[Translation]

CONVOCATION NOTICE OF THE 2ND ORDINARY GENERAL MEETING OF SHAREHOLDERS

For the Fiscal Period Ended March 31, 2007

DAIICHI SANKYO COMPANY, LIMITED

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(Securities Identification Code 4568) June 1, 2007 To Shareholders,

DAIICHI SANKYO COMPANY, LIMITED Takashi Shoda, President 5-1, Honcho 3-chome, Chuo-ku, ,

CONVOCATION NOTICE OF THE 2ND ORDINARY GENERAL MEETING OF SHAREHOLDERS

Daiichi Sankyo Company, Limited respectfully requests your attendance at the 2nd Ordinary General Meeting of Shareholders (“the Meeting”), which will be held as detailed below.

If you will not be able to attend the Meeting, you may exercise your voting rights through either of the methods described below, in which case we ask that you please exercise your voting rights by 17:30 (within our business hours), Wednesday, June 27, 2007 (Japan Time), after considering the attached reference materials.

[Exercise of Voting Rights by Mail] Please indicate your approval or disapproval for the proposals on the enclosed voting form and return the form. Your completed voting form must arrive no later than the time mentioned above.

[Exercise of Voting Rights on the Internet etc.] After referring to the “Information on Exercise of Voting Rights, etc” on page 45 to 46, please vote on the Internet at the dedicated voting website (http://www.evote.jp/) no later than the time mentioned above. The Company is participating in the platform for electronic exercise of voting rights for institutional investors, which is operated by ICJ Inc.

1. Date and Time: June 28, 2007, Thursday at 10 a.m. (Japan Time)

2. Place: Rose Room, Palace Hotel 2F, 1-1, Marunouchi 1 chome, Chiyoda-ku, Tokyo, Japan

3. Purpose of the Meeting: Reports: 1. Reports on the Business Report, the Consolidated Financial Statements for the 2nd Fiscal Year (from April 1, 2006 to March 31, 2007); and Audit Reports by the Accounting Auditor and the Board of Corporate Auditors 2. Reports on the Non-consolidated Financial Statements for the 2nd Fiscal Year (from April 1, 2006 to March 31, 2007) Proposals: First Agenda Item: Appropriation of Retained Earnings Second Agenda Item: Election of Ten (10) Directors Third Agenda Item: Election of Two (2) Corporate Auditors Fourth Agenda Item: Grant of Share Remuneration-type Stock Options for Directors

4. Decisions made prior to the convocation: Please refer to [Information on Exercise of Voting Rights, etc] on pages 45 and 46 of this document.

If attending the Meeting in person, please hand in the enclosed Card for Exercise of Voting Rights at the reception desk.

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[Attachment]

Business Report (From April 1, 2006 to March 31, 2007)

1. Status of Daiichi Sankyo Group (the Group) (1) Analysis of Results of Operations DAIICHI SANKYO COMPANY, LIMITED (hereinafter “the Company”) was established in September 2005 as the joint holding company for the DAIICHI SANKYO Group by means of a stock transfer. Business integration has proceeded steadily since then, and has involved the reorganizing of various Group companies. The integration process was completed in April 2007 with the merger of Sankyo Company, Limited and Daiichi Pharmaceutical Co., Ltd. into the Company. The growth of global pharmaceutical market is generally trending downward. In the United States, the world’s largest market for prescription drugs, there are signs that the emergence of generics is causing market growth to taper off in value terms. In the European and Japanese markets, governments continue to impose measures designed to constrain medical expenditures by targeting the cost of medicines. In Japan, the home market for the Group, competition is intensifying notably between the major pharmaceutical manufacturers, including foreign-owned makers. Responding to such business conditions, the Group focused marketing efforts on providing medical professionals with accurate efficacy and safety information to cater to increasingly diverse medical needs based on the promotion of the proper use of drugs. Such efforts helped to cultivate and expand markets for the Company’s products. Consolidated net sales in the fiscal year ended March 2007 totaled ¥929.5 billion, an increase of 0.4% compared with the previous year. In terms of profitability, although the Group made substantial efforts to cut costs by boosting operational efficiency across the board, the revision of the National Health Insurance (NHI) price in April 2006 had a negative impact on the profitability of domestic operations. Additional negative factors included higher R&D investments associated with the development of global drug candidates and the cultivation of various strategic alliances. Operating income fell 11.9% in year-on-year terms to ¥136.3 billion. The fiscal year ended March 2007 also was witnessed by accelerating efforts by the Group to concentrate on the pharmaceutical business to facilitate the evolution into a “Global Pharma Innovator.” The Company booked extraordinary losses due to operational reorganizing and workforce resizing. At the consolidated level, losses associated with business integration totaled to ¥82.4 billion and losses related to operational reorganizing amounted to ¥3.6 billion. Although these charges were partially offset by extraordinary gains of ¥59.3 billion arising from the sale of Group subsidiaries involved in non-pharmaceutical businesses, net income for the year ended March 2007 equaled ¥78.5 billion, a decline of 10.4% compared with the previous year. These Group results for the year ended March 2007 included contributions of the 15-month period from January 2006 to March 2007 for the Group’s U.S. subsidiaries such as Daiichi Sankyo INC. and Luitpold Pharmaceuticals Inc. following a change in these companies’ fiscal year-end from December to March. The aggregate operating results of these subsidiaries for the period from January to March 2006 were net sales of ¥31.5 billion, operating income of ¥9.0 billion, ordinary income of ¥10.5 billion and net income of ¥5.8 billion.

The operational progress reviewed by segment is as follows:

Net sales in the pharmaceuticals segment increased 6.7% in year-on-year terms to ¥837.1 billion, while operating income fell 11.3% to ¥131.3 billion. In the Japanese prescription drugs market, the downward revision in NHI price implemented in April 2006 averaged 6.7% across the industry. Other factors also contributed to increasingly harsh business conditions surrounding the , including the gradual adoption by medical facilities of the Diagnosis and Procedure Combination (DPC) case-mix system for NHI reimbursement (under which reimbursement fees for inpatient care are calculated on an inclusive daily basis based on the diagnoses and procedures involved); the implementation of measures to promote the use of generics; and the passage of a new law introducing various reforms to healthcare system in Japan. Under harsh market conditions, the Company recorded sales of prescription drugs in the Japanese market of ¥433.4 billion, up 0.5% compared with a year earlier. Although the effects of expanded generic use and fiercer competition contributed to a reduction in sales of the antihyperlipidemic agent

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Mevalotin® and the contrast medium Omnipaque®, the antihypertensive agent Olmetec® generated rapid sales growth. The analgesic, anti-inflammatory and anti-febrile preparation Loxonin® also made a positive contribution to growth following an expansion in the range of available presentations. In overseas prescription drug markets, the number of patients enrolled in the state-subsidized Medicare system rose in the United States following the implementation of the Medicare Part D reforms in January 2006; also inherent in this move was an expansion of the government-regulated segment of the U.S. market. Overall, the U.S. prescription drugs market saw a pronounced slowdown as growth from original branded drugs failed to offset the effects of a shift to generics amid patent expirations on several leading products. Prescription drug markets in Europe were sluggish overall due to the effects of ever-stronger regulatory controls, including moves to remove certain drugs from public reimbursement schedules and to promote generic dispensing. Sales of prescription drugs in overseas markets increased 16.8% over the previous year to ¥338.0 billion. As anticipated, the DAIICHI SANKYO Group recorded a significant decline in exported bulk of pravastatin, antihyperlipidemic agent, due to expire the patent in the U.S. Major contributors to growth included the antihypertensive agent olmesartan (marketed as Benicar® in the U.S. and as Olmetec® in Europe), the antihyperlipidemic agent WelChol® and the anemia treatment Venofer®. The broad-spectrum oral antibacterial levofloxacin also produced consistent growth. In the healthcare products sector, the sales framework for OTC drugs in Japan underwent its first fundamental reform in 46 years. The enactment of the revised Pharmaceutical Affairs Law heralded the transition to a new system that will be based on standards stipulated in the new legislation. With the aim of contributing to an improved quality of life (QOL) for all through better health and beauty, the Group has positioned healthcare products sector as a core business alongside prescription drugs. In April 2006, the Group acquired all the shares of Zepharma, Inc. As a result, sales of healthcare products jumped 71.9% on a year-on-year basis to ¥47.9 billion. Zepharma, Inc. was absorbed into Daiichi Sankyo Healthcare Co., Ltd. at the start of April 2007.

Net sales in this segment declined 34.6% year on year to ¥92.3 billion, while operating income fell 28.8% to ¥4.3 billion. DAIICHI SANKYO Group has been in the process of making non-pharmaceutical operations independent out of the Group in order to focus resources on the pharmaceutical business. During the fiscal year ended March 2007, the Company completed transfers to other firms of shares in several Group subsidiaries, including Wakodo Co., Ltd., Daiichi Pure Chemicals Co., Ltd., Daiichi Radioisotope Laboratories, Ltd. and Sankyo Agro Co., Ltd. Meanwhile, Fuji Flour Milling Co., Ltd. was excluded from the scope of consolidation as the result of a merger and Sankyo Lifetech Co., Ltd. was spun off as a separate operation and then sold. These various moves resulted in a significant decline in sales and profits in this segment in year-on-year terms.

R&D activities R&D investments by the DAIICHI SANKYO Group, which was mostly incurred in the pharmaceuticals segment, were totaled to ¥170.6 billion in the fiscal year ended March 2007 (rising 7.5% in year-on-year terms). The ratio of R&D investments to sales was 18.4%. The R&D activities of the Group are directed at realizing the Company’s vision of being a “Global Pharma Innovator.” The Group has focused its R&D investments in four target therapeutic areas (cardiovascular, glucose metabolism, cancer, and autoimmune diseases/rheumatoid arthritis) with the aim of bringing a continuous stream of world-class innovative drugs to market while simultaneously trying to shorten product lead times. In terms of significant R&D-related successes during the year under review, in September 2006 the Company filed an application in Japan for regulatory approval of DU-6859a (generic name: sitafloxacin), a new quinolone type of synthetic antibacterial. The Company also received import approval in October 2006 for Sonazoid® (generic name: perflubutane), an ultrasound contrast medium, and in January 2007, the product was launched tin Japan. In the United States, the Group filed an application in November 2006 for regulatory approval of CS-8663, a combination antihypertensive containing olmesartan and amlodipine, and in December 2006 filed a supplemental New Drug Application (sNDA) with the U.S. Food and Drug Administration (FDA) to gain an additional indication for treatment of type II diabetes for the antihyperlipidemic agent WelChol®. In addition, the Company received regulatory approval in Japan for ActHIB®, a vaccine for preventing infections due to Haemophilus influenzae type b, and is currently preparing to launch the product.

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The Group continued to focus on moves to build alliances aimed at further enhancing the development pipeline or acquiring innovative drug-discovery technology. In an in-licensing move, the Company reached an agreement in July 2006 with CIMYM BioSciences Inc. granting the Group exclusive sales and development rights in Japan for the anticancer drug nimotuzumab (development code: DE-766, a human monoclonal antibody). Separately, in August 2006 the Group reached an agreement with Co., Inc. that granted the Group global development, manufacturing and sales rights for AJD101, a novel diabetes treatment that is currently in Phase I clinical trials outside Japan. Elsewhere, with the aim of augmenting drug-discovery efforts, the Group is also pursuing other approaches such as investing in healthcare venture funds. In terms of the status of other key pipeline projects, the Company terminated development work on DJ-927, a taxane derivative (oral anticancer), after comparator studies failed to demonstrate sufficient efficacy. Clinical trials in the U.S. on DW-908e, a VLA-4 inhibitor (anti-allergic), were also suspended when comparator studies using rival drugs with a similar mechanism of action pointed to the uncertainty of prospects for breaking the clinical hold of such products in the U.S. market. Elsewhere, based on a pipeline management perspective, the Company decided to return development rights for an agent used to reduce reperfusion injury in acute myocardial infarction (development code: CS-9803) that is currently under joint development with U.S.-based KAI Pharmaceuticals, Inc. The pipeline drugs currently selected as top-priority development projects for the Group are: prasugrel (CS-747), an antiplatelet agent; DU-176b, a factor-Xa inhibitor; CS-8663, an antihypertensive; and DZ-697b, an antiplatelet agent. Data from Phase I clinical studies demonstrating the superior medical effect of prasugrel over current antiplatelet therapy benchmark treatments were published at the Transcatheter Cardiovascular Therapeutics annual conference that was held in the U.S. in October 2006. Patient enrollment for Phase III clinical trials on prasugrel outside Japan was also completed in January 2007.

(2) Status of Plant and Equipment Investment The Group continuously invests in plants and equipment, aiming to enhance and streamline production facilities as well as strengthen and facilitate research and development. During the fiscal year under review, the Group spent ¥31.5 billion on plants and equipment mainly in the pharmaceutical segment, including equipment for manufacturing equipment at Pfaffenhofen Plant of Daiichi Sankyo Europe GmbH.

(3) Status of Financing With respect to financing of the Group, there is no particular information that must be reported.

(4) Issues to be dealt with The Group’s corporate philosophy is “To contribute to affluent and healthy living of people around the world by continuously creating and providing innovative pharmaceuticals.” On February 14, 2007, the Group formulated a three-year business plan, starting from fiscal 2007, as the first step toward the achievement of its long-term vision by 2015.

[2015 Vision] - Basic vision: Realization of Global Pharma Innovator - Numerical targets: Net sales: ¥1.5 trillion Operating income margin: 25% or more Overseas sales ratio: 60% or more - Priority diseases in research and development: To build a global top class pipeline in each of the areas of thrombotic, diabetic, cancer, autoimmune diseases and rheumatoid arthritis.

