Mid-term Business Plan

Formulation of the Third Mid-term Business Plan

In February 2013, Sumitomo Dainippon Pharma formulated the third Mid-term Business Plan ("MTBP") for the five years beginning with fiscal 2013.

The Mid to Long term Vision ("2017 Vision") that Sumitomo Dainippon Pharma drew up in 2007 when it created the first MTBP set the targets of "Establish a solid foundation for our domestic business," "Expand our international business operation" and "Enrich our R&D product pipeline to realize our future vision" in envisioning its corporate status for the next ten years. For its vision of the next 15 years, Sumitomo Dainippon Pharma aims to become an internationally competitive R&D-oriented pharmaceutical company and to have two solid mainstreams of revenue, from operations in Japan and from international operations.

Sumitomo Dainippon Pharma is currently making progress in the second MTBP for the 5 years beginning with fiscal 2010. After about three years, both net sales and profit in Japan are close to targets according to the plan, and net sales in North America are also steadily increasing. Sumitomo Dainippon Pharma also made significant progress in research and development including the acquisition of promising compounds and a drug discovery platform in the area of oncology.

However, the risk of profit decline is rapidly increasing in long-listed products in Japan toward fiscal 2014 and North America is facing a challenge of achieving profit targets due to several factors such as the delayed launch of new product. Furthermore, Sumitomo Dainippon Pharma's business structure is substantially changing toward the future with its entry into the oncology area.

Under these circumstances, Sumitomo Dainippon Pharma has created the third MTBP for the 5 years beginning with fiscal 2013.

Formulation of the Third Mid-term Business Plan

By executing the third MTBP, Sumitomo Dainippon Pharma is committed to achieving its 2017 Vision. It has also set the new vision "Aspire to be a globally active R&D-based company" and "Contribute to medical care through leading-edge technologies" to ensure further growth in the quest for innovation.

Business Goals

3rd MTBP: Changes in FY2017 business goals (Revised in May 2016)

hundred millions of yen

Business Goals FY2015 FY2016
Net Sales 4,032 4,100 4,400
Operating income 369 400 500
R&D costs 820 845 850
EBITDA 558 610 750
Exchange rate 120.2 yen/$ 110.0 yen/$ 110.0 yen/$

※Earnings before interest, taxes, depreciation and amortization

Basic Strategies of the Third MTBP

Under the following five principles, Sumitomo Dainippon Pharma is committed to sustainable growth by promoting strategic business activities while strengthening business foundation.

1.Establish a robust revenue base in Japan
2.Further expand overseas business and maximize earnings
3.Expand global pipeline
4.Continuously pursue operational efficiency and CSR
5.Build an active corporate culture and develop talent

Third MTBP Strategies

(1) Product Strategy

Sumitomo Dainippon Pharma will work to grow LATUDA® (lurasidone hydrochloride), an atypical antipsychotic and our global strategic product, to be a blockbuster by maximizing product value through additional indications and by expanding business regions.

Sumitomo Dainippon Pharma will also work towards the earliest possible launch of BBI608 and BBI503, currently in development as the first anticancer drugs in the world with efficacy against cancer stem cells. In addition, Sumitomo Dainippon Pharma will expand its businesses globally. This will be driven by new medicines through the successful development of "post-LATUDA®" candidates primarily in the Psychiatry & Neurology and Oncology areas as well as through proactive in-licensing and strategic alliances.

Maximize LATUDA® (lurasidone) business
Successful development of new oncology product (BBI608/BBI503)
Successful development of post-LATUDA® candidates
Proactively promote in-licensing and strategic alliances
Globally grow businesses driven by new medicines

(2)Therapeutic Area Strategy

Sumitomo Dainippon Pharma is shifting resources to research and development in Psychiatry & Neurology and Oncology and will continue to actively invest resources during the third MTBP. This will enable Psychiatry & Neurology and Oncology areas to grow as global business pillars of revenue by the final year of the third MTBP.

R&D Resource Allocation (FY2013 Plan)

R&D Resource Allocation (FY2013 Plan)

Sales Volume by Area

Sales Volume by Area

(3)Regional Strategy

Sumitomo Dainippon Pharma will place a priority on maintaining and expanding businesses in Japan and North America.

