorders, suffering from developmental to better health for these project, we hope to contribute mothers. Daiichi Sankyo is supportingchildren as well as their activities in the aforementioned regions for cultivating health of contributingcare workers capable healthcare for to better and for providing healthcare educat children and mothers is focusinglocal on improving the residents. The Company this and under in health and nutrition among children aged five of the healthcare area through the improvement impoverished this goal, we are working to develop accomplish system. To in community healthcare through a seriesmedical professionals of Integrated Management of Childhood Illness strategy the training sessions and by offering education to improve a of establishment the through local of care capability pediatric community center. for a community center established The opening ceremony 2015. This in Guangnan County was held in November by approximately 230 individuals, was attended ceremony hygieneincluding representatives from health and bureaus, healthcare professionals (village doctors), the mayor of the localvillage in which the center was built, and other residents. willWe continue to hold Integrated Management of Childhood Illness strategy training sessions to foster healthcare workers. Participation in the Global Health Innovative (GHIT)Technology Fund The Daiichi Sankyo Group is participating in the GHIT Fund, a public-private partnership originating in Japan supported of Japan, six Japanese pharmaceutical by the government Foundation.companies, and the Bill & Melinda Gates The 2013, founded on the GHIT Fund was established in April belief that public-private partnership is necessary to of drugs for combating infectiouspromote the development countries. diseases in developing Daiichi Sankyo is participating in the Fund by utilizing its compound library (consisting of small molecules and natural substances) in a screening program through this fund for exploring candidate compounds to treat tuberculosis, malaria, and neglected tropical diseases (leishmaniasis, Chagas are also engaged- in the joint develop disease). We ment of lead compounds for tuberculosis and malaria based through this program.on promising compounds discovered Duchenne muscular dystrophy. We also commercially We Duchenne muscular dystrophy. provide Intrathecal Injection - - - the ion with 503 1,758563 408 47,682 535 India Cameroon Tanzania 6,726 1,070,787 3,240 Fiscal 2015 Achievements Details on the initiatives conducted since the start of these activities can be found on the following website. http://www.daiichisankyo.com/about_us/responsibility/csr/ business/medical/index.html ernments, and local communities in order to contribute Activities such as vaccinations and antenatal physical Number of mobile healthcare field clinics (times) Number of infants receiving vaccinations (people) preventative Number of prenatal checkups (people) Examples of Initiatives Cultivation of Healthcare Workers in China Cultivation of Healthcare Workers embarked on a project In July 2015, the Company targeting 60,000 households in six approximately province of in the Yunnan townships in Guangnan County, China. This project is conducted together with the NGO Plan International Japan, a member of Plan International, and through collaboration with health authori- government tieshealthcare institutions and mother‒child from portation to hospitals are all in insufficient supply. vaccinations, and cantly large number of children received prenatal checkups were conducted in collaborat conducted by the Regional DelegationMaternal Health Week is operated under Cameroon’s Health, which of Public aid in these activities, Daiichi To Health. Ministry of Public Sankyo is focusing of community healthcareon the fostering workers that are capable of supporting healthcare activities. Mobile Healthcare Field Clinic Services in India and Africa Mobile Healthcare Field Clinic Services been operating we have In India, Cameroon, and Tanzania, mobile healthcare field clinics in cooperation with interna tional organizations non-governmental (NGOs), local gov to regions where medical infrastructure, doctors and trans 4: “Goal examinations started in fiscal 2011 to contribute to maternal Improve 5: “Goal and Reduce child mortality” Goals. The status of of the Millennium Development health” activities in fiscal 2015 is as follows. In Cameroon, a signifi s resources to contribute to the resolution ofcontribute to the resolution s resources to ’ Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value healthcare workers, and educate local residents about healthcare and hygiene in regions lacking sufficient medical infrastructure diseases, rare diseases and global health issues ・ Provide mobile healthcare field clinic services, cultivateProvide mobile healthcare ・ Promote R&D activitiesaddressing difficult-to-treat for ・ Basic Policy social issues related to health and medicine, such as global health issues in developing to health and medicine, social issues related in devel- difficult to treat and rare diseases limited access to medicine for countries and oped countries. 72 Directives for Initiatives Goal 3 Ensure healthy and promote lives well-being for all at all ages countries in developing Global health issues faced include lacking measures to address neglected tropical diseases and limited access to basic medical services as well as the presence of people and entire regions suffering from health problems due to insufficient health and hygiene knowledge. countries still In addition, developed require appropriate access to medicine for difficult to treat and rare diseases.The Daiichi Sankyo Group continues its to create new pharmaceuticals and improve endeavor countries to contribute access to healthcare in developing of Goal 3 of the Sustainable to the achievement Goals. Development The member states of the United Nations have adopted 17 of the United NationsThe member states have Goals to be accomplished by Sustainable Development 2030 in relation to the issues needing to be addressed on a and 3: Ensure healthy lives “Goal global scale. Of these, particularly appli- promote well-being for all at all ages,”is below.) cable to the healthcare field. (See table

Improving access to healthcare is an important mission as a pharmaceutical company. to healthcare is an important Improving access utilizing Daiichi Sankyo We are effectively Improving Access to Healthcare Access Improving CSR Activities 75 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value The Company updates its corporate website with informationThe Company on the following initiatives. http://www.daiichisankyo.com/about_us/responsibility/ philanthropy/index.html (cleanup activities around operating sites, etc.) seminars for high school students, etc.) Ongoing Vigilance in Contributing to the Growth of Coastal Forests The coastal forests of the Sendai plain were apparently formed 400 to years ago. After the surrounding hinterlands were converted protected people farmland, these coastal forests are said to have from the strong ocean winds and high tides. It was learning of this history of the coastal forests that made the goal of the Coastal Forest Restoration that had been Project, namely reviving forests damaged by flooding due to tsunamis following the Great East Japan Earthquake in 2011, resonated with inspiring me to me, to participate.volunteer Visiting the site of the project, I was able to get a clear picture of five though even earthquake, the of result a as incurred damage the years had passed. After finishing cultivation and weeding activities along a two kilometer strip of coastline, I watched the sunset from the shore. It was then that I realized how much persistence would the once-beautifulbe necessary to recover scenery at this site. I hope to continue participating activities, in these volunteer helping in my limited capacity through ongoing vigilance to contribute to the growth of the coastal forests. Tomiyo Kamata Business Planning Department ASCA Company Daiichi Sankyo Co., Ltd. Voice ・ Advancement of medicine and pharmacology (scholarships, etc.) ・ preservation activitiesEnvironmental ・ (science and pharmacology Support for Youth Developmental ・ Reconstruction Following Support East Japan the Great Earthquake the ideals of the Coastal Forest Daiichi Sankyo supports Restoration East Japan Project, a long-term post-Great Earthquake reconstruction support program conducted by in Miyagi Prefecture, and has been supporting Natori City, this initiative since 2012. assisted in October 2015, 15 employee volunteers In planting the tasks they and caring for these trees. Among and diggingperformed were weeding holes in which to around the Japanese black pine plant broadleaf trees (Pinusthunbergii) grown trees through this project. participating Employee volunteers in this project have stated that seeing the condition forests made of the coastal it apparent that the post-earthquake reconstruction effort how the was not yet finished. Others pointed out made them realize the necessity of offering experience continuous aid into the future. Going forward, we will continue to provide ongoing support in the form of to respond to the project’s need for employee volunteers below.) “Voice” term. (See the long human assistance over Other Initiatives Checkup by physician at a Health Camp Health Camps (VisitingHealth Camps Health Examination Free Program) in India In cooperation with NGO Plan International, the Daiichi Private Ltd. is holding health camps Sankyo India Pharma that lack sufficient medical infra- in areas of South Delhi camps, physicians offer free structure. In these health provide vaccinationscheckup, and we also for infants to and conduct the maternal and child health improve programs to provide mothers with knowledge about child healthcare. partici- fiscal 2015, approximately 12,000 people In pated in these health camps. in Activity to Consider the Healthcare of Elderly People an Aging Society in Taiwan health improvement Ltd. promotes Daiichi Sankyo Taiwan the agingamong elderly people to help contribute to society. visited nursing In 2015, approximately 120 employees homes for elderly people, at which pharmacists led lectures on the subject of health. After Guide” “Medication called on to the entertainment portion ofthe lectures, they moved which included simple exercises offered in time the event, to relaxing music and dances performed by employees. These activities provided a valuable opportunity for the employees to reaffirm the importance of health. Daiichi Sankyo Taiwan employees exercising with elderly people Daiichi Sankyo Taiwan reconstruction ・ Advance activities based on global and regional needs ・ Provide support for post-Great East Japan Earthquake ・ Examples of Initiatives Employee volunteers guiding visitors to the event site guiding visitors to the event Employee volunteers Daiichi Sankyo Presents Family Tie Theater Sankyo “Daiichi Daiichi Sankyo has been holding the program in cooperation with Presents Family Tie Theater” and the NPO Cancer Support the Shiki Theatre Company year since fiscal 2010. Through Community Japan every cancer patientsthis program, and their family we invite Theatre Company. members to enjoy musicals by the Shiki from the In fiscal 2015, 20 employees volunteered Some of the comments Group to carry out this event. has like this event feel “I from patients were received “Please and deepened my connection with my family,” These sentiments help all of us make new medicine for us.” at Daiichi Sankyo remember why we are in the business of drug discovery. Directives for InitiativesDirectives Basic Group Social Contribution Policy Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value pating activities. in and supporting voluntary pharmacology, social welfare, and environmental pharmacology, willconservation. We assist with disaster restoration, youth education, and promote culture and arts. activities to contribute to society. We will engageWe with and prosper with communities. • We will by partici- foster healthy socialWe development • We will particularlyWe prioritize progress in medicine and • We will help create a sustainable societyWe engaging in • Basic Policy 74 The Daiichi Sankyo Group has established the Basic Policies Policies Basic the established has Group Sankyo Daiichi The on Group Social Contribution Activities, which guide various initiatives contributing for other organizations to and society These initiatives as a whole. aid in the consider We advancement of medicine and pharmacology. our activities to promote social contributions as our responsibility to society as well as for the support it continue identifyprovides to our business. We to the areas on which we should focus from among relevant social advance initiatives,empha- we issues and challenges. To size collaborating with a wide range of stakeholders, such groups,as NPOs, NGOs, local government volunteer organizations, and public sector institutions. participation in Furthermore, we view employees’ activitiesvolunteer as a chance for them to step away from completely new their day-to-day work and experience a withperspective, goal of supporting the a concern for that this broadening of one’s horizons believe We society. of society withhelps link the healthy development the therefore are We of the Company. sound development and provide opportuni- working to foster an environment participation in volunteer ties that support employees’ activities.

