Otsuka Holdings Co Ltd · Otsuka Holdings Co Ltd The 2nd Medium-Term Management Plan FY 2014 - 2018...
Transcript of Otsuka Holdings Co Ltd · Otsuka Holdings Co Ltd The 2nd Medium-Term Management Plan FY 2014 - 2018...
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Otsuka Holdings Co Ltd
The 2nd Medium-Term Management Plan FY 2014 - 2018
August 26, 2014
Tatsuo Higuchi President and Representative Director, CEO
Otsuka Holdings Co., Ltd.
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Disclaimer
n This material contains forward-looking statements regarding the financial conditions, results of operations and business activities of Otsuka and its subsidiaries (collectively the “Otsuka Group"). All forward-looking statements, due to their inherent nature, will be influenced by future events and developments for which the occurrence is uncertain, and therefore involve risks and uncertainties. Otsuka cautions you in advance that actual financial conditions, results of operations and business activities could differ materially from those discussed in the forward-looking statements.
n Otsuka disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, further events, or otherwise.
n Further, this material contains statements and information regarding corporate entities other than those belonging to the Otsuka Group, which have been compiled from various publically-available sources. Otsuka has not verified any of such statements or information and does not provide any guarantees with regard to their accuracy and relevance.
n The IMS Health, Euromonitor and other reports described herein (the “Reports”) represent data, research opinions or viewpoints published as part of a syndicated subscription service and are not representations of fact. The Reports speak as of their original publication dates (and not as of the date of this material), and the opinions expressed in the Reports are subject to change without notice.
n This material contains information on pharmaceuticals (including compounds under development), but this information is not intended to make any representations or advertisements regarding the efficacy or effectiveness of these preparations nor provide medical advice of any kinds.
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Agenda
n Management Policy & Plan Outline
n Performance Targets
n Pharmaceutical Business Strategy
n Nutraceutical Business Strategy
n Investment Policy and Shareholder Return
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Management Policy &
Plan Outline
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Corporate Philosophy
nDramatic expansion of business opportunities rooted in corporate philosophy
Developing a truly global
businesses
Building new
category markets
Creating our own
unique and innovative products
Developing a truly global
businesses
Building new
category markets
Creating our own
unique and innovative products
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Transition of business opportunity expansion
OTC
NC
alliance
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diagnostics chemical
Clinical nutrition
medical devices
cosmedics
consumer products
pharma
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Otsuka’s identity and business model
Unmet medical needs
Pharmaceutical business
Yet-to-be-imagined needs
Nutraceutical* business
Total Healthcare from prevention to treatment
*Nutraceutical: Nutrition + Pharmaceutical
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To become an indispensable contributor to people’s health worldwide
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Otsuka’s Goal
1st mid-term plan
Globalization &
Investment
2nd mid-term plan
Sustained investment &
Structural reform
Nth
Mid-term plan
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Outline of the 2nd mid-term plan
n Strengthen core therapeutic areas
n Nutraceutical business - structural reform, evolution and growth
n Active investment in new growth areas and shareholder return
5 year period to establish diversified business portfolio
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Performance Targets
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Performance Targets
¥ billion 2013A1)
Actual 2016E1) Target
2018E1) Target
Net sales 1,452.8 1,190 1,440 R&D expense 249 170 170 Operating income 198.7 100 200 vs. net sales(%) 13.7 8.4 13.9 Net income 151 70 140 ROE(%) 10.8 4-5 8-10
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n Performance recovers in FY2018 to FY2013 level n R&D expenses maintained at high level for growth beyond
2020
Note: -Foreign currency exchange rate assumptions: US$ 1= ¥100, Euro 1=¥ 140 -Excluding external growth 1) FY 2013 is 12 months ended March 2014. FY 2016 and 2018 are calendar year due to change in business year from 2014.