[Core messages of the medium-term business plan (from fiscal 2007 to fiscal 2009)] - Enhancing growth base for the realization of 2015 Vision - Maximizing synergies from management integration - Greatly expanding marketing capability in the U.S. (increase the number of medical representatives by 150%) - Targets for fiscal 2009: Operating income margin of 25% or more and overseas sales ratio of

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40% or more - Proactively passing on profits to shareholders - Expanding business through strategic investment

Based on these core policies, the Company is actively tackling the following issues.

1) Early Realization of Fruits of Complete Integration In line with the business integration schedule, the first step in the creation of the DAIICHI SANKYO Group was the establishment of the Company as a joint holding company in September 2005 via a stock transfer. Operational integration then progressed in several areas, involving the restructuring of Group companies. The business integration process was finally completed in April 2007 with the merger of Sankyo Company, Limited and Daiichi Pharmaceutical Co., Ltd. into the holding company. Going forward, the DAIICHI SANKYO Group aims to attain world-class levels of operational efficiency through steady realization of integration synergies. At the same time, the Group plans to strengthen operational management and business development functions and to boost HR development.

2) Concentration on the Pharmaceutical Business To promote superior earnings and consistent growth, the DAIICHI SANKYO Group plans to concentrate on the pharmaceutical business consisting of prescription drug and healthcare product operations. The ongoing aim is to establish all non-pharmaceutical businesses as fully independent operations outside the Group. As of the end of March 2007, this goal had been achieved for all of the major non-pharmaceutical Group firms, including Wakodo Co., Ltd., Daiichi Pure Chemicals Co., Ltd., Daiichi Radioisotope Laboratories, Ltd. and Sankyo Agro Co., Ltd. Going forward, the Company remains focused on pursuing the goal of attaining “Global Pharma Innovator” status, involving further restructuring of Group subsidiaries where deemed appropriate.

3) Enhancement of Innovative Drug Discovery In order to achieve its goal of developing innovative new drugs to fulfill unsatisfied medical needs, the Company is working to build an R&D operation with specific management objectives. The principal objectives include (1) a global R&D organization of an appropriate scale; (2) sufficient scale to support innovative research in key therapeutic areas; (3) retention and development of researchers for in-house discovery of key drug candidates; and (4) effective and efficient control of development projects coupled with timely decision-making. Integration of the R&D management functions of Sankyo and Daiichi to create global development capabilities has been a top management priority within the overall integration process. Global development processes commenced in October 2005. As part of this process, the Company established the Global Executive Meeting of Research and Development (GEMRAD) as a single deliberative body to facilitate global R&D-related decision-making. GEMRAD has designated the four target therapeutic areas for the DAIICHI SANKYO Group as cardiovascular, glucose metabolism, cancer, and autoimmune conditions/rheumatoid arthritis. Selection of drug development candidates within each of these targets has been undertaken, with an additional priority evaluation of candidate drugs also being conducted. The top-priority development projects have been selected on this basis, and separate project teams are focusing on the development of each candidate drug.

4) Enhancement of Earnings Bases in Japan and Overseas Integration of the domestic prescription drug businesses has resulted in a combined sales force of about 2,300 medical representatives (MRs), affording DAIICHI SANKYO superior marketing power in terms of quality and quantity. Integration has also facilitated further strengthening of relationships with medical wholesalers operating on a national scale, thereby enabling the implementation of a distribution strategy that can extract maximum value from economies of scale. Beginning in April 2007, the Company plans to concentrate its marketing power on promoting sales of the leading products, thereby increasing sales and creating a stronger base of sales operations within the domestic market. In overseas markets, the Company plans to take full advantage of larger economies of scale

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created by the integration and thereby achieve substantial increases in product value by conducting both development and marketing in-house for certain high-priority projects, particularly in the United States. To this end, management recognizes a critical need in the expansion of overseas development and marketing bases in the United States and other markets. The Company plans to focus on such expansion through various means, including selective acquisition of external resources based on an alliance- and M&A-centered strategy. In the healthcare product business, Daiichi Sankyo Healthcare Co., Ltd. recommenced operations in April 2007 following the absorption of Zepharma, Inc. Through organic integration, this move will serve to focus capabilities in R&D, sales and marketing to facilitate the expansion of sales of existing brands as well as new products. Going forward, the Company plans to focus on reinforcing the earnings base by upgrading brand assets and constructing a low-cost operational structure.

5) Basic policy regarding moves toward large-scale acquisition of Company stock The Company believes that it is the sole prerogative of shareholders to decide whether or not to respond to any moves toward large-scale acquisition of Company stock. The Company does not deny the potentially significant impact that transfers of control of the Company may have in terms of stimulating business enterprise. In line with this thinking, the Company has not prepared any specific takeover defenses. Nonetheless, the Company would consider it a self-evident duty of the Company management to oppose any takeover plans whose aims were generally considered inappropriate (such as schemes to ramp up the share price) or that would otherwise be deemed detrimental to the value of the Company or the mutual interests of shareholders. Accordingly, the Company will continue monitoring closely share transactions and changes in shareholders. In the event any moves toward large-scale acquisition of Company stock are noticed, the Company would assemble a panel of outside experts to evaluate any takeover proposal and to determine carefully the impact of such on the value of the Company and the mutual interests of shareholders. If any proposal were deemed detrimental to such interests, the Company would institute appropriate anti-takeover measures in response to individual case.

(5) Policy on deciding dividends from retained earnings, etc. Under its medium-term policy to pass on profits to shareholders, the Group will do its utmost to achieve 5% or more of DOE at early stages, increase dividends steadily and buy back the shares flexibly, targeting a “total payback ratio” of 100%, under which an amount equivalent to net income will be allocated to dividend payment and acquisition of treasury stocks. The Company regards liquidity on hand as operating funds and investment funds for flexibly implementing growth strategies.

(6) Trends in Operating Results and Assets (Millions of yen, unless otherwise stated) 1st fiscal year 2nd fiscal year (Consolidated previous fiscal year) (Consolidated current fiscal year) Net Sales 925,918 929,506 Operating Income 154,728 136,313 Ordinary Income 159,714 152,086 Net Income 87,692 78,549 Net Income per Share (Yen) 119.49 107.75 Total Assets 1,596,126 1,636,835 Net Assets 1,237,529 1,272,148 Notes: 1. Because the Company was established as of September 28, 2005, there is no accounting data for the year 2004 or before. 2. Net income per share is calculated based on the average number of shares during the fiscal year. Treasury stock is deducted from the total number of issued shares when calculating the average number of shares. 3. Effective from the 2nd term, the Company adopted the “Accounting Standard for Presentation of Net Assets in the Balance Sheet” (Accounting Standards Board of Japan (ASBJ) Statement No. 5, December 9, 2005) and the “Implementation Guidance on Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ

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Implementation Guidance No. 8, December 9, 2005).

(7) Status of Subsidiaries (as of March 31, 2007) 1) The Status of Principal Subsidiaries: Common Stock Voting Rights Name of Subsidiary Main Business (Millions of yen) Percentage (%) Research and development, Sankyo Company, Limited 68,793 100.00 manufacture and marketing of pharmaceuticals Research and development, Daiichi Pharmaceutical Co., Ltd. 45,246 100.00 manufacture and marketing of pharmaceuticals Research and development, Daiichi Asubio Pharma Co., Ltd. 11,000 100.00 manufacture and marketing of pharmaceuticals Daiichi Sankyo Healthcare Co., Ltd. 100 100.00 Marketing of healthcare products Zepharma Inc. 300 100.00 Marketing of healthcare products Daiichi Pharmatech Co., Ltd. 2,471 100.00 Manufacture of pharmaceuticals Manufacture and marketing of fine Nippon Nyukazai Co., Ltd. 300 100.00 chemicals, etc. Manufacture and marketing of fine Daiichi Co., Ltd. 2,276 100.00 chemicals and pharmaceuticals 24.9 million Research, development and Daiichi Sankyo, INC. 100.00 dollars marketing of pharmaceuticals 0.2 million Development, manufacture and Luitpold Pharmaceuticals, Inc. 100.00 dollars marketing of pharmaceuticals Supervision of the Daiichi Sankyo Daiichi Sankyo Europe GmbH 16 million euro 100.00 Europe Group, and development and manufacture of pharmaceuticals Notes: - The Group responded to a tender offer for shares of Wakodo Co., Ltd., made by , Ltd., and sold all of its shares equity interests in Wakodo in May 2006. - The Company transferred all shares held in Sankyo Agro Co., Ltd. to Chemicals, Inc. on March 30, 2007. - The Company transferred operations of Sankyo Lifetech Co., Ltd. to other companies by means of corporate division (“Kaisha-Bunkatsu”), etc. - The Company sold its entire shares of Daiichi Pure Chemicals, Co., Ltd. to Sekisui Chemical Co., Ltd. on October 2, 2006. - The Company sold its entire shares of Daiichi Radioisotope Laboratories, Ltd. to FUJIFILM Corporation on October 2, 1006. - Daiichi Sankyo Healthcare Co., Ltd., which was established in December 2005, took over the healthcare businesses of Sankyo Company, Limited and Daiichi Pharmaceutical Co., Ltd. by means of corporate division (“Kaisha-Bunkatsu”). - The Company acquired all the shares of Zepharma Inc. from Inc. in April 2006. - Sankyo Pharma GmbH and its European subsidiaries respectively changed their corporate name to Daiichi Sankyo Europe GmbH in June and July 2006.

2) Status of Principal Alliances, etc. a. Licensing-in of technology Licensee Licensor Country Details of Technology Sankyo Company, Technology related to “AJD101,” a Ajinomoto Co., Ltd. Japan Limited treatment for diabetes Daiichi Pharmaceutical Technology related to Coversyl a Les Laboratoires Servier France ®, Co., Ltd. long-acting ACE inhibitor Technology related to Artist®, a long-acting Daiichi Pharmaceutical beta-blocker for treating high blood F. Hoffman-La Roche Switzer-land Co., Ltd. pressure, angina, and chronic cardiac insufficiency Daiichi Pharmaceutical CIMYM Bio Sciences Technology related to “DE-766,” an Canada Co., Ltd. Inc. anticancer agent Technology related to WelChol the Daiichi Sankyo, INC. Genzyme Corporation U.S.A. ®, antihyperlipidemic agent

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Luitpold Technology related to Venofer , a drug for Vifor AG Switzer-land ® Pharmaceuticals, Inc. treating anemia

b. Licensing-out of technology Licensor Licensee Country Details of Technology Technology related to enzyme HMG-CoA Sankyo Company, Bristol-Myers Squibb U.S.A. reductase inhibitor, an antihyperlipidemic Limited Company agent Sankyo Company, Technology related to CS-747, an agent for U.S.A. Limited ischemic disease Daiichi Pharmaceutical Technology related to levofloxacin Johnson & Johnson U.S.A. Co., Ltd. preparation Daiichi Pharmaceutical Sanofi-Aventis Pharma Technology related to levofloxacin Co., Ltd. Deutschland GmbH preparation Daiichi Pharmaceutical Santen Pharmaceutical Technology related to levofloxacin Japan Co., Ltd. Co., Ltd. ophthalmologic preparation

c. Distribution Agreement and Others Name of Group Company Partner(s) Country Details of Agreement Exclusive sale in Japan the anticancer agent Sankyo Company, Krestin® Kureha Corporation Ltd. Japan Limited Exclusive sale in Japan the agent for chronic kidney failure, Kremezin® Sankyo Company, Glaxo Smith Joint sale in Japan of, the therapeutic agent Japan Limited Kline Co., Ltd. for ulcers, Zantac® Sankyo Company, Joint sale in Japan of the antihyperlipidemic Kowa Co., Ltd. Japan Limited agent Livalo® Sankyo Company, Sale of Fastic®, the fast-acting Ajinomoto Co., Ltd. Japan Limited. hypoglycemic agent in Japan. Daiichi Pharmaceutical Exclusive sale in Japan of the antiplatelet Sanofi-Aventis S.A. France Co., Ltd. agent Panaldine® Daiichi Pharmaceutical Joint sale in Japan of the natural , Inc. Japan Co., Ltd. beta-interferon Feron® Daiichi Pharmaceutical The Kitazato Institute Japan Sale of the vaccines in Japan Co., Ltd. Exclusive sale in Japan of the nonionic Daiichi Pharmaceutical contrast media for MRI Omniscan® GE Healthcare Norway Co., Ltd. Exclusive sale in Japan of the nonionic contrast media Omnipaque® Daiichi Pharmaceutical Exclusive sale in Japan of an anti-allergy UCB Japan Co., Ltd. Japan Co., Ltd. agent Zyrtec® Daiichi Pharmaceutical Nippon Boehringer Exclusive sale in Japan of the nonsteroidal Japan Co., Ltd. Ingelheim Co., Ltd. anti-inflammatory agent Mobic® Daiichi Pharmaceutical Joint sales in Japan of the anticancer agent Yakult Honsha Co., Ltd. Japan Co., Ltd. Topotecin® Daiichi Pharmaceutical Zeria Pharmaceutical Co., Exclusive sale in Japan of alpha human Japan Co., Ltd. Ltd. atrial natriuretic polypeptide agent Hanp® Daiichi Pharmaceutical Kissei Pharmaceutical Sale in Japan of the dysuria treatment drug Japan Co., Ltd. Co., Ltd. Urief® Joint sales of the antihypertensive agent Daiichi Sankyo, INC. Forest Laboratories Inc. United States Benicar® (olmesartan) in the United States Daiichi Sankyo Europe Joint sale in Europe of the antihypertensive Menarini Co., Ltd. Italy GmbH agent Olmetec® (olmesartan)

(8) Principal Business Research and development, manufacture, marketing and import and export of pharmaceuticals, etc.

