Plain-text annual report
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For the Year Ended March 31, 2017
For the Year Ended March 31, 2017
ANNUAL REPORT
ANNUAL REPORT
2017
2017
Contents
Business Philosophy
Introduction
Astellas’ Value Creation Process
Astellas’ Evolution
Astellas Today
Financial and Non-Financial Highlights
Editorial Policy
Corporate Strategy and Corporate Governance
CEO Message
Medium-Term Strategy
CFO Message
CSR-Based Management
Corporate Governance
Business Review
Risk Management
Directors and Audit &
Supervisory Board Members
Interview with an Outside Director
13
17
21
22
25
Executive Committee
Top Management Discussion
Value Creation and Value Protection Activities
Maximizing the
Product Value
Review of Operations by Therapeutic Area
Business Environment and Strategy by Region
CSR Activities from Manufacturing to Sales
Creating Innovation
Research and Clinical Development
R&D Topics during the Year
CSR Activities in Research and Development
Pursuing Operational
Excellence
Initiatives in the Fiscal Year Ended March 31, 2017
Our People, Our Organization
Ethics & Compliance
Contribution to the Sustainable Development Goals
Access to Health
Social Contribution
Environmental Preservation
Dialogue with Stakeholders
Financial Information and Data
11-Year Financial Summary
Financial Review
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Independent Auditor’s Report
Investor Information
Corporate Data/Principal Subsidiaries and Affiliates
2
3
3
5
7
9
11
12
30
31
33
36
37
38
41
43
49
51
53
57
61
63
64
67
71
72
75
77
81
82
83
85
94
99
154
155
156
Cautionary Note
In this annual report, statements made with respect to current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements
about the future performance of Astellas. These statements are based on management’s current assumptions and beliefs in light of the information currently available to it and involve
known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such factors
include, but are not limited to: (i) changes in general economic conditions and in laws and regulations relating to pharmaceutical markets, (ii) currency exchange rate fluctuations, (iii)
delays in new product launches, (iv) the inability of Astellas to market existing and new products effectively, (v) the inability of Astellas to continue to effectively research and develop
products accepted by customers in highly competitive markets, and (vi) infringements of Astellas’ intellectual property rights by third parties. Information about pharmaceutical
products (including products currently in development) which is included in this annual report is not intended to constitute an advertisement or medical advice.
1
Astellas Pharma Inc. ANNUAL REPORT 2017 Contents
Business Philosophy
Introduction
Astellas’ Value Creation Process
Astellas’ Evolution
Astellas Today
Editorial Policy
Financial and Non-Financial Highlights
Corporate Strategy and Corporate Governance
CEO Message
Medium-Term Strategy
CFO Message
CSR-Based Management
Corporate Governance
Risk Management
Directors and Audit &
Supervisory Board Members
Interview with an Outside Director
13
17
21
22
25
Business Review
Executive Committee
Top Management Discussion
Value Creation and Value Protection Activities
Maximizing the
Product Value
Review of Operations by Therapeutic Area
Business Environment and Strategy by Region
CSR Activities from Manufacturing to Sales
Creating Innovation
Research and Clinical Development
R&D Topics during the Year
CSR Activities in Research and Development
Pursuing Operational
Initiatives in the Fiscal Year Ended March 31, 2017
Excellence
Our People, Our Organization
Ethics & Compliance
Contribution to the Sustainable Development Goals
Access to Health
Social Contribution
Environmental Preservation
Dialogue with Stakeholders
Financial Information and Data
11-Year Financial Summary
Financial Review
Consolidated Financial Statements
Investor Information
Corporate Data/Principal Subsidiaries and Affiliates
2
3
3
5
7
9
11
12
30
31
33
36
37
38
41
43
49
51
53
57
61
63
64
67
71
72
75
77
81
82
83
85
94
99
100
Cautionary Note
In this annual report, statements made with respect to current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements
about the future performance of Astellas. These statements are based on management’s current assumptions and beliefs in light of the information currently available to it and involve
known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such factors
include, but are not limited to: (i) changes in general economic conditions and in laws and regulations relating to pharmaceutical markets, (ii) currency exchange rate fluctuations, (iii)
delays in new product launches, (iv) the inability of Astellas to market existing and new products effectively, (v) the inability of Astellas to continue to effectively research and develop
products accepted by customers in highly competitive markets, and (vi) infringements of Astellas’ intellectual property rights by third parties. Information about pharmaceutical
products (including products currently in development) which is included in this annual report is not intended to constitute an advertisement or medical advice.
Business Philosophy
Raison D'être
Contribute toward improving the health of people around the world
through the provision of innovative and reliable pharmaceutical products
• To go beyond all others in exploring and tapping the potential
of the life sciences.
• To continue tackling new challenges and creating innovative
pharmaceutical products.
• To deliver quality products along with accurate information and retain solid credibility among customers.
• To support healthy living for people around the world.
• To continue shining on the global pharmaceutical field.
Mission
Sustainable enhancement of enterprise value
• Astellas will seek to enhance its enterprise value in a sustainable manner.
• Astellas will seek to be the company of choice among all its stakeholders, including its customers,
shareholders, employees, and the global community.
Astellas will strive to gain the trust of all stakeholders and thereby enhance its enterprise value.
Beliefs
Our “beliefs” provide the code of conduct we prize at all times.
Astellas will always be a group of people who act upon these beliefs.
High Sense of Ethics
Customer Focus
Creativity
Competitive Focus
We will always manage our business with the highest sense of ethics.
We will always seek to understand customer needs and our focus will always be on achieving customer satisfaction.
We will not be complacent and will always seek to innovate to create new value.
Our eyes will always be directed to the outside world, and we will continue to create better value faster.
Astellas promises to perform its obligations toward all stakeholders
by acting ethically and seeking to actively disclose information.