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Diversified sales structure
2013A 2018E
1,440 New Drugs &
others NC*
Consumer & others 1,452.8
Impact of Abilify
Net Sales (¥billion)
<Net Sales>
*NC: nutraceutical business
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Diversified sales structure
n Each core area’s growth diversifies sales structure
Consumer & others CNS
(except Abilify)
Oncology
Cardio -vascular
Other pharma
NC Abilify
2013A 2018E
Net Sales ¥1,452.8 billion
Net Sales ¥1,440 billion
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New Drugs - Key driver for growth platform n 3 global products, 3 next-generation products and new drugs in Japan
to contribute to sustainable growth n 80% of $4.3bn sales (FY2018E) from products already filed or launched n Investments to enrich pipeline, including in-licensing deals
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2013A 2018E
2023E
$2.0bn
$1.8bn
*New drugs in Japan: products newly launched or to be launched in Japan between 2009 and 2018, excluding 3 global products and 3 next-generation products above.
Foreign currency exchange rate assumptions: US$ 1= ¥100, Euro 1=¥ 140
New drugs in Japan*
3 next-generation products • Lonsurf • Lu AE58054 • SGI-110 $0.5bn
Sales
Approx. $0.8bn
3 global products • Abilify Maintena • brexpiprazole • tolvaptan
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Cross-organizational cost optimization
COGS
SG&A
R&D
Promotion
Adminis-tration
Pharmaceutical Consumer/others NC
n Energy cost reduction by investment in energy saving system n Enhance production efficiency through new capital expenditures
n Clearly focused spending and saving
n Accelerated investments by 2014 n Maintain at steady level from 2016 • Prioritize assets in the pipeline • Utilize & coordinate research functions in
the Group
n Continuous efforts for overhead costs efficiency n Utilize the Group assets
n Decrease in Abilify co-promotion expenses
n Review & optimization of cost mainly in the US
n Full use of the Group’s sales infrastructure
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Profit Diversification
2013A Operating income
Effect of R&D
acceleration
2018E Operating income
198.7
0
100
200
2016E Operating income
Increase in gross profit
by new drugs’ contribution
Cost optimization
Investment for growth
Impact of US Abilify* and Contribution of new drugs
*Include decrease in co-promotion fee of Abilify
(¥ billion)
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Pharmaceutical Business Strategy
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Outline of pharmaceutical business strategy
n Maximize product values
n Aggressive R&D investments in core therapeutic areas
(CNS and oncology)
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Strengthen core therapeutic areas
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CNS business : Evolution through products fr
anch
ise
Solutions for patient needs 18
Lu AE58054 • Alzheimer’s disease
Lu AF20513 • Amyloid β vaccine
Abilify Maintena
Smart tablet
Value-added drug therapy
Abilify
brexpiprazole • Schizophrenia • MDD adjunctive therapy
New category creation
Anxiety disorder PTSD
Behavioral disorder Agitation associated with AD
AD: Alzheimer’s disease, PTSD: Posttraumatic stress disorder
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Abilify Maintena
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n LCM plan (additional indications & administration routes, improved formulations)
n Collaboration with Lundbeck in US and Europe n NDA filed in Japan for schizophrenia
2014 2015 2016 2017 2018
<Development plan>
P-3:Bipolar disorder
Dual chamber
New administration route (deltoid)
Schizophrenia
2013 2012
Acute schizophrenia:PDUFA 2014/12
EU
EU
EU
Filed Approved
Schizophrenia
Schizophrenia
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Growth potential of Abilify Maintena
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0
2,000
4,000
Target: 30% market
share
~
~
*LAI: Long Acting Injection ** Total sales of three atypical antipsychotics LAI products (Source: annual reports, Datamonitor, company data)
(¥100 mil)
n Atypical antipsychotics LAI* market sees double-digit growth n Abilify Maintena targets 30% market share
1,735
4,337
6,315
7,858
10,771
0
5,000
10,000