also voluntarily seek to our business but also voluntarily contribute to society through We will not only sound as being faced in ensuring the various issues that we recognize help resolve the society. development of Social Contribution Activities Contribution Social Corporate Governance 77 Appointment / Appointment Dismissal Internal Audit Accounting Auditors Report Report Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Internal Audit Department Internal Audit Basic Policies Appointment / Dismissal Appointment Direction Report Report Corporate Ethics Committee Audit & Supervisory Board Audit management, the Company has adopted an Audit & an Audit has adopted management, the Company & the Audit Supervisory Board system and established including Supervisory Board comprising four members, & Supervisory Board (Outside). two Members of the Audit of the Board judgment of independence of Members & Supervisory Board (Outside) and Members of the Audit (Outside) and basic matters regarding execution of duties by Members of the Board and Members of the Board. & Supervisory Audit contributes to appropriate and swift management decision-making and the conduct of operations. For audits of legal compliance and soundness of specific criteria on the prescribes The Company which System Officer Corporate a employs Company The ■ ■ ■ Environmental Management Committee Environmental Report / Proposal Report Audit General Meeting of Shareholders s Corporate Governance Appointment / Appointment Dismissal / Supervision Direction / Supervision Appointment / Appointment Dismissal ’ President Report Report Board of Directors Report Corporate Officers, Divisions, Subsidiaries in Charge of Operations Submission / Submission / Overview of the Corporate Governance Structure of the Corporate Governance Overview Management Executive MeetingManagement Executive Consultation Delegation Recommendation Nomination Committee Compensation Committee of the Board, of whom Members of the Board (Outside) of the Board, of whom Members of the and are chaired by a Member of the form a majority, Board (Outside). the Board and reinforce their oversight of management their oversight the Board and reinforce and the conduct of operations, their terms of office are ten Members of the and four out of our set at one year, Board are Members of the Board (Outside). Corporate candidates for Member of the Board and Officer and compensation thereof are deliberated on by a Nomination Committee and a Compensation which are established as Committee, respectively, committees. voluntary To clarify the management responsibility of Members of clarify the management To nomination of transparency, ensure management To Characteristics of Daiichi Sankyo Characteristics Response to Japan’s Corporate Governance CodeResponse to Japan’s Corporate Governance Code, complied with has which was and implemented all of the Principles of the Corporate Governance The Company and spirit of the code, understand and respect the objectives and we are continuallyenacted on June 1, 2015. We pursuing systems based on the code. in our corporate governance improvements In addition to creating in the and flexibly to changes respond speedily that can a management structure to secure legal Daiichi Sankyo is working and management transparency compliance environment, business of operations. place great of management and the conduct importance on We oversight and to strengthen especially to the trust of our stakeholders, structure that is responsive governance building up a corporate our shareholders. ■ ■ These Committees consist of at least three Members ⑭ Yutaka Katagiri Member of the Audit & Supervisory Board (Outside) ⑦ Akiko Kimura Member of the Audit & Supervisory Board (Outside) Members of the & Supervisory Audit Board (Outside) （As of June 20, 2016）（As ⑬ Kazuyuki Watanabe Member of the Audit & Supervisory Board ⑥ Hideyuki Haruyama, Ph.D. Member of the Audit & Supervisory Board Members of the Audit & Members of the Audit Supervisory Board ⑫ Toshiaki Tojo, Ph.D. Member of the Board Senior Executive Officer ⑤ Sunao Manabe, DVM, Ph.D. Representative Director Vice Executive President ⑪ Toshiaki Sai Member of the Board Senior Executive Officer ④ Joji Nakayama Representative Director President and CEO ⑭ ⑦ Representative Representative Director Vice Executive President ⑩ Katsumi Fujimoto, Ph.D. Member of the Board Senior Executive Officer ③ Kazunori Hirokawa, MD., Ph.D. Members of the Board ⑬ ⑥⑤ ⑫ ⑪ ④ ⑩ ② Noritaka Uji Member of the Board (Outside) ⑨ Naoki Adachi Member of the Board (Outside) ③② ⑨ Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value ⑧ ① ① Hiroshi Toda Member of the Board (Outside) Member of the Board (Outside) ⑧ Tsuguya Fukui, MD., MPH, Ph.D. Members of the Board and Members of the Audit & Supervisory Board Supervisory Board of the Audit & and Members of the Board Members 76

Corporate Governance Corporate Members of the Board (Outside) Corporate Governance

Nomination Committee Basic Design of Remuneration to Members of the Board adequately perform their role, which is supervision of and Members of the Audit & Supervisory Board management, short-term and long-term incentives are The Nomination Committee has been established to delib- • Remuneration to Members of the Board is designed to not provided and only basic remuneration is granted. Chairperson： Noritaka Uji, Member of the Board erate matters required for the nomination of Members of provide remuneration that contributes to maximizing （Outside） the Board and Corporate Officers at the request of the corporate value. Specifically, in addition to basic Determination of Procedures for Remuneration to Members ： Hiroshi Toda, Naoki Adachi and Tsuguya Board of Directors and contribute to the enhancement of remuneration, performance based bonuses serving as Members of the Board and Members of the Audit & Fukui, Members of the Board（Outside） management transparency. a short-term incentive and share remuneration-type Supervisory Board In fiscal 2015, meetings were held three times in April, stock options serving as a long-term incentive are adopted. • The General Meeting of Shareholders approves basic October, and January 2016 to discuss matters required remuneration to Members of the Board of up to ¥450 • Performance based bonuses serving as short-term for nominating candidate Members of the Board and million per fiscal year and share-based payments with incentives are determined by the degree of achievement Corporate Officers and plan to train successors of the stock options of up to ¥140 million per fiscal year. of a single fiscal year measured by adopting revenue, President and CEO. Performance bonuses are approved in the General operating profit margin and profit attributable to owners Meeting of Shareholders for each relevant fiscal year. of the Company as the relevant indices. • The General Meeting of Shareholders approved • Share remuneration-type stock options serving as long- remuneration to Audit & Supervisory Board Members that Policies and Procedures for Appointment and Nomination • When appointing the candidates for Members of the term incentives provide a scheme whereby stock options consists of only the fixed basic remuneration of up to of Candidates for Members of the Board and Members of Board, the Board of Directors shall appoint the candi- may not be exercised during the period in office of a ¥120 million per fiscal year. the Audit & Supervisory Board dates after they have been sufficiently deliberated by the Member of the Board and the value of current manage- • The candidates for Members of the Board shall meet the Nomination Committee, of which Members of the Board ment efforts being reflected in future share price rises • The Compensation Committee, of which Outside requirement of being personnel of excellent character （Outside） form a majority. can be received. Directors form a majority, sufficiently deliberates on and insight who contribute to maximizing the corporate matters that involve establishing the remuneration • The candidates for Members of the Audit & Supervisory • The level of remunerations is set to provide a medium- value of the Daiichi Sankyo Group. system for Directors and Corporate Officers and setting Board shall be examined prudently concerning their to-high level of remuneration in the industrial sector, criteria thereof, examining and reviewing levels of • The candidates for Members of the Board shall meet the suitability as Members of the Audit & Supervisory Board, referring to the levels of other companies based on remuneration for each position, confirming perfor- requirements of being appropriate candidates with such as whether they can fulfil their duties, ensuring their surveys of external specialist institutions. mance-based bonuses, and calculating and granting respect to term of office and age, and of being suitably independence from the Representative Directors, • In order to ensure that Members of the Board（Outside） share-based payments with stock options. competent of performing timely and accurate judgment, Members of the Board, and Corporate Officers. and Members of the Audit & Supervisory Board looking at the changes in the business environment while • The candidates for Members of the Audit & Supervisory giving importance to the continuance of management Board（Outside）, in addition to meeting the aforemen- policies, etc. tioned requirements, shall be confirmed to have no Remuneration for Members of the Board for Fiscal 2015

• The candidates for Members of the Board shall meet problems according to specific criteria relating to the Members of the Audit & Members of the Board Total Supervisory Board the requirements that there shall always be Members judgment of independence. Classification Payment Payment Payment Amount paid Amount paid Amount paid of the Board（Outside） included to strengthen the recipients recipients recipients • When appointing the candidates for Members of the decision-making functions based on various perspec- Number of Number of Number of Millions of yen Millions of yen Millions of yen Audit & Supervisory Board, the Board of Directors shall persons persons persons tives and to strengthen the function of supervising appoint the candidates after the relevant proposal has business execution. Fees (annual amount) been sufficiently verified and agreed to by the Audit & [Of which Members of the Board (Outside) and 13 380 6 105 19 485 Supervisory Board. Members of the Audit & Supervisory Board 〔6〕〔60〕〔2〕〔30〕〔8〕〔90〕 (Outside)]

Members of the Board bonuses Corporate Governance (Excluding Members of the Board (Outside) and 6 128 ーー 6 128 Compensation Committee Members of the Audit & Supervisory Board)

The Compensation Committee has been established to Members of the Board and Corporate Officers and share Share remuneration-type stock option remuneration deliberate matters required for a policy on compensation remuneration-type stock options. 6 106 ーー 6 106 (Excluding Members of the Board (Outside) and of Members of the Board and Corporate Officers at the Members of the Audit & Supervisory Board) request of the Board of Directors and contribute to the Total enhancement of management transparency. Chairperson： Hiroshi Toda, Member of the Board [Of which Members of the Board (Outside) and 13 612 6 105 19 717 In fiscal 2015, meetings were held a total of three times, （Outside） Members of the Audit & Supervisory Board 〔6〕〔60〕〔2〕〔30〕〔8〕〔90〕 two meetings were held in May and one meeting in Members ： Noritaka Uji, Naoki Adachi and Tsuguya (Outside)] February 2016, to discuss matters required for bonuses to Fukui, Members of the Board（Outside）

78 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Report 2016 79 Corporate Governance

Introduction of Members of the Board and Members of the Audit & Supervisory Board

Members of the Board Member of the Board (Outside) (Independent Director)