Business
Philosophy
Raison D'être
Mission
Beliefs
Charter of Corporate Conduct
Astellas Group Code of Conduct
Charter of Corporate Conduct
Astellas is committed to conducting its business activities with the
highest ethical standards in order to realize its business philosophy
and help enhance the sustainability of society by fulfilling its social
responsibilities as a pharmaceutical company.
For more details, please refer to
WEB
https://www.astellas.com/en/about/
charter-of-corporate-conduct/
Astellas Group Code of Conduct
The Astellas Group Code of Conduct serves as a common global
code of compliance for all officers and employees to ensure that
compliance is maintained at all times in the course of conducting
business activities.
For more details, please refer to
WEB
https://www.astellas.com/en/about/
group-code-of-conduct/
2
Astellas Pharma Inc. ANNUAL REPORT 2017 Astellas’ Value Creation Process
Astellas stands on the forefront of healthcare change, turning innovative science into
value for patients. By repeating this cycle continuously, we are pursuing the sustainable
growth of enterprise value.
Corporate Governance
Create innovative new drugs and
medical solutions by leveraging our core
capabilities with a central focus on our innovative
drug business
Focus Areas
View business opportunities
from multiple perspectives
Drivers
Core capabilities
Astellas Way
Earning trust from
patients and
other stakeholders
Principles of Activity
Focus
our resources on
identified areas
Redefine
the focus when appropriate
Expand
into new opportunities
CSR-Based Management
Enhance the sustainability of society and the Company
by fulfilling social responsibility
Innovative
science
Value for
patients
Dialogue
with
stakeholders
Sufficient funds
to create
innovation
Returns to
stakeholders
Generate funds
to sustain
growth
3
Our Approach to
the Value Creation
Process
Astellas’ raison d’être is to “contribute toward improving the health of people around the world
through the provision of innovative and reliable pharmaceutical products.”
Based on this, we aim to stand on the forefront of healthcare change, turning innovative
science into value for patients. The keys to our success will be our Focus Areas, Principles of Activity,
and Drivers, which describe where we should create value and how we should act to realize that
value. Guided by this approach, we will create innovation with a central focus on the innovative
drug business.
This process originates with advances in science, and Astellas then allocates sufficient funds and
implements measures to satisfy the requests and expectations of stakeholders. By creating value for
patients, through this process, we will generate funds to sustain the next phase of growth and provide
returns to stakeholders.
Astellas will continue to follow this cycle to achieve sustainable growth of enterprise value.
Focus Areas
Amid continuing evolution in the healthcare industry, Astellas needs to identify business opportunities
more flexibly and efficiently than ever in order to achieve further growth. We will define our Focus
Areas by adding multiple perspectives to our conventional viewpoint of therapeutic areas. We will
factor in a consideration of new technologies and treatment approaches, product development
feasibility and new possibilities for commercialization, market trends and changes in pharmaceutical
laws and regulations. Our goal is to identify areas of unmet need and find new business opportunities.
Principles of
Activity
In a fast-changing business environment, it is crucial to have the flexibility to reexamine business fields
as needed—even those that have been carefully selected as opportunities at some point in the past.
Astellas aims to drive further evolution by having all employees remain mindful of the three-step
process of Focus our resources on identified areas, Redefine the focus when appropriate, and Expand
the focus for the next generation of activity, as they carry out their activities.
Drivers
One of the drivers for Astellas to achieve sustainable growth is its core capabilities, which constitute
the source of its competitive edge. It is vital to carefully identify our essential capabilities and enhance
them until they are among the world’s best. At the same time, when there are outstanding capabilities
outside the Company, we will proactively form partnerships. By combining optimal capabilities, both
internal and external, we enhance our productivity and creativity to maximize our value creation
capabilities. Moreover, in the Astellas Way*, we have defined a shared set of values to be embraced by
all our employees as part of efforts to foster a corporate culture to help realize our business
philosophy. At the same time, we remain committed to understanding the requests and expectations
of a multitude of stakeholders, including patients, and transforming that understanding into value.
* For details on the Astellas Way, Five Messages for One Astellas—Patient Focus, Ownership, Results, Openness, and Integrity—please refer
to p. 64.
Astellas’ Currently Identified Core Capabilities
Capability to
Capability to
create new drugs
deliver new drugs
Commercial
presence
Partnership
Operational
foundation
Corporate Governance
P25-29
CSR-Based Management
P22-24
IntroductionAstellas Pharma Inc. ANNUAL REPORT 2017 Astellas stands on the forefront of healthcare change, turning innovative science into
value for patients. By repeating this cycle continuously, we are pursuing the sustainable
growth of enterprise value.
Our Approach to
the Value Creation
Process
Astellas’ raison d’être is to “contribute toward improving the health of people around the world
through the provision of innovative and reliable pharmaceutical products.”
Based on this, we aim to stand on the forefront of healthcare change, turning innovative
science into value for patients. The keys to our success will be our Focus Areas, Principles of Activity,
and Drivers, which describe where we should create value and how we should act to realize that
value. Guided by this approach, we will create innovation with a central focus on the innovative
drug business.
This process originates with advances in science, and Astellas then allocates sufficient funds and
implements measures to satisfy the requests and expectations of stakeholders. By creating value for
patients, through this process, we will generate funds to sustain the next phase of growth and provide
returns to stakeholders.
Astellas will continue to follow this cycle to achieve sustainable growth of enterprise value.
Focus Areas
Amid continuing evolution in the healthcare industry, Astellas needs to identify business opportunities
more flexibly and efficiently than ever in order to achieve further growth. We will define our Focus
Areas by adding multiple perspectives to our conventional viewpoint of therapeutic areas. We will
factor in a consideration of new technologies and treatment approaches, product development
feasibility and new possibilities for commercialization, market trends and changes in pharmaceutical
laws and regulations. Our goal is to identify areas of unmet need and find new business opportunities.
Principles of
Activity
In a fast-changing business environment, it is crucial to have the flexibility to reexamine business fields
as needed—even those that have been carefully selected as opportunities at some point in the past.