No. of new prescription of Abilify Maintena
(numbers)
Global LAI sales**
Copyright 2014 IMS Health. All rights reserved. Source: Estimated based on IMS Data (NPA) 2013-2014 Reprinted with permission
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brexpiprazole
n NDA filed in US for schizophrenia and MDD n P-3 studies ongoing for PTSD and for agitation associated
with dementia of the Alzheimer’s type
P-3:Agitation associated with dementia of the Alzheimer’s type
P-3:PTSD (Posttraumatic stress disorder)
2014 2015 2016 2017 2018 2013 2012
P-3:Schizophrenia
P-3:MDD
P-3:Schizophrenia
Schizophrenia MDD
EU
EU
EU
EU
<Development plan> Filed
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Potential of tolvaptan
30s 40s 50s 60s
Average age of dialysis
introduction2) ESRD
Early subjective symptoms
No symptoms
ESRD Challenge of tolvaptan
1) reference: research team of progressive renal impairment, Ministry of Health, Labour and Welfare, 2) source: the Japanese society for dialysis therapy “Chronic Dialysis Therapy in Japan ‘as of Dec 31, 2006, 2007 the Japanese society for dialysis therapy, Tokyo, 3) abstracted from application document approved as orphan drug in 2006 (reference: article by Prof. Higashihara), 4) reference: document applied to EMA for orphan drug approvement, 5) source: applied for orphan drug based on prevalence report by Prof. Willy of University of Rhode Island and approved on April 6 2012.
n ADPKD (Autosomal Dominant Polycystic Kidney Disease) ‒ Genetic disease ‒ Subjective symptoms: hematuria, stomachache, lumbar back pain,
abdominal distension, hypertension ‒ Approx. 5-10% of end-stage renal disease (ESRD) patients have ADPKD1)
‒ No drug therapy is available
Patient population: 31,0003) 205,0004) 116,0005) EU
age
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tolvaptan
n US: Additional Phase 3 study started n EU: MA filed for ADPKD in December 2013 n Japan: Penetration of ADPKD market n Asia: NDA filed for hepatic edema/cardiac edema
additional P-3:ADPKD
ADPKD
ADPKD
Hepatic edema
2012 2014 2015 2016 2017 2018 2013
Cardiac edema Asia
EU
<Development plan> Filed Approved
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Evolution of anti-metabolite franchise
molecular targeted drug
Evolution of oncology business n Broad therapeutic coverage from hematological & solid cancers
to cancer supportive care n Lonsurf – a growth driver in the 2nd mid-term plan
Busulfex Conditioning regimen
prior to BMT*
SGI-110 AML・MDS
Dacogen AML・MDS
ASTX-727
Sprycel CML, pancreas
Aloxi Nausea, vomiting
TS-1 Gastric, others
Lonsurf Colorectal
cancer
UFT Colorectal, others
TAS-118 Prostate, others
OCV-501 AML
TAS-116 Solid tumor
TAS-115 Solid tumor
AT13387 Prostate, NSCLC
Abraxane Breast, others
E-fen Cancerous
breakthrough pain Samsca
Carcinomatous edema rebamipide
Oral Mucositis SATIVEX Cancerous pain
TAS-114 Solid cancer
Hematologic cancer
Solid tumor
Supportive care
Expansion of molecular target agents
AT7519 Multiple Myeloma
24 Note) AML:acute myelogenous leukemia, MDS: myelodysplastic syndromes, Oral mucositis: stomatitis associated with cancer chemoradiotherapy CML: chronic myelogenous leukemia, NSCLC: non-small-cell lung cancer
* BMT: bone marrow transplant
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Lonsurf
n Japan: Penetration of Japanese market n US/EU: NDA/MA to be filed for colorectal caner n Establishment of sales infrastructure in US and Europe
2014(plan)
1Q 2015(plan)
Colorectal cancer
2014 2015 2016 2017 2018 2013 2012
EU
<Development plan> To be Filed Approved
Establishment of sales infrastructure in US and EU
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New drugs in Japan
n Foster new drugs in the 2nd mid-term plan period n Contribute as growth drivers together with 1st mid-term new drugs
0
1,000
2,000
3,000 2013-2018 total sales of new drugs in Japan CAGR approx. 30%
2nd mid-term new drugs
• Aloxi • Abraxane • E Keppra • Samsca • Mucosta eye drop • Neupro patch • Elneopa
• Lonsurf • Abilify Maintena • TAK-438 • brexpiprazole • others
1st mid-term new drugs
<Sales plan of new drugs in Japan*> (¥100 mil)
*New drugs in Japan: drugs launched or to be launched between 2009 and 2018, including 3 global products and 3 next-generation products. Definitions are different from those on page 13.