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(9) Principal Branches, Plants and Laboratories (as of March 31, 2007) Daiichi Sankyo Company, Limited Headquarters Chuo-ku, Tokyo Headquarters Chuo-ku, Tokyo Sapporo Branch, Tohoku Branch I (Miyagi), Tohoku Branch II (Miyagi), Tokyo Branch I, Tokyo Branch II, Saitama Branch, Chiba Branch, Yokohama Branch, Kitakanto Branch (Tokyo), Koshin-etsu Branch (Tokyo), Tokai Branch I (Aichi), Tokai Branches Branch II (Aichi), Osaka Branch I, Osaka Branch II, Kobe Sankyo Company, Limited Branch, Kyoto Branch, Hokuriku Branch (Ishikawa), Chugoku Branch I (Hiroshima), Chugoku Branch II (Okayama), Shikoku Branch (Kagawa), Kyushu Branch I (Fukuoka), Kyushu Branch II (Fukuoka), Kyushu Branch III (Fukuoka) Onahama Plant (Fukushima), Hiratsuka Plant (Kanagawa), Plants Odawara Plant (Kanagawa), and Osaka Plant Laboratory Shinagawa-ku, Tokyo Headquarters Chuo-ku, Tokyo Sapporo Branch, Sendai Branch, Tokyo Branch I, Tokyo Branch II, Chiba/Saitama Branch (Chiba), Yokohama Branch, Nagoya Daiichi Pharmaceutical Co., Ltd. Branches Branch, Kyoto Branch, Osaka Branch, Kobe Branch, Hiroshima Branch, Takamatsu Branch, Fukuoka Branch Laboratory Edogawa-ku, Tokyo Daiichi Asubio Pharma Co., Ltd. Laboratory Mishima-gun, Osaka Daiichi Sankyo Healthcare Co., Headquarters Chuo-ku, Tokyo Ltd. Zepharma Inc. Headquarters Chuo-ku, Tokyo Daiichi Pharmatech Co., Ltd. Plant Akita, Shizuoka, Osaka Nippon Nyukazai Co., Ltd. Headquarters Chuo-ku, Tokyo Daiichi Fine Chemical Co., Ltd. Headquarters Takaoka-shi, Toyama Daiichi Sankyo, INC. Headquarters Parsippany, NJ, U.S.A. Luitpold Pharmaceuticals, Inc. Headquarters Shirley, NY, U.S.A. Daiichi Sankyo Europe GmbH Headquarters Munich, Germany

(10) Status of Employees (as of March 31, 2007) Number of Employees Change from previous fiscal year-end 15,358 (3,076) Note: The number of employees are that of working employees, and does not include that of employees temporarily transferred to other groups, but does include that of employees temporarily transferred to the Group from other groups.

(11) Litigation 1) In the United States, numerous lawsuits seeking damages and other compensation were brought against Warner-Lambert Company and other pharmaceutical companies by certain patients who took the diabetes drug Rezulin, which had been sold until March 2000 using a compound whose generic name is supplied by the Sankyo Company, Limited, a wholly-owned subsidiary of the Company. A U.S. subsidiary of the Company, Sankyo Pharma Inc. (currently, Daiichi Sankyo, INC.), is named as a defendant in a small portion of these cases, and it is defending these cases in cooperation with Warner-Lambert. In these cases, the compensation demanded from all defendants includes claims for both compensatory and punitive damages. In connection with the costs and damages to be borne by the Sankyo Company, Limited and its subsidiaries, there is a provision in the license agreement with Warner-Lambert indemnifying the Sankyo Company, Limited and its subsidiaries, and this provision continues to be applicable to Daiichi Sankyo Co., Ltd. 2) With its local U.S. licensee as co-plaintiff, Daiichi Pharmaceutical Co., Ltd., which had been a subsidiary of the Company, filed a patent infringement lawsuit in a U.S. court against the Mylan Group, which had filed an application for a generic version of levofloxacin. Daiichi Pharmaceutical won the case against the Mylan Group at a U.S. appeal court in December 2005, and the decision was finalized in June 2006 as the Mylan Group gave up appealing to a higher

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court. Daiichi Pharmaceutical also won the case against the remaining three companies, including Teva Pharmaceutical Industries Ltd., at the New Jersey Federal District Court in May 2006, and the decision was finalized in June of the same year as Teva and the other firms gave up further appeals. Since Lupin Ltd. filed an application for a generic version of levoflaxacin, Daiichi Pharmaceutical instituted a patent infringement lawsuit against Lupin at the New Jersey Federal District Court in October 2006. 3) Sankyo Company, Limited, which had been a subsidiary of the Company, and Daiichi Sankyo, INC., which had been a U.S. subsidiary of Sankyo, filed a patent infringement lawsuit against Mylan Pharmaceuticals Inc., which had filed an application for a generic version of Benicar (general name: olmesartan medoxomil), an antihypertensive agent of Daiichi Sankyo, INC., with the New Jersey Federal District Court in July 2006 based on the substance patent on olmesartan medoxomil held by Sankyo Company, Limited (currently Daiichi Sankyo Company, Limited) in the U.S.

(12) Status of the Group after the end of the fiscal year under review The Group restructured its organization as of April 1, 2007. Under the reorganization, Daiichi Sankyo Company, Limited merged by absorption with Sankyo Company, Limited and Daiichi Pharmaceutical Co., Ltd. Principal subsidiaries, branches, plants and laboratories of the Group after the realignment are as follows:

1) Principal subsidiaries (As of April 1, 2007) Capital Voting Rights Name of Company Main Business (Millions of yen) Percentage (%) Daiichi Sankyo Propharma Co., Ltd. 100 100.00 Manufacture of pharmaceuticals Daiichi Sankyo RD Associe Co., Support for research and development 50 100.00 Ltd. of the Group Daiichi Sankyo Business Associe 50 100.00 Business support for the Group Co., Ltd. Daiichi Sankyo Happiness Co., Ltd. 50 100.00 Business support for the Group Daiichi Sankyo Logistics Co., Ltd. 50 100.00 Logistics and relevant operations Daiichi Sankyo Healthcare Co., Ltd. 100 100.00 Marketing of healthcare products Research and development, Asubio Pharma Co., Ltd. 11,000 100.00 manufacture and marketing of pharmaceuticals Research and development and Daiichi Sankyo, INC. 24.9 million dollars 100.00 marketing of pharmaceuticals Development, manufacture and Luitpold Pharmaceuticals, Inc. 0.2 million dollars 100.00 marketing of pharmaceuticals Supervision of the Daiichi Sankyo Daiichi Sankyo Europe GmbH 16 million euro 100.00 Europe Group, and development and manufacture of pharmaceuticals Daiichi Pharmaceutical (Beijing) Development, manufacture and 63.8 million dollars 100.00 Co., Ltd. marketing of pharmaceuticals Shanghai Sankyo Pharmaceuticals Manufacture and marketing of 53 million dollars 100.00 Co., Ltd. pharmaceuticals

2) Principal branches, plants and laboratories (As of April 1, 2007) Headquarters Chuo-ku, Tokyo Sapporo Branch, Tohoku Branch (Miyagi), Tokyo Branch, Chiba Branch, Saitama Branch, Yokohama Branch, Kitakanto Branch (Tokyo), Koshin-etsu Branch (Tokyo), Tokai Branch Daiichi Sankyo Company, Limited Branches (Aichi), Kyoto Branch, Hokuriku Branch (Ishikawa), Osaka Branch, Kobe Branch, Chugoku Branch (Hiroshima), Shikoku Branch (Kagawa), and Kyushu Branch (Fukuoka) Laboratories Shinagawa-ku and Edogawa-ku, Tokyo Akita Plant, Onahama Plant (Fukushima), Hiratsuka Plant Daiichi Sankyo Propharma Co., Ltd. Plants (Kanagawa), Odawara Plant (Kanagawa), Shizuoka Plant, Osaka Plant and Takatsuki Plant (Osaka) Daiichi Sankyo RD Associe Co., Ltd. Headquarters Shinagawa-ku, Tokyo Daiichi Sankyo Business Associe Co., Headquarters Chuo-ku, Tokyo Ltd.

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Daiichi Sankyo Happiness Co., Ltd. Headquarters Hiratsuka (Kanagawa) Daiichi Sankyo Logistics Co., Ltd. Headquarters Chuo-ku, Tokyo Headquarters Chuo-ku, Tokyo Higashi Nihon Branch (Miyagi), Tokyo Branch I, Tokyo Daiichi Sankyo Healthcare Co., Ltd. Branches Branch II, Nagoya Branch, Osaka Branch, Chushikoku Branch (Hiroshima) and Kyushu Branch (Fukuoka) Asubio Pharma Co., Ltd. Laboratory Mishima-gun, Osaka Daiichi Sankyo, INC. Headquarters Parsippany, NJ, U.S.A. Luitpold Pharmaceuticals, Inc. Headquarters Shirley, NY, U.S.A. Daiichi Sankyo Europe GmbH Headquarters Munich, Germany

2. Status of the Company

(1) Status of Shares (as of March 31, 2007) 1) Total Number of Shares Authorized to be Issued: 2,800,000,000 shares 2) Total Number of Shares Outstanding: 735,011343 shares (excluding 86,982 treasury stocks) 3) Number of Shareholders: 61,382 4) Major Shareholders: Number of Shares Held Ratio of Share Name of Shareholders (thousand shares) Contribution (%) The Master Trust Bank of Japan, Ltd. (trust account) 63,904 8.70 Japan Trustee Services Bank, Ltd. (trust account) 45,468 6.19 Nippon Life Insurance Company 41,839 5.69 The Chase Manhattan Bank NA, London SL, Omnibus Account 17,553 2.39 Sumitomo Mitsui Banking Corporation 13,413 1.83 State Street Bank & Trust Co. 12,048 1.64 State Street Bank & Trust Co. 505103 11,640 1.58 Japan Trustee Services Bank, Ltd. (trust account 4) 11,604 1.58 BNP Paribas Securities (Japan) Ltd. 10,237 1.39 The Bank of Tokyo-Mitsubishi UFJ, Ltd 9,468 1.29 Notes: Treasury stock (86,982 shares) is not included in the ratio of share contribution.

(2) Status of Stock Subscription Rights 1) Status of Stock Subscription Rights Possessed by Directors of the Company as of the End of the Fiscal Year N/A 2) Details, etc. of Stock Subscription Rights Granted to Employees, etc. of the Company during the Fiscal Year N/A

(3) Status of the Company’s Officers 1) Directors and Corporate Auditors (as of March 31, 2007) Responsibility, Main Job and Representative Conditions at Name Title Other Companies Kiyoshi Morita Representative Director and Representative Director and President of Daiichi Chairman Pharmaceutical Co., Ltd. Takashi Shoda Representative Director and Director of Sankyo Company, Limited President Hiroyuki Nagasako Director Advisor, Daiichi Pharmaceutical Co., Ltd. Yasuhiro Ikegami Director Representative Director and President of Sankyo Company, Limited Tsutomu Une Director Senior Managing Director and President of Daiichi Pharmaceutical Co., Ltd. Masao Sugimura Director Representative Director and Vice President of Sankyo Company, Limited Kunio Nihira Outside Director Outside Director of Sankyo Company Limited Yoshifumi Nishikawa Outside Director Outside Director of Daiichi Pharmaceutical Co., Ltd.

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Jotaro Yabe Outside Director Outside Director of Daiichi Pharmaceutical Co., Ltd. Katsuyuki Sugita Outside Director Outside Director of Sankyo Company Limited Kozo Wada Full-Time Corporate Auditor Corporate Auditor of Sankyo Company, Limited Atsuo Inoue Full-Time Corporate Auditor Kaoru Shimada Outside Corporate Auditor Outside Corporate Auditor of Sankyo Company, Limited Koukei Higuchi Outside Corporate Auditor Outside Corporate Auditor of Daiichi Pharmaceuticals Co., Ltd. Notes: 1. Company’s Directors Kunio Nihira, Yoshifumi Nishikawa, Jotaro Yabe and Katsuyuki Sugita are Outside Directors as provided for in Article 2, Item 15 of the Company Law of Japan. 2. Company’s Corporate Auditors Kaoru Shimada and Koukei Higuchi are Outside Corporate Auditors as provided for in Article 2, Item 16 of the Company Law of Japan. 3. Major positions concurrently held by Directors and Corporate Auditors other than those mentioned above are as follows: Company, corporation, etc. in which Details of positions held Name positions are held concurrently concurrently Kiyoshi Morita Laboratoires Daiichi Sanofi-Aventis Representative Director and President Tsutomu Une Sanofi-Aventis Daiichi Pharmaceutical Co., Representative Director and Ltd. Vice President Daiichi Pharmaceutical (Beijing) Co., Ltd. President Daichi Sankyo Korea Co., Ltd. Representative Director Kunio Nihira Japan Traffic Management Technology Chairman Association Yoshifumi Nishikawa Japan Post Co., Ltd. Representative Director and Matsushita Electric Industrial Co., Ltd. President Tokyo Broadcasting System, Inc. Outside Director Nankai Electric Railway Co., Ltd. Outside Corporate Auditor Outside Corporate Auditor Jotaro Yabe Faculty of Human Life Sciences of Jissen Professor Women’s University Outside Corporate Auditor Onward Kashiyama Co., Ltd. Katsuyuki Sugita , Inc. Honorary Advisor Asahi Mutual Life Insurance Co. Outside Director Koukei Higuchi Tokyo Marine & Nichido Fire Insurance Co., Advisor Ltd. Outside Corporate Auditor Outside Corporate Auditor Japan Airport Terminal Co., Ltd. Outside Corporate Auditor Royal Park Hotel Co., Ltd. Outside Corporate Auditor Motor Co., Ltd.

2) The Amount of Fees and Related Payments to Directors and Corporate Auditors Type Payment recipients Amount paid (Millions of yen) Directors 10 188 (Number who are Outside Directors) (4) (24) Corporate Auditors 4 59 (Number who are Outside Corporate Auditors) (2) (12) Notes: The amount of fees paid to Directors is ¥450 million or less per annum, and the amount of fees to Corporate Auditors is ¥120 million or less per annum. These amounts were approved at the 151st Ordinary General Meeting of Shareholders of Sankyo Company, Limited and the 127th Ordinary General Meeting of Shareholders of Daiichi Pharmaceutical Co., Ltd., held on June 29, 2005, concerning the establishment of a holding company through a stock transfer.