Astellas aims to drive further evolution by having all employees remain mindful of the three-step
process of Focus our resources on identified areas, Redefine the focus when appropriate, and Expand
the focus for the next generation of activity, as they carry out their activities.
Drivers
One of the drivers for Astellas to achieve sustainable growth is its core capabilities, which constitute
the source of its competitive edge. It is vital to carefully identify our essential capabilities and enhance
them until they are among the world’s best. At the same time, when there are outstanding capabilities
outside the Company, we will proactively form partnerships. By combining optimal capabilities, both
internal and external, we enhance our productivity and creativity to maximize our value creation
capabilities. Moreover, in the Astellas Way*, we have defined a shared set of values to be embraced by
all our employees as part of efforts to foster a corporate culture to help realize our business
philosophy. At the same time, we remain committed to understanding the requests and expectations
of a multitude of stakeholders, including patients, and transforming that understanding into value.
* For details on the Astellas Way, Five Messages for One Astellas—Patient Focus, Ownership, Results, Openness, and Integrity—please refer
to p. 64.
Astellas’ Currently Identified Core Capabilities
Capability to
create new drugs
Capability to
deliver new drugs
Commercial
presence
Partnership
Operational
foundation
Corporate Governance
P25-29
CSR-Based Management
P22-24
4
Corporate Governance
Create innovative new drugs and
medical solutions by leveraging our core
capabilities with a central focus on our innovative
drug business
Focus Areas
View business opportunities
from multiple perspectives
Drivers
Core capabilities
Astellas Way
Earning trust from
patients and
other stakeholders
Principles of Activity
Focus
our resources on
identified areas
the focus when appropriate
Redefine
Expand
into new opportunities
CSR-Based Management
Enhance the sustainability of society and the Company
by fulfilling social responsibility
Innovative
science
Value for
patients
Dialogue
with
stakeholders
Sufficient funds
to create
innovation
Returns to
stakeholders
Generate funds
to sustain
growth
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Astellas’ Evolution
Astellas will steadily expand business by optimally allocating resources, along with
focusing on building a business foundation to sustain growth.
Mid-Term
Management
Plan
2010-2014
Overcome the impacts of patent expiry for core
products and accelerate growth to a new
stage based on both growth and efficiency strategies
Mid-Term
Management
Plan
2006-2010
Concentrate resources on the innovative drug
business, strengthening product creation capabilities
and building a solid global business foundation
Global business
expansion in Japan,
the Americas, EMEA
and Asia & Oceania
• Expanded the urology franchise area while maintaining a
leading position in transplantation
• Implemented growth strategies according to regional
characteristics in Japan, the Americas, EMEA and Asia
& Oceania
R&D
• Global in-house development of compounds with
high potential
• Focused disease areas for research (urology, immunology
and inflammatory, central nervous system and pain,
diabetes, infectious disease, oncology)
• Established global development headquarters in the U.S.
• Acquired Agensys, Inc.
Implemented
growth
strategies
Cost structure
reforms
• Realigned the production framework (from 18 to 10 sites)
Strategic
Plan
2015-2017
Steadily advance three strategic priorities to achieve
sustainable growth over the medium and long terms,
while flexibly responding to changes in the environment
Maximizing the
product value
P13-16, 17-18,
38, 43-52
• Expanded sales of new products
• Rapidly established urology (overactive bladder) and
oncology areas as growth drivers
P13-16, 19-20,
39, 53-62
Enhancing capabilities to deliver
innovative medicines
• Open innovation through the Network Research System
• Multi-tracked the R&D process through the use of FASTEN
• Strengthened, enriched and expanded the pipeline
• Acquired Ganymed Pharmaceuticals AG
• Focused disease areas for research
Existing diseases: Urology, oncology, immunology,
nephrology and neuroscience
New diseases: Muscle diseases and ophthalmology
Advancing into new opportunities
• New technologies and new modalities: regenerative
medicine, vaccines, etc.
• Acquired Ocata Therapeutics, Inc. (cell therapy)
• Strengthened oncology (acquired OSI Pharmaceuticals,
Create innovation
Strategy for therapeutic areas
• Strengthened and maintained position as a Global
Category Leader (GCL) in the urology and
transplantation areas
Inc.) as a third GCL area
Regional strategy
• Implemented well-balanced business expansion in
Japan, the Americas, EMEA and Asia & Oceania
• Invested further in emerging countries
R&D innovation strategy
• Promoted a precision medicine approach
• Harnessed cutting-edge technologies (antibody,
regenerative medicine, vaccines, etc.)
• Focused disease areas for research (urology,
immunology and infectious diseases, oncology,
neuroscience diseases, diabetes complications and
metabolic diseases)
• Enriched and expanded the pipeline
Utilization of
human resources
• Achieved an agile, highly productive organizational
structure and optimized personnel
Efficiency
strategy
• Allocated resources efficiently through execution of the
therapeutic area strategy
• Optimal allocation of expenses
Pursuing operational excellence
P13-16, 20, 40, 63-70
• Streamlined costs further by reviewing operational processes
• Five approaches, including the optimal reallocation of resources
Initiatives to fulfill social responsibilities
Value protection
Activities centered on
environmental preservation, ethics and
compliance and social contribution
Value creation + Value protection
Contribution through business, including activities to improve Access to Health,
in addition to existing activities based on CSR
Market capitalization (¥ billion)
• Patent expiry of Harnal and Prograf
• Launched XTANDI and
Betanis/Myrbetriq/BETMIGA
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
(Year)
5,000
4,000
3,000
2,000
1,000
0
5
IntroductionAstellas Pharma Inc. ANNUAL REPORT 2017 Astellas will steadily expand business by optimally allocating resources, along with
focusing on building a business foundation to sustain growth.
