Mitsubishi Chemical Holdings

THE KAITEKI COMPANY

Overview of Business Segments : Health Care Domain

Capitalizing on the Group’s comprehensive capabilities and network, the Health Care domain develops businesses for pharmaceuticals, diagnostic reagents and instruments, clinical testing, healthy support service, support for new pharmaceutical development, active pharmaceutical ingredients and intermediates, pharmaceutical formulation materials such as capsules, pharmaceutical equipment.

Business Lines by Segment

Health Care

The health care business comprehensively covers pharmaceuticals such as diagnostic reagents and instruments, clinical testing, as well as support for new pharmaceutical development. We also take on the challenge of creating new businesses, such as regenerative medicine, while aiming to expand into the health and medical businesses using ICT. In addition to disease treatments, MCHC is advancing operations with the ultimate aim of realizing a society where people can live long and healthy lives.

Main Businesses and Products

Opportunities and Risks

Strengths Growth Opportunities Risks
  • Broad business foundation covering sick care to health care and life care
  • Ability to discover and post-marketing development in the pharmaceutical business
  • Strong market position in the capsule business
  • Diversification of medical needs
  • Growing demand in the healthcare field as elderly populations increase around the world
  • Upward trend in use of Big Data via healthcare and medical ICT
  • Government incentives to maintain health and prevent serious diseases to restrain growth in medical expenditures
  • Government incentives to promote health checkups and self-medication
  • Declined success rate for new drug development and increased R&D spending from stricter drug approval process
  • Delayed global operations
  • Various policies to control healthcare expenditures
  • High ratio of long-listed drugs in the pharmaceutical business
  • Lack of economic incentives in healthcare business

Review of Segments in Fiscal 2015

APTSIS 15 Step 2 Review and Forecast

The Health Care domain fell short of its operating income target under APTSIS 15 by ¥6.6 billion. This was due in part to a sharp decline in earnings for long-listed drugs as a result of stronger-than-anticipated government policies to encourage the use of generic drugs in the earnings base of the domestic ethical pharmaceutical market. It was also due to slow business development in the U.S., the world’s largest drug market, owing to the abandonment of a drug under development for treating kidney disease.
Amid rapid change in the business environment for this segment, the MCHC Group aims to sustain growth by accelerating global business development. At the same time, we are also expanding in the health and medical businesses that use ICT, and developing new businesses such as regenerative medicine.

Growth Strategies

Business Portfolios (by Business Unit)

Plan Values APTSIS 20 Five-Year Plan (J-GAAP)

APTSIS 20 Action Plans

■ Ethical Pharmaceuticals

  • Invest ¥400 billion in R&D and create new drugs that can be deployed worldwide
  • Achieve domestic sales of ¥300 billion (new drug and priority product sales ratio of 75%) by strengthening value development and sales especially in new drugs and priority products
  • In the U.S., establish a sustainable growth platform by establishing business platforms with strategic investments of ¥200 billion or more, including M&A and by building a product lineup with open shared business (OSB*)
  • Improve profitability and expand business by global spread in the capsule business

■ Life Science

  • Expand the healthcare-medical business that utilizes ICT (health prediction support, diagnostic support, etc.) by viewing the progress of the use of digital information as a business opportunity
  • Obtain early approval of regenerative medicine products that use Muse cells in 2019
  • Improve profitability and expand business by global spread in the capsule business

FOCUS Pharmaceutical Business

Priority Measures
Establish a sustained growth platform by developing business in the U.S.

Amid rapid changes in the business environment for ethical pharmaceuticals, in its aim for sustained growth in the pharmaceutical business, MTPC must quickly roll out a business platform for marketing drugs on its own in the U.S., the world’s largest pharmaceutical market, and maximize the value of priority products by strengthening value development and sales in the domestic market, while enhancing its presence in priority disease fields.

In June 2016, MTPC filed a New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA) for Radicut (MCI-186), which was approved in Japan as an additional indication for amyotrophic lateral sclerosis (ALS) in June 2015. On the assumption the drug will be approved in fiscal 2016, we are making its market launch our highest priority. As the first step for MCI-186, we plan to make the necessary preparations for creating a product lineup for nervous system disorders and rare diseases, such as putting in place a marketing structure focused on medical specialists. We plan to invest more than ¥200 billion over the course of the medium-term management plan (fiscal 2016-2020), including M&A, to expand the business foundation in the U.S. By fiscal 2020, we target sales of ¥80 billion in the U.S. Moreover, we aim to build up our product lines in the U.S. by acquiring products and products under development through various types of partnerships with academia, venture companies and pharmaceutical companies, in addition to our own pharmaceutical discovery capabilities.

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