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Full Report (PDF/8011KB) Securities Code 4506 Integrated Report 2018 Innovation today, healthier tomorrows Profile Company Overview Sumitomo Dainippon Pharma Co., Ltd. was established in October 2005 through the merger of Dainippon Pharmaceutical Co., Ltd. and Sumitomo Pharmaceuticals Co., Ltd. with the aim of broadly contributing to society through value creation based on innovative research and development activities for the betterment of healthcare and fuller lives of people worldwide. The spirit of these two companies has been passed on to Sumitomo Dainippon Pharma. While striving to be a cutting-edge pharmaceutical company with a strong market presence, we will continue to provide innovative and effective pharmaceutical solutions to people not only in Japan, but also around the world. Corporate Mission To broadly contribute to society through value creation based on innovative research and development activities for the betterment of healthcare and fuller lives of people worldwide Management Mission • To contribute to healthcare and people’s well-being based upon the principles of patient-oriented management and innovative research • To continuously strive to maximize corporate value through constant business development and to fulfill shareholder expectations • To create an environment in which employees can fulfill their potential and increase their creativity • To maintain the trust of society and to contribute to the realization of a better global environment Innovation today, healthier tomorrows Declaration of Conduct At Sumitomo Dainippon Pharma, directors and employees alike are determined not only to comply with all laws and regulations, but also to ensure that all corporate activities are carried out in accordance with this Declaration of Conduct. The pledges below express our commitment to earning greater trust from society and becoming a truly innovative company. 1. Follow through the global slogan “Innovation today, healthier tomorrows.” 2. Pursue trustworthy corporate activities. 3. Positively disclose information and properly manage information. 4. Help employees reach their full potential. 5. Respect human rights. 6. Positively address global environmental issues. 7. Build harmonious relationships with society. 01 Sumitomo Dainippon Pharma Co., Ltd. Integrated Report 2018 Contents 01 Profile 03 Business Model——Value Creation Process 05 Stakeholder Relationships Supporting Competitive Advantage 07 Financial and Non-Financial Highlights 09 Message from the Chairman 11 Message from the President 17 FY2017 Performance & Topics 19 Research & Development 19 Focus Research Areas / Alliances with Outside Institutions / Intellectual Property / Consideration in Clinical Studies / Product Launch Target 23 Focus Striving to quickly commercialize regenerative medicine and cell therapy 25 Development Pipeline 29 In-Licensing, Partnerships & Acquisitions 30 Medical Science 31 Corporate Regulatory Compliance & Quality Assurance 33 Production and Quality Control 35 Marketing 37 Pharmaceutical Business: Japanese Market 39 Pharmaceutical Business: North American Market 41 Pharmaceutical Business: Chinese Market 42 Related Business 43 Corporate Governance 51 Board Members and Executive Officers 53 CSR-based Management Our approach to CSR-based Management / Work Style Innovation / Access to Healthcare / Support for Patients and Their Families / Support Education of the Next Generation / Responding to Counterfeit Medicines / Training and Development of Employees / Health, Safety, and Welfare of Employees / Promoting Diversity / Environment 63 Financial Section Ten-Year Summary of Selected Financial Data / Operating Results and Financial Condition / Business Risks / Consolidated Statement of Profit or Loss / Consolidated Statement of Comprehensive Income / Consolidated Statement of Financial Position / Consolidated Statement of Changes in Equity / Consolidated Statement of Cash Flows / Notes to Consolidated Financial Statements 135 Shareholder Data Editorial Policy Applicable Period This report is based on the results for fiscal 2017 (April 1, 2017 to March 31, 2018). Some of the activities described were conducted in fiscal 2018. Organizational Scope The report covers the 16 companies in the Sumitomo Dainippon Pharma Group (Sumitomo Dainippon Pharma Co., Ltd., and its 15 consolidated subsidiaries). However, environmental performance data in the report are totals for major facilities in Japan only (plants, research laboratories, distribution centers, Osaka Head Office, Tokyo Head Office, branches). Reference guidelines regarding disclosure on non-financial information • IIRC, International Integrated Reporting Framework • GRI Sustainability Reporting Standards Disclaimer Regarding Forward-Looking Statements This Report contains