Mid-Term
Management
Plan
2006-2010
Concentrate resources on the innovative drug
business, strengthening product creation capabilities
and building a solid global business foundation
Global business
expansion in Japan,
the Americas, EMEA
and Asia & Oceania
• Expanded the urology franchise area while maintaining a
leading position in transplantation
• Implemented growth strategies according to regional
characteristics in Japan, the Americas, EMEA and Asia
& Oceania
R&D
• Global in-house development of compounds with
high potential
• Focused disease areas for research (urology, immunology
and inflammatory, central nervous system and pain,
diabetes, infectious disease, oncology)
• Established global development headquarters in the U.S.
• Acquired Agensys, Inc.
Implemented
growth
strategies
Cost structure
reforms
• Realigned the production framework (from 18 to 10 sites)
Mid-Term
Management
Plan
2010-2014
Overcome the impacts of patent expiry for core
products and accelerate growth to a new
stage based on both growth and efficiency strategies
Strategy for therapeutic areas
• Strengthened and maintained position as a Global
Category Leader (GCL) in the urology and
transplantation areas
• Strengthened oncology (acquired OSI Pharmaceuticals,
Inc.) as a third GCL area
Regional strategy
• Implemented well-balanced business expansion in
Japan, the Americas, EMEA and Asia & Oceania
• Invested further in emerging countries
R&D innovation strategy
• Promoted a precision medicine approach
• Harnessed cutting-edge technologies (antibody,
regenerative medicine, vaccines, etc.)
• Focused disease areas for research (urology,
immunology and infectious diseases, oncology,
neuroscience diseases, diabetes complications and
metabolic diseases)
• Enriched and expanded the pipeline
2015-2017
Strategic
Plan
Steadily advance three strategic priorities to achieve
sustainable growth over the medium and long terms,
while flexibly responding to changes in the environment
Maximizing the
product value
• Expanded sales of new products
• Rapidly established urology (overactive bladder) and
P13-16, 17-18,
38, 43-52
oncology areas as growth drivers
Create innovation
P13-16, 19-20,
39, 53-62
Enhancing capabilities to deliver
innovative medicines
• Open innovation through the Network Research System
• Multi-tracked the R&D process through the use of FASTEN
• Strengthened, enriched and expanded the pipeline
• Acquired Ganymed Pharmaceuticals AG
• Focused disease areas for research
Existing diseases: Urology, oncology, immunology,
nephrology and neuroscience
New diseases: Muscle diseases and ophthalmology
Advancing into new opportunities
• New technologies and new modalities: regenerative
medicine, vaccines, etc.
• Acquired Ocata Therapeutics, Inc. (cell therapy)
Utilization of
human resources
• Achieved an agile, highly productive organizational
structure and optimized personnel
Efficiency
strategy
• Allocated resources efficiently through execution of the
therapeutic area strategy
• Optimal allocation of expenses
• Streamlined costs further by reviewing operational processes
Pursuing operational excellence
• Five approaches, including the optimal reallocation of resources
P13-16, 20, 40, 63-70
Value protection
Activities centered on
environmental preservation, ethics and
compliance and social contribution
Value creation + Value protection
Contribution through business, including activities to improve Access to Health,
in addition to existing activities based on CSR
• Patent expiry of Harnal and Prograf
• Launched XTANDI and
Betanis/Myrbetriq/BETMIGA
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
(Year)
6
Initiatives to fulfill social responsibilities
Market capitalization (¥ billion)
5,000
4,000
3,000
2,000
1,000
0
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Astellas Today (Fiscal 2016/as of March 31, 2017)
As a global pharmaceutical company conducting business in more than 50 countries
around the world, Astellas is focused on expanding new drugs and growth products,
and creating innovative medicines that will help it to achieve sustainable growth.
Market capitalization
(as of June 30, 2017)
¥2.8
trillion
Sales
¥1,311.7
billion
Core Operating Profit
¥274.6
billion
Core Operating Margin
20.9%
ROE 17.3%
Related Information Definition of Financial Results on a Core Basis
P10
7
R&D Expenses
¥208.1
billion
R&D Ratio to Sales
%
15.9
35
Number of new
molecular/
biological entities
in the pipeline
* Number of new molecular/biological entities in the pipeline as of
April 2017 (partially updated)
Number of ongoing collaborative
research projects
More than100
Number of R&D personnel
Approx. 3,200
Sales composition of the three main therapeutic areas and main products
Oncology
23.5 %
• XTANDI
Urology
16.4
• Vesicare
%
• Betanis/Myrbetriq/BETMIGA
Transplantation
14.2
%
• Prograf
Number of countries where Astellas
Sales by region
has its own distribution channels
Asia & Oceania
Japan
countries50
Approx.
Number of Medical
Representatives (MRs)
5,750
Approx.
¥87.7
billion
6.7
%
EMEA
¥330.8 billion
25.2
%
Number of employees by region
Number of employees
17,202
Asia & Oceania
2,485
EMEA
4,672
¥480.8
billion
36.7
%
Americas
¥412.4 billion
31.4 %
Japan
7,029
Americas
3,016
IntroductionAstellas Pharma Inc. ANNUAL REPORT 2017 As a global pharmaceutical company conducting business in more than 50 countries
around the world, Astellas is focused on expanding new drugs and growth products,
and creating innovative medicines that will help it to achieve sustainable growth.
Sales composition of the three main therapeutic areas and main products
Oncology
23.5 %
• XTANDI
Transplantation
14.2
%
• Prograf
Urology
16.4
%
• Vesicare
• Betanis/Myrbetriq/BETMIGA
Number of countries where Astellas
has its own distribution channels
Number of Medical
Representatives (MRs)
Approx.
countries50
5,750
Approx.
