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Happiness with Vision CORE PRINCIPLE

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Happiness with Vision CORE PRINCIPLE Santen Report 2020 Year ended March 31, 2020 Happiness with Vision CORE PRINCIPLE Happiness with Vision Exploring the secrets and mechanisms of nature in order to contribute to people’s health* The Happiest Life for every individual, * Santen’s original interpretation of a passage from the Zhongyong (The Doctrine of the Mean) by Confucius through the Best Vision Experience Our Value Creation Sustainability 1 CORE PRINCIPLE 42 CSR Promotion System 2 130-Year History 43 Environment 6 Business Model and Value Creation 44 Building an Inclusive Society 46 Diversity and Inclusion Our Aspirations Corporate Governance 8 CEO Message 14 Vision 2020: Past and Present 48 Chairman’s Message 18 Our New Vision 51 A Conversation between the Chairman and 24 Feature – Long-Term Vision Santen 2030: an Outside Director Our Challenges and Mindset 54 Corporate Governance 60 Directors, Corporate Auditors Our Approach and Corporate Officers 28 Financial Strategy/CFO Message Financial Data & Corporate Information 30 Financial and Non-Financial Highlights 32 Research and Development 62 Management’s Discussion and Analysis of 34 Business Development Results and Finances 36 Overview by Region 66 Eleven-Year Summary of Selected Financial Data 68 Main Financial Information 73 Stock Information 74 Corporate Information 75 On the Publication of Santen Report 2020 Note Key words that are explained in detail in this report are shown in bold type along with a page number for reference. Particularly important points are underlined. See page 74 for more details of our editorial policy. 2 Santen Report 2020 Santen Report 2020 01 130-Year History Our Value Creation Since its founding in 1890, Santen has continued to contribute to patients and their loved ones in the specialized field of ophthalmology based on our CORE PRINCIPLE, from which our company name is also derived. 1890— Establishment We have developed many products during our 130-year history and now support the eye health of more than 30 Pursuing a strategy focused on Taking on the challenge million patients worldwide. 1990— 1950— eye drops, and expanding into of internationalization prescription pharmaceuticals A Brief History of Santen’s Product Innovation (Major products based on year of launch) 1890 1890 1899 1890: Establishment 1990: 100th anniversary and formulation Heburin-gan Daigaku Eye Drops Founder Kenkichi Taguchi opened Taguchi Santendo in of a long-term vision (cold medication) More than 120 years after its launch, Kitahama, Osaka, Japan. Announced long-term vision, “To contribute to society Daigaku Eye Drops continues to be a Heburin-ganH , a cold medication, with the best products and services focusing on the eye trusted brand. wasw its main product at the time. and health,” and set management objectives that included becoming “a world-class company” and “a leader in all areas of ophthalmic treatment.” 1996: Completed construction of Nara Research 1950 1935: Opening of Yodogawa Plant and Development Center and Shiga Plant Production centered on eye (now Shiga Product Supply Center) drops, gastrointestinal medications, antipyretics, 1962 1962 1987 1987 antidiarrheals and topical Mydrin-P Super Sante Tarivid Rimatil wound medications (mydriatic) (anti-infective ophthalmic) (anti-rheumatic) 1952: Corporate rebuilding with a focus on eye drops 1997: Full-scale entry into the European market 1990 During the post-war reconstruction period, Acquired Oy Star Ab, a Finnish ophthalmic pharmaceutical Santen launched products such as company, and established Santen Oy. In addition to being Daigaku Penicillin Eye Drops, and sought Santen’s first production base outside Japan, this to rebuild by pursuing a strategy focused on eye drops. acquisition marked Santen’s entry into the northern and eastern European markets. 1991 1992 1995 1958: Expansion into prescription Sante FX Kary Uni Hyalein (treatment for early-stage (treatment for corneal disorders) pharmaceuticals business senile cataracts) 1963: Listed on the second section of the Osaka 2000 Securities Exchange 1964: Listed on the second section of the Tokyo Stock Exchange 1977: Listed on the first sections of the Tokyo Stock Establishment of Group companies Exchange and the Osaka Securities Exchange 1992: TAHMIN SANTEN CO., LTD. 1982: Opened the Central Research Laboratories (now Taiwan Santen Pharmaceutical Co., Ltd. / Taiwan) 2000 2008 in Osaka, Japan Cravit Tapros 1993: Santen Inc. (U.S.) (anti-infective ophthalmic) (treatment for glaucoma and 1994: Santen GmbH (Germany) 1985: Completed construction of 2010 ocular hypertension) 1996: Beijing Representative Office* (China) Noto Plant 1997: Santen Oy (Finland) To this day, the plant is one of the world’s largest eye