forecasts, projections, goals, plans, and other forward-looking statements regarding the Group’s financial results and other data. Such forward-looking statements are based on the Company’s assumptions, estimates, outlook, and other judgments made in light of information available at the time of preparation of such statements and involve both known and unknown risks and uncertainties. Accordingly, plans, goals, and other statements may not be realized as described, and actual financial results, success/failure or progress of development, and other projections may differ materially from those presented herein. Information concerning pharmaceuticals (including compounds under development) contained herein is not intended as advertising or as medical advice. Sumitomo Dainippon Pharma Co., Ltd. Integrated Report 2018 02 Business Model——Value Creation Process Business Model for Value Creation By utilizing our Company’s intellectual capital, human capital, and social and relationship capital, while also creating and delivering new value, we contribute to the betterment of healthcare and fuller lives of people worldwide. At the same time, we generate economic value and strive to boost long-term corporate value. Sources of value creation Value creation process Sumitomo Dainippon Pharma recognizes that our intellectual Rich pipeline, drug discovery capability, leading-edge technology and know-how, capital, human capital, and broad network related to science, and distinctive R&D capacity in the three focus areas. social and relationship capital Psychiatry & Neurology Area Oncology Area are specific sources of • New compounds under development: 10 • New compounds under development: 9 competitiveness. • R&D know-how cultivated in-house as part • R&D focused on our proprietary of our long-standing track record of technologies, such as cancer stemness producing pharmaceutical products. inhibition, cancer immunomodulation, and Financial capital • Drug discovery initiatives leveraging kinase inhibition. leading-edge technologies (in-silico, • Robust network that includes overseas biomarkers, iPS cells, etc.). academic institutions and biotech companies. Manufactured capital Excellent human resources and a framework that utilizes the capabilities of individual employees Intellectual capital • Professional Human Resources System • Human resources highly skilled in R&D utilizing employees with specialization (technology, expertise, know-how) and a strong ability to produce results. • Sincere, talented employees that contribute ü Professional Human Resources strongly to the Company Human capital (“Professional Contributors”): approx. 40 A platform supporting global business expansion Social and • The capacity to roll out new businesses in • Business operations leveraging the strengths relationship capital the global market of acquired overseas subsidiaries ü A robust platform in Japan, North America, ü Respecting the corporate culture and and China leveraging subsidiaries’ strengths Natural capital ü Rolling out business in Southeast Asia and Europe 03 Sumitomo Dainippon Pharma Co., Ltd. Integrated Report 2018 Changes Since the 2005 Merger — Soundly Improving Capacity for Business Value Creation — FY2007 FY2017 Future Vision Expand business from domestically-focused to globally-focused Overseas 9% Domestic Overseas 40% Expand regions Domestic 60% where we do 91% business Toward becoming a 264.0 billion yen 466.8 billion yen “Global Specialized Shifting focus research areas in order to address unmet medical needs Player” Diabetes/ Psychiatry & Expanding business Cardiovascular Area Neurology Area Psychiatry & Neurology Area worldwide in four Psychiatry & areas Neurology Area Oncology Area Oncology Area Inflammation/ Regenerative Medicine/ Regenerative Medicine/ Allergy Area Cell Therapy Field Cell Therapy Field Frontier Areas Outside Pharmaceutical Products Contributing to sustainable development Contributing to achieving the Sustainable Regenerative Medicine / Cell Therapy Field Development Goals (SDGs) • Ongoing projects: 5 • A top player aiming to commercialize iPS Creating innovative cell-derived cellular medicines. pharmaceutical products • A robust network with academic institutions and contributing to and biotech companies; a technology healthcare worldwide platform of in-house production facilities and manufacturing know-how. Delivering pharmaceutical products in areas where unmet medical needs are high Stably supplying high-quality • Initiatives for further strengthening human pharmaceuticals resources ü Fostering leaders (DSP Academy) Contributing to the ü Diversity and inclusion initiative targeting development of medical active participation by a varied work force science through research and development Improving sustainable Contributing
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