Sales by region
Asia & Oceania
¥87.7
6.7
%
billion
EMEA
¥330.8 billion
25.2
%
Number of employees by region
Number of employees
17,202
Asia & Oceania
2,485
EMEA
4,672
Japan
¥480.8
36.7
billion
%
Americas
¥412.4 billion
31.4 %
Japan
7,029
Americas
3,016
8
Market capitalization
(as of June 30, 2017)
¥2.8
trillion
Sales
¥1,311.7
billion
Core Operating Profit
¥274.6
billion
Core Operating Margin
20.9%
R&D Expenses
¥208.1
billion
R&D Ratio to Sales
15.9
%
Number of new
molecular/
biological entities
in the pipeline
35
* Number of new molecular/biological entities in the pipeline as of
April 2017 (partially updated)
Number of ongoing collaborative
research projects
More than100
ROE 17.3%
Related Information Definition of Financial Results on a Core Basis
P10
Number of R&D personnel
Approx. 3,200
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Financial and Non-Financial Highlights
Despite a decline in sales in the fiscal year ended March 31, 2017 due to the impact of
foreign exchange rates, all levels of profit increased. We will steadily advance initiatives on
strategic priorities for sustainable growth.
Sales by Region
Core Operating Profit /
Core Operating Margin
R&D Expenses /
R&D Ratio to Sales
Dividends per Share / DOE
Number of Participants in
Changing Tomorrow Day
1,311.7
87.7
330.8
74.2
313.3
329.3
1,372.7
91.1
1,247.3
Core operating
margin
(%)
25
Japan
Americas
EMEA
Asia & Oceania
Core operating profit
(¥ billion)
1,500.0
1,200.0
900.0
600.0
300.0
0
(¥ billion)
400.0
320.0
240.0
160.0
80.0
0
361.0
455.1
412.4
498.7
497.2
480.8
20.9
19.5
267.5
274.6
17.4
216.5
20
15
10
5
0
R&D expenses
R&D ratio to sales
Dividends per share
Japan
Americas
EMEA
Asia & Oceania
(¥ billion)
350.0
280.0
16.6
16.4
15.9
210.0
206.6
225.7
208.1
140.0
70.0
0
(%)
20
16
12
8
4
0
(¥)
50
40
30
20
10
0
(TJ)
5,000
3,000
2,000
1,000
0
5.1
30
5.4
32
5.6
34
DOE
(%)
6
5
4
3
2
1
0
10,000
7,500
5,000
2,500
0
over
6,937
7,449
682
over
597
2,246
1,133
472
2,179
6,618
724
410
2,198
3,412
3,665
3,286
Number of Employees /
Female Employee Ratio /
Female Manager Ratio
Number of
employees
(people)
50,000
Female employee ratio
Female manager ratio
42.6
29.9
43.5
44.0
32.2
32.6
17,113
17,217
17,202
40,000
30,000
20,000
10,000
0
(%)
50
40
30
20
10
0
Energy Consumption /
Greenhouse Gas Emissions
Energy consumption
Greenhouse gas
emissions
4,000
3,923
3,917
3,801
10,456
10,331
8,788
(kilotons)
500
(thousand m3)
12,000
400
300
200
100
0
9,000
6,000
3,000
0
210
185
179
Definition of Financial Results on
a Core Basis
We disclose our financial results under IFRS on
a core basis to help provide an accurate
indication of the Group’s recurring profitability.
Certain items reported in financial results
under IFRS on a full basis that are deemed to
be non-recurring items by the Company are
excluded as non-core items on a core basis.
Consolidated Financial
Consolidated Financial
Results (Full Basis)
Results (Core Basis)
Sales
Cost of sales
Gross profit
Selling, general
and administrative
expenses
R&D expenses
Amortisation of
intangible assets
Share of profits of
associates and
joint ventures
Other income
Other expense
Operating profit
Finance income
Finance expense
Profit before tax
Income tax expense
Profit for the year
Non-recurring other
income and other
expense within
IFRS-based operating
profit are excluded (for
example, items such as
impairment losses or
restructuring expenses)
Core operating
profit
Adjustments for finance
income and finance
expense (for example,
gain (loss) on sale of
available-for-sale (AFS)
financial assets and
impairment losses on AFS
financial assets are
excluded)
Core profit for the year
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
Consolidated sales decreased by 4.4%
year on year. Sales in Japan decreased
mainly due to the impact of revisions to
NHI drug prices, while sales in the
Americas, EMEA and Asia & Oceania
increased excluding the foreign
exchange impact.
Core operating profit increased 2.7%
year on year to ¥274.6 billion. The core
operating margin was 20.9%. Excluding
the impact of foreign exchange rates
and the transfer of the dermatology
business, core operating profit rose 9%.
Research and development (R&D)
expenses decreased 7.8% year on year to
¥208.1 billion, partly due to the impact of
foreign exchange rates. The ratio of R&D
expenses to sales was 15.9%.
Astellas strives to increase dividend
payments stably and continuously
based on medium- to long-term profit
growth. In fiscal 2016, the annual
dividend was ¥34 per share,
representing a DOE of 5.6%.
Astellas employees conduct a variety of
volunteer activities as part of Changing
Tomorrow Day based on the themes of
promoting healthcare and maintaining
the environment. In fiscal 2016, 6,618
employees participated in Changing
Tomorrow Day worldwide.
On a global basis, the female employee
ratio was 44.0%, and the female
manager ratio was 32.6%. In Japan,
where the ratio of female employees in
managerial positions is particularly low,
improving the female manager ratio is
an urgent issue for Astellas.
Core Profit for the Year
Free Cash Flow
ROE
Amount of Water Withdrawal
213.3
198.8
153.2
(¥ billion)
240.0
180.0
120.0
60.0
0
166.7
162.2
116.2
(¥ billion)
200.0
150.0
100.0
50.0
0
(%)
20
15
10
5
0
17.3
15.0
10.5
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
Core profit for the year increased by 7.3%
year on year to ¥213.3 billion, tracking
the increase in core operating profit.
Free cash flow in fiscal 2016 was ¥162.2
billion, as a decrease in net cash flows
from operating activities were mostly
offset by an increase in proceeds from
sales of available-for-sale financial assets.
ROE was 17.3%. Positioning ROE as a key
performance indicator, Astellas aims to
maintain and improve ROE over the
medium to long term by maximizing
earnings capabilities and enhancing
capital efficiency.