Filed Approved
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Global expansion of clinical nutrition business
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0
500
1,000
1,500
2013A 2018E
(¥ 100mil)
Japan
Over seas
n Japan: Expand the stable profitability n Overseas:Target to be a leading company in Asia
CAGR 1%
Area Principal measures
India • Business expansion through Claris Otsuka
China • Aiming at higher I.V. market share
Indonesia • Expansion of clinical
nutrition business including high value-added products
Japan • New product introductions
to surgical operation area • Product development to
reflect clinical needs
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For diversified therapeutic solutions n Offer therapeutic
solutions with medical devices to address unmet medical needs that remain unsolved by drugs
Drugs
Medical devices
Ortho- pedics
Urology GI
Cerebro vascular
Cardio vascular
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Strengthening in-house drug discovery capability
n Combination of the Group’s fragmented assets
n Complementary use of each strength
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Fragment-based drug discovery
CNS
CNS Oncology
Oncology
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Active R&D investment
1,534 1,493
1,835 2,408
1,600 1,600
20% 19%
22% 23% 22%
17%
0
1,000
2,000
3,000
2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E
% of R&D expenses/Pharmaceutical net sales
nMaintain R&D expenses for sustainable growth
R&D expenses (¥ 100 mil)
<R&D expenses in pharmaceutical business>
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Nutraceutical Business Strategy
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Outline of nutraceutical business strategy
n Review of business assets that support value-chain
n Acceleration of global expansion
n Improved profitability
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Structural reform and evolution to achieve growth
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Review of business assets that support value-chain
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Product strategy
R&D Production Distribution
n Product strategy, R&D - R&D acceleration focused on “healthy life expectancy”
n Production - Enhanced production efficiency by new capital
investments
n Marketing, Sales - Reintroduce creative pull-marketing approach based
on the philosophy of “total healthcare”
n Distribution - Establish distribution bases according to market needs
Marketing Sales
Human resources, management
Consumers
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n Promote growth through brand-building in established markets
n Expansion to new markets capitalizing on regional network
Acceleration of global expansion
Areas where Otsuka group companies have operations
0
1,000
2,000
2013A 2018E
Core brand* international sales
*Core brand:SOYJOY, Pocari Sweat, Nature Made, N&S products 34
(¥100 mil)
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Sales plan by area
1,475
598
739
0
2,000
4,000
2013A 2018E
US
EU
Asia
Japan
n International sales drive NC business growth (¥ 100 mil)
2013-2018 CAGR
n 11%
n 6%
n 5%
n 1%
Area Measures
Asia <driver: Pocari Sweat> • Focused investments in
Indonesia and China
EU <driver: N&S products> • Focusing on growing areas
such as gluten-free and soy products
US <driver: Nature Made> • Fostering new category
Japan • Reviewing business asset
through fostering new products
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Improve profitability and structural reform
Target operating income ratio of 10% or more
(¥100 mil)
0.9%
7.1%
8.7%
8.5%
8.8%
>10%
0
500 Operating income Operating income ratio
Review of business assets that support value-chain
Structural reform
NC Operating income Foster new products
Accelerate global
expansion
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Investments Policy &
Shareholder Return
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Flexibility based on strong balance sheet
(¥ billion)
Approx. 1,700