SantenPharma AB (Sweden) Claire Co., Ltd. (Special subsidiary drop manufacturing sites. company / Japan) * Now closed FY1970 Revenue FY1990 2010 2013 2018 2019 2019 ¥4.6 billion Revenue 2020 Diquas Alesion Eybelis LENTIS Comfort Alesion LX (treatment for dry (anti-allergy (treatment for (intraocular lens) (anti-allergy ¥36.6 billion eye syndrome) ophthalmic) glaucoma and ocular ophthalmic) hypertension) 02 Santen Report 2020 Santen Report 2020 03 Our Value Creation 130-Year History Expanding solutions 2000— Making a full-scale 2010— Accelerating global operations to contribute to eye health worldwide entry into Asia 2020— 2000: Establishment of CORE PRINCIPLE 2010: Creation of Vision 2020 2015: Specialization in ophthalmology Established our CORE PRINCIPLE, which articulates the Formulated long-term vision that included management objectives Transferred the anti-rheumatic pharmaceuticals business to AYUMI Formulation of Company’s business philosophy, and formulated and corresponding strategies with a view to becoming a Pharmaceutical Corporation Organizational Principles and Individual Action Principles “Specialized Pharmaceutical Company with a Global Presence” Santen 2030 2016: Acquired InnFocus, Inc. of the U.S. to 2000: Occurrence of OTC product tampering 2011: Acquired Novagali Pharma S.A., a French company enhance the product pipeline and contribute Become A Social Innovator incident. Considering consumer safety first, with excellent formulation technologies such as Novasorb, further to treatment in the glaucoma area Orchestrate and mobilize key immediately recalled all OTC products from to strengthen overseas business in Europe and elsewhere 2018: Sold former corporate headquarters and Osaka technologies and players around stores. Resumed sales half a month later with the Plant site in Osaka, Japan introduction of tamper-evident plastic shrink wrap 2014: Took over ophthalmology assets of Merck the world, to deliver happiness with security printing features. & Co., Inc. of the U.S. to strengthen the glaucomaa 2019: Transferred the Tampere Plant of Santen Oy to through vision business and accelerate global operations NextPharma Oy 2007: Completed construction of Suzhou Plant in China 2020: Announced construction of a second plant for The first plant established Chinese subsidiary Santen Pharmaceutical (China) Co., directly by Santen outside of 2011: Santen India Private Limited (India) Ltd. to meet growing demand for products in China Japan, with the aim of Novagali Pharma S.A. (now Santen S.A.S.) acquired (France) supplying high-quality products 2012: Santen Holdings EU B.V. (Netherlands) 2016: Santen Business Services Co., Ltd. (Japan) for the Chinese market 2013: Santen Pharmaceutical Sales and Marketing (Suzhou) Co., Ltd. (China) Santen Eye Care Co., Ltd. (Japan) Ho Chi Minh City Representative Office (Vietnam) SANTEN PHARMACEUTICAL (HONG KONG) LIMITED (Hong Kong) Santen Pharmaceutical Asia Pte. Ltd. (Singapore) InnFocus, Inc. acquired (U.S.) 2014: Santen Italy S.r.l. (Italy) Chongqing Santen Kerui Pharmaceutical Co., Ltd. (China) Santen Switzerland SA (now Santen SA / Switzerland) 2000: Santen Pharmaceutical Korea 2017: SANTEN LIMITED LIABILITY COMPANY (Russia) Co., Ltd. (Korea) Santen UK Limited (U.K.) Santen Ventures, Inc. (U.S.) 2001: Advanced Vision Science, Inc. SANTEN PHILIPPINES INC. (Philippines) 2019: Santen Canada Inc. (Canada) acquired (U.S.) SANTEN (THAILAND) CO., LTD. (Thailand) 2002: Santen Holdings U.S. Inc. (U.S.) SANTEN PHARMA MALAYSIA SDN. BHD. (Malaysia) 2005: Santen Pharmaceutical (China) Santen Pharmaceutical Spain, S.L. (Spain) Co., Ltd. (China) FY2019 Revenue FY2010 FY2000 Revenue ¥241.6 billion Revenue ¥110.8 billion ¥88.4 billion Overseas Revenue Revenue in Japan 04 Santen Report 2020 Santen Report 2020 05 Business Model and Value Creation Our Value Creation As a company specialized in ophthalmology, Santen focuses on the unmet needs of people who have eye problems and From both a financial and non-financial perspective, we aim to develop new solutions by reinvesting the capital created consistently provides value through its solutions. To realize our goal of “Happiness with Vision” (page 20) for people all through various initiatives to earn even greater trust among patients and medical professionals. over the world, we aim to “Becoma A Social Innovator” in ophthalmology (page 20). We provide valuable products and Looking at the external environment, lifestyles are changing due to the diversification of health needs and the widespread services by integrating our own expertise with excellent technologies and knowledge from external partners. In addition, we use of information technology such as smartphones. While technology has advanced through innovation, environmental are committed to contributing to ophthalmology through a cycle of developing
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