Greenhouse gas emissions were 179
kilotons. Emissions were reduced mainly
due to improvement in the electricity
CO2 emissions coefficient and the
transfer of the Norman Plant in the U.S.
Aiming to establish a recycling-oriented
society, Astellas has been striving to reduce
water withdrawal. In fiscal 2016, Astellas
established a new management indicator
called “water resources productivity” (page
79), and has been working to make
improvements on this front.
* Figures for prior fiscal years are restated to reflect
the addition of overseas research sites to the
scope of reporting.
9
IntroductionAstellas Pharma Inc. ANNUAL REPORT 2017 Despite a decline in sales in the fiscal year ended March 31, 2017 due to the impact of
foreign exchange rates, all levels of profit increased. We will steadily advance initiatives on
strategic priorities for sustainable growth.
Sales by Region
(¥ billion)
1,500.0
1,200.0
1,247.3
900.0
600.0
300.0
0
1,372.7
1,311.7
91.1
74.2
313.3
329.3
87.7
330.8
361.0
455.1
412.4
498.7
497.2
480.8
20.9
19.5
267.5
274.6
17.4
216.5
16.6
16.4
15.9
210.0
206.6
225.7
208.1
Core operating
margin
(%)
25
20
15
10
5
0
(¥ billion)
350.0
280.0
140.0
70.0
0
(%)
20
16
12
8
4
0
Core Operating Profit /
Core Operating Margin
R&D Expenses /
R&D Ratio to Sales
Dividends per Share / DOE
Number of Participants in
Changing Tomorrow Day
Japan
Americas
EMEA
Asia & Oceania
Core operating profit
R&D expenses
R&D ratio to sales
Dividends per share
5.1
30
5.4
32
5.6
34
(¥)
50
40
30
20
10
0
DOE
(%)
6
5
4
3
2
1
0
Japan
Americas
EMEA
Asia & Oceania
10,000
7,500
5,000
2,500
0
over
6,937
682
over
597
2,246
7,449
1,133
472
2,179
6,618
724
410
2,198
3,412
3,665
3,286
Number of Employees /
Female Employee Ratio /
Female Manager Ratio
Number of
employees
(people)
50,000
Female employee ratio
Female manager ratio
(%)
50
42.6
29.9
43.5
44.0
32.2
32.6
17,113
17,217
17,202
40,000
30,000
20,000
10,000
0
40
30
20
10
0
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
Consolidated sales decreased by 4.4%
year on year. Sales in Japan decreased
mainly due to the impact of revisions to
NHI drug prices, while sales in the
Americas, EMEA and Asia & Oceania
increased excluding the foreign
exchange impact.
Core operating profit increased 2.7%
year on year to ¥274.6 billion. The core
operating margin was 20.9%. Excluding
the impact of foreign exchange rates
and the transfer of the dermatology
business, core operating profit rose 9%.
Research and development (R&D)
expenses decreased 7.8% year on year to
¥208.1 billion, partly due to the impact of
foreign exchange rates. The ratio of R&D
expenses to sales was 15.9%.
Astellas strives to increase dividend
payments stably and continuously
based on medium- to long-term profit
growth. In fiscal 2016, the annual
dividend was ¥34 per share,
representing a DOE of 5.6%.
Astellas employees conduct a variety of
volunteer activities as part of Changing
Tomorrow Day based on the themes of
promoting healthcare and maintaining
the environment. In fiscal 2016, 6,618
employees participated in Changing
Tomorrow Day worldwide.
On a global basis, the female employee
ratio was 44.0%, and the female
manager ratio was 32.6%. In Japan,
where the ratio of female employees in
managerial positions is particularly low,
improving the female manager ratio is
an urgent issue for Astellas.
Core Profit for the Year
Free Cash Flow
ROE
213.3
198.8
153.2
166.7
162.2
17.3
15.0
116.2
10.5
(¥ billion)
240.0
180.0
120.0
60.0
0
(%)
20
15
10
5
0
Energy Consumption /
Greenhouse Gas Emissions
Energy consumption
Greenhouse gas
emissions
Amount of Water Withdrawal
(TJ)
5,000
(kilotons)
500
(thousand m3)
12,000
10,456
10,331
8,788
4,000
3,923
3,917
3,801
210
185
179
3,000
2,000
1,000
0
400
300
200
100
0
9,000
6,000
3,000
0
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
2015.3
2016.3
2017.3
Core profit for the year increased by 7.3%
year on year to ¥213.3 billion, tracking
the increase in core operating profit.
Free cash flow in fiscal 2016 was ¥162.2
billion, as a decrease in net cash flows
from operating activities were mostly
offset by an increase in proceeds from
sales of available-for-sale financial assets.
ROE was 17.3%. Positioning ROE as a key
performance indicator, Astellas aims to
maintain and improve ROE over the
medium to long term by maximizing
earnings capabilities and enhancing
capital efficiency.
Greenhouse gas emissions were 179
kilotons. Emissions were reduced mainly
due to improvement in the electricity
CO2 emissions coefficient and the
transfer of the Norman Plant in the U.S.
Aiming to establish a recycling-oriented
society, Astellas has been striving to reduce
water withdrawal. In fiscal 2016, Astellas
established a new management indicator
called “water resources productivity” (page
79), and has been working to make
improvements on this front.
* Figures for prior fiscal years are restated to reflect
the addition of overseas research sites to the
scope of reporting.
Definition of Financial Results on
a Core Basis
We disclose our financial results under IFRS on
a core basis to help provide an accurate
indication of the Group’s recurring profitability.
Certain items reported in financial results
under IFRS on a full basis that are deemed to
be non-recurring items by the Company are
excluded as non-core items on a core basis.