(4) Status of Outside Directors 1) Positions concurrently held by Outside Directors (in the case in which Outside Directors serves as corporate officers, etc. or outside directors of other companies) As written in Note 3. “Major positions concurrently held by Directors and Corporate Auditors” of 1) Directors and Corporate Auditors of (3) Status of Directors of the Company’s Officers, mentioned above. Outside Director Yoshifumi Nishikawa concurrently serve as representative director and

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president of Japan Post Co., Ltd. There is no important trading relationship between Japan Post and the Company.

2) Major Activities during the Fiscal Year Name Position Major activities Kunio Nihira Outside Director Attended 16 of the 17 Board of Directors Meetings held during the fiscal year under review, and spoke at need based on his expertise and insight concerning laws and compliance, which he had developed while working at governmental organizations. Yoshifumi Nishikawa Outside Director Attended 14 of the 17 Board of Directors Meetings held during the fiscal year under review, and spoke at need based on knowledge and insight concerning financial affairs and corporate management, based on his extensive banking experience. Jotaro Yabe Outside Director Attended all of the 17 Board of Directors Meetings held during the fiscal year under review, and spoke at need based on his expertise and insight concerning laws and corporations as a whole, developed in his previous work at governmental organizations and as a scholar. Katsuyuki Sugita Outside Director Attended 16 of the 17 Board of Directors Meetings held during the fiscal year under review, and spoke at need based on knowledge and insight concerning finance and corporate management, based on his extensive banking experience. Kaoru Shimada Outside Attended all of the 17 Board of Directors Meetings and all of the 7 Corporate meetings of the Board of Corporate Auditors held during the fiscal year Auditors under review, and spoke at need based on his expertise in medicine and knowledge acquired through hospital management. Koukei Higuchi Outside Attended 14 of the 17 Board of Directors Meetings and all of the 7 Corporate meetings of the Board of Corporate Auditors held during the fiscal year Auditors under review, and spoke at need based on his expertise in risk management, developed through his extensive experience at a nonlife insurance company, and provided insight based on his management experience.

3) Outline of the Details of Liability Limitation Agreement The Company has concluded a liability limitation agreement with Outside Directors Kunio Nihira, Yoshifumi Nishikawa, Jotaro Yabe and Katsuyuki Sugita and Outside Corporate Auditors Kaoru Shimada and Koukei Higuchi, respectively, concerning the liability specified in Article 423, Paragraph 1 of the Company Law, for cases falling under the requirements specified in laws. The limit on the amount of liability under the said contracts is the legally defined minimum liability amount.

(5) Status of Accounting Auditors 1) Name of accounting auditor KPMG AZSA & Co.

2) Amount of fees and others to Accounting Auditors concerning the current fiscal year Amount of fees Amount of fees and others to Accounting Auditors concerning the current ¥ 26 million fiscal year: Total amount of money and other financial benefits that the Company and ¥ 153 million its subsidiaries should pay to Accounting Auditors: Note: 1. Financial statements of Sankyo Company, Limited, a subsidiary of the Company, are audited by Ernst & Young ShinNihon. 2. The amount of fees and others to Accounting Auditors concerning the current fiscal year is the sum of the amount of remunerations for auditing services in accordance with the Company Law and the amount of remunerations for auditing work in accordance with the Securities and Exchange Law, since the two kinds of remunerations are not clearly divided under the audit contract concluded between the Company and Accounting Auditors and they cannot be divided practically. 3. The total amount of money and other financial benefits that the Company and its subsidiaries should pay to Accounting Auditors includes ¥45 million paid for auditing services pursuant to the U.S. GAAP concerning the current fiscal year.

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3) Details of non-auditing services The Company entrusts accounting auditors with services other than those defined in Article 2, Paragraph 1 of the Certified Public Accountants Law (non-auditing services), including financial due diligence services and advisory services concerning the improvement of internal control related to financial reports.

4) Policy on decision to discharge or not to reappoint accounting auditors When accounting auditors meet any of the provisions of Article 340, Paragraph 1 of the Company Law and when it is deemed to be difficult for accounting auditors to execute auditing properly because of the occurrence of events that damage the competence and independence of accounting auditors, the Board of Directors shall submit to a general meeting of shareholders a proposal for discharging or not reappointing the accounting auditors after obtaining the consent of the Board of Corporate Auditors or at the request of the Board of Corporate Auditors.

3. Systems for ensuring compliance with laws and the Company’s Articles of Incorporation in the performance of duties by Directors and other systems for securing appropriateness of duties

With regard to the systems mentioned above, the Company resolved basic policies on the establishment of internal control systems at the Board of Directors’ Meeting held on April 27, 2006. However, following the complete business integration carried out after the resolution, the Company decided as follows at the Board of Directors’ Meeting held on March 30, 2007, based on the said basic policies.

(1) Systems for ensuring compliance with laws and the Company’s Articles of Incorporation in the performance of duties by Directors - The Company shall establish a compliance system by stipulating the Daiichi Sankyo Group Company Action Charter, Daiichi Sankyo Compliance Behavior Standard, etc. as the code of conduct for Directors and employees and setting up a meeting body, including outside experts. - The Company shall appoint Outside Directors for the strengthening and enhancement of the function to supervise management. - Corporate Auditors shall audit the performance of duties by Directors, legality and appropriateness of decision making and the status of the establishment of internal control systems.

(2) Systems regarding the retention and management of information relating to the performance of duties by Directors - The Company shall establish information security systems, and properly store and manage information relating to the performance of duties by Directors, including the minutes of the Board of Directors, in accordance with laws and in-house regulations of the Company.

(3) Rules and other systems for risk management - The Company shall stipulate various in-house regulations to establish risk management systems. - The Audit Division shall audit the status of operation of the systems mentioned above.

(4) Systems for ensuring the efficient performance of duties by Directors - The Company shall form a Management Executive Conference, consisting of Directors, excluding Outside Directors, and Corporate Officers designated by President, as an advisory organ of President. The conference shall discuss important matters. The Company shall also set up an approval system as a means of decision-making. - The Company shall introduce a corporate officer system in consideration of speedy decision making and execution of duties.

(5) Systems for ensuring compliance with laws and the Company’s Articles of Incorporation in the performance of duties by employees - The Company shall establish a compliance system by stipulating Daiichi Sankyo Group Company Action Charter, Daiichi Sankyo Compliance Behavior Standard, etc. as the code of conduct for Directors and employees and setting up a meeting body, including outside experts. - The Company shall properly operate the “Office Regulations,” while general managers who received orders from the President shall manage duties in their charge and supervise, manage and

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direct members of their divisions. - Each of the functions related to the improvement of systems concerning personnel management, risk management, etc. shall convey policies to, manage and guide each department. - The Auditing Division shall implement internal audit of the status of compliance with laws, the Articles of Incorporation and in-house regulations.

(6) Systems for ensuring the proper operation of the Group, consisting of the Company and its subsidiaries - The Company shall establish “Group Company Management Regulations” to clarify the management control system of the Group, and operate systems such as compliance, risk management and personnel systems. - The Company shall transmit management policies, etc. to Group companies and manage them. - The Company shall establish “Internal Audit Regulations” and implement internal audit on Group companies.

(7) Systems regarding employees assisting duties of Corporate Auditors, when Corporate Auditors ask to appoint such employees - The Company shall appoint full-time staffers who assist duties of Corporate Auditors.

(8) Matters regarding the independence of the employees specified in the preceding paragraph from Directors - Full-time staffers assisting Corporate Auditors shall be independent of Directors, and shall execute duties under the directions and orders from Corporate Auditors. - Personnel changes, performance appraisal, etc. of full-time staffers assisting Corporate Auditors shall require prior consent of the Board of Corporate Auditors.

(9) Systems of reporting to Corporate Auditors by Directors and employees and other systems regarding reporting to Corporate Auditors - Directors shall establish a system, under which when they find facts that could badly hurt the Company, they shall immediately report the facts to Corporate Auditors. - When an audit is carried out by Corporate Auditors under the annual audit plan, Corporate Auditors shall receive reports on the status of execution of duties from Directors and general mangers. - Corporate Auditors shall attend the Management Executive Conference and other important meetings. - To verify the legality and appropriateness of the details of approvals, the Company shall send approval documents to standing Outside Directors assigned for the purpose.

(10) Other systems for ensuring the effective audit by Corporate Auditors - Corporate Auditors shall have meetings with Representative Director on a regular basis to check management policies and exchange views concerning important issues related to auditing. - Corporate Auditors shall exchange information with Corporate Auditors of the Group and closely cooperate with them. - Corporate Auditors shall coordinate and exchange views with Outside Corporate Auditors and the Auditing Division.

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CONSOLIDATED BALANCE SHEET (As of March 31, 2007) (Millions of yen) Item Amount Item Amount [ASSETS] 1,636,835 [LIABILITIES] 364,687 I. Current assets 1,015,840 I. Current liabilities 281,510 Cash and time deposits 232,614 Trade notes and accounts payable 56,435 Trade notes and accounts receivable 197,158 Short-term bank loans 8,560 Marketable securities 373,896 Accounts payable 89,591 Mortgage-backed securities 15,000 Income taxes payable 27,573 Inventories 107,758 Allowance for sales returns 1,315 Deferred tax assets 63,364 Allowance for sales rebates 2,471 Other current assets 26,773 Allowance for contingent losses 3,498 Allowance for doubtful accounts (724) Other current liabilities 92,062 II. Non-current liabilities 83,176 Long-term debt 1,533 Deferred tax liabilities 36,145 Accrued retirement and severance benefits 35,062 Accrued directors’ and corporate auditors’ retirement and severance II. Non-current assets 620,994 benefits 1,037 Property, plant and equipment 248,857 Accrued soil remediation cost 3,956 Buildings and structures 142,534 Other non-current liabilities 5,441 Machinery, equipment and vehicles 40,010 Land 38,011 [NET ASSETS] 1,272,148 Construction in progress 12,013 Other 16,288 I. Shareholders’ equity 1,191,346 Intangible assets 60,153 Common stock 50,000 Goodwill 18,569 Additional paid-in-capital 179,860 Other intangible assets, net 41,584 Retained earnings 971,483 Investments and other assets 311,983 Treasury stock at cost (9,997) Investment securities 262,240 II. Valuation translation and other Long-term loans 1,615 adjustments 77,310 Net unrealized gain on investment Prepaid pension costs 18,021 securities 72,358 Foreign currency translation Deferred tax assets 8,890 adjustments 4,951 Other assets 21,636 Allowance for doubtful accounts (421) III. Minority Interests 3,491 Total assets 1,636,835 Total liabilities and net assets 1,636,835 Notes: Amounts less than one million yen have been rounded down to the nearest one million yen.

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CONSOLIDATED STATEMENT OF INCOME (From April 1, 2006 to March 31, 2007)

(Millions of yen) Item Amount Net sales 929,506 Cost of sales 265,200 Gross profit 664,306 Selling, general and administrative expenses 527,992 Operating income 136,313 Non-operating income Interest income 7,725 Dividend income 3,547 Derivative income 2,639 Other income 6,088 20,001 Non-operating expenses Interest expense 251 Loss on disposal and write-down of inventories 1,485 Charitable contributions 592 Equity in net losses of affiliated companies 17 Other expenses 1,881 4,228 Ordinary income 152,086 Extraordinary gains Gain on sale of property, plant and equipment 4,314 Gain on sale of investments in affiliates 59,347 Gain on sale of investment securities 8,221 Gain on adjustments of prior-year R&D expenses 1,608 73,492 Extraordinary losses Loss on disposal of property, plant and equipment 3,622 Loss on business integration 82,479 Loss on impairment of property, plant and equipment 4,916 Restructuring charge 3,609 Provision for soil remediation costs 2,875 Loss on valuation of investment securities 686 Supplemental retirement benefit cost 287 Provision for contingent losses 166 Loss on sales of investment securities 22 98,666 Net income before income taxes and minority interests 126,912 Income taxes expenses - current 64,710 Income tax benefit - deferred (16,631) 48,078 Minority interests in net income of subsidiaries 283 Net income 78,549 Notes: Amounts less than one million yen have been rounded down to the nearest one million yen.

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Consolidated Statement of Changes in Net Assets (From April 1, 2006 to March 31, 2007)

(Millions of yen) Shareholders' capital

Additional Treasury stock at Total shareholders' Common stock Retained earnings paid-in-capital cost capital

Balance as of March 31, 2006 50,000 179,858 936,513 (9,832) 1,156,539

Changes during the fiscal year

Dividends (40,097) (40,097) Directors’ and corporate auditors' bonuses (343) (343) Net income 78,549 78,549

Acquisition of treasury stock (172) (172)

Reissuance of treasury stock 2 7 10 Reduction due to addition of new subsidiaries to scope of (3,007) (3,007) consolidation Reduction due to decrease in number of equity-method (131) (131) affiliates Changes other than shareholders’ capital, net – Total changes during the fiscal – 2 34,970 (164) 34,807 year Balance as of March 31, 2007 50,000 179,860 971,483 (9,997) 1,191,346

Valuation translation and other adjustments Net unrealized gain Foreign currency Total valuation Minority interests Total net assets on investment translation translation and other securities adjustments adjustments Balance as of March 31, 2006 80,254 735 80,989 11,609 1,249,138

Changes during the fiscal year

Dividends (40,097) Directors’ and corporate auditors' bonuses (343) Net income 78,549

Acquisition of treasury stock (172)

Reissuance of treasury stock 10 Reduction due to addition of new subsidiaries to scope of (3,007) consolidation Reduction due to decrease in number of equity-method (131) affiliates Changes other than shareholders’ capital, net (7,895) 4,216 (3,679) (8,118) (11,797) Total changes during the fiscal year (7,895) 4,216 (3,679) (8,118) 23,009 Balance as of March 31, 2007 72,358 4,951 77,310 3,491 1,272,148 Note: Amounts less than one million yen have been rounded down to the nearest one million yen.