Joji Nakayama Kazunori Hirokawa Noritaka Uji Career Summary, Positions, Assignments, Career Summary, Positions, Assignments, and Material Concurrent Positions and Material Concurrent Positions Corporate governance is a common topic of discussion lately. There is a clear Apr. 1979 Entered Suntory Limited (“Suntory”) Apr. 1975 Entered Daiichi Pharmaceutical Co., Ltd. (“Daiichi”) need for management systems capable of furnishing a quick and flexible Mar. 2000 Director of Suntory Oct. 2000 Vice President, Drug Safety Administration Department of Dec. 2002 President of Daiichi Suntory Pharma Co., Ltd. Daiichi response to changes in the operating environment and a Board of Directors Mar. 2003 Resigned as Director of Suntory Oct. 2002 Vice President, Medical Planning & Coordination Department of Jun. 2003 Member of the Board of Daiichi Pharmaceutical Co., Ltd. (“Daiichi”) Daiichi structure that sufficiently incorporates outside viewpoints. I therefore feel Jun. 2006 Member of the Board, Vice President of Corporate Strategy Department of Daiichi Jun. 2003 Member of the Board, Vice President of Medical Planning & Coordination Department of Daiichi Apr. 2007 Corporate Officer, Vice President of Europe / US Business Management immense responsibility to live up to expectations with this regard as an Outside Department of the Company Oct. 2004 Member of the Board, Vice President of R&D Strategy Department of Daiichi Apr. 2009 Executive Officer, Vice President of Overseas Business Management Department Jun. 2005 Senior Corporate Officer, Vice President of R&D Strategy Department of Daiichi Member of the Board. of the Company Apr. 2006 Executive Vice President, Daiichi Sankyo Inc. in U.S. Apr. 2010 Executive Vice President, President of Japan Company of the Company Apr. 2007 Executive Officer, Head of R&D Division of the Company Over the medium term, Daiichi Sankyo will need to overcome the challenges Jun. 2010 Representative Director, President and CEO of the Company (to present) Apr. 2010 Senior Executive Officer, Head of R&D Division of the Company Career Summary, Positions, Assignments, presented by the loss of exclusivity for some of its products. This period will be Jun. 2010 Member of the Board, Senior Executive Officer, Head of R&D Division of the Company and Material Concurrent Positions Apr. 2012 Member of the Board, Senior Executive Officer, Head of Corporate Strategy Division an incredibly important time for transformation to build foundations for sustain- of the Company Apr. 1973 Entered Nippon Telegraph and Telephone Public Apr. 2013 Member of the Board, Senior Executive Officer, Head of Corporate Strategy Division, Corporation able growth to ensure that the Company can continue growing. and Head of Business Intelligence Division, Japan Company of the Company Jun. 1999 Director, Senior Vice President, Advanced Information Apr. 2014 Member of the Board, Senior Executive Officer, Head of Corporate Strategy Division Network Services Sector of NTT DATA Corporation This topic was discussed when formulating this 5-year business plan. of the Company (“NTT DATA”) Apr. 2015 Member of the Board, Executive Vice President, Head of Corporate Management Sep. 2000 Director, Senior Vice President, Corporate Strategy However, more important than planning for this period will be steadily imple- Division of the Company Planning Department of NTT DATA Jun. 2015 Representative Director, Member of the Board, Executive Vice President, Head of Jun. 2001 Director, Senior Vice President, Industrial System Sector menting that plan. Based on this belief, I will fulfill my responsibilities based on Sunao Manabe Corporate Management Division of the Company (to present) of NTT DATA Apr. 2002 Director, Senior Vice President, Enterprise Business the perspective of“aggressive governance.” Sector of NTT DATA Career Summary, Positions, Assignments, Jun. 2003 Managing Director, Executive Vice President, Enterprise I am committed to offering viable advice and suggestions based on my Systems Sector and Enterprise Business Sector of NTT and Material Concurrent Positions DATA experience as a manager in the information and communication industry and the Jun. 2005 Representative Director, Executive Officer of NTT DATA Apr. 1978 Entered Sankyo Company, Limited (“Sankyo”) Jun. 2007 Representative Director, Senior Executive Vice President, Jul. 2005 Vice President, Medicinal Safety Research Laboratories Toshiaki Sai insight gained through this experience, thereby contributing to more lively Nippon Telegraph and Telephone Corporation (“NTT”) of Sankyo Jun. 2012 Adviser of NTT (to present) discussions among the Board of Directors. At the same time, from my outside Apr. 2007 Vice President, Medicinal Safety Research Laboratories of the Company Career Summary, Positions, Assignments, Jun. 2014 Member of the Board (Outside) of the Company (to present) standpoint, I will strive to facilitate effectively functioning corporate governance Apr. 2009 Corporate Officer, Vice President of Global Project Management Department, R&D and Material Concurrent Positions Division of the Company Apr. 1979 Entered Daiichi Pharmaceutical Co., Ltd. (Material Concurrent Positions) with regard to such areas as conducting appropriate investments for future Apr. 2011 Corporate Officer, Head of Group HR & CSR of the Company Apr. 2007 Vice President, Management System Department Adviser of Nippon Telegraph and Telephone Corporation Apr. 2012 Corporate Officer, Vice President of Corporate Strategy Department, Corporate of the Company Outside Director of Yokogawa Electric Corporation growth and selecting members of the management team. Strategy Division of the Company Apr. 2008 Vice President, Corporate Communications Department Chairman of Japan Institute of Information Technology Apr. 2014 Executive Officer, President of Japan Company and Head of Business Intelligence of the Company President of Japan Telework Association I also am interested in helping Daiichi Sankyo improve its corporate value by Division of the Company Apr. 2010 Corporate Officer, Vice President of Corporate Communications Department of the Jun. 2014 Member of the Board, Executive Officer, President of Japan Company and Head of Company contributing to the enrichment of quality of life around the world through the Business Intelligence Division of the Company Apr. 2012 Corporate Officer, Vice President of Global Brand Strategy Department, Corporate Apr. 2015 Member of the Board, Senior Executive Officer, In Charge of Global Sales & Strategy Division of the Company union of medicine, healthcare, and information and communication technology. Marketing of the Company Apr. 2014 Executive Officer, Vice President of Corporate Strategy Department, Corporate Apr. 2016 Member of the Board, Executive Vice President, Head of General Affairs & Human Strategy Division of the Company Resources Division, and Medical Affairs Division of the Company (to present) Apr. 2015 Senior Executive Officer, Head of Corporate Strategy Division of the Company Jun. 2015 Member of the Board, Senior Executive Officer, Head of Corporate Strategy Division of the Company (to present) Member of the Board (Outside) (Independent Director) Katsumi Fujimoto

Career Summary, Positions, Assignments, Toshiaki Tojo Hiroshi Toda and Material Concurrent Positions Career Summary, Positions, Assignments, Apr. 1980 Entered Sankyo Company, Limited (“Sankyo”) Over the next five years, Daiichi Sankyo’s management will be faced with one of Nov. 2005 Vice President, Development CMC Planning Department and Material Concurrent Positions of Sankyo Apr. 1980 Entered Daiichi Pharmaceutical Co., Ltd. the toughest and most challenging periods it has ever experienced. During this Apr. 2007 Vice President, CMC Planning Department, Pharmaceutical Apr. 2010 Vice President, Supply Chain Technology Department, period, management will need to undertake a bold transformation to a new Technology Division of the Company Supply Chain Division of the Company Apr. 2011 Corporate Officer, Vice President, CMC Planning Department, Pharmaceutical Apr. 2011 Corporate Officer, Vice President, Supply Chain Technology business model, build global business operation systems, and tackle other tasks. Technology Division of the Company Department, Supply Chain Division of the Company Jun. 2011 Corporate Officer, Head of Pharmaceutical Technology Division of the Company Jun. 2011 Corporate Officer, Vice President, Supply Chain Planning Department, Supply Chain Of course, this means that the number of important management decisions to Division of the Company Apr. 2014 Executive Officer, Head of Pharmaceutical Technology Division of the Company Apr. 2013 Corporate Officer, Head of Quality and Safety Management Division of the Company be made by President Nakayama and other members of the executive team will Apr. 2015 Executive Officer, Head of Supply Chain Division of the Company Apr. 2014 Executive Officer, Head of Quality and Safety Management Division of the Company Apr. 2016 Senior Executive Officer, Head of Supply Chain Division of the Company Apr. 2016 Senior Executive Officer, In charge of Vaccine Business of the Company (to present) continue to increase. (to present) Career Summary, Positions, Assignments, (Material Concurrent Positions) In this challenging period, I will aspire to go about my duties as an Outside Representative Director and President of Kitasato Daiichi Sankyo Vaccine Co., Ltd. and Material Concurrent Positions

Apr. 1975 Entered Nomura Securities Co., Ltd. Member of the Board based on an in-depth understanding of Daiichi Sankyo’s Corporate Governance Jun. 1991 President of Nomura Bank (Switzerland) Limited mission, strategies, corporate culture, and history. In addition, I will make sure Jun. 1997 Director, Head of Financial Market of Nomura Securities Co., Ltd. not to forget the perspective of ensuring that the Company’s fiduciary duty and Jun. 2000 Senior Managing Director, Head of Investment Banking of Nomura Securities Co., Ltd. accountability duties toward shareholders are being fulfilled. Members of the Audit & Supervisory Board Oct. 2001 Director of Nomura Holdings, Inc. and Senior Managing Director, Head of Global Wholesale of Nomura Securities Japan’s Corporate Governance Code states that one of the responsibilities of Co., Ltd. Jun. 2003 Deputy President and Chief Operating Officer of Nomura the Board of Directors is“setting the broad direction of corporate strategy.” To Holdings, Inc. and Deputy President and Chief Operating Hideyuki Haruyama Kazuyuki Watanabe Officer of Nomura Securities Co., Ltd. help accomplish this objective, I hope to facilitate lively discussion among the Apr. 2008 Vice Chairman of Nomura Securities Co., Ltd. Career Summary, Positions, Assignments, Career Summary, Positions, Assignments, Mar. 2009 Resigned as Vice Chairman of Nomura Securities Co., Ltd. Board of Directors with regard to the structure of the pharmaceutical industry Jul. 2010 Ambassador extraordinary and plenipotentiary to Greece and Material Concurrent Positions and Material Concurrent Positions Jun. 2014 Member of the Board (Outside) of the Company and nature of competition therein, analyses of risks anticipated in future Apr. 1980 Entered Sankyo Company, Limited (“Sankyo”) Apr. 1978 Entered Daiichi Pharmaceutical Co., Ltd. (“Daiichi”) (to present) business activities, measures to improve corporate value, and other matters. I Jul. 2003 Vice President, IT Management Department of Sankyo Jun. 2006 General Manager, Secretariat Department of Daiichi (Material Concurrent Positions) Jun. 2004 Corporate Officer, Head of Research Division and Apr. 2007 Vice President, General Affairs Department of the Company Outside Director (Part Time) of Yusen Logistics Co., Ltd. thereby aim to contribute to the setting of directives based on which we will Vice President of IT Management Department of Sankyo Apr. 2012 Vice President, External Affairs Department, Feb. 2005 Corporate Officer, Head of Research Division of Sankyo Business Intelligence Division, Japan Company of the Company Special Adviser of UBS Securities Japan Co., Ltd. “articulate the profit plans and capital policy,”“present targets for profitability Apr. 2007 Corporate Officer, Vice President of R&D Planning & Management Department of Apr. 2014 Corporate Officer, Vice President of External Affairs Department, Business the Company Intelligence Division, Japan Company of the Company and capital efficiency,” and provide explanations with“respect to the allocation Apr. 2010 Corporate Officer, In Charge of Research, R&D Division of the Company Apr. 2015 Corporate Officer, In Charge of External Affairs of the Company (to present) Apr. 2011 President, Daiichi Sankyo RD Novare Co., Ltd. (“Novare”) of management resources and specific measures that will be taken in order to Apr. 2015 Member of the Board of Novare (to present) achieve the plans and targets.”