Consolidated Financial
Results (Full Basis)
Consolidated Financial
Results (Core Basis)
Sales
Cost of sales
Gross profit
Selling, general
and administrative
expenses
R&D expenses
Amortisation of
intangible assets
Share of profits of
associates and
joint ventures
Other income
Other expense
Operating profit
Finance income
Finance expense
Profit before tax
Income tax expense
Profit for the year
Non-recurring other
income and other
expense within
IFRS-based operating
profit are excluded (for
example, items such as
impairment losses or
restructuring expenses)
Core operating
profit
Adjustments for finance
income and finance
expense (for example,
gain (loss) on sale of
available-for-sale (AFS)
financial assets and
impairment losses on AFS
financial assets are
excluded)
Core profit for the year
10
(¥ billion)
400.0
320.0
240.0
160.0
80.0
0
(¥ billion)
200.0
150.0
100.0
50.0
0
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Corporate Strategy and Corporate Governance
Anticipating and Flexibly Incorporating
Change Is the Key to
Achieving Sustained Growth
Astellas will proactively incorporate state-of-the-art scientific and technological
advances and turn them into value for patients.
To achieve this, we will continue to transform ourselves and flexibly utilize
external capabilities.
We will make ceaseless efforts to further increase society’s trust in us.
Astellas will continue these initiatives in response to a rapidly changing business
environment, thereby achieving sustained growth.
Editorial Policy
To enable deeper stakeholder understanding of
Astellas’ efforts to continue to create value for
sustainable growth, the Company has published this
annual report as an integrated report.
In this report, we have attempted to provide
disclosure while taking note of the Guiding Principles
and Content Elements of the international integrated
reporting framework of the International Integrated
Reporting Council (IIRC). We have also referred to G4
Sustainability Reporting Guidelines* published by the
Global Reporting Initiative and Environmental
Reporting Guidelines (Fiscal Year 2012 Version) issued
by Japan’s Ministry of the Environment.
In creating the report, we have sought to make an
effective tool for communicating with our many
stakeholders. We have therefore used charts and
photographs, and endeavored to use plain language
that is easy to read.
Astellas has adopted the International Financial
Reporting Standards (IFRS), effective from fiscal 2013.
Information in this report is based on IFRS unless
otherwise indicated.
* For the GRI Content Index, please visit the following website:
https://www.astellas.com/en/csr/management/report.html
Scope of the Report
Period covered
Fiscal 2016 (April 1, 2016 - March 31, 2017)
* As much as possible, we have used the latest information
available at the time of publication.
* The period and scope of coverage may vary depending on the
subject. We have noted each such case individually.
* The figures indicated in the field of Environment represent the
results for fiscal 2016 (April 1, 2016 to March 31, 2017) in Japan
and the calendar year 2016 (January 1 to December 31, 2016)
for overseas operations as a combined total.
Organizations covered
Astellas Pharma Inc. and its consolidated subsidiaries in Japan
and overseas (referred to in the report as “Astellas”)
* The Americas includes North America and Latin America, and
EMEA includes Europe, the Middle East, and Africa.
* In the field of Environment, the report covers all business sites
in Japan and production sites overseas, which are subject to
the Environmental Action Plan, as well as overseas sites not
covered by the plan such as principal office buildings, research
facilities, sales office buildings, and sales fleets.
Note: In the information about pharmaceutical products in this report,
market size, market share and product ranking are sourced from
IMS Health Information Services.
Copyright © 2017 QuintilesIMS.
Calculated based on IMS MIDAS 2017Q1 MAT
Reprinted with permission
Astellas has launched a new global website as part of efforts to enhance the transparency of
the Company and to strengthen its brand power. In order to promote further understanding of
Astellas, the website is designed to be easy to read, easy to use, and easy to understand, and
features content created according to these goals.
By harnessing a variety of communication tools, including this new website, Astellas will
work to provide timely and proper disclosure, as it strive to become the company of choice for
all stakeholders.
Websites
Global Website
https://www.astellas.com/en/
11
IntroductionAstellas Pharma Inc. ANNUAL REPORT 2017 Editorial Policy
To enable deeper stakeholder understanding of
Scope of the Report
Astellas’ efforts to continue to create value for
sustainable growth, the Company has published this
annual report as an integrated report.
In this report, we have attempted to provide
disclosure while taking note of the Guiding Principles
and Content Elements of the international integrated
reporting framework of the International Integrated
Reporting Council (IIRC). We have also referred to G4
Sustainability Reporting Guidelines* published by the
Global Reporting Initiative and Environmental
Reporting Guidelines (Fiscal Year 2012 Version) issued
by Japan’s Ministry of the Environment.
In creating the report, we have sought to make an
effective tool for communicating with our many
stakeholders. We have therefore used charts and
photographs, and endeavored to use plain language
that is easy to read.
Astellas has adopted the International Financial
Reporting Standards (IFRS), effective from fiscal 2013.
Information in this report is based on IFRS unless
otherwise indicated.
* For the GRI Content Index, please visit the following website:
https://www.astellas.com/en/csr/management/report.html
Period covered
Fiscal 2016 (April 1, 2016 - March 31, 2017)
* As much as possible, we have used the latest information
available at the time of publication.
* The period and scope of coverage may vary depending on the
subject. We have noted each such case individually.
* The figures indicated in the field of Environment represent the
results for fiscal 2016 (April 1, 2016 to March 31, 2017) in Japan
and the calendar year 2016 (January 1 to December 31, 2016)
for overseas operations as a combined total.
Organizations covered
Astellas Pharma Inc. and its consolidated subsidiaries in Japan
and overseas (referred to in the report as “Astellas”)
* The Americas includes North America and Latin America, and
EMEA includes Europe, the Middle East, and Africa.
* In the field of Environment, the report covers all business sites
in Japan and production sites overseas, which are subject to
the Environmental Action Plan, as well as overseas sites not
covered by the plan such as principal office buildings, research
facilities, sales office buildings, and sales fleets.
Note: In the information about pharmaceutical products in this report,
market size, market share and product ranking are sourced from
IMS Health Information Services.
Copyright © 2017 QuintilesIMS.
