- 1/3 -

Company Name:
Shionogi & Co., Ltd.
Representative: Isao
Teshirogi, President
Securities Code:
4507; TSE 1st Section / OSE 1st Section
For Inquiries, Contact: Noriyuki Kishida, General Manager, Corporate Communications Dept.Telephone: +81
-
(6) 6202-2161

SHIONOGI’S THIRD MEDIUM-TERM BUSINESS PLAN
——————————————
Osaka (March 16, 2010) — Shionogi & Co., Ltd. (Head Office: Osaka; President: Isao Teshirogi;
hereafter referred to as “Shionogi”) announced that it has formulated the third Medium-Term
Business Plan for five years from April 2010 through March 2015.
1.

Positioning of the Third Medium-Term Business Plan
Shionogi has completed the first medium-term business plan to concentrate its management resources on the prescription drug business and the second medium-term business plan to augment its R&D activities and make a very significant initial stride in its globalization since fiscal 2000. This will establish the foundation for its future growth in an environment of intense competition for pharmaceutical companies. As a result of those efforts, the Company achieved steady results such as globally-competitive drug candidates, anti-hypercholesterolemia Crestor as a core product, and a sales network in the U.S. based on Shionogi Pharma, Inc., which is a key factor in our global business development. Now, Shionogi has entered into a new growth stage which addresses a wide variety of issues.
In the long term, the next ten-year period, the Company has acknowledged that it may face a challenging period with the expiration of the Crestor patent after 2016, and it is important to begin to take action to generate further growth.
The third medium-term business plan “SONG for the Real Growth” was established as a concrete plan for Shionogi to achieve further growth over the next five years and long-term progress, which takes into account the achievements and issues of the second medium-term business plan and long-term future prospects. “SONG for the Real Growth” expresses the actions and mindset that all Shionogi employees should have through the implementation of the third medium-term business plan.
“SONG for the Real Growth”
Speed
(Quick decision and implementation)
Open Mind
(Flexible mind and out of box thinking)
Never-Failing Passion
(Persistent passion)
Global Perspective
(Higher and broader perspective)

- 2/3 -
2.

Basic Strategy in the Third Medium-Term Business Plan
(1)

Steady growth primarily through enriched pipeline
Shionogi will focus its sales and marketing resources on eight strategic products: Pirespa, Differin, Rapiacta, Finibax and Oxycontin/Oxinorm, as well as Crestor, Irbetan and Cymbalta. These key products will be marketed independently from the legacy products. Shionogi will also significantly expand the consolidated net sales ratio of overseas business by capitalizing on existing products and the products in development.
(2)

Investment in new growth drivers
Shionogi will diligently manage its development pipeline portfolio such as S-349572, an HIV Integrase inhibitor, and velneperit (S-2367), an anti-obesity drug. By striving for the world’s highest level of research productivity, Shionogi will globally develop more than five products in the late stage (Phase 2b and beyond), achieve NDA submission overseas for four in-house products, and receive an approval for more than one product by fiscal year 2014.
(3)

Therapeutic areas to be focused on
Shionogi will continue to provide patients with medicines to treat metabolic syndrome, infectious diseases, and pain. It will develop products in new therapeutic areas that meet unmet medical needs, which requires being more flexible and challenging early-stage research. Shionogi will also focus management resources specifically on obesity/diabetes and viral infection, which have been positioned as R&D priority areas.
3.

Financial Goals of the Third Medium-Term Business Plan

FY2009
(Prospect)
(% of net sales)
FY2014 (Target)
(% of net sales)
Net sales
280 billion yen
375 billion yen
(Royalty）
52 billion yen
75 billion yen
Operating income
60 billion yen
(21.4%)
110 billion yen (29.3%)
R&D expenses
50 billion yen
(17.9%)
65 billion yen (17.3%)
SG&A expenses
96 billion yen
(34.2%)
102 billion yen (27.2%)
Cost of sales
74 billion yen
(26.4%)
98 billion yen (26.1%)
4.

Strengthening of Operational Fundamentals and Shareholder Return
Shionogi will implement the strengthening of its operational fundamentals in the future by investing in R&D and capital investments and improving the Balance Sheet, which will provide for the expansion of strategic business development investments. This plan provides balance, enabling shareholders to realize a return on their investment, while ensuring the achievement of future growth.

- 3/3 -
Forward-Looking Statements
This announcement contains forward-looking statements. These statements are based on
expectations in light of the information currently available, assumptions that are subject to risks
and uncertainties which could cause actual results to differ materially from these statements. Risks
and uncertainties include general domestic and international economic conditions such as general
industry and market conditions, and changes of interest rate and currency exchange rate. These
risks and uncertainties particularly apply with respect to product-related forward-looking
statements. Product risks and uncertainties include, but are not limited to, completion and
discontinuation of clinical trials; obtaining regulatory approvals; claims and concerns about
product safety and efficacy; technological advances; adverse outcome of important litigation;
domestic and foreign healthcare reforms and changes of laws and regulations. Also for existing
products, there are manufacturing and marketing risks, which include, but are not limited to,
inability to build production capacity to meet demand, unavailability of raw materials and entry of
competitive products. The company disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future events or otherwise.


For further information:
Shionogi & Co., Ltd.
Corporate Communications Department
Telephone: +81-6-6209-7885
Fax: +81-6-6229-9596