Approx. 1,150
Approx. 500
Approx. 1,050 Working
capital
Shareholder return
Strategic investments
Net cash at the end of FY2013 1)
Net income + R&D expense + depreciation/ amortization2)
R&D expense and CapEx
1) Cash and deposits + marketable securities - short & long term debt 2) Total of net income, depreciation and R&D expense from FY2014 to FY2018
Cash flow accumulated in
5 years +
Net cash
The 2nd medium-term management plan period
n Cash Flow & Net Cash accumulated for 5 years : ¥1 tril
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Investment policy
Management philosophy
n Share management philosophy, human resources, products and technologies to enhance corporate value
n Investments with long-term perspective
Focusing area
Phar
ma • Product-based acquisitions and
alliances mainly in CNS and oncology
• Strengthen oncology sales infrastructure in the US
• Investment in medial device business
NC
• Brand-based acquisitions and alliances
• Acquisitions of overseas distribution network
• Aggressive global expansion of our own brands
Products Technologies
Human resources
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Shareholder return policy
0
500
2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E
Total dividend (¥100 million)
40
n Raise dividend to ¥100 per share in 2015
n Shareholder return balancing with strategic investment
n Flexible share buyback
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appendix
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Plan by business segment - net sales and operating income*
10,351
7,200
9,150
2,128 1,000
1,900
0
5,000
10,000
2013A 2016E 2018E
Net sales Operating income
2,871 3,200
3,500
254 310 390 0
5,000
2013A 2016E 2018E
1,743 2,000 2,250
50 85 110 0
5,000
2013A 2016E 2018E
Pharmaceutical
Nutraceutical Consumer/others
(¥ 100mil)
* Net sales before elimination of inter-segment transaction. Operation income before elimination of unallocated corporate expense.
(¥ 100mil) (¥ 100mil)
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Consumer product business
Early return to profitability
Match
Natural water Tea
Crystal Geyser sparkling water
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Mannan Hikari
Increase new customers Develop new markets
Stable profit by balanced investment and spending
Enhance production efficiency
Pouch-packed food business
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Other businesses (Chemical)
Accelerate new market development in Japan as well as overseas
0
500
2013 2018
(¥100 mil) Area measures
EU Asia
• Business expansion from raw material to upstream business
US • Raw material business
Japan • New highly functional polymer business
<Sales plan of chemical business>
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Major products to be filed in the 2nd mid-term plan
CNS Products1) Indication Area
Abilify Maintena Bipolar I disorder
brexpiprazole Schizophrenia Adjunctive therapy for major depressive disorder Agitation associated with dementia of the Alzheimer’s type
PTSD
ABILIFY Autism Agitation associated with dementia of the Alzheimer’s type
ASC-01 Major depressive disorder
Lu AE58054 Alzheimer’s disease
E Keppra Epilepsy (generalized onset seizures)
Oncology Products1) Indication Area
TS-1 Cervical cancer
TAS-118 Pancreatic cancer
trabectedin Malignant soft tissue sarcoma
SGI-110 AML / MDS
Lonsurf Colorectal cancer
SATIVEX Cancer pain
rebamipide Stomatitis associated with cancer chemoradiotherapy
Other area tolvaptan ADPKD
Deltyba Multidrug-resistant tuberculosis
bilastine Allergic rhinitis
Chronic urticaria, pruritus associated with skin disease
OPF-105 Peripheral parenteral nutrition
OPC-1085EL Glaucoma
OPA-15406 Atopic dermatitis
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Products filed from April to July 2014 - brexpiprazole (US: adjunctive therapy for major depressive disorder, schizophrenia) - Abraxane (Japan: pancreatic cancer) - olanexidine (Japan: disinfectant) - Zosyn (Japan: febrile neutropenia)
EU
EU
EU
EU
EU
EU
EU
1) Brand name, generic name or development code