Annual Report 2004 Annual Report 2004 Annual Report 2004
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FUJISAWA PHARMACEUTICAL COMPANY LIMITED COMPANY PHARMACEUTICAL FUJISAWA FUJISAWA PHARMACEUTICAL COMPANY LIMITED PHARMACEUTICAL FUJISAWA ANNUAL REPORT 2004 ANNUAL REPORT 2004 REPORT ANNUAL ANNUAL REPORT 2004 ANNUAL REPORT Printed on recycled paper in Japan C4 C1 04.07/藤沢薬品 AR 04 表1-4 YMCB Fujisawa Pharmaceutical Co., Ltd., headquartered in Japan, is a research-driven pharmaceutical company with a firm commitment to innovative research in its quest to satisfy unmet medical needs and contribute to the progress of medical care. Corporate Mission “Fujisawa contributes to healthier, more prosperous lives for people around the world by exploring the frontiers of human health and disease.” CONTENTS The F-mark, Fujisawa’s logo, encapsulates Fujisawa’s desire to share the Financial Highlights/1 Highlights of the Year/2 joy of good health with people all over the world. Message from the President/4 Red: Passionate commitment to research and development Global Network/8 Major Products/10 Blue: Pursuit of purity and quality People-our most precious resource/12 Ethical Pharmaceuticals Business/14 Yellow: Desire to improve the health and lives of people everywhere Japan/14 North America/15 Europe/16 Under the banner of the F-mark, Fujisawa will continue to help people Asia/17 live healthy, satisfying lives. R&D Network/18 Research/21 Products under Clinical Development/22 Tremendous progress has been made in the biomedical sciences in Development/23 Health Care/24 recent years. In an attempt to summarize in a few words the essence of Production Network/26 Production/27 Fujisawa’s corporate philosophy, we have coined the corporate slogan Environmental Protection/28 “New Medicines for New Times.” Board of Directors/Top Management with Global Functional Heads/30 Review of the Year/31 Management and Corporate Auditors/ Corporate Directory/55 Investor Information/57 Brief History/58 Fujisawa Pharmaceutical Company Limited and Consolidated Subsidiaries Financial Highlights Years ended March 31 Millions of yen Thousands of U.S. dollars* 2004 2003 2004 Change (%) Net sales ........................................ ¥395,401 ¥382,079 $3,730,198 103.5 Income before income taxes ................. 69,138 44,690 652,245 154.7 Net income ..................................... 41,468 28,635 391,208 144.8 Shareholders’ equity .......................... 375,944 335,337 3,546,642 112.1 Amounts per share (in yen and dollars): Net income Basic ..................................... ¥ 125.63 ¥ 86.62 $ 1.19 145.0 Diluted .................................. 123.65 85.37 1.17 144.8 Cash dividends ............................. 22.00 18.00 0.21 122.2 Total assets .................................... ¥499,693 ¥511,516 $4,714,085 97.7 Research and development expenses ....... 73,643 62,426 694,745 118.0 * The U.S. dollar amounts in this report represent, for convenience only, translations of Japanese yen at the rate of ¥106=US$1. Net Sales Operating Income Net Income (¥ bn) (¥ bn) (%) (¥ bn) (%) 400 395.4 70 20 45 15 382.1 41.5 62.1 341.4 320 56 16.3 56.7 16 36 12 289.1 297.5 13.7 14.3 10.5 28.6 240 42 12.1 11.3 46.9 12 27 26.2 9 7.9 34.8 33.6 6.9 7.5 22.9 7.7 160 28 8 18 20.5 6 80 14 4 9 3 0 0 0 0 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 Operating Income Net Income Ratio to Net Sales Ratio to Net Sales Statements made in this annual report with respect to Fujisawa’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Fujisawa. These statements are based on management’s current assumptions and beliefs in light of the information currently available to it and involve known and unknown risks and uncertainties. Consequently, undue reliance should not be placed on these statements. Fujisawa cautions the reader that a number of important factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such factors include, but are not limited to: (i) changes in general economic conditions in, and the Pharmaceutical Affairs Law and other laws and regulations relating to, Fujisawa’s markets, (ii) currency exchange rate fluctuations, (iii) delays in new product launches, (iv) the inability of Fujisawa to market existing and new products effectively, (v) Fujisawa’s ability to continue to research and develop products accepted by customers in highly competitive markets and (vi) infringements of Fujisawa’s intellectual property rights. 