80 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Report 2016 81 Corporate Governance 83 pa- Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Japanese companies are rapidly expanding their business on a globalJapanese companies are basis. governance companies need to promptly establish corporate these Accordingly, and affiliates in foreign countries as well as those insystems at their subsidiaries com an enormous amount of efforts by Japanese Japan. This task requires managed in Japan where a single historically been nies, because they have societylanguage is used and the Furthermore, in the homogenous. is relatively manufacture, and sales of case of Daiichi Sankyo, as research and development, it is impera- pharmaceuticals country, are subject to strict regulations in every systems for securing compliance with to establish those tive for the Company regulations operation in each country of its and also to establish a global framework for monitoring the situation compliance. of such Vision” “2025 is standing at a significant turning point with its The Company It could be said that the establish- and the 5-year business plan being prepared. systems is a prerequisite for accom- ment of global corporate governance plishing such vision and business plan. been practicing law primarily in the area of international As I have transactions, of Daiichi I will make my best efforts to contribute to sound development Sankyo’s business from a legal perspective. & Member of the Audit passed since I became an Outside years have Two movements Supervisory Board at Daiichi Sankyo. In these two years, several among Japanese been made to reinforce corporate governance have companies, including the implementation of the revised Companies Act and the Code. At the establishment and enactment of Japan’s Corporate Governance same time, unfortunate in been this has been a period during which we have witnessingnumerous corporate scandals. to appropriately implement the new Daiichi Sankyo has faithfully endeavored frameworks. While engaginggovernance discussion among the Board in active of the Corporate for all 73 requirements of Directors, compliance was achieved Code, & and we also put regulationsGovernance into place for the Audit Supervisory Board. easy to make the “It’s actor Ichikawa Enou I, as stated by Kabuki However, these governance if we have Even form, but difficult to put the heart into it.” systems in place, putting our heart into them will be no easy task. The real struggle lies ahead of us. therefore Pharmaceutical with companies are charged the important mission of I hope to continueprotecting aiding people’s health and safeguarding their lives. Daiichi Sankyo in fulfilling this mission and growing in a sound manner. Akiko Kimura Akiko Kimura Yutaka Katagiri ri & Tomotsune o¯ Policy Agency Policy Agency Commissioner General’s Secretariat of National Policy Commissioner General’s Secretariat of National Policy Agency Exchange and Other Transactions of the Ministry of Exchange and Other Transactions Finance of Japan and Other Transactions of the Ministry of Finance of Japan and Other Transactions Police Department Police Anderson Mo¯ri & Tomotsune), Attorney-at-law & Tomotsune), Anderson Mo¯ri 1975 Agency Entered National Police 1973 (currently & Tomotsune Entered Nishimura, Komatsu Jun. 2013 (to present) Policy President of Council for Public Oct. 2011 Agency Commissioner General of National Police Jun. 2009 Agency Deputy Commissioner General of National Police Aug. 2008 Chief of Commissioner General’s Secretariat of National Jan. 2007 Chief of Community Safety Bureau of National Policy Aug. 2004 Matters, Director General for Secretariat's Policy Jan. 2011 (to present) & Tomotsune Anderson Mo¯ri Of Counsel, Aug. 2003 Agency Chief Inspector General of National Police Jan. 2001 of the Council on Customs Duties, Member Foreign Jan. 2002 Prefectural Police Director General of Kyoto Oct. 1997 Member of the Council Committee on Foreign Exchange Feb. 2001 Metropolitan Chief of Community Safety Bureau of Tokyo Jan. 1977 & Tomotsune of Nishimura, Komatsu Partner Career Summary, Positions, Assignments, Career Summary, and Material Concurrent Positions Apr. (Material Concurrent Positions) Policy President of Council for Public Consultant of Sompo Japan Insurance Inc. Special Advisor of The Japan Chamber of Commerce and Industry and Chamber of Commerce and Industry The Tokyo Career Summary, Positions, Assignments, Career Summary, and Material Concurrent Positions Apr. (Material Concurrent Positions) Of Counsel, Anderson M Outside Auditor of Fuji Electric Co., Ltd. Outside Auditor Member of the Audit & Supervisory Board (Outside) (Independent Auditor) Member of the Audit Member of the Audit & Supervisory Board (Outside) (Independent Auditor) Board (Outside) (Independent & Supervisory Member of the Audit y Tsuguya Fukui underlying the of elements important infrastructuremost the among is Medicine can feel at ease, and drugs form the foundationfor a society in which everyone it is important to determine the of medicine. As a pharmaceutical company, of patients from the perspectives and health- drugs that are worth developing utilizingcare professionals. These drugs must then be created by collectively and and chemistry, modern-day science, such as biomedicine, pharmacy, cutting-edge technologies, after which their safety and efficacy will need to be to the frontlines of the so that these drugs may be quickly delivered verified these noble social contributions are to be made while medical field. Moreover, increasing returns through the unique competitive mechanism of a capitalist society. utilized As a physician, I have numerous pharmaceuticals in a clinical setting. witnessed substantial the past 40 years, I have in the rates of changes Over occurrence and shocking drops in the fatality rates of countless illnesses. It is from this experience as a clinician and a medical scientist from my stand- and opinions at meetings that I offer point as a manager of a hospital and a university of the Board of Directors. with Daiichi Sankyo is currently at a crossroads regard to determining the junction, In this illnesses and fields it will I am target in drug development. faithfully practice of corporate committed to helping the Company the high level that it may grow so society with expects of a first-rate company governance confidence. to the greatest gained degree through possible. Calling upon the insight I have my during as well as career long my interactionsover my with companies various I will swap opinions with proactively time other as a corporate manager, to be of assistance to Daiichi members of the Board of Directors while striving Sankyo’s management. Naoki Adachi Naoki Adachi a strong social is trusted presence that should have a company I firmly believe as where I serve LTD., CO., PRINTING At TOPPAN and respected by society. of I remind our officers and employees director, chairman and representative that simply grow being a company beyond To opportunity. this need at every that earns the respect of all of pursues earnings growth to become a company its stakeholders, the construction and implementation of an appropriate corpo- such there is no However, system is of the utmost importance. rate governance find companies must system. Rather, corporate governance “right” thing as the particularthe system that is best suited to maximizing their corporate value and perspective, Ithe value for their shareholders. Based on this hope to help system for Daiichi Sankyo. contribute to the ideal corporate governance Furthermore, I view my role as an Outside Member of the Board that is also the soundness of the Compan an independent director to be to aid in ensuring (to present) (to present) (to present) (to present) Chairperson of the Board of Trustees of St. Luke’s College Chairperson of the Board of Trustees of Nursing (currently St. Luke’s International University) Corporate Sales & Marketing; of Finance Head Instruments and Securities and Commercial Division Printing Division of Toppan Senior Managing Director, In Charge of Corporate Sales & Senior Managing Director, Marketing; and Securities Head of Finance Instruments Division and Commercial Printing Division of Toppan Vice President, St. Luke’s International Hospital Vice Commercial Printing of Finance Division; Head Instruments and Securities of Toppan Division Professor, Department of Health Informatics, Professor, EBM Collaborative Research Center, Director, Graduate University Health, Kyoto School of Public School of Medicine Printing Instruments and Division; Head of Finance Securities Division of Toppan Professor, Department of Health Informatics, Professor, Graduate University Health, Kyoto Dean, School of Public School of Medicine Printing Division of Toppan Kyoto University Graduate School of Medicine University Kyoto Division of Toppan Kyoto University Hospital University Kyoto Subdivision, Commercial Printing Division of Toppan Saga Medical School Hospital Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 2016 President of St.Luke's International University 2012 2005 President of St. Luke’s International Hospital (to present) 1998 2000 Department of Clinical Epidemiology, Professor, 1999 Department of Clinical Epidemiology, Professor, 1995 General Manager of Commercial Printing Director, 1962 Printing Co., Ltd. (“Toppan”) Entered Toppan Jun. 2015 Member of the Board (Outside) of the Company Apr. Jun. 2010 Director of Toppan Chairman & Representative Jun. 2015 Member of the Board (Outside) of the Company Jun. 2000 Director of Toppan President & Representative Apr. Jun. 1998 President, In Charge of Vice Executive Representative Apr. Apr. Sep. 2004 of Internal Medicine, Chief of Staff, Department Jun. 1997 General Manager of Senior Managing Director, Feb. 2001 Department of Clinical Epidemiology, Professor, Oct. 1996 Commercial General Manager of Managing Director, Apr. Jun. 1995 General Manager of Commercial Managing Director, Apr. Apr. Mar. 1994 Department of General Medicine of Professor, Jun. 1993 of Commercial Printing General Manager Director, (Material Concurrent Positions) President of St. Luke's International University President of St. Luke's International Hospital Director of Japan Hospital AssociationExecutive President of The Japan Medical Library Association Career Summary, Positions, Assignments, Career Summary, and Material Concurrent Positions Jan. 1992 Department of General Medicine of Professor, (Material Concurrent Positions) Printing Ltd. Co., Chairman & Representative Director of Toppan Forms Co., Ltd. Director of Toppan Printing Co., Ltd. Director & Advisor of Tosho Ink SC Holdings Co., Ltd. Director of Toyo Career Summary, Positions, Assignments, Career Summary, and Material Concurrent Positions Apr. 82 Member of the Board (Outside) (Independent Director) Member of the Board (Outside) (Independent Member of the Board (Outside) (Independent Director) Member of the Board Corporate Governance Corporate Corporate Governance 85 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value organizations that threaten the order and safety of civil society. To To organizations that threaten the order and safety of civil society. antisocial in the prevent and organizations forces from being involved management activitiesCompany’s and to stop such forces and orga- shall stipulate, the Company as nizations from harming the Company, in the Daiichi Sankyo Group Corporate Conduct its basic policy, etc. that it shall thoroughly forbid relations with antisocialCharter, forces and organizations. shall establish an In addition, the Company organizational to eliminate relations structure to that end, and strive with antisocial forces and organizations through means such as collecting information in cooperation with the police and other bodies, and conducting activities of the Board and other to train Members Officers, and employees. the Preceding Paragraph (G) from Members of the Board and Ensuring (G) from Members of the Board the Preceding Paragraph of Effectiveness of Instructions & Supervisory by Members of the Audit Board of the Board, and shall execute shall be independent of Members duties& under the directions Audit and orders from Members of the Supervisory Board. assisting & Supervisory Board shall require prior Members of the Audit Board. & Supervisory consent of the Audit Board and Employees of the by Members of the the Company Regarding and Subsidiaries and Other Systems ReportingCompany to & Supervisory Board of the Company Members of the Audit they shall the Board find facts that could badly hurt the Company, & Supervisory immediately report the facts to Members of the Audit Board. reports on the status of execution of dutiesreceive from executives employees and as well as executives and employees of the Company of Group companies. Meetingattend the Management Executive and other important meetings. recipi- & Supervisory Board as permanent the Members of the Audit ents of approval document notification. & Supervisory Board Audit meetings with Members of the Board on a regular Representative basis to check management policies and exchange views concerning important issues related to auditing. exchange information with & Supervisory Board Members of the Audit of the Group companies and closely cooperate with them. coordinate and exchange views with external auditors and the Internal Department. Audit second item in the preceding paragraph person who reports (I) or any according to Daiichi Sankyo Group Principles of Individual Behavior, etc. because of the fact of such reporting. & Supervisory Board. the duties of the Members of the Audit Basic Ideas About and Systems for Eliminating AntisocialBasic Ideas About and Systems Forces Matters Regarding in of the Employees Specified the Independence of Reporting of & Supervisory Board Systems to Members of the Audit by Members of the Audit for Ensuring the Effective Systems Other I J K H - shall take a firm stance toward antisocialThe Company forces and - Full-time & Supervisory Board staffers assisting Members of the Audit - appraisal, etc. of full-time changes, performance staffers Personnel - a system under which when Members of shall establish The Company - shall Supervisory Board of the Company & Audit Members of the - shall Supervisory Board of the Company & Audit Members of the - process shall establish verify and details of approvals, the Company To - shall have & Supervisory Board of the Company Audit Members of the - shall Supervisory Board of the Company & Audit Members of the - shall & Supervisory Board of the Company Members of the Audit - the under reports who person any unfairly treat not shall Company The - shall bear expenses that may be occurred in executingThe Company Audit & Supervisory Board, when Members of the Audit & Supervisory & Supervisory Board, when Members of the Audit Audit Such Employees Board Ask to Appoint & Supervisory Board. of Members of the Audit the Board excluding Members of the Board ing of Members of the Board (Outside), and executives appointed by the President who are responsible for the main regions, corporate bodies and functions―which matters for strategicshall deliberate important decision-making by shall also set up an approval system as a the President. The Company means of decision-making. ation and execution of speedy decision making of duties. ArticlesCompany’s of Incorporation Execution in the of Duties by Employees Daiichi Sankyo Daiichi Sankyo Group Corporate Conduct Charter, etc. as the code of conduct Group Principles of Individual Behavior, & Supervisory for Members of the Board and Members of the Audit out- including Board and employees and setting up a meeting body, side experts. corporate bodies and functions orders from the President who receive shall manage duties and direct in their charge and supervise, manage members of their business units in accordance with the Global Management Regulations, the Organizational Management rules. Regulations and other Company poli- shall convey ing personnel management, risk management, etc. cies to manage and guide each department. status of compliance with laws and ordinances, and the Articles of Incorporation and internal regulations. and Its Subsidiaries the Company Regulations Establishment Internal Control System to clarify the management control system of the Daiichi Sankyo Group, and transmit management policies, etc. to Group companies and set a system in place for receiving reports on management and financial results from the Board of group companies. Regulations to clarify responsibilities and authorities of each group company. the Daiichi Sankyo Group risk management system. to develop it to all Group companies and also etc. to develop Individual Behavior, arrange the Group’s compliance promotion system to keep all Group companies informed about it. Reporting and ensure the reliability of financial reporting by properly implementing those regulations. internal audit on Group companies. Systems Regarding Systems Employees Assisting Duties of Members of the Systems for Ensuring the Efficient Execution for of DutiesSystems by Members of with for Ensuring Compliance and Ordinances and the Laws Systems Proper Operation for Ensuring the of the Group, ConsistingSystems of F E D G - shall appoint full-time staffs who assist withThe Company the duties - Meeting―consist- shall form a Management Executive The Company - shall introduce a corporate officer system in consider- The Company - a compliance system by stipulating shall establish The Company - responsible for the main regions, and executives Presidents Vice - of systems concern- Each of the functions related to the improvement - shall implement internal audit of the Department The Internal Audit - Global Management Regulations shall establish and The Company - Management shall establish Group Company The Company - shall establish Risk Management PromotionThe Company Regulations - shall establish Daiichi Sankyo Group Principles of The Company - shall establish Internal Control RegulationsThe Company Financial on - Regulations and implement shall establish Internal Audit The Company risk management systems. the systems mentioned above. Relating to the Execution of Duties by Members of the Board erly store and manage information relating to the execution of duties by Members of the Board, including the minutes of the Board of Directors, in accordance with laws, ordinances and internal regulations of the Company. Rules and Other Systems for Risk Management and Other Systems Rules Systems Regarding Systems the Retention and Management of Information B C - shall stipulate various internal regulationsThe Company to establish - Department shall audit the status of operation of The Internal Audit - shall establish information security systems, and prop- The Company in any of the last three fiscal years, exceeds 2% of any of the companies’ consolidated gross revenues; of the companies’ of the last three fiscal years, exceeds 2% of any in any three fiscal years; or of the last Group exceeding 10% of its gross in any revenue nomination. sons and daughters-in-law, spouses of siblings, grandchildren-in-law, and brothers and sisters-in-law. The same shall apply hereafter. The same shall apply and brothers and sisters-in-law. spouses of siblings, grandchildren-in-law, sons and daughters-in-law, officer, executive officer or other employee; provided, however, limited to those who are important persons in terms of relationship limited to those who are important persons with immediate executive however, officer or other employee; provided, officer, or shall apply hereafter.); family members. The same other than compensation as Member of the Board or Member of the accounting professional, etc. from the Company, or tax, or a healthcare in law, & Supervisory Board. Audit areholder holding at least 10% of total shares outstanding of t means a shareholder holding at least 10% of total shares outstandinghe Company. of determining the independence. A major shareholder ¥10 million and 2% of annual gross of that organization revenues or other associations. & Supervisory Board (Outside). Audit that falls under the following items: Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value interests with general shareholders of the Company unless any of the following of the categories applies to him or her: unless any interests with general shareholders of the Company or the Audit & Supervisory Board judge him or her to be ensured of independent after comprehensive review, it may be determined that he or she satisfies it may the review, of independent after comprehensive & Supervisory Board judge him or her to be ensured or the Audit & Supervisory Board (Outside). of the Audit criteria for independence as Member of the Board / Member 1. A Member of the Board or a Member of the Audit & Supervisory Board shall be determined to be independent from the Company and may not have a conflict of a and may not have independent from the Company & Supervisory Board shall be determined to be of the Audit A Member of the Board or a Member 1. (1) or his or her immediate family member who: A candidate i) corporate to a director other than outside director, or subsidiary (referring or sister company of the Company Officer, is or has been an Executive ii) compensation three fiscal years more than ¥10 million in direct of the last during any a specialist for his or her services as a consultant, has received includes a person’s spouse, parents, children, siblings, grandparents, grandchildren, mothers and fathers-in-law, family member” “immediate An * (2) of a corporation or other association family member who is or has been withinA candidate or his or her immediate Officer, the last ten years, an Executive i) Business relationship products from, the Group for an amount which, or services in payments to, or received that has made payments A company (a) A consulting firm, law firm, auditing firm, tax accounting firm or incorporated educational institution, remuneration etc. that receives from the (b) at the end of the fiscal year immediately before lender from whom the Group obtained a loan of more than 10% of its consolidated total assets A (c) ii) Major shareholder A corporation or other legal is a major shareholder of at the time or a corporation entity that the Company shareholder of the Company that is a major iii) Recipient of charitable contributions An organization discretionary are more than which the Company’s charitable contributions of the last three fiscal years to in any iv) Accounting auditor v) firm that is or has been for the last three years an accounting An audit auditor of the Group. Cross-directorship arrangement when the Board of Directors & Supervisory Board (Outside), of the Audit apply to a candidate for Member of the Board / Member of the above though any Even 2. is a current Member of the Board (Outside) or Member of the in which an Executive Officer of the Company A listed company Daiichi Sankyo Group Corporate Conduct Charter, Daiichi Sankyo Daiichi Sankyo Group Corporate Conduct Charter, etc. as the code of conduct Group Principles of Individual Behavior, for Members of the Board and employees and setting up a meeting including outside experts. body, strengthening and enhancing the function to supervise management. duties by Members of the Board, process and contents of decision making and the status of the establishment and implementation of internal control systems. Systems for Ensuring Compliance with Laws and RegulationsSystems and the Articles Company’s of Incorporation in the Execution of Duties by Members of the Board Supervisory Board (Outside) Supervisory Board