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Notes to Consolidated Financial Statements

1. Basis of Presentation and Summary of Significant Accounting Policies for the Preparation of Consolidated Financial Statements

(1) Scope of Consolidation 1) Status of consolidated subsidiaries - Consolidated subsidiaries: 54 - Principal consolidated subsidiaries: (In Japan) Sankyo Co., Ltd., Daiichi Pharmaceutical Co., Ltd., Daiichi Asubio Pharma Co., Ltd., Daiichi Fine Chemical Co., Ltd., Zepharma Inc., Daiichi Pharmatech Co., Ltd., Daiichi Sankyo Healthcare Co., Ltd. and Nippon Nyukazai Co., Ltd. (Overseas) Daiichi Sankyo, INC., Luitpold Pharmaceuticals, Inc. and DAIICHI SANKYO EUROPE Due to the sale of shares in Wakodo Co., Ltd., Fuji Flour Milling Co., Ltd. and four other companies, these subsidiaries were excluded from the scope of consolidation from the beginning of this fiscal year, yet they were included as part of retained earnings as of the beginning of the year. Sankyo Agro Co., Ltd., Daiichi Radioisotope Laboratories, Ltd., Daiichi Pure Chemicals Co., Ltd. and four other subsidiaries were excluded from the scope of consolidation during this fiscal year due to the sale of their shares. Formerly non-consolidated subsidiaries, Shanghai Sankyo Pharmaceuticals Co., Ltd. and Taiwan Sankyo Pharmaceutical Co., Ltd., were newly included in the scope of consolidation from the beginning of this fiscal year due to their increased materiality. Zepharma Inc., which was acquired in this fiscal year, was newly included in the scope of consolidation from the beginning of the fiscal year. Daiichi Sankyo Propharma Co., Ltd. and six other companies, which were all established during this fiscal year, were also newly included in the scope of consolidation.

2) Status of non-consolidated subsidiaries - Non-consolidated subsidiaries: 10 Non-consolidated subsidiaries (including Sankyo Insurance Agency Co., Ltd. and Godo Real Estate Co., Ltd.) are small and are not material to the consolidated financial statements when measured by the amounts of total assets, sales, net income (based on the Company’s ownership percentage), retained earnings (based on the Company’s ownership percentage), and other indicators. They have therefore been excluded from the scope of consolidation.

(2) Application of the Equity Method 1) Status of non-consolidated subsidiaries or affiliates which are accounted for under the equity method - Number of non-consolidated subsidiaries or affiliates which are accounted for under the equity method: 3 - Name of principal company: Sanofi Pasteur Daiichi Vaccine Co., Ltd.

Two affiliated companies were excluded from the scope of application of the equity method because of decreases of investment equity resulting from the sale of their shares.

2) Status of non-consolidated subsidiaries and affiliates which are not accounted for under the equity method Net income (based on the Company’s equity percentage), retained earnings (based on the Company’s equity percentage), and other indicators of those non-consolidated subsidiaries (including Sankyo Insurance Agency Co., Ltd. and Godo Real Estate Co., Ltd.) and affiliated companies (including Tokyo Yakugyo Kaikan Co., Ltd.) that have not been accounted for under the equity method are not material or significant to the Company as a whole. Therefore, these companies have not been accounted for under the equity method, but are rather reported in the Company’s investment account under the cost method.

3) Matters of particular importance related to procedures for the application of the equity method The fiscal year-end of certain companies which are accounted for under the equity method is

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December 31. In preparing the consolidated financial statements, the Company uses the financial statements of these companies as of their fiscal year-end.

(3) Fiscal Year-End of Consolidated Subsidiaries The fiscal year-end of certain consolidated subsidiaries is December 31. In preparing the consolidated financial statements, the Company uses the financial statements of these companies as of their fiscal year-end. But, for major intervening transactions that occurred between the fiscal year-end of those companies and March 31, appropriate adjustments have been made in the consolidated financial statements.

(Subsidiaries that have fiscal year-end on December 31) Daiichi Asubio Pharmaceuticals, INC., DAIICHI SANKYO EUROPE GmbH and its 11 subsidiaries as well as Daiichi Pharmaceutical (Beijing) Co., Ltd., Shanghai Sankyo Pharmaceuticals Co., Ltd. and 5 other subsidiaries.

(Supplemental information) Daiichi Sankyo INC. and Luitpoid Pharmaceuticals, Inc. changed their fiscal-year end from December 31 to March 31 effective this fiscal year. As a result, while the financial statements of these subsidiaries as of December 31, 2005 were used in the preparation of the Consolidated Financial Statements for the fiscal year ended March 2006, due to this change in fiscal year-end, the consolidated financial statements for the fiscal year ended March 2007 include 15-month results of the two subsidiaries for the period from January 1, 2006 to March 31, 2007. The net effect of this change in fiscal year-end on the consolidated statement of income for the fiscal year ended March 31, 2006 was an increase in net sales, operating income, ordinary income, income before income taxes and minority interests, and net income of ¥31,514 million, ¥9,030 million, ¥10,575 million, ¥9,587 million and ¥5,830 million, respectively.

(4) Accounting Policies 1) Methods of Valuation of Significant Assets a. Marketable and Investment Securities Held-to-maturity securities: Mainly the amortized cost method (straight-line amortization) Available-for-sale securities: Securities with determinable market value: Mainly stated at market value based on the quoted market prices at the end of the fiscal year. Unrealized holding gains and losses are reported in a component of shareholders' equity, with the cost of securities sold being calculated by the moving-average method. Securities without determinable market value: Mainly stated at cost based on the moving-average method b. Derivatives Market value method c. Inventories Mainly stated at the lower of cost, by the average method, or market

2) Depreciation and Amortization of Significant Depreciable Assets a. Property, Plant and Equipment The Company and its domestic consolidated subsidiaries account for depreciation of property, plant and equipment by the declining-balance method, except for the buildings (excluding fixtures) acquired on or after April 1, 1998, which are accounted for by the straight-line method. Overseas consolidated subsidiaries account for depreciation of property, plant and equipment mainly by the straight-line method. The principal useful lives are as follows: Buildings and structures: 15-50 years Machinery, equipment and vehicles: 4-7 years b. Intangible Assets Intangible assets are being amortized by the straight-line method. Software for internal

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use is amortized over the estimated useful lives of a five-year period.

3) Method of Accounting for Significant Allowances a. Allowance for Doubtful Accounts The Company covers the risk of credit losses from potential customer defaults by providing for this allowance. For normal accounts, the allowance is computed on the basis of the historical default rates. For specific over-due accounts, the allowance is based on individual account-by-account estimates of the amounts that may not be recoverable. b. Allowance for Sales Returns To prepare for losses on potential returns of products after the end of the fiscal year, Sankyo, Daiichi and the Company's certain subsidiaries provide for an amount equal to the sum of gross profits and inventory losses on such returned products, based on its estimate of possible sales returns. For the current fiscal year, the provision for this allowance of ¥380 million is included in cost of sales. c. Allowance for Sales Rebates To prepare for future sales rebates, Sankyo, Daiichi and the Company's certain subsidiaries provide for this allowance calculated by multiplying an estimated sales rebate percentage for the fiscal year by the amounts of accounts receivable from and inventories held by wholesalers at the end of the fiscal year. d. Accrued Retirement and Severance Benefits To prepare for future payments of employee retirement severance benefit, the Company's domestic consolidated subsidiaries provide for an amount incurred by the fiscal year-end based on estimated projected benefit obligations and plan assets at the end of the fiscal year. Certain overseas consolidated subsidiaries provide for such accruals in accordance with accounting principles generally accepted in the countries of their domicile. Prior service cost is amortized under the straight-line method over a period of 5 to 10 years, which is equal to or less than the estimated average remaining years of service of the eligible employees at the time such prior year service cost was incurred. Actuarial gains and losses are amortized under the straight-line method, beginning in the fiscal year following the year in which the gain or loss was initially measured, over a period of 5 to 10 years, which is equal to or less than the average remaining years of service of the eligible employees at the time such actuarial gain or loss occurred, except for Sankyo which recognizes actuarial gains or losses immediately as they occur. e. Accrued Directors' and Corporate Auditors’ Retirement and Severance Benefits To prepare for payments of Directors' and Corporate Auditors’ retirement and severance benefits, the Company's domestic consolidated subsidiaries provide for an amount equal to the total benefits that would have become payable at the end of the fiscal year, in accordance with the internal policies, had Directors and Corporate Auditors retired. Some of the Company's overseas consolidated subsidiaries record a provision for an amount incurred by the end of the fiscal year. f. Allowance for Contingent Losses To prepare for possible future contingent losses, the Company provides an accrual for an amount of reasonably possible losses, by examining individual risks on a case by case basis. g. Accrued for soil remediation costs To prepare for future losses relating to soil clean-up, the Company provides accrual for the estimated amount of costs for soil clean up on a part of land.

4) Translation of Assets and Liabilities Denominated in Foreign Currencies into Yen Receivables and payables denominated in foreign currencies are converted into yen amounts at the rates of exchange in effect at the balance sheet date, with resulting translation gains or losses recognized currently in earnings. The assets and liabilities of overseas consolidated subsidiaries are converted into yen amounts at the rates of exchange in effect at their balance sheet dates, while income and expenses are converted into yen amounts at the average exchange rates in effect over the respective periods, with resulting translation gains and losses recorded in a component of net assets under translation adjustments or in the minority interests section of the balance sheet.

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5) Accounting for Significant Lease Transactions Financing leases are accounted for using the same accounting method applied to operating leases, with the exception of those financing leases in which the legal title of the underlying property is transferred from the lessor to the lessee.

6) Significant Hedge Accounting Methods a. Hedge Accounting Methods Foreign exchange forward contracts that meet certain criteria are accounted as a hedge of underlying assets and liabilities. Interest rate swaps that meet certain hedge criteria and whose notional amounts, interest payments and maturities match with those of the hedged borrowings are accounted for by the special short-cut method, as if the interest rates of the interest rate swaps had been originally applied to the underlying borrowings. b. Hedging Instruments and Hedged Items Hedging instruments: Foreign exchange forward contracts, and interest rate swaps Hedged items: Accounts payable and receivable and forecasted transactions denominated in foreign currencies, and loans c. Hedge Policy Certain consolidated subsidiaries hedge foreign exchange rate fluctuation risks relating to imports and exports, interest rate risks related to variable rate borrowings. The Company and its consolidated subsidiaries do not enter into speculative derivative transactions. d. Methods of Assessing Hedge Effectiveness The hedge effectiveness of foreign exchange forward contracts as a hedge has not been assessed, as the principal terms of the hedging instruments are the same as those of the hedged items. The effectiveness of interest rate swaps accounted for by the special short-cut method has also not been assessed, as permitted under the standard.

7) Other Significant Basic Items for making Consolidated Financial Report Accounting method for consumption taxes: The tax-exclusion (net of tax) method is used to account for the national and local consumption taxes.

(6) Valuation Method for Assets and Liabilities of Subsidiaries, etc. Assets and liabilities of subsidiaries are valued on a full fair value basis.

(7) Amortization of Goodwill and Negative Goodwill Goodwill is being amortized over a period of five years and of ten years. However, if the amount is immaterial, it is written off currently in earnings.

(8) Changes in Accounting Policies (Accounting Standard for Directors’ and Corporate Auditors’ Bonuses) Under the previous accounting standard, bonuses to directors and corporate auditors were recorded as appropriations of retained earnings. Effective in the fiscal year ended March 2007, the Company adopted the provisions of “the ASBJ Accounting Standard for Directors’ Bonuses” (ASBJ Statement No. 4; November 29, 2005), under which such bonuses are expensed as incurred on an accrual basis. As a result of adopting this accounting standard, each of operating income, ordinary income and net income before income taxes was decreased by ¥305 million for the year ended March 31, 2007.

(Accounting Standard for Presentation of Net Assets in the Balance Sheet) Effective in the fiscal year ended March 2007, the Company adopted the provisions of “the ASBJ Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Statement No. 5; December 9, 2005) and the related “Implementation Guidance on the Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Guidance No. 8; December 9, 2005). Total shareholders’ equity at March 31, 2007 that would have otherwise been reported under the previous accounting standard was ¥ 1,268,656 million.

(Accounting Standard for Business Combinations) Effective from the fiscal year ended March 2007, the Company adopted the provisions of “Accounting Standard for Business Combination” (Corporate Accounting Deliberation Council; October 31, 2003),

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as well as “Accounting Standard for Business Separation (Corporate Accounting Standard No. 7; December 27, 2005) and the related “Implementation Guidelines on Accounting Standards for Business Combination and Business Separation” (Corporate Accounting Standard Implementation Guidelines No. 10; December 27, 2005).

(9) Changes in Presentation (Consolidated Balance Sheets) Accounts payable (¥39,491 million in the previous year) which was included in “Other current liabilities” in the previous year, has been presented as a separate line item in this fiscal year because the balance became more than 5 percent of total liabilities and net assets.

2. Notes to Consolidated Balance Sheet

(1) Assets pledged as collateral (Millions of yen) Pledged assets Buildings and structures 1,692 (1,692) Machinery, equipment and vehicles 1,945 (1,945) Land 882 (757) Other (Property, plant and equipment) 49 (49) Total 4,569 (4,445)

(Millions of yen) Secured liabilities Short-term bank loans 150 (100) Long-term debt 601 (601) Total 751 (701)

Figures in parenthesis indicate factory foundation mortgaged assets and related obligations, and are also included in the figures of the left.

