Overview of Business Strategy
To become a company that supports healthy lifestyles, as stated in the long-term vision, the Company will build a diverse business portfolio centered on the core pharmaceutical business, and contribute to the health of individuals through the consumer healthcare business.
Overview of the Multi-core Strategy
To strengthen its pharmaceutical business through multi-faceted expansion, and diversify business risk, the Company will aim for diverse expansion and growth in its consumer healthcare business.
Overview of the Pharma Complex (PC) Model
In order to respond to changes in business conditions, including trends in pharmaceutical administration policies, the Kyorin Group will work toward a multi-faceted expansion of its pharmaceutical business, aiming for sustainable growth. To do this, under the PC model the Company classifies ethical drugs into new drugs (drugs already launched or slated for development, which are protected by patents and exclusivity), original drugs, and generic drugs, enabling us to adopt a flexible strategy in responding to changing conditions.
Based on the concept of the PC model for multi-faceted expansion of its pharmaceutical business, the Company classifies ethical drugs into three categories: new drugs, original drugs, and generic drugs. By coordinating the production activities, and a portion of the sales activities of subsidiaries KYORIN Pharmaceutical and KYORIN Rimedio on a common platform, and promoting alliances with companies outside the Group, the Company will aim to achieve sustainable growth by responding to the dramatic changes anticipated in its business environment and pursuing effective and efficient operations. The sales target in the pharmaceutical business for fiscal 2015 is based on developing our primary products including bronchial asthma and allergic rhinitis treatment Kipres and overactive bladder (OAB) treatment Uritos. We aim for total sales in the ethical drug business of ¥120.0 billion in fiscal 2015.
New Drugs
Drugs already launched or slated for development which are protected by patents and exclusivity.
Kipres
The key attributes of Kipres, which has driven the growth of the Kyorin Group, include once-a-day oral administration, and the absence of drowsiness. It has contributed to the treatment not only of adult and childhood asthma, but with an added indication also helps to treat both seasonal and perennial allergic rhinitis (in adults only).
We will position Kipres as a base treatment for allergic rhinitis and encourage its wider prescription by educating doctors in the fact that allergic rhinitis is a chronic inflammatory disease, and by building further evidence.
Prescriptions of leukotriene antagonists for allergic rhinitis remain low, and by continuing these efforts, we hope to expand their prescription not only among otolaryngologists, but general internists as well, with target sales in fiscal 2015 of ¥40.0 billion.
Uritos
Key attributes of Uritos include its effectiveness against nocturnal symptoms of OAB, dose adjustment capabilities and twice-a-day administration.
We were able to expand our share of the overactive bladder (OAB) market by working aggressively to position Uritos as a first-choice prescription through uncovering latent markets and product differentiation.
We will continue these efforts as we work to increase market penetration of our new orally disintegrating (OD) tablet formulation, which went on sale in April 2011. While consultation rates for patients with OAB remain low, we believe that new treatments scheduled to come to market will give it greater momentum, increasing patient awareness of the disease and demand for treatment. The OAB market is predicted to grow to ¥100.0 billion in fiscal 2015, and we aim to grow sales of Uritos with it to ¥10.0 billion by the same year.
KRP-108
In development of KRP-108, the Company aims to apply in fiscal 2012, and bring the product to market in fiscal 2014. Characteristics of KRP-108 include its combination of ICS (fluticasone) and LABA (formoterol), and the selection of an optimal delivery device.
The market for inhaled asthma therapies reached ¥80.0 billion in fiscal 2010, and the market for combination ICS/LABA products is expanding rapidly.
Original Drugs
For original drugs the Company uses life cycle management (LCM) to improve value and extend life cycles of the drugs.
Mucodyne
We have implemented calculated, ongoing life cycle management of Mucodyne since its launch in 1981. In May of 2010, we launched Mucodyne DS50% as a new formulation based on patient needs for convenience and on indications.
We will work to increase prescription of the new DS50% formulation to a wide age range, while also aiming to maximize market penetration by utilizing evidence-based data to increase prescriptions in patients with chronic respiratory disorders and sinusitis. We aim to grow sales of Mucodyne to a target of ¥24.0 billion by fiscal 2015.
Pentasa
We worked to establish Pentasa as a standard prescription for treating ulcerative colitis, and saw increased prescription of the 4g dose for use in the active stage of the disease, as well as combination use of Pentasa Enema to induce and maintain remission.
We will continue to establish Pentasa as a standard prescription for ulcerative colitis, while also emphasizing patient convenience by providing a variety of dosages and formulations (250mg tablets, 500mg tablets, enema) in response to broad patient needs. We will further meet those needs by developing new formulations and dosages, targeting sales in fiscal 2015 of ¥19.0 billion.
Generic Drugs
Generic Drug Group
The Kyorin Group is aiming to expand its business in distinctive generic drugs by working to strengthen collaboration within the Group and aggressively promoting external alliances. We also worked to implement measures to increase sales and expand profits in response to systemic reforms and other changes in the business environment, including integrating distribution channels and lowering the cost of sales ratio by reducing raw material costs.
By further expanding sales of key products, enhancing the number of new items and strengthening our product lineup in key areas, we plan to raise sales from ¥8.9 billion in fiscal 2010, to ¥20.0 billion by fiscal 2015.
Integration of Distribution Channels
On October 1, 2010, KYORIN Rimedio Co., Ltd. integrated its wholesale sales routes with those of KYORIN Pharmaceutical Co., Ltd. As a result, we are beginning to see increased sales of generic drugs through wholesale channels. The important next step is to begin building an effective, efficient infrastructure to enable us to deploy more flexible strategies within the Group in response to future changes in the market environment.
Promotion of Distinctive Generic Drugs Business
The first objective is to promote quality assurance, stable supply, and lower costs by strengthening collaboration within the Group and alliances both at home and abroad. We see reducing our cost of sales ratio as a particularly important issue. Our second objective is to begin working initiatives to gain competitive advantage through our product lineup in specific areas. Specifically, we will focus on infectious diseases as one key area, and we are currently working to enhance our product lineup in certain types of antibacterial agents that are needed in Japan.
Sales in Consumer Healthcare Business
(Skincare and Nonprescription Drugs. etc)
Under HOPE 100 Stage 1, the consumer healthcare business is classified into the skincare business and nonprescription drugs. We are working to diversify our business, both to compensate for risks in our pharmaceutical business and to achieve sustained growth for the Kyorin Group as a whole. In the skincare business, our efforts focus on bringing the business into profitability while promoting growth, including expansion into Asian markets. In nonprescription drugs, we are working to leverage the Milton brand, while also aiming to create new businesses. Beginning in fiscal 2011, the Kyorin Group has also decided to begin aggressive work in the new business of environmental hygiene, finding ways to meet medical needs and contribute to better health through environmental infection control.
By continuing to study and consider new future-oriented acquisitions in the field of environmental hygiene, while also considering the potential for business growth in areas related to ethical drugs, we are targeting sales of ¥20.0 billion in fiscal 2015.
Participation in Environmental Hygiene Business
The Kyorin Group considers the environmental hygiene business to include “businesses related to maintaining and enhancing human health by improving harmful environments, based on an approach to health and disease that examines the environments where people live.”
We will initially develop this business by focusing on controlling bacterial and viral infections in the environment.
In fiscal 2011, we will begin sales of space purification systems and related products, utilizing stabilized chloride dioxide manufactured by DuPont in the U.S. Sales will be handled primarily by KYORIN Medical Supply Co., Ltd. (formerly Kyobundo Co., Ltd.).