Basic Policy on Establishing Internal Control Structure Criteria for Independence as Member of the Board (Outside) and Member of the Audit & of the (Outside) and Member of the Board as Member for Independence Criteria A 84 ArticlesConcerning systems for ensuring compliance with of Incorporation ordinances and the Company’s laws and in the execution of duties has by Members of the Board and other systems for securing appropriateness of duties, the Company Meeting 28, 2015 and effective on May 1, 2015, as held on April the basic policies at the Board of Directors’ resolved follows. Major changes from the previous basic policy are to fulﬁll (1) a system on the Group’s internal control and (2) a & Supervisory Board, considering the revision of the system on arranging for Members of the Audit environment audit Companies Act in 2014. Corporate Governance Corporate - shall appoint Members of the Board (Outside) for the The Company - & Supervisory Board shall audit the execution ofMembers of the Audit - shall establish a compliance system by stipulatingThe Company the Risk Management Data Section 87 88 96 98

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Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value

(Environmental, Social, and Governance Data) (Environmental, Social, and Governance Financial Data • Financial Data Corporate Information • Corporate Information • ESG Data • Major Products Data Section Base-specific BCPs BCP for IT Procedure manuals Documents regarding compliance Disaster prevention and response manual Disaster prevention BCPs for individual divisions and Group companies Supply chain Action plan for response to a new strain of influenza continuity plan Documents and labor accidents regarding environmental risks with the potential to significantly impact the manage- At meetings of of the Board ment of the Company. Meeting,Directors and Management Executive we regularly seek to identify and assess such risks. Moreover, the heads of each division formulate countermeasures through coordination with the CRMO. of the risk management scheme, the Group has a As part business continuityplan (BCP) that stipulates preparations of a disaster for and measures to be instituted in the event as well as crisis management procedure manuals for use in (See chart below.) the case of an emergency. System halt System Natural disaster Facility accident Product problem Disaster / accident other infectious disease Risk Management System Case / scandal / law violation (e.g., large-scale earthquake) Outbreak of H5N1 influenza or Business continuity basic plan BCP system manual Emergency headquarters establishment procedure manual Crisis management Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Risk Management Promotion Regulations Risk Management System Risk Management The head of the Corporate Management Unit oversees Unit oversees The head of the Corporate Management Group-wide as the chief risk manage- risk management educa- ment officer (CRMO), promotes risk management tion, and operates the risk management system. In addition, the heads of each division autonomously manage goals divisions’ risks to aid in the accomplishment of their and evaluate this end, they analyze and targets. To yearly risk individual risks, formulate and implement withmanagement plans, and provide employees information on underlying risks in organization, education, and the insight concerning risk management. Moreover, the actualization takes precautions of to prevent Company 86

prevent the Group from attaining its organi Group from attaining the prevent factors that may defines risks as those Sankyo Group The Daiichi - zational in advance. The Group is promoting and targets and that can be predicted goals risk management in corporate activities as taking steps to address risks inherent through such means reduc- through retaining, or eliminating these risks and rationallying, avoiding, controlling the potential should risks actualize. impacts and the Group. society, impacts of risks on people, the adverse we seek to minimize In this manner, Risk Management Risk Data Section 89 ̶ 819 2,115 9,148 50,000 37,161 33,679 12,287 14,028 34,770 28,335 53,936 20,000 (Millions of yen) (64,155) FY2015 994,916 146,717 103,927 667,000 287,306 181,000 379,694 379,694 241,831 1,900,522 1,233,521 1,231,406 (As of March 31, 2016) Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 426 2,984 2,713 8,337 6,735 7,767 7,576 50,000 65,707 88,357 11,631 19,444 20,000 (14,198) FY2014 993,953 169,034 105,267 675,244 377,747 201,000 297,496 297,070 235,546 1,982,286 1,307,041 1,304,057 (As of March 31, 2015) Total liabilities and equity Total Total equity Total Non-controlling interests Non-controlling interests Total equity attributable to owners of the Company equity attributable to owners Total Retained earnings Other components of equity Treasury shares Treasury Capital surplus Equity Company Equity attributable to owners of the Share capital Total liabilities Total Total non-current liabilities Total Other non-current liabilities Deferred tax liabilities Provisions Post-employment benefit liabilities Post-employment Other financial liabilities Non-current liabilities Bonds and borrowings Total current liabilities Total Liabilities directly associated with assets held for sale Subtotal Other current liabilities Provisions Income taxes payable Other financial liabilities Bonds and borrowings LIABILITIES AND EQUITY Current liabilities payables and other Trade 1,207 1,071 10,875 55,726 78,691 15,233 (Millions of yen) FY2015 775,254 168,189 210,395 250,168 144,273 493,768 248,762 222,159 1,900,522 1,125,268 1,124,196 (As of March 31, 2016) 1,347 3,165 19,059 45,330 71,366 14,697 FY2014 593,944 199,411 266,491 785,334 782,168 150,093 186,457 241,547 189,372 1,982,286 1,196,951 (As of March 31, 2015) Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Consolidated Statement of Financial Position of Financial Statement Consolidated Total assets Total Total non-current assets Total Other non-current assets Deferred tax assets Other financial assets Investments accounted for using the equity method Investments Intangible assets Goodwill Non-current assets plant and equipment Property, Total current assets Total Assets held for sale Subtotal Other current assets Inventories Other financial assets Trade and other receivables and other Trade 88 ASSETS Current assets Cash and cash equivalents

Financial Data Financial Data Section 91 ̶ (11) (Millions of yen) (5,397) FY2015 80,399 24,959 26,961 24,959 (2,001) (18,942) (31,088) (55,439) March 31, 2016) (For the year ended 66 (24) Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value (4,293) (4,347) FY2014 26,694 47,252 29,131 318,923 366,176 366,201 366,176 March 31, 2015) (For the year ended income using the equity method Consolidated Statement of Comprehensive Income of Comprehensive Statement Consolidated Profit for the year Other comprehensive income Other comprehensive Items that will or loss not be reclassified to profit at fair value through other comprehensive Financial assets measured Remeasurements of defined benefit plans Cash flow hedges accounted for income of investments of other comprehensive Share income (loss), net of taxes Other comprehensive income comprehensive Total income attributable to: comprehensive Total Owners of the Company Non-controlling interests income comprehensive Total Items that may be reclassified subsequently to profit or loss Items that may be reclassified subsequently differences on the translationExchange of foreign operations ̶ ̶ ̶ 287 5,292 (Millions of yen) (1,883) FY2015 13,028 41,988 80,399 80,399 82,282 80,399 119.37 119.37 119.11 119.11 986,446 318,622 667,823 328,755 208,656 130,412 122,388 March 31, 2016) (For the year ended 925 9,600 3,160 66.01 65.88 (3,195) FY2014 74,422 79,936 36,370 43,566 457.56 391.55 390.75 456.62 919,372 323,087 596,284 331,195 190,666 275,357 318,923 322,119 318,923 March 31, 2015) (For the year ended Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Consolidated Statement of Profit or Loss Statement Consolidated 90 Cost of sales Gross profit expenses administrative Selling, general, and expenses Research and development Operating profit Revenue