(2) Accumulated depreciation on property plant and equipment totaled ¥502,776 million

(3) Contingent Liabilities The Company offered loan guarantee to companies other than consolidated companies and employees when they borrowed money from financial institutions, etc. The breakdown of loan guarantee is as follows: Employees (housing funds, etc.) ¥5,037 million Saudi Arabian-Japanese Pharmaceutical Co., Ltd. ¥148 million Others ¥3 million

(4) Discounted Trade Notes Receivable ¥47 million

3. Notes to Consolidated Statement of Income (1) Research and development expenses totaled ¥170,662 million. (2) Loss on Business Integration The loss represents one-time costs associated with integration of the pharmaceutical operations of the Sankyo Group and the Daiichi Group. The amount consisted of the following: Supplemental retirement benefits etc. ¥54,211 million IT system related expenses ¥11,096 million Expenses associated with the Consolidation and closure of operating locations ¥3,255 million Expenses associated with the integration of overseas operations ¥3,225 million Expenses associated with the integration of healthcare business ¥3,353 million Other research and consulting expenses ¥7,336 million (3) Loss on impairment of property, plant and equipment The Group (the Company and consolidated subsidiaries) classifies its assets held and use for its business operations into asset groups on the basis of operating segments in the management reporting in consideration of similarities of products or operating activities, consistency within the Group, and

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future maintenance sustainability. On the other hand, leased assets and idle assets that are not directly used for its business operations are grouped on a properly by properly basis. For the current fiscal year, the Daiichi Sankyo Group recorded an impairment loss on the following asset groups;

Location Function Asset Type Status Shimotsuke, Tochigi Former Tochigi Research Center facility Buildings, etc. Idle Tosu, Saga Former Kyushu Distribution Center facility Buildings and land Idle Kasukabe, Saitama Former Tokyo Distribution Center facility Buildings Idle Iwaki, Fukushima, etc. Dormitory / recuperation facility Buildings and land Idle Bunkyo-ku, Tokyo Office Buildings Idle Shinagawa-ku, Tokyo, etc. ERP packages Software Idle

Because the above asset groups are idle and have uncertain prospects for future utilization, their book values have been written down to a recoverable amount, and such reductions in the mount of ¥4,916 million were recorded as a loss on impairment in the extraordinary losses. The impairment loss consisted of ¥2,103 million associated with buildings and structures, ¥32 million associated with machinery and equipment, ¥407 million associated with land, ¥4 million associated with other assets and ¥2,368 associated with software. The recoverable amount of an assets group is an estimated net realizable value, which was obtained based on third-party appraisal or the valuation amount for real estate tax purpose, with reasonable adjustments.

4. Notes to Consolidated Statement of Changes in Net Assets

(1) Matters Related to the Total Number of Shares Outstanding Increase in the Decrease in the Number of shares as Number of shares as number of shares number of shares Type of share of the end of the of the end of the during the current during the current previous fiscal year current fiscal year fiscal year fiscal year 735,011 thousand 735,011 thousand Common stock – shares – shares shares shares

(2) Matters related to treasury stock Increase in the Decrease in the Number of shares as Number of shares as number of shares number of shares Type of share of the end of the of the end of the during the current during the current previous fiscal year current fiscal year fiscal year fiscal year 5,959 thousand 6,008 thousand Common stock 52 thousand shares 3 thousand shares shares shares Notes: 1. The increase in the number of treasury shares resulted from the purchase of less-than-one-unit (fractional) shares. 2. The decrease in the number of treasury shares is because the Company complied with the request for additional purchase of less-than-one-unit (fractional) shares.

(3) Matters Related to Dividends from Retained Earnings 1) Amount of cash dividends paid a. Matters related to dividends based on a resolution made at the 1st Ordinary General Meeting of Shareholders, held on June 29, 2006 - Total cash dividends: ¥18,226 million - Dividend per share: ¥25 - Base date: March 31, 2006 - Effective date: June 29, 2006 b. Matters related to dividends based on a resolution made at the Board of Directors Meeting held on November 6, 2006 - Total cash dividends: ¥21,870 million - Dividend per share: ¥30

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- Base date: September 30, 2006 - Effective date: December 1, 2006

2) Of dividends for which the base date belongs to the current fiscal year, those that come into effect in the following fiscal year a. The following shall be referred to the 2nd Ordinary General Meeting of Shareholders, which will be held on June 28, 2007. - Total of cash dividends: ¥21,870 million - Fiscal resource of dividends: Retained earnings - Dividend per share: ¥30 - Base date: March 31, 2007 - Effective date: June 29, 2007

5. Notes to Per Share Information (1) Net assets per share: ¥1,740.26 (2) Net income per share: ¥107.75

6. Notes to Subsequent Events N/A

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NON-CONSOLIDATED BALANCE SHEET (As of March 31, 2007)

(Millions of yen) Item Amount Item Amount [Assets] 1,189,969 [Liabilities] 27,100 I. Current assets 6,532 I. Current liabilities 27,100 Cash and time deposits 5,320 Short-term borrowing 25,000 Prepaid expenses 286 Accounts payable 1,387 Deferred tax assets 349 Accrued expenses 383 Other receivables 574 Income taxes payable 290 Other current assets 2 Consumption tax payable 27 Advance receipts 11 II. Non-current assets 1,183,436 Property and equipment 27 [Net Assets] 1,162,869 Buildings 18 I. Shareholders’ Equity 1,162,869 Furniture, tools and fixtures 8 Common Stock 50,000 Intangible assets 278 Additional paid-in-capital 1,083,352 Trade marks 278 Capital surplus 179,858 Other 0 Other additional paid-in-capital 903,494 Investments and other assets 1,183,131 Retained Earnings 29,766 Investment in affiliated companies 1,183,019 Other retained earnings 29,766 Investment securities, other than stock 3 Retained earnings carried forward 29,766 Deferred tax assets 13 Treasury stock at cost (249) Other assets 95 Total 1,189,969 Total 1,189,969 Note: Amounts less than one million yen have been rounded down to the nearest one million yen.

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NON-CONSOLIDATED STATEMENT OF INCOME (From April 1, 2006 to March 31, 2007)

(Millions of yen) Item Amount Operating revenue Management fee income 6,141 6,141 Operating expense General and administrative expenses 5,780 5,780 Operating income 361 Non-operating income Interest income 34 Income tax refunds 42 Other income 0 77 Non-operating expenses Interest expenses 168 168 Ordinary income 269 Extraordinary losses Loss on elimination upon merger of investments in affiliated companies 3,488 3,488 Net income before income taxes 3,218 Income taxes expenses-current 311 Income tax benefit-deferred (173) 137 Net loss 3,355 Note: Amounts less than one million yen have been rounded down to the nearest one million yen.

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Non-Consolidated Statement of Changes in Net Assets (From April 1, 2006 to March 31, 2007)

(Millions of yen) Shareholders' capital

Additional paid-in-capital Retained earnings

Other Total net retained Treasury Total Common Other Total assets earnings Total stock at Shareholder stock Capital additional additional retained cost s' capital surplus paid-in- paid-in- Retained earnings capital capital earnings carried forward Balance as of March 31, 50,000 1,083,349 0 1,083,350 73,545 73,545 (84) 1,206,810 1,206,810 2006 Changes during the fiscal year Transfer from capital (903,491) 903,491 – – – surplus Dividends (40,422) (40,422) (40,422) (40,422)

Net loss (3,355) (3,355) (3,355) (3,355) Acquisition of treasury (172) (172) (172) stock Reissuance of treasury 2 2 7 10 10 stock Changes other than shareholders’ capital, – net Total changes during the – (903,491) 903,493 2 (43,778) (43,778) (164) (43,941) (43,941) fiscal year Balance as of March 31, 50,000 179,858 903,494 1,083,352 29,766 29,766 (249) 1,162,869 1,162,869 2007 Note: Amounts less than one million yen have been rounded down to the nearest one million yen.

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Notes to Non-consolidated Financial Statements

1. Significant Accounting Principles and Policies

(1) Methods of Valuation of Investment Securities 1) Investments in subsidiaries: Accounted for by the moving-average cost method (2) Depreciation and Amortization of Depreciable Assets 1) Property and Equipment: Depreciation is calculated based on the declining-balance method. 2) Intangible Assets: Amortization is calculated based on the straight-line method. (3) Lease Transactions Finance leases are accounted for using the same method applied to operating leases, with the exception for those finance leases in which the legal title of the underlying property is transferred from the lessor to the lessee. (4) Account method for consumption taxes The tax-exclusion (net of tax) method is used to account for the national and local consumption taxes. (5) Changes in Accounting Policies (Accounting Standard for Presentation of Net Assets in the Balance Sheet) Effective in the fiscal year ended March 2007, the Company adopted the provisions of “the ASBJ Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Statement No. 5; December 9, 2005) and the related “Implementation Guidance on the Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Guidance No. 8; December 9, 2005). Total shareholders’ equity at March 31, 2007 that would have otherwise been reported under the previous accounting standard was ¥ 1,162,869 million.

2. Notes to Non-Consolidated Balance Sheet (1) Accumulated depreciation on property and equipment ¥18 million (2) Monetary assets from and liabilities to affiliated companies are as follows: 1) Short-term monetary assets due from affiliated companies ¥574 million 2) Short-term monetary liabilities due to affiliated companies ¥25,190 million

3. Notes to Non-Consolidated Statement of Income (1) Transactions with affiliated companies 1) Operating revenue ¥6,141 million 2) Operating expenses ¥80 million 3) Non-operating income ¥168 million

4. Notes to Non-Consolidated Statement of Changes in Net Assets (1) Matters Related to the Total Number of Shares Outstanding Increase in the Decrease in the Number of shares as Number of shares as number of shares number of shares Type of share of the end of the of the end of the during the current during the current previous fiscal year current fiscal year fiscal year fiscal year Common stock 37 thousand shares 52 thousand shares 3 thousand shares 86 thousand shares Notes: 1. The increase in the number of treasury shares resulted from the purchase of less-than-one-unit (fractional) shares. 2. The decrease in the number of treasury shares is because the Company complied with a request for additional purchase of less-than-one-unit (fractional) shares.

5. Notes to Deferred Income Taxes Components of deferred tax assets and deferred tax liabilities Deferred tax assets: Millions of yen Accrued expenses 243 Accrued bonuses 75 Accrued enterprise tax 15 Depreciation 13

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Other 14 Total deferred tax assets 363 Net deferred tax assets 363

6. Notes to Lease Transactions Millions of yen (1) Acquisition cost equivalents at the end of this fiscal year: 25 (2) Accumulated depreciation equivalents at the end of this fiscal year: 9 (3) Future lease payments obligation at the end of this fiscal year Due within one year: 5 Due after one year: 10

7. Notes to Related Party Transactions (1) Subsidiaries, etc. Capital Relationship Balance Trans- at the or Owner- action invest- ship Inter- Name of end of Property Name Main business amount Accounts the fiscal ments percent locking Relation on transactions (Millions (Millions -tage directo- business year of yen) of yen) rate (Millions of yen) Research and development, Sankyo manufacturer Directors: Management Management Other Subsidiary Company, 68,793 and marketing 100.0 3,070 29 7 control fee income receivables Limited of pharmaceuticals, etc. Research and Management Other 3,070 29 development, fee income receivables Daiichi manufacturer Directors: Management Borrowing Short-term Subsidiary Pharmaceutical 45,246 and marketing 100.0 25,000 25,000 6 control of funds borrowing Co., Ltd. of Payment of Accrued pharmaceuticals, 168 168 etc. interest expenses Note: Transaction terms and policies on deciding transaction terms, etc. Transaction terms with the companies mentioned above are decided while referring to market prices, etc.

8. Notes to Per-Share Information (1) Net assets per share: ¥1,582.30 (2) Net loss per share: ¥4.57

9. Notes to Subsequent Events 1. Acquisition by merger of Sankyo Company, Limited and Daiichi Pharmaceutical Co., Ltd. by the Company Pursuant to a merger agreement entered into on November 30, 2006, Sankyo Company, Limited (“Sankyo”) and Daiichi Pharmaceutical Co., Ltd. (“Daiichi”), wholly-owned subsidiaries, were merged into the Company on April 1, 2007. (1) Names of parties to the business combination, legal form of the business combination, the name of the combined entity, and a summary of the transaction including its purpose a. Names of parties to the business combination

• Combining entity: Name Nature of business Daiichi Sankyo Company, Limited (the “Company”) Management and supervision of subsidiaries

• Combined entities: Name Nature of business Manufacture, sales, export and import of pharmaceuticals and other Sankyo Company, Limited products Daiichi Pharmaceutical Co., Manufacture, sales, export and import of pharmaceuticals and other Ltd. products

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b. Legal form of the business combination and the name of the combined entity This business combination took place in the form of an acquisition by merger between entities under common control, in which the Company was the surviving entity and both Sankyo and Daiichi were the dissolved entities. The name of the combined entity is Daiichi Sankyo Company, Limited. c. Summary of the transaction including its purpose In accordance with the original plan of integration, the purpose of the merger is, by merging the two subsidiaries into the Parent holding company, to create a foundation on which the Company strives to transform itself into a Japan-based “global pharma-innovator.” The merger did not involve any issuance of new shares or other increase in capital. (2) Summary of accounting treatment Under the provisions of “Accounting Standard for Business Combination,” the transaction was accounted for as a business combination among entities under common control. At March 31, 2007, the Company recorded a ¥3,488 million “Loss on elimination upon merger of investments in affiliated companies” for the difference between the amount of shareholder’s capital received by the Company as part of the net assets of the dissolved subsidiaries and the book value of its investments in these subsidiaries immediately prior to the merger.