1 Highlights of the Year (For the Year ended March 31) Fujisawa established new highs in business performance — net sales of ¥395,401 million (US$3,730 million) and net income of ¥41,468 million (US$391 million). Firm sales growth of Fujisawa Healthcare, Inc. and Fujisawa GmbH contributed significantly to Fujisawa’s business performance. Overseas business accounted for 48.6% of total revenue. ® Our No. 1 product Prograf achieved 16% sales growth with ¥104 billion (US$985 million) and is further strengthening its position as the cornerstone immunosuppressant for organ transplantation. ® Protopic is now commercially available in almost 30 countries. The global ® marketing of Protopic achieved a 33% sales jump over the previous term. R&D Expenses Capital Expenses Total Assets (¥ bn) (%) (¥ bn) (¥ bn) 75 73.6 25 30 550 511.5 499.7 462.3 474.5 60 20 24.4 62.4 24 440 421.7 17.5 57.1 18.6 21.2 19.8 19.7 20.4 20.3 45 15.8 52.0 15 16.7 16.3 18 330 45.6 16.1 15.6 15.4 30 10 12 12.9 220 15 5 6 110 0 0 0 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 R&D Expenses Acquisition of Property, Plant Ratio to Net Sales and Equipment Depreciation and Amortization 2 Micafungin, Fujisawa’s third global product, has been well accepted since its debut as Funguard® for Infusion in Japan, and recorded ¥11 billion (US$105 million) sales. Under the Global Headquarters, a newly established global management system in April 2003, the local operations are involved on an equal footing in decision-making and execution of the global agenda. In the three Chinese-speaking economies of China, Hong Kong and Taiwan,we reorganized our operations effective April 1, 2004 in order to improve operational efficiency and profitability in these markets. On June 24, 2004 the shareholders of Fujisawa and Yamanouchi Pharmaceutical Co., Ltd., respectively, approved a definitive agreement on the merger of the two companies leading the creation of Astellas Pharma Inc. effective April 1, 2005. Return on Equity Earnings per Share Overseas Sales Ratio (%) (¥) (%) 15 150 50 46.7 48.6 44.1 125.63 12 11.7 120 40 35.3 36.3 9.5 9 8.8 90 30 7.8 8.8 86.62 71.09 80.07 6 60 63.62 20 3 30 10 0 0 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 3 Message from the President I am very pleased to present Fujisawa’s annual report for the year ended March 31, 2004. The term under review was highlighted by the announcement of our planned merger with Yamanouchi Pharmaceutical Co., Ltd., and we also made many other strategic decisions to focus our management resources more effectively on our healthcare platform, thus ensuring sustainable growth over the long term. Progress of Our Business Net sales increased by 3.5% to ¥395,401 million (US$3,730 million) over the previous year, setting a new record. Key drivers of this growth once again are the continuing growth of our two major subsidiaries, Fujisawa Healthcare, Inc. and Fujisawa GmbH, both led by the immunosuppressant Prograf® (tacrolimus). As for sales of individual products, consolidated sales of Prograf® surpassed ¥100 billion for the first time. With ¥104.4 billion (US$985 million), a 16% increase over the previous fiscal year, Prograf® has become the first ¥100 billion product in Fujisawa’s history. The injectable antifungal agent Funguard® for Infusion (micafungin) also achieved sales of ¥11.1 billion (US$105 million) for its first full year in Japan after its launch in December 2002. Funguard® has become the number one injectable antifungal agent in Japan. We also successfully launched the ketoride class oral antibiotic Ketek® (telithromycin) in Japan in December 2003. While operating income, at ¥56,703 million (US$535 million), recorded an 8.8% year-on-year decrease, mainly due to heavy investments in research and development, recognition of extraordinary gains caused net income to rise 44.8% to ¥41,468 million (US$391 million). We announced our long-term management strategy “VISION 2005” in the fiscal year ended March 31, 2000. Over the subsequent four years from April 1, 2000, in pursuit of our targets Progress under VISION 2005 Return on Equity 11.7% 10.0% Net Sales 9.5% Overseas Sales 8.8% (¥bn) Japanese Sales 7.8% 8.8% 400 400 Net Income 300 200 100 40 0 Years to March 31 2000 2001 2002 2003 2004 2006 4 under this strategy, we have achieved growth of 8.1% and 12.9% on a compounded annual growth rate basis for net sales and operating income, respectively. Total overseas sales, at ¥192.1 billion (US$1,813 million), were up even more sharply, recording compounded annual growth of 17.1% over the same four-year period. I believe this is clear evidence that we have implemented the right strategies to improve the corporate value of Fujisawa under VISION 2005. Progress in Research and Development We are committed to sustaining a high level of spending on research and development while taking profitability constantly into account.