Financial Data Financial Financial income Financial expenses for using the equity method accounted Share of loss of investments Profit before tax Income taxes Profit from continuing operations Profit from discontinued operations Profit for the year Profit attributable to: Owners of the Company Non-controlling interests Profit for the year Earnings per share Basic earnings per share (yen) Continuing operations Discontinued operations Discontinued operations Diluted earnings per share (yen) Continuing operations Data Section 93 0 0 ̶ ̶ ̶ 972 287 8,971 1,913 7,004 5,546 3,603 4,730 (Millions of yen) (1,247) (5,967) (1,616) (7,024) (1,397) (7,739) (5,292) FY2015 45,383 18,875 33,083 13,028 44,306 (12,596) (48,468) (50,239) (22,976) (11,771) (42,261) (27,136) (37,443) (15,121) 222,159 189,372 618,423 419,899 174,281 209,519 122,388 (122,930) (303,023) (674,891) March 31, 2016) (For the year ended 0 0 ̶ ̶ (25) 984 453 925 (906) (237) (966) 3,080 1,489 9,227 3,468 3,661 3,160 (1,728) (1,732) (1,769) (1,056) (9,600) FY2014 17,003 72,915 37,612 42,023 79,936 (10,701) (42,254) (90,000) (21,278) (36,712) (33,476) (56,130) (38,500) (64,511) (21,874) Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 189,372 183,070 390,984 142,776 153,688 (132,200) (259,142) March 31, 2015) (For the year ended ies Consolidated Statement of Cash Flows Statement Consolidated Cash and cash equivalents at the end of the year Effect of exchange rate change on cash and cash equivalents Cash and cash equivalents at the beginning of the year Net increase (decrease) in cash and cash equivalents Net cash flows from financing activities Cash flows from financing activities of discontinued operations Other, net Other, Dividends paid Proceeds of treasury shares from sales Purchase of treasury shares Purchase Repayments of bonds and borrowings Repayments Cash flows from financing activities Proceeds and borrowings from bonds Net cash flows from investing activities Net cash flows from investing Cash flows from investing activities Cash flows from investing of discontinued operations Other, net Other, Proceeds from collection of loans receivable Payments for loans receivable Payments Proceeds subsidiary from sale of Acquisition of subsidiary Acquisition of intangible assets Proceeds from sale of property, plant, and equipment Proceeds from sale of property, Acquisitions of property, plant, and equipment Acquisitions of property, Settlement of forward foreign exchange contract for sale of securit Settlement of forward foreign exchange Proceeds from sale of securities Acquisition of securities Proceeds from maturities in time deposits Cash flows from investing activitiesCash flows from investing of time deposits Purchase Net cash flows from operating activities Cash flows from operating activities of discontinued operations Income taxes paid Interest paid Interest and dividends received Subtotal Other, net Other, Increase (decrease) in trade and other payables Increase (decrease) in trade and other (Increase) decrease in inventories (Increase) decrease in trade and other receivables (Increase) decrease in trade and other (Gain) loss on sale and disposal of fixed assets (Gain) loss on sale and disposal of fixed Share of (profit) loss of investments accounted for using the equity method accounted for using the equity Share of (profit) loss of investments Financial expenses Financial income Impairment loss Depreciation and amortization Cash flows from operating activities continuing Profit before tax from operations ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ (0) (1,086) (1,087) income (Millions of yen) comprehensive comprehensive Financial assets measured at fair value through other 0 0 ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ 39,821 ̶ 69,586 ̶ ̶ ̶̶ (18,942) (18,942) ̶ (5) (25) 206 410 220 (Millions of yen) ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ (6)(6) 4,347 4,347 23,109 23,109 (5) Other components of equity interests equity Total Exchange of foreign operations hedges Cash flow differences on the translation Non-controlling 0 0 ̶ ̶ ̶ (25,016) (25,016) ̶ ̶ (12) ̶ ̶̶ (31,001) (31,001) ̶ ̶ ̶ ̶ ̶ ̶̶̶ 25,963 25,963̶ (4,347)̶ (4,347)̶ 26,684 26,684 ̶ 80 (12) to owners attributable Total equity Total Subscription rights to shares of the Company ̶ 44,081 3,170 47,252 ̶ (55,321) (118) (55,439) ̶ (12) 218 ̶ 220 ̶̶ (25)̶ 197 ̶ 212 ̶ (50,239)̶ ̶ (1,138)̶ (50,239) 1,138 ̶ ̶ ̶ ̶ ̶̶ ̶ 220 ̶ ̶ ̶ ̶ ̶ ̶̶ ̶ 197 ̶ 80 (45) Equity attributable to owners of the Company Equity attributable to owners earnings Retained ̶ ̶̶ ̶ 209 ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶̶̶ ̶ (25) ̶ 234̶ (117) ̶ 322,119̶ 322,119 (3,195)̶̶ 318,923 (42,238) (42,238) ̶̶ 82,282 (42,238) ̶ 82,282̶ (1,883)̶ (48,456) 80,399 (48,456)̶ ̶ (48,456) of equity Total other Total components ̶ ̶ ̶ ̶ ̶ ̶̶ ̶ ̶ (201)̶ (50,037) ̶ (1,138) ̶ ̶ (1,339) (49,957) 175 ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ (12) ̶ 146,717 994,916 1,231,406 2,115 1,233,521 ̶̶ 169,034 993,953̶ 1,304,057̶̶ 2,984̶ ̶ 1,307,041 (45) 220 ̶ (34) ̶̶ 121,753 717,320̶ 979,933̶̶ 27,594̶ ̶ (117) 1,007,527 197 (116) Equity attributable to owners of the Company 4,218 3,1314,218 (3,131) 3,198 (45,486) (42,077) (24,585) (66,662) 5,378 33,004 (81,320) (99,613) 1,133 (98,479) 5,378 32,828 (32,828) (5,378)(5,378) (55,321) (55,321) 82,282 26,961 (2,001) 24,959 (4,218)(4,218) 44,081 44,081 322,119 366,201 (24) 366,176 of defined 50,000 105,267 (14,198) 1,760 106,202 (4,347) 65,419 50,000 105,267 (14,408) 1,680 80,252 50,000 103,927 (64,155) 1,935 75,195 benefit plans Share capital surplus Capital shares Treasury Other components of equity Remeasurements Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value equity to retained earnings equity to retained earnings equity to retained earnings equity to retained earnings Company the Company the Company the Company the Company Consolidated Statement of Changes in Equity of Changes Statement Consolidated 92 Acquisition of non-controlling interests components of ransfer from other T Other otal transactions with the owners of the T Acquisition of treasury shares Disposal of treasury shares Share-based payments Dividends Balance as of April 1, 2015 Balance as of April Profit for the year income Other comprehensive income comprehensive Total Transfer from other components of from other Transfer Other otal transactions with the owners of T Disposal of treasury shares Share-based payments Dividends Change in scope of consolidation Profit for the year income Other comprehensive income comprehensive Total Acquisition of treasury shares Balance as of April 1, 2014 Balance as of April

Financial Data Financial Other Balance as of March 31, 2016 Other otal transactions with the owners of T Balance as of March 31, 2016 Dividends Acquisition of non-controlling interests ransfer from other components of T Other comprehensive income Other comprehensive income comprehensive Total Acquisition of treasury shares Disposal of treasury shares Share-based payments T otal transactions with the owners of T 1, 2015 Balance as of April Profit for the year Dividends Change in scope of consolidation ransfer from other components of T Total comprehensive income comprehensive Total Acquisition of treasury shares Disposal of treasury shares Share-based payments Balance as of April 1, 2014 Balance as of April Profit for the year income Other comprehensive Data Section 5.0 30.0 25.0 20.0 15.0 10.0 （%）（FY） 70 95 (Billions of yen) 15 13.2 130.4 60 14 8.1 74.4 IFRS 60 13 10.0 111.6 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 60 7.4 6.54.9 28.2 4.5 6.5 3.7 3.8 9.9 10.0 8.1 13.2 12 9.9 53.8 52.920.4 (124.1) 65.8 121.5 64.8 168.3 48.698.7 52.4 111.6 42.7 74.418.545.3 43.7 130.4 65.1 17.1 51.5 49.2 20.7 42.0 36.3 21.2 44.3 23.3 98.7 83.11 100.24 109.94 120.14 994.7483.2 1,118.2 585.7 919.4 392.4 986.4 184.4 430.7 191.2 190.7 208.7 938.5 1,007.590.96 1,307.0 86.57 1,223.5 457.56 119.37 FY2012 FY2013 FY2014 FY2015 107.1532,229 134.38 32,791 138.78 16,428 132.57 15,249 1,684.9 1,854.0 1,982.3 1,900.5 1,287.94 1,392.03 1,852.28 1,801.90 11 98.2 10.5 10 12.6 122.1 , and figures for fiscal 2012 and forward are based on IFRS. (EUR/JPY) 09 95.5 10.0 08 88.8 10.6 expenses to revenue (%) expenses to revenue Ratio (right axis) of operating profit to revenue of the Company (ROE) (%) of the Company to total assets (%) of the Company owners of the Company (%) of the Company owners of the Company (yen) of the Company 07 17.8 156.8 Number of Employees Main Financial Indicators on equity attributable to owners eturn R atio owners of equity attributable to R atio of dividends to equity attributable to R Free cash flows exchange rates Average (USD/JPY) Overseas revenue Overseas (%) to revenue revenue Ratio of overseas Operating profit Ratio (%) of operating profit to revenue Profit attributable to owners of the Company expenses Research and development atio of research and development R 64.0 Depreciationamortization and Capital expenditure 60.9Financial Position assets Total 322.1 equity Total Share Information Per 82.3 Basic earnings per share (yen) per share attributable to owners quity E Annual dividends per share (yen) Note: Results for fiscal 2012 in compliance with IFRS are restated for comparison purposes. Financial Results Revenue 06 14.7 136.3 60 7.9 5.0 53.7 18.3 41.4 65.1 10.1 66.6 48.8 19.9 94.64 915.7 183.0 100.5 486.6 83.11 997.8 FY2012 90 60 30 32,229 107.15 1,644.0 180 150 120 (Billions of yen) 1,253.86 Operating Profit/Ratio of Operating Profit to Revenue (Billions of yen) ■ Operating profit (left axis) Note: Figures for fiscal 2011 and prior are based on Japanese GAAP （FY） 60 15 986.4 60 14 Japanese GAAP 919.4 60 13 1,118.2 80 12 994.7 70 11 938.6 10 967.3 60 6.33.5 7.8 (20.5) 4.0 4.9 5.4 8.2 4.9 1.3 5.0 5.1 , and figures for fiscal 2012 and forward are based on IFRS. 77.5 83.6 57.7 57.4 57.4 53.0 18.439.931.5 18.6 38.7 21.1 21.9 40.5 19.6 20.7 45.9 29.7 20.1 43.9 37.3 19.7 46.3 62.9 14.778.5 17.8 97.6 10.6 (215.4) 10.0 41.8 12.6 70.1 10.5 10.3 38.4 40.7 44.3 50.7 50.6 50.0 170.6 163.4 184.5 196.8 194.3 185.0 136.3 156.8 88.8 95.5 122.1 98.2 356.7 358.6 373.2 482.3 489.7 469.0 929.5 880.1 842.1 952.1 967.3 938.6 151.7 17.2 (335.4) 172.8 78.1 (32.5) FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 107.75 135.35 (304.22) 59.45 99.62 14.75 15,358 15,349 28,895 29,825 30,488 31,929 1,272.1 1,244.5 888.6 889.5 887.7 832.7 1,636.8 1,487.8 1,494.5 1,489.5 1,480.2 1,518.4 1,740.26 1,730.09 1,226.04 1,215.62 1,206.12 1,143.52 09 952.1 08 842.1 (EUR/JPY) 146.16 160.52 143.49 131.16 113.13 108.96 07 880.1 * 06 929.5 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value expenses to net sales (%) net sales (%) net sales (%) 800 600 400 200 Historical Data Historical 1,200 1,000 Annual dividends per share (yen) Main Financial Indicators Return on equity (ROE) (%) Equity ratio (%) Dividend on equity (DOE) (%) Free cash flows Net assets per share (yen) Per Share Information Per Basic net income per share (yen) Net assets Depreciationamortization and Capital expenditure Financial Position assets Total R atio of research and development atio of research and development R Net income (loss) expenses Research and development R atio of operating income to R Operating income Number of Employees R atio of overseas sales to sales atio overseas of R