2. Spin-off of the pharmaceutical manufacturing operation of former Sankyo Company, Limited into Daiichi Sankyo Propharma Co., Ltd. Pursuant to a spin-off agreement between Daiichi Sankyo Propharma Co., Ltd. (“Daiichi Sankyo Propharma”) and Sankyo Company, Limited (“Sankyo”), wholly owned subsidiaries, entered into on November 30, 2006, the Company spun off the manufacturing operation of former Sankyo related to pharmaceuticals and other products on April 1, 2007, and the operation was then contributed to Daiichi Sankyo Propharma Co. In addition, Daiichi Sankyo Propharma acquired by merger Daiichi Pharmatech Co., Ltd., a manufacturing subsidiary of former Daiichi Pharmaceutical Co., Ltd. on April 1, 2007. (1) Names of parties to the business combination, legal form of the business combination, the name of the combined entity, and a summary of the transaction including its purpose a. Names of parties to the business combination

• Combining entity: Name Nature of business Daiichi Sankyo Propharma Manufacture, consigned manufacture, sales, export and import of Co., Ltd. pharmaceuticals and other products

• Combined entities: Name Nature of business Daiichi Sankyo Company, Manufacture of (former Sankyo’s) pharmaceuticals and other Limited products b. Legal form of the business combination and the name of the combined entity This business combination took place in the form of a spin-off and contribution between entities under common control, in which Daiichi Sankyo Propharma Co., Ltd. was the successor entity and the Company was the entity that span-off the operation. The name of the combined entity is Daiichi Sankyo Propharma Co., Ltd. c. Summary of the transaction including its purpose The purpose of the transaction is, by integrating manufacturing operations for pharmaceuticals and other products, to efficiently achieve a steady supply of products, and high-quality and low-cost manufacturing. The merger did not involve any issuance of new shares or other increase in capital. (2) Summary of accounting treatment Under the provisions of “Accounting Standard for Business Combination,” the transaction was accounted

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for as a business combination among entities under common control. The Company’s shareholders’ capital (additional paid-in capital) was reduced by the amount of net assets, excluding those related to deferred tax assets and liabilities, of the operation transferred from the Company to the subsidiary on April 1,2007.

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Translation of a report originally issued in Japanese

INDEPENDENT AUDITORS’ REPORT

May 14, 2007

The Board of Directors DAIICHI SANKYO COMPANY, LIMITED

KPMG AZSA & Co. Teruo [seal] Designated and Engagement Partner Certified Public Accountant

Akihiro Ohtani [seal] Designated and Engagement Partner Certified Public Accountant

Tetsuzo Hamajima [seal] Designated and Engagement Partner Certified Public Accountant

We have audited the consolidated statutory report, comprising the consolidated balance sheet, the consolidated statement of income, the consolidated statement of changes in net assets and the related notes to consolidated financial statements of DAIICHI SANKYO COMPANY, LIMITED as of March 31, 2007 and for the year from April 1, 2006 to March 31, 2007 in accordance with Article 444(4) of the Corporate Law. The consolidated statutory report is the responsibility of the Company’s management. Our responsibility is to express an opinion on the consolidated statutory report based on our audit as independent auditors.

We conducted our audit in accordance with auditing standards generally accepted in Japan. Those auditing standards require us to obtain reasonable assurance about whether the consolidated statutory report is free of material misstatement. An audit is performed on a test basis, and includes assessing the accounting principles used, the method of their application and estimates made by management, as well as evaluating the overall presentation of the consolidated statutory report. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated statutory report referred to above presents fairly in all material respects the financial position and the results of operations of Daiichi Sankyo Company, Limited and its consolidated subsidiaries, for the period, for which the consolidated statutory report was prepared, in conformity with accounting principles generally accepted in Japan.

Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

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Translation of a report originally issued in Japanese

INDEPENDENT AUDITORS’ REPORT

May 14, 2007 The Board of Directors DAIICHI SANKYO COMPANY, LIMITED KPMG AZSA & Co., Teruo Suzuki [seal] Designated and Engagement Partner Certified Public Accountant

Akihiro Ohtani [seal] Designated and Engagement Partner Certified Public Accountant

Tetsuzo Hamajima [seal] Designated and Engagement Partner Certified Public Accountant We have audited the statutory report, the non-consolidated balance sheet, the non-consolidated statement of income, the statement of changes in net assets and the related notes to non-consolidated financial statements and its supporting schedules of DAIICHI SANKYO COMPANY, LIMITED as of March 31, 2007 for the 2nd business year from April 1, 2006 to March 31, 2007 in accordance with Article 436(2)①of the Corporate Law. The statutory report and supporting schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on the statutory report and supporting schedules based on our audit as independent auditors.

We conducted our audit in accordance with auditing standards generally accepted in Japan. Those auditing standards require us to obtain reasonable assurance about whether the statutory report and supporting schedules are free of material misstatement. An audit is performed on a test basis, and includes assessing the accounting principles used, the method of their application and estimates made by management, as well as evaluating the overall presentation of the statutory report and supporting schedules. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statutory report and supporting schedules referred to above present fairly, in all material respects, the financial position and the results of operations of Daiichi Sankyo Company, Limited for the period, for which the statutory report and supporting schedules were prepared, in conformity with accounting principles generally accepted in Japan.

[Supplemental information] As discussed in Note 9 to the non-consolidated financial statements as a subsequent event, Sankyo Company, Limited and Daiichi Pharmaceutical Co., Ltd., wholly-owned subsidiaries, were merged into the Company on April 1, 2007.

Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

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Translation of a report originally issued in Japanese

AUDIT REPORT

We, the Board of Corporate Auditors, have prepared upon consultation this Audit Report based on reports compiled by each Corporate Auditor with respect to the Directors’ performance of their duties during the 2nd fiscal year from April 1, 2006 to March 31, 2007, as follows: 1. Auditing methods used by Corporate Auditors and the Board of Corporate Auditors, and details of audit The Board of Corporate Auditors specified an audit policy and an audit plan, and received reports from each Corporate Auditor on the status of implementation and results of audit as well as received reports from Directors and accounting auditors on the status of the execution of their duties and asked them for explanations at need. Each Corporate Auditor, according to the audit standard, the audit policy and the audit plan set up by the Board of Corporate Auditors, has maintained good communications with Directors, the audit division and other employees and strived to collect information and improve the audit environment as well as attended meetings of the Board of Directors and other meetings as deemed important, received from Directors and employees reports on the execution of their duties, asked for explanations as necessary, perused the documents whereby the important decisions were made, and examined business and financial conditions at the head office. In addition, we have monitored and verified the details of the resolution made by the Board of Directors concerning the establishment of systems defined in Article 100, Paragraph 1 and Paragraph 3 of the Regulations for Enforcement of the Company Law as what is necessary for ensuring compliance with laws and the Company’s Articles of Incorporation in the performance of duties by Directors and for ensuring appropriateness of duties of a joint stock company. We have also monitored and verified the status of the systems established based on the said resolution (internal control systems). With regard to the basic policy specified in Article 127, Paragraph 1 of the Regulations for Enforcement of the Company Law and each item in Paragraph 2 of the same Article, which are stated in the business report, we have reviewed their details in consideration of the status of deliberations at the Board of Directors, etc. Also, we have maintained good communications and exchanged information with directors, corporate auditors and others of the subsidiaries of the Company, and received from the subsidiaries reports on their business conditions, at need. Based on the methods mentioned above, we have reviewed the financial statements for the said fiscal year and their supplementary schedules. We have also monitored and verified whether the accounting auditors maintain independency and properly implement audit, received from the accounting auditors reports on the execution of their duties and asked them for explanations as necessary. We were reported by the accounting auditors that “systems for ensuring proper execution of duties” (listed in each item of Article 159 of the Corporate Calculation Regulations) have been established in accordance with the quality control standards concerning audit (Business Accounting Council, October 28, 2005), etc., and asked them for explanations as necessary. Based on the methods mentioned above, we have reviewed financial statements for the said fiscal year (balance sheet, statement of income, statement of changes in shareholders’ equity, etc. and notes to non-consolidated financial statements), their supplementary schedules and consolidated financial statements (consolidated balance sheet, consolidated statement of income, consolidated statement of changes in shareholders’ equity, etc. and notes to consolidated financial statements).

2. Results of Audit (1) Results of audit of the business report, etc. 1) We consider that the business report and their supplementary schedules fairly present the situation of the Company in accordance with relevant laws and regulations and the Company’s Article of Incorporation. 2) With respect to the Directors’ performance of their duties, we have found neither undue transactions nor material facts that violate relevant laws and regulations or the Company’s Article of Incorporation. 3) We consider that the details of the resolution made by the Board of Directors concerning internal control systems are proper. With respect to the Directors’ performance of their duties regarding the said internal control systems, we have found no items to be pointed out. (2) Results of audit of financial statements and their supplementary schedules We consider that the auditing methods and results of the Company’s Accounting Auditors, KPMG AZSA & Co., are proper. (3) Results of audit of consolidated financial statements We consider that the auditing methods and results of the Company’s Accounting Auditors, KPMG AZSA & Co., are proper.

May 17, 2007 Board of Corporate Auditors of Daiichi Sankyo Company, Limited Corporate Auditor (full-time) Kozo Wada Corporate Auditor (full-time) Atsuo Inoue Corporate Auditor Kaoru Shimada Corporate Auditor Koukei Higuchi

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Reference Materials for General Shareholders Meeting

First Agenda Item: Appropriation of Retained Earnings

The Company considers the distribution of results obtained by the Company group’s business activities to be one of its most important business issues, and it will determine the allocation of retained earnings after comprehensively considering various matters such as enhancing retained earnings for the Company’s strategic development for future growth and emphasizing a distribution of profits to shareholders that reflects business performance and capital efficiency. The Company will, in principle, allocate the amount equivalent to net income to dividends and the acquisition of treasury stocks for three years from April 2007 through fiscal 2009. It will strive to increase dividends stably, with a view to achieving a payout ratio of about 50% and DOE of 5% or more as of fiscal 2009, while flexibly acquiring treasury stocks. The Company will appropriate retained earnings to investments for the embodiment of future growth, including research and development, corporate tie-ups and enhancement of the overseas business basis. Based on those policies, the Company proposes to pay a year-end dividend for this term as follows: 1) Type of dividend assets Cash 2) Matters related to allocation of dividend assets to shareholders and the total amount ¥30 per ordinary share of the Company Total amount: ¥21,870,087,660 3) Day when dividends from retained earnings take effect June 29, 2007

Combined with the interim dividend of ¥30, annual dividend will be ¥60 per share for this fiscal year.

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Second Agenda Item: Election of Ten (10) Directors

The terms of office of all ten (10) current Directors will end at the close of this Ordinary General Meeting of Shareholders. Accordingly, the Company requests approval for the election of ten (10) Directors. Candidates for Director are as follows:

Number of Conflict Number of Name, Biographical Data and Positions, Shares of the of Candidates Date of Birth and Representative of Other Companies etc. Company Held Interest April 1962 Entered Daiichi Pharmaceutical Co., Ltd. (“Daiichi”) April 1988 General Manager of Medical Sales & Market Information Department of Daiichi April 1991 General Manager of Medical Planning & Administration of Daiichi June 1991 Director of Daiichi October Director in charge of Medical Products of Daiichi 1993 Kiyoshi June 1995 Managing Director of Daiichi Morita 1 June 1997 Representative and Senior Managing Director of 41,188 None (March 29, Daiichi 1939) June 1999 Representative Director and President of Daiichi September Representative Director and Chairman of the 2005 Company April 2007 Representative Director, Chairman and Corporate Officer of the Company (to present)

Positions as Representative of Other Companies etc. Representative Director and President of Laboratoires Daiichi Sanofi-Aventis April 1972 Entered Sankyo Company, Limited (“Sankyo”) January General Manager of Europe Department of Sankyo 1999 June 1999 Senior General Manager of International Pharmaceutical Division & General Manager of Europe Department of Sankyo Takashi June 2001 Director of Sankyo Shoda June 2002 Managing Director of Sankyo 2 60,400 None (June 21, June 2003 Representative Director and President of Sankyo 1948) September Representative Director and President of the 2005 Company April 2007 Representative Director, President and Corporate Officer of the Company (to present)

Positions as Representative of Other Companies etc. None

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Number of Conflict Number of Name, Biographical Data and Positions, Shares of the of Candidates Date of Birth and Representative of Other Companies etc. Company Held Interest April 1970 Entered Daiichi Pharmaceutical Co., Ltd. (“Daiichi”) October General Manager of Corporate R&D Planning 1997 Department of Daiichi June 1998 General Manager of Corporate Development & Licensing Department of Daiichi June 1999 Director of Daiichi October Director & General Manager of Corporate R&D 1999 Coordination & Business Development Department of Daiichi June 2001 Director in charge of Corporate R&D Coordination

& Business Development Department of Daiichi Tsutomu Une 3 October Managing Director of Daiichi 4,372 None (December 2002 11, 1947) September Director of the Company 2005 April 2007 Director and Senior Corporate Officer of the Company (to present)

Positions as Representative of other Companies etc. Representative Director and Vice President of Sanofi-Aventis Daiichi Pharmaceutical Co., Ltd. Managing Director of Daiichi Pharmaceutical (Beijing) Co., Ltd. Director of Daiichi Pharmaceutical Korea Co., Ltd. April 1957 Entered the National Police Agency June 1989 Chief of Police Administration, National Police Agency December Tokyo Metropolitan Police Commissioner 1990 Kunio Nihira June 1999 Chairman of the Japan Automobile Federation 4 (April 6, June 2003 Outside Director of Sankyo Company, Limited 16,300 None 1933) October Chairman of Japan Traffic Management Technology 2003 Association (to present) September Outside Director of the Company 2005 Positions as Representative of Other Companies etc. None April 1961 Entered Sumitomo Banking Corporation (“Sumitomo Banking”) June 1986 Director of Sumitomo Banking June 1989 Managing Director of Sumitomo Banking November Senior Managing Director of Sumitomo Banking 1991 May 1996 Vice President of Sumitomo Banking Yoshifumi June 1997 President of Sumitomo Banking Nishikawa 5 April 2001 President of Sumitomo Mitsui Banking Corporation 0 None (August 3, December President and Director of Sumitomo Mitsui 1938) 2002 Financial Group Corporation June 2005 Outside Director of Daiichi September Outside Director of the Company (to present) 2005 Positions as Representative of other Companies etc. Representative Director and President of Japan Post Co., Ltd.