In Japan, resources will be concentrated on growth products - AIMIX®, METGLUCO® and SUREPOST® in the Cardiovascular and Diabetes areas and LONASEN® and TRERIEF® in the Psychiatry & Neurology area - to maintain and increase scale of business operations. Furthermore, global products such as lurasidone hydrochloride and BBI608 will be launched in Japan in the latter half of the third MTBP to expand the Japan business. Sumitomo Dainippon Pharma will also proactively promote in-licensing and alliances.

In North America, Sumitomo Dainippon Pharma aims to minimize the impact from sales decline of existing products by expanding LATUDA® sales and launching APTIOM®. During the latter half of the third MTBP, Sumitomo Dainippon Pharma will significantly advance its North American business with the launch and quick expansion of its oncology business and launch of new products. Meanwhile, Sumitomo Dainippon Pharma will continue to invest to expand its businesses in North America.

In China, Sumitomo Dainippon Pharma aims to expand businesses through the launch of three products that are currently under development. In Europe, Sumitomo Dainippon Pharma will start selling lurasidone hydrochloride through its own sales organization in the UK and consider the possibility of expanding its sales regions. In Southeast Asia, Sumitomo Dainippon Pharma will also create a foundation with lurasidone hydrochloride to enter into business in the region and investigate opportunities for business expansion in the Oceania region.

Expand Business Deployment Regions

Expand Business Deployment Regions

Sales Targets by Region (Revised in May 2016)

Sales Targets by Region

(4)R&D Strategy

Sumitomo Dainippon Pharma will focus research and development on Psychiatry & Neurology and Oncology areas as focus therapeutic areas, where high unmet medical needs exist in order to channel all energies into innovative drug discovery.

In Psychiatry & Neurology areas, Sumitomo Dainippon Pharma seeks solutions to current treatments that do not sufficiently result in adequate symptom relief and intends to focus on offering treatments to patients who do not respond enough to existing medicines by promoting research and development in schizophrenia, depression, Alzheimer's disease and other disorders. In the Oncology area, Boston Biomedical, Inc. (US), Tolero Pharmaceuticals, Inc. (US) and the DSP Cancer Institute (Japan) will form a global R&D team to lead the world in the cancer stem cell area and to continually create innovative products.

In addition, Sumitomo Dainippon Pharma will apply leading-edge science such as iPS cells to drug discovery, while strengthening activities in cell therapy and regenerative medicines to develop medicines for refractory diseases.

[Focus Therapeutic Areas]

  • Psychiatry & Neurology
  • Oncology

[Explore new fields]

  • Disease field where no approved drugs exist
  • Regenerative Medicine/Cell Therapy

Psychiatry & Neurology

  • ・Focusing on areas of high unmet medical needs psychiatric illnesses including schizophrenia, depression, cognitive dysfunction
  • ・Targeting other illnesses including alzheimer's disease, neuropathic pain, developmental disorders, neurodegenerative disorders


  • ・Aiming to create cutting-edge, breakthrough products through the strong collaboration between Boston Biomedical, Inc. (US), Tolero Pharmaceuticals, Inc. (US) and the Cancer Institute (Japan)
  • ・Aiming to become a global leader in cancer stem cell research
  • ・Tacking drug discovery based on cancer immunotherapy and new concepts

Explore new fields

  • ・Aiming to create first-in-class medicines in disease fields where no approved drugs exist and in regenerative medicine/cell therapy field

Returns to Shareholders

Based on integrated and sustainable improvement of corporate value and shareholder value, in addition to stability, Sumitomo Dainippon Pharma will consider increases in dividends in line with improved business performance.

Investment Strategy

Strengthen Business Foundation and Promote CSR Management

Sumitomo Dainippon Pharma pursues business efficiency and works to build a strong corporate culture to establish a robust business management structure that can respond flexibly to changes in the business environment.

At the same time, Sumitomo Dainippon Pharma will ensure further reinforcement of its Corporate Mission, Management Mission and Declaration of Conduct, strengthen its corporate governance globally, promote social contribution activities in and out of Japan, improve the vitality of employees, and promote communication with various stakeholders.