Overseas sales Overseas Average exchange rates Average (USD/JPY) 116.99 114.28 100.54 92.86 85.72 79.07 Note: Figures for fiscal 2011 and prior are based on Japanese GAAP 94 (Billions of yen) * Cash flows from operating activities activities + Cash flows from investing Revenue Financial Results Net sales

Financial Data Financial Data Section 3 4 0 4 2 1 First First 97 3 4 0 4 2 1 First First 3 4 0 4 2 0 3060 30 60 30 70 16 2010 15 10 10 30 30 40 First First 501202 499 306 503 408 669105 555 105 612 105 1,141 1,773 1,758 2,7801,600 2,549 1,700 2,176 1,200 11,811 14,695 13,674 120,000 120,000 118,000 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Yen Yen Yen Yen Yen Rank Rank Cases Times Persons Persons Persons Persons Persons Persons Persons ¥ Million ¥ Million Scope Unit FY2013 FY2014 FY2015 Scope Unit FY2013 FY2014 FY2015 Scope Unit FY2013 FY2014 FY2015 Scope Unit FY2013 FY2014 FY2015 Non‒ consolidated In India Non‒ consolidated Non‒ consolidated Non‒ consolidated Non‒ consolidated In JapanIn Japan ¥ Million Non‒ consolidated Persons In Japan Persons Non‒ consolidated Non‒ consolidated Non‒ consolidated Non‒ consolidated Non‒ consolidated Non‒ consolidated In Japan In Japan In Japan In CameroonIn Tanzania Times Times *6 *6 Item Item Item Item MRs rated (all responding physicians) Interim Number of activities Number of directors & Number of Audit Supervisory Board members Total Number of Outside Audit & Number of Outside Audit Supervisory Board members & Number of Outside Audit Supervisory Board members (female) Year‒end Total Number of outside directors Number of female directors Overall assessment of MRs Overall (cardiologists) *7 Classification Classification Classification Classification Structure of Audit & Structure of Audit Supervisory Board Remuneration of Directors & Remuneration of Audit Total Supervisory Board members Evaluation of corporate stance and MR activities Dividends per share Number of mobile healthcare field clinics Number of development projects conducted through the GHIT Fund Amount of contributions Number of visitors to our factories Number of visitors to Kusuri Museum leave Acquisition of volunteer Structure of Board of Directors Number of inquiries received (pharmaceutical products) Aspect Aspect Aspect Aspect Referenced Guidelines • UN Global Compact Reporting Guidelines, 2012 Edition” “Environmental • Japanese Ministry of the Environment, • ISO 26000 Integrated Reporting“International Framework” • IIRC (International Integrated Reporting Council), Governance Governance Patients and medical professionals Shareholders Social Social Employees Enhancement of Communication with Stakeholders Improving Access to Healthcare Social Contribution Activities *6. Conducted by ANTERIO Inc. (FY2013̶FY2015) *7. Fund Global Health Innovative Technology 7 ̶ 6 ̶ 100 ̶ 1,243 ̶ 100 ̶ ̶̶ 3,290 3,370 ̶̶ 34.9 20.5 5 ̶ ̶̶ 1,094 772 ̶ 1,578 ̶ ̶ ̶ 74 37 ̶ ̶ ̶ ̶ 51 46 49 347 384 354 4.2 4.5 5.0 0.47 0.68 0.46 17.822.6 18.0 22.1 17.6 2.21 22.8 2.34 2.45 67.17 58.98 54.69 9,1458,111 8,549 7,8797,170 8,589 6,660 2,157 6,788 1,973 6,631 1,958 96,599 89,74377,194 85,045 88,76711,62813,785 91,112 11,62410,457 12,14011,615 11,868 10,490 12,531 10,93737,191 10,834 11,288 22,359 21,764 15,535 32,791 16,428 15,249 173,793539,642 178,510 475,296 176,157 206,757 243,402 171,580332,885 115,243 303,716 128,159 2 2 2 2 2 2 t % % % % % % % Years Years t-CO t-CO t-CO t-CO t-CO t-CO Cases Times sheets Million 1,000 m³ 1,000 m³ 1,000 m³ Scope Unit FY2013 FY2014 FY2015 Scope Unit FY2013 FY2014 FY2015 Scope Unit FY2013 FY2014 FY2015 In JapanIn Japan 1,000 m³ 1,000 m³ Global In Japan In Japan Persons In JapanOutside JapanOutside Japan Persons Persons Consolidated Persons In Japan Persons In Japan Persons Persons In Japan In Japan In Japan In Japan In Japan In Japan In Japan In Japan In Japan In Japan In Japan Persons Outside Japan % Outside Japan Persons Outside Japan Persons Outside Japan Persons Global Global Global Global Global Global Global Global In Japan Persons *5 Item Item Item Average years of service years Average of female Percentage In Japan employees of women in Percentage managerial positions rate of people Employment with physical or mental disabilities In Japan Outside Japan Ranbaxy Group Total Number of male employees Number of female employees Number of company‒wide award winners Views of intranet Views training pages (aggregate) Scope 2 Ratio of employees participating in e-learning and group training Scope 1 *1 *2 *4 *4 *3 Classification Classification Classification *4 emissions emissions by Greenhouse 2 2 Employee data Number of employees by region Compliance training CO CO used Water Wastewater Effective water usage volume generated Waste Final disposal rate Challenged worker Human resource development in the United States by UN Global Training Compact area (human rights) Training on Daiichi Sankyo Training Group Individual Conduct Principles Compliance violations through discovered DS‒hotline and reporting for sexual and power venues harassment Compliance training based on Corporate Integrity Agreement Amount of office paper consumed Gas Protocol Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Aspect Aspect Aspect 2 employment rate of people with rate physical or mental disabilitiesemployment of June 1 for all fiscal years except fiscal 2015 are as Social Environmental Employees Compliance Waste Waste Water resources Water CO *5. awards. prize from the culture-building and achievement The total number of employees who received 96 *1. intake ‒ Wastewater Water *2. of training for new hires, newly appointed managerial employees, newly executive candidates, and mid-career hires appointed Total *3. Corporate Integrity Agreement: an agreement regarding legal compliance 1 of the following fiscal year; figures for numbers of employees (in Japan) except fiscal 2015 are as of April Figures as of the settlement date of each Group company; *4. Mutual Growth of Employees and the Company Mutual Growth of Employees and the Promoting Compliance Management Promoting Environmental Management Promoting Environmental ESG Data (Environmental, Social, and Governance Data) Governance and Social, (Environmental, Data ESG Data Section

99 amlodipine amlodipine , and , and (diuretic) (diuretic) (calcium channel blocker) (calcium channel blocker) series (Vaccines) besylate

besylate

hydrochlorothiazide hydrochlorothiazide , , hydrochlorothiazide hydrochlorothiazide (OTC Related Drugs) MINON ActHIB and (Measles and rubella vaccine) (Haemophilus inﬂuenzae type b vaccine) (Rotavirus vaccine) and amlodipine amlodipine

Brand name (Efﬁcacy) / medoxomil and medoxomil

and Remarks (Seasonal inﬂuenza vaccine) Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value medoxomil

medoxomil

olmesartan olmesartan medoxomil

olmesartan olmesartan olmesartan Japan [Kitasato Daiichi Sankyo Vaccine Co., Ltd., Japan Vaccine Co., Ltd.] Co., Ltd., Japan Vaccine Japan [Kitasato Daiichi Sankyo Vaccine Influenza HA VaccineLive AttenuatedRubella Measles Combined Vaccine ActHIB Rotarix olmesartan Vaccines (OTC Related Drugs) (OTC Related Drugs) : Combination of : Combination of : Triple combination of : Triple : Triple combination of : Triple Loxonin S Transino Olmesartan Olmesartan : : : Combination of : Combination of First once-daily oral product approved by the FDA for the treatment of opioid-induced constipa- for the treatment FDA by the First once-daily oral product approved tion with (OIC) for adults chronic non-cancer pain. and reversibly It is an anticoagulant that specifically, inhibitor. Orally administered Factor Xa Xa, a clotting factor in the blood.directly inhibits the enzyme,Factor for indications and systemic embolism (SE) in patients to reduce the risk of stroke withApproved thromboembolism (VTE) of venous and for the treatment non-valvular atrial fibrillation (NVAF) thrombosis (DVT)(deep vein and pulmonary embolism (PE)). Inhibits platelet aggregation stenosis and occlusion. and reduces the incidence of artery Bile acid sequestrant. Marketed as a drug for treatment of hypercholesterolemia. Gained approval also for type 2 diabetes mellitus indication as part of life-cycle management. had intolerance to oral iron or who have Effective for patients who have non-dialysis-dependent chronic kidney disease. unsatisfactory response to oral iron or who have Iron replacement product. of iron deficiency anemia in dialysis patients. Effective for treatment and reversibly It is an anticoagulant that specifically, Orally administered Factor Xa inhibitor. Xa, a clotting the blood.directly inhibits the enzyme,Factor factor in for indications of stroke and systemic embolism (SE) in patients for the prevention withApproved venous of recurrent and for the treatment and prevention non-valvular atrial fibrillation (NVAF) thromboembolism (VTE) thrombosis (DVT) (deep vein and pulmonary embolism (PE)). Inhibits platelet aggregation reduces the incidence of artery stenosis and occlusion. and Benicar Benicar HCT AZOR TRIBENZOR Olmetec Olmetec Plus besylate Sevikar Sevikar HCT besylate 2015 2015 2009 2002 2003 2007 2010 2000 2013 2000 2015 2009 2002 2005 2009 2010 (Antiphlogistic analgesic for external use) (Combination cold remedy) (Melasma treatment) (Multi-ingredient digestive remedy) Launched Brand name (Efficacy) (Antipyretic analgesic)

(Generic Drugs)

(Europe) Japan [Daiichi Sankyo Healthcare Co., Ltd.] Loxonin S Patecs Lulu Daiichi Sankyo Ichoyaku Transino OTC Related Drugs Efﬁcacy LIXIANA levoﬂoxacin Opioid-induced constipation treatment Anticoagulant Anticoagulant Antihypertensive Antihypertensive agent Hypercholesterolemia treatment/ type 2 diabetes mellitus inhibitor Antihypertensive agent Antiplatelet agent Antiplatelet agent Anemia treatment ) Anemia treatment ) ) ) ) ) ) ) ) ) naloxegol edoxaban prasugrel olmesartan colesevelam ferric carboxymaltose iron sucrose injection edoxaban prasugrel olmesartan ( ( ( ( injection (Antihypertensive agent) (Synthetic antibacterial agent) (Type 2 diabetes mellitus inhibitor) (Alzheimer’s disease treatment) (Antihyperlipidemic agent) (US)