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Number of Conflict Number of Name, Biographical Data and Positions, Shares of the of Candidates Date of Birth and Representative of Other Companies etc. Company Held Interest April 1963 Entered Fair Trade Commission (“FTC”) June 1991 Manager of Trade Department of FTC July 1992 Manager of Economics Department of FTC July 1994 Manager of Investigation Department of FTC June 1996 Investigation Commissioner of FTC June 1997 Secretary General of FTC Jotaro Yabe April 1999 Professor of Graduate School of Law and Politics of 6 (January 8, Osaka University 2,318 None 1939) April 2004 Professor of Jissen Women’s University, Department of Human Sociology (to present) June 2005 Director of Daiichi Pharmaceutical Co., Ltd. September Director of the Company (to present) 2005 Positions as Representative of Other Companies etc. None April 1966 Entered Nihon Kangyo Bank June 1994 Director of Daiichi Kangyo Bank Ltd., and General Manager, Administration June 1997 Representative Director and President of Daiichi Kangyo Bank Ltd.

September Director and President of Mizuho Holdings & Katsuyuki 2000 Representative Director and President of Daiichi Sugita 7 Kangyo Bank Ltd. 13,200 None (October 13, June 2002 Honorary Advisor of the Mizuho Financial Group, 1942) Inc.

June 2003 Outside Director of Sankyo Company, Limited September Director of the Company (to present) 2005 Positions as Representative of Other Companies etc. None April 1998 Entered Sankyo Company, Limited (“Sankyo”) May 1999 General Manager of Osaka Plant of Sankyo July 2001 General Manager of Business Reform Promotion Department of Sankyo June 2002 Took office as Director of Sankyo; Deputy General Manager of the Pharmaceutical Division June 2003 Retired from office of Director of Sankyo; took office as Managing Corporate Officer; Senior Akio General Manager of Pharmaceutical Division Ozaki April 2004 Senior General Manager of Supply Chain 8 (January 8, Supervisory Division of Sankyo 18,200 None 1945) June 2004 Took office as Senior Corporate Officer of Sankyo June 2005 Took office as Director of Sankyo September Corporate Officer and General Manager of 2005 Management Integration Promotion Department of the Company April 2007 Senior Corporate Officer of the Company (to present)

Positions as Representative of Other Companies, etc. None

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Number of Conflict Number of Name, Biographical Data and Positions, Shares of the of Candidates Date of Birth and Representative of Other Companies etc. Company Held Interest April 1969 Entered Daiichi Pharmaceutical Co., Ltd. (“Daiichi”) October General Manager of Fukuoka Branch of Daiichi 1966 June 1999 General Manager of Pharmaceutical Business Department of Daiichi June 2001 Director and General Manager of Pharmaceutical Ryuzo Business Department of Daiichi Takada June 2005 Managing Director and Senior General Manager of 9 5,795 None (December Pharmaceutical & Marketing Division of Daiichi 22, 1945) September Managing Director, Senior General Manager of 2005 Pharmaceutical & Marketing Division and General Manager of Osaka Branch of Daiichi April 2007 Senior Corporate Officer of the Company (to present)

Positions as Representative of Other Companies, etc. None April 1969 Entered Sankyo Company, Limited (“Sankyo”) July 2000 General Manager of Corporate Planning Department of Sankyo June 2003 Corporate Officer of Sankyo Hitoshi April 2004 General Manager of Environment & Compliance Matsuda Promotion Department of Sankyo 10 (August 31, 4,400 None June 2005 Managing Corporate Officer of Sankyo 1948) April 2007 Senior Corporate Officer of the Company (to

present)

Positions as Representative of Other Companies, etc. None

Notes: 1. Kunio Nihira, Yoshifumi Nisikawa, Jotaro Yabe and Katsuyuki Sugita are candidates for outside director as stipulated in Article 2, Item 15 of the Company Law. 2. Matters of particular importance related to candidates for outside directors are as follows: (1) Reasons for nomination as candidates for outside directors (Relating to Item 2 and 5, Paragraph 4, Article 74 of the Enforcement Regulations of the Company Law of Japan) 1) The Company requests election of Kunio Nihira as outside director, so that his knowledge and insight concerning law and compliance, which were fostered while he worked for administrative organs, will be reflected in the management of the Company. 2) The Company requests election of Yoshifumi Nishikawa as outside director, so that his knowledge and insight concerning financial affairs and corporate management based on his long experience at banks will be reflected in the management of the Company. 3) The Company requests election of Jotaro Yabe as outside director, so that his expertise and insight in laws and corporations as a whole, which were fostered while he worked for administrative organs and through his experience as a scholar, will be reflected in the management of the Company. 4) The Company requests election of Katsuyuki Sugita as outside director, so that his knowledge and insight in finance and corporations as a whole based on his long experience at banks will be reflected in the management of the Company. (2) In the case in which candidates for Outside Directors have served as outside directors, corporate officers or corporate auditors of other joint stock companies in the past five years, facts of unfair execution of duties while they were in office Yoshifumi Nishikawa, one of the candidates for Outside Directors, served as director of Sumitomo Mitsui Banking Corporation from April 2001 to June 2005. Sumitomo Mitsui Banking

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Corporation was issued a recommendation by the Fair Trade Commission of Japan in December 2005 based on several violations of Article 19 of the Anti-Monopoly Law, and was issued business improvement orders by the Financial Services Agency in April 2006 in accordance with the Banking Law. (3) Number of years since candidates for Outside Directors took office as Outside Directors All the Outside Directors (Kunio Nihira, Yoshifumi Nishikawa, Jotaro Yabe and Katsuyuki Sugita) took office on September 28, 2005, when the Company was established, and will have been in office for more than one year at the close of this Ordinary General Meeting of Shareholders. (4) Liability limitation agreement with outside Directors With regard to the liabilities for damages specified in Article 423, Paragraph 1 of the Company Law, the Company has concluded agreements for limitation of liabilities for damages (liability limitation agreements) with all the Outside Directors (Kunio Nihira, Yoshifumi Nishikawa, Jotaro Yabe and Katsuyuki Sugita) when the case falls under the requirements defined in laws and regulations; provided, however, that the maximum amount of liabilities for damages under such agreement is the lowest amount provided by laws and ordinances. Assuming that the appointment of the Outside Director is approved at the Meeting, we will renew the contract on equal terms.

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Third Agenda Item: Election of Two (2) Corporate Auditors

The terms of office of two (2) current Corporate Auditors will end at the close of this Ordinary General Meeting of Shareholders. Accordingly, the Company requests approval for the election of two (2) Corporate Auditors. This proposal has been consented to by the Board of Corporate Auditors. Candidates for Corporate Auditor are as follows:

Number of Conflict Number of Name, Biographical Data and Positions, Shares of the of and Representatives of Other Companies etc. Candidates Date of Birth Company Held Interest April 1975 Entered Daiichi Pharmaceutical Co., Ltd. (“Daiichi”) October General Manager of Academic Management 1997 Department of Daiichi October General Manager of Corporate Research Planning 2000 Department of Daiichi Teruo June 2001 Director and General Manager of Corporate Takayanagi Research Planning Department of Daiichi 1 (October 4, 3,977 None October Director and General Manager of Corporate R&D 1946) 2004 Business Department of Daiichi

April 2006 Director and General Manager of Corporate R&D Strategy Department of Daiichi April 2007 Advisor of the Company (to present)

Positions as Representative of Other Companies, etc. None April 1971 Entered Sankyo Company, Limited (“Sankyo”) June 2001 General Manager of International Marketing Hikaru Department II of Sankyo Nagata June 2003 Corporate Officer and Senior General Manager of 2 (June 30, International Pharmaceutical Division of Sankyo 9,997 None 1948) April 2007 Advisor of the Company (to present)

Positions as Representative of Other Companies, etc. None

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Fourth Agenda Item: Grant of Share Remuneration-type Stock Options for Directors

With respect to fees to Directors, Auditors and Corporate Officers, the Company is pursuing its review into remuneration systems that are linked to the improvement of its corporate value and rather than employing the retirement benefit system, the Company shall grant share remuneration-type stock options, which use stock acquisition rights based on an exercise price of one yen per share, to Directors and Corporate Officers The Company therefore requests approval for allocating stock acquisition rights according to the details stated below and setting a framework of remunerations(the maximum amount of which is obtained by multiplying the fair value of per one allocated stock acquisition right by the total number of stock acquisition rights), which will be allocated to Directors of the Company as share remuneration-type stock options as follows, with a ceiling limit of ¥140 million per annum for each business year. These stock options, which are separate from the monetary fees currently awarded to Directors (not exceeding ¥450 million per annum), shall be granted to Directors excluding Outside Directors. The Company currently has 10 Directors (including four Outside Directors), and assuming that the Second Agenda Item (Election of Ten (10) Directors) is approved as the original proposal, the number of Directors will be 10 (including four Outside Directors) at the close of this Ordinary General Meeting of Shareholders.

[Details of stock acquisition rights] 1. Number of shares to be issued upon exercise of stock acquisition rights The number of shares per one stock acquisition right shall be 100 in ordinary shares of the Company. If the Company effects a stock split of its shares (including allotment of ordinary shares to shareholders without consideration) or effects a stock consolidation, the number of shares subject to one stock acquisition right shall be adjusted to the extent reasonable. 2. Amount of assets paid upon exercise of stock acquisition rights The assets paid upon exercise of the stock acquisition rights shall be the amount calculated by multiplying the per-share amount, which stands at ¥1, by the number of shares that are granted per one stock acquisition right. 3. Exercise period for the stock acquisition rights Any person granted stock acquisition rights may exercise his or her rights from the following day of the day he or she retired from office of director to the last day of the business year within 10 years from his or her retirement. 4. Conditions for exercising the stock acquisition rights Each stock acquisition right cannot be partially exercised. 5. Restriction on transfer of the stock acquisition rights Acquisition of stock acquisition rights through transfer shall be subject to the approval of the Board of Directors. 6. Other details of the stock acquisition rights The details of the above-mentioned (1) to (5) and other matters shall be decided by the Board of Directors of the Company.

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[Information on Exercise of Voting Rights, etc]

(1) Exercise of Voting Rights by Proxy If you don’t attend the Ordinary General Meeting of Shareholders, you may attend through another one shareholder holding voting rights of the Company as your proxy; provided, however, that a document proving the proxy must be submitted. (2 )How to Learn the Revisions to Reference Materials and Attached Documents. If any revisions in the Reference Materials and Attached Documents for the Ordinary General Meeting of Shareholders arise, revised matters will be displayed on the Company’s website (http://www.daiichisankyo.co.jp/). (3) Treatment of Duplicate Votes by Mail and on the Internet etc. If your voting rights are exercised both by mail and on the Internet etc., we will consider the exercise on the Internet to be valid. (4)Treatment of Duplicate Votes on the Internet etc. If your voting rights are exercised more than once on the Internet, we will consider the latest vote to be valid. (5) Information on Exercise of Voting Rights on the Internet etc. 1) Dedicated Voting Website a. Voting rights may be exercised on the Internet only by gaining access to and using the website designated by us (http://www.evote.jp/) from a PC or a mobile phone (i-mode, EZweb or Yahoo! Mobile) for exercise of voting rights. (However, please note that Shareholders cannot exercise the rights between 2:00 am and 5:00 am everyday at the website) (“i-mode,” and “EZweb” and “Yahoo!” are trademarks of NTT DoCoMo, Inc., KDDI Corporation, and the Yahoo Inc. in the US, respectively.) b. When exercising your voting rights on PC, please note that if firewalls, etc., are in place for Internet connections, anti-virus software has been installed, or if you are using a proxy server, you might not be able to exercise your voting rights on the Internet at the website for exercise of voting rights depending on the Internet environment of your setup. c. When exercising your voting rights using a mobile phone, you need to use one of the following services: i-mode, EZweb, or Yahoo! Mobile. However, even if you use one of the listed services, for security reasons, you will only be able to vote on mobile terminals that may both process encrypted communications (SSL communications) and send such information. d. Regarding the exercise of your voting rights on the Internet, although voting must be performed by 5:30 pm on June 27, 2007, we may request the sooner exercise. For further information, please contact Help Desk. 2) How to Exercise Voting Rights on the Internet a. Please use the “login ID” and the “temporary password” printed on the Card for Exercise of Voting Rights and input your vote in accordance with the instructions that will appear on your screen at Dedicated Voting Website (http://www.evote.jp/.). b. Please note that, to prevent unauthorized access to the site by individuals other than shareholders (persons impersonating shareholders) or the alteration of votes, we may request that shareholders change their “temporary password” at Dedicated Voting Website. c. Shareholders will be notified of the new “login ID” and “temporary password”, every time a General Shareholders Meeting is scheduled. 3) Costs Related to Accessing the Voting Website All costs associated with the access to the voting website (http://www.evote.jp/)(cost of dial-up connections, telephone tolls, etc.) need to be borne by the shareholder. Also, when voting by mobile phone, packet communication fees and other costs entailed by the use of a mobile phone also need to be borne by the shareholder.

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4) Method for Receiving the Convocation Notice For the General Shareholders Meeting to be held next time and in subsequent times, shareholders may elect to receive their convocation notice by e-mail. Shareholders accessing the voting website on PC should complete the registration procedures on the website. (Please note that these procedures may not be completed using mobile phone and that mobile phone e-mail addresses may not be submitted for registration purposes.)

For further assistance regarding the system, please contact: Transfer Agent Department (Help Desk) Mitsubishi UFJ Trust and Banking Corporation Phone: 0120-173-027 (9:00 to 21:00 (Japan Time), toll free (Japan only))

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