Brand name (Efﬁcacy) (US)

( ( ( ( Brand name (generic name) Brand name (generic (

( US [Daiichi Sankyo Inc.] US [Luitpold Pharmaceuticals, Inc.] Europe [Daiichi Sankyo Europe GmbH] Japan [Daiichi Sankyo Espha Co., Ltd.] amlodipine levofloxacin pioglitazone MOVANTIK SAVAYSA Effient Benicar Benicar HCT AZOR TRIBENZOR Welchol Injectafer Venofer LIXIANA Efient Olmetec Olmetec Plus Sevikar donepezil atorvastatin Sevikar HCT Generic Drugs Innovative Drugs Innovative MOVANTIK Injectafer , and an azelnidipine (Japan) (Japan) . Efient TENELIA is a prodrug and is not metabolized in the tablets and granules have strong analgesic tablets and granules have Remarks blocks the vasoconstrictor effects of angiotensin II medoxomil

Loxonin Loxoprofen Olmesartan olmesartan (Japan) (Japan) PRALIA RANMARK angiotensin II receptor blocker, angiotensin II receptor blocker, Angiotensin II receptor blocker. Angiotensin II receptor blocker. A combination drugs: calcium ion antagonist, of two antihypertensive New quinolone antibacterial agent offering strong antibacterial action and a broad antibacterial spectrum. Injectable preparation has been added as part of life-cycle management. Beta blocker blocks that selectively nerve. receptors of the sympathetic beta-adrenaline HMG-CoA reductase inhibitor (statin) by inhibiting blood that lowers choles- cholesterol levels terol synthesis in the liver. visibility of diagnostic X-ray imagingNonionic contrast medium used to improve is inadequate. Nonsteroidal anti-inflammatory analgesic. Inhibits platelet aggregation stenosis and occlusion. and reduces the incidence of artery Human monoclonal antibody that binds to RANKL. for osteoporosis. treatment as a novel six months A subcutaneous injection once every for use that enzyme an Inhibits the activity (dipeptidyl DPP-4, of peptidase-4)DPP-4 inhibitor. inactivates incretin, which is a glucose-dependent excreted from insulin-releasing hormone the gastrointestinal tract, and thereby increases incretin concentration blood in and facilitates insulin release. Human monoclonal antibody treatment optionnew and effective that binds to RANKL. A for treating stemming from multiple bone disorders bone metastases from solid myeloma and tumors. It is an anticoagulant that specifically, inhibitor. Orally administered Factor Xa Factor Xa, a clotting factor in the blood. and directly inhibits the enzyme, reversibly thromboembolism (VTE) of venous for the prevention Approved in patients with lower limb orthopedic surgery. for additional indications of ischemic stroke and systemic em- for the prevention Approved bolism (SE) in patients and for the treatment and with non-valvular atrial fibrillation (NVAF) thromboembolism (VTE) of venous recurrence prevention thrombosis (DVT) (deep vein and pulmonary thromboembolism). AstraZeneca. It suppresses gastric Licensed from acid secretion. Proton pump inhibitor. receptor antagonist. Memantine slows down progressionN-methyl-D-aspartate (NMDA) of in patientsdementia with symptoms disease. Alzheimer’s moderate to severe is completed with a Neuraminidase inhibitor that inhibits influenza viral proliferation. Treatment single inhaled dosage. alpha 1A-adrenoceptorSelective blocks antagonist that selectively alpha 1A-adrenoceptors in the lower part of the urinary tract. Compared with other alpha blockers, it causes fewer side effects, such as orthostatic hypotension. by selectively blockingby selectively the binding of angiotensin II to the angiotensin II receptor. activity with lowered gastric side effects. stomach but activated after absorption through the small intestine. Other formulations such as tape are also available as a part of life cycle management. 1993 1989 1987 1986 2011 2011 2010 2006 2004 2010 1993 2013 2012 2012 2011 2014 2014 Launched (Japan) (Japan) Efficacy Memary NEXIUM Contrast medium Anticoagulant Synthetic antibacterial agent for Treatment hypertension, angina pectoris and chronic heart failure Anti-inflammatory analgesic Antihypertensive Antihypertensive agent Antihyperlipidemic agent Alzheimer’s disease treatment Treatment for Treatment osteoporosis for bone Treatment complications caused by bone metastases from tumors for dysuria Treatment Antiplatelet agent Anti-influenza treatment Type 2 diabetes Type mellitus inhibitor ) Ulcer treatment ) ) ) ) ) ) ) ) ) ) ) ) ) ) pravastatin iohexol loxoprofen levofloxacin carvedilol laninamivir silodosin olmesartan edoxaban esomeprazole memantine teneligliptin denosumab prasugrel denosumab ( ( ( ( (Japan) (Japan) ( Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value ( (

Brand name (generic name) Brand name (generic ( ( ( ( ( ( ( ( Japan [Daiichi Sankyo Co., Ltd.] Japan [Daiichi Sankyo Co., Omnipaque Loxonin Mevalotin Cravit Artist Rezaltas Urief Olmetec Memary Inavir NEXIUM LIXIANA RANMARK TENELIA Eﬁent PRALIA 98 Innovative Drugs Innovative Major Products Major LIXIANA Olmetec Data Section 101 Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value Main business activities Management of Chinese subsidiary business and investment Development, manufacturing, and marketing of pharmaceuticals Research, development, manufacturing, and marketing of pharmaceuticals Marketing of pharmaceuticals Sales and marketing of pharmaceuticals Marketing of pharmaceuticals Sales and marketing of pharmaceuticals Manufacturing and marketing of pharmaceuticals Marketing of pharmaceuticals Research, development, and marketing of pharmaceuticals Research, development, and marketing of pharmaceuticals and drugs for animals Manufacturing and marketing of pharmaceuticals Research of prescription drugs Research of prescription drugs manufacturing of Control of Group development in Europe and pharmaceuticals Sales and marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Marketing of pharmaceuticals Manufacturing of raw materials for pharmaceuticals Research of prescription drugs Development of prescription drugs Manufacturing and sales of pharmaceuticals Manufacturing and sales / sales of pharmaceuticals, over-the- Manufacturing and purchase food products, and counter products, cosmetics, medical equipment, drinking water Manufacturing of pharmaceuticals manufacturing of active pharmaceutical Manufacturing and contract ingredients and intermediates of pharmaceuticals Research and development of pharmaceuticals Research and development Group business support Group business support sales of vaccines Research and development, manufacturing, and （As of April 1, 2016） of April （As Company name Daiichi Sankyo (China) Holdings Co., Ltd. Daiichi Sankyo Pharmaceutical (Beijing) Co., Ltd. Daiichi Sankyo Pharmaceutical (Shanghai) Co., Ltd. Daiichi Sankyo Taiwan Ltd. Daiichi Sankyo Korea Co., Ltd. Daiichi Sankyo (Thailand) Ltd. Daiichi Sankyo Hong Kong Ltd. Daiichi Sankyo Brasil Farmaceutica LTDA. Daiichi Sankyo Venezuela, S.A. Daiichi Sankyo India Pharma Private Ltd. Daiichi Sankyo, Inc. Luitpold Pharmaceuticals, Inc. Plexxikon Inc. Ambit Biosciences Corp. Daiichi Sankyo Europe GmbH Daiichi Sankyo France SAS Daiichi Sankyo Deutschland GmbH Daiichi Sankyo Italia S.p.A. Daiichi Sankyo España, S.A. Daiichi Sankyo UK Ltd. Daiichi Sankyo (Schweiz) AG Daiichi Sankyo Portugal, Lda. Daiichi Sankyo Austria GmbH Daiichi Sankyo Belgium N.V.-S.A. Daiichi Sankyo Nederland B.V. Daiichi Sankyo Ilac Ticaret Ltd. Sti. Daiichi Sankyo Ireland Ltd. Daiichi Sankyo Altkirch S.a.r.l. U3 Pharma GmbH Daiichi Sankyo Development Ltd. Daiichi Sankyo Espha Co., Ltd. Daiichi Sankyo Espha Co., Co., Ltd. Daiichi Sankyo Healthcare Co., Ltd. Daiichi Sankyo Propharma Pharma Co., Ltd. Daiichi Sankyo Chemical Asubio Pharma Co., Ltd. Co., Ltd. Daiichi Sankyo RD Novare Daiichi Sankyo Business Associe Co., Ltd. Daiichi Sankyo Happiness Co., Ltd. Kitasato Daiichi Sankyo Vaccine Co., Ltd. * Region Japan ASCA U.S.A. Europe Main Group Companies Main * Abbreviation for Asia, South & Central America

7.35 6.77 5.24 2.11 1.67 1.55 1.41 1.36 1.33 1.26 Ratio (%) Treasury stock 3.61% Financial institutions 42.91% Foreign investors 29.22% 9,636 9,285 9,063 8,591 （As of March 31, 2016）（As 50,222 46,293 35,776 14,402 11,413 10,590 Number of shares held (Thousands of shares) Distribution of Shareholders 5.31% Individuals and others 16.72% Financial instrument ﬁrms 2.22% Other corporations

Name 105,897 (As of March 31, 2016) （As of April 1, 2016） of April （As （As of March 31, 2016）（As sales, and marketing of pharmaceutical products 103-8426, Japan Tokyo Osaka, Kyoto, Tokai, Kanetsu, Yokohama, Kyushu Chugoku, Shikoku, Kobe, Daiichi Sankyo Group Value Report 2016 Daiichi Sankyo Group Value 2. Treasury shares are not included in the computing of equity stake. 2. Treasury Major Shareholders Common Stock Corporate Proﬁle Corporate 100 Notes: 1. The Company holds 25,618,187 treasury shares, which are excluded from the above list. holds 25,618,187 treasury shares, which are excluded from the above 1. The Company Notes: The Master Trust Bank of Japan, Ltd. (trust account) The Master Trust (trust account) Services Bank, Ltd. Japan Trustee Nippon Life Insurance Company & Custody Services Bank, Ltd. as trustee for Mizuho Bank, Ltd. Trust Account re-entrusted by Retirement Beneﬁt Trust and Banking Co., Ltd. Mizuho Trust Sumitomo Mitsui Banking Corporation Employee stock ownership of Daiichi Sankyo Group 505234 STREET BANK WEST CLIENT ‒ TREATY STATE 505225 STREET BANK AND TRUST COMPANY STATE (trust account 7) Services Bank, Ltd. Japan Trustee Mizuho Bank, Ltd.

Number of shares authorized: 2,800,000,000 Number of shares issued: Number of shareholders: 709,011,343 Company name: Company LIMITED COMPANY, SANKYO DAIICHI Established: Business: September 28, 2005 manufacturing, import, and development, Research capital: Paid-in ¥50,000 million Headquarters: Nihonbashi-honcho, Chuo-ku, 3-5-1, Branches: Chiba, Saitama, Tokyo, Sapporo, Tohoku, Corporate Information Corporate 3-5-1, Nihonbashi-honcho, Chuo-ku, Tokyo 103-8426, Japan Corporate Communications Department Tel : +81-3-6225-1126 CSR Department Tel : +81-3-6225-1067 http://www.daiichisankyo.com Daiichi Sankyo Group Value Report 2016

Precautions for future prospects This report contains future prospects, such as the Company’s plan, strategy, and business performance. These prospects are based on our conclusions from information that is currently available. Therefore, please be advised that the actual business performance will be influenced by various risks and uncertainties and could achieve different results from these prospects. Examples of factors that could influence future prospects are including, but are not limited to, the economic environment, competition, related laws, change in product development circumstances, or fluctuation of exchange rates that surround the Company’s business domain.

Period covered April 1, 2015 ‒ March 31, 2016 (ﬁscal 2015) and also information for the period from April 2016 onward.

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