Calculated based on IMS MIDAS 2017Q1 MAT
Reprinted with permission
Websites
Global Website
https://www.astellas.com/en/
Astellas has launched a new global website as part of efforts to enhance the transparency of
the Company and to strengthen its brand power. In order to promote further understanding of
Astellas, the website is designed to be easy to read, easy to use, and easy to understand, and
features content created according to these goals.
By harnessing a variety of communication tools, including this new website, Astellas will
work to provide timely and proper disclosure, as it strive to become the company of choice for
all stakeholders.
Corporate Strategy and Corporate Governance
Anticipating and Flexibly Incorporating
Change Is the Key to
Achieving Sustained Growth
Astellas will proactively incorporate state-of-the-art scientific and technological
advances and turn them into value for patients.
To achieve this, we will continue to transform ourselves and flexibly utilize
external capabilities.
We will make ceaseless efforts to further increase society’s trust in us.
Astellas will continue these initiatives in response to a rapidly changing business
environment, thereby achieving sustained growth.
12
Astellas Pharma Inc. ANNUAL REPORT 2017 CEO Message
Flexibly Incorporate
Cutting-Edge Science and
Technology, Turning It into
Value for Patients
Yoshihiko Hatanaka
Representative Director, President and CEO
The Environment Surrounding the Pharmaceutical Industry and Astellas’ Vision
Reference
As Long as We Don’t Lose Our Vision, We Can Surmount a Changing
Business Environment
As the business environment surrounding Astellas undergoes changes, I believe there are two
broad themes that will profoundly impact our businesses. The first theme is productivity in R&D.
Drug discovery is becoming increasingly difficult because drug targets have become more
complicated and the regulatory standard for new drug approval has become more strict. Under
these conditions, R&D productivity has been decreasing, presenting a major issue for the entire
pharmaceutical industry. The second theme concerns the problems surrounding access to medicine.
Poverty, underdeveloped healthcare systems, and other factors have hindered patient access to
medicines. We must find ways of improving access to medicines for the people who need them.
Moreover, in the past few years, there has been extremely strong pressure in various countries to
reduce the price of pharmaceuticals caused by healthcare financing and patients’ affordability.
Meanwhile, these changes in the environment are major management priorities for
pharmaceutical companies. If we could solve the challenges they present, we would be able to
deliver significant value to patients. I believe that we must always keep this perspective in mind. If
we are able to improve R&D productivity, we could deliver treatment modalities as early as possible
to patients who previously did not have any effective treatment options. Improving patient access
to medicines is an issue that must be ultimately examined based on the value for patients. In the
past, pharmaceutical companies have seen their roles as confined to developing good medicines,
obtaining regulatory approval, and launching those products in the marketplace. They have not
13
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 taken adequate steps to ensure access to medicines by individual patients. However, only after
launched drugs reach patients do they show their worth. Going forward, I believe that we must
take proactive steps on this front as well.
The environment surrounding Astellas has been changing at a dizzying pace and has become
increasingly complex. However, Astellas’ vision—turning innovative science on the forefront of
healthcare change into value for patients —will guide us forward as we determine our future
course of action. As long as we stay focused on our vision, I’m confident that we will be able to find
a way to surmount our challenging environment.
Reference
Medium-Term Strategy
P17
Our People,
Our Organization
P64
Imperatives for Further Growth
Our Vision and Strategy Remain Unchanged, but More Flexible
Collaboration with External Partners Is Now Crucial
There has been no change in our vision, or our strategy for realizing the vision, which is our goal.
However, in the course of executing our strategy, I believe that it has become more crucial than
ever to build up a flexible network and incorporate external capabilities.
One key to solving the issues I discussed earlier is technological advancement. In drug
discovery fields, the flexible use of new technologies, such as regenerative medicine, cell therapy,
gene therapy, and platforms for new vaccines, will enable us to take unprecedented approaches to
delivering innovative medicines. Advances in information technology are also becoming a critical
factor behind drug discovery. The use of real-world data* is expected to help improve overall R&D
productivity and the probability of success as a matter of course. Real-world data is also expected
to be used to clarify the basis for setting drug prices. Apart from this, technologies that could
dramatically increase value provided to patients and society as a whole are continuously evolving
day by day, driven by progress on artificial intelligence, diagnostic technologies and other fronts.
Based on this reasoning, we cannot completely create the final value we deliver using our own
internal resources alone. That is why we must enhance our sensitivity to the world outside the
Company and flexibly incorporate new technologies, human resources, approaches, and methods.
In doing so, we must enhance Astellas’ Group-wide capabilities and continuously create innovation
that maximizes the final value we deliver. This approach will be absolutely essential to driving our
strategies even further.
* Anonymized data obtained from clinical sites.
Highly Eager to Obtain New Technology and Evolving into a Company
Which Is Flexibly Incorporating External Capabilities
Our vision is to turn innovative science into value for patients. That vision cannot be realized simply
by preparing products and organizations already in place. The success of the vision will depend on
whether every employee working at Astellas will take ownership of their duties based on an
understanding of the Astellas Way and our aspirations for the organization. Guided by this firm
belief, we have compiled our HR Vision, which lays out expectations for human resources and
organizations that all members of Astellas should share on a global basis, and we have been
concentrating on instilling this vision in employees.
14
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 We have been working to foster an organizational culture and nurture human resources by
Reference
consistently conveying the importance of respecting diversity, anticipating change and embracing
Medium-Term Strategy
challenges, focusing our thinking outwards and flexibly incorporating new initiatives. These efforts
are already producing concrete results. For example, in the research field, Astellas has realized more
than 20 new collaborations in the space of around three years. In new therapeutic areas (muscle
diseases and ophthalmology), we have rapidly launched new projects in tandem by adding several
P17
Business Review
P36
new collaborations in these areas. Moreover, in the real-world informatics function*, in just 1.5
years since this initiative was started, we have already completed numerous analyses and are
sharing the results across various departments and regions. I am confident that Astellas is highly
eager to obtain new technology and has been evolving into a company that is flexibly
incorporating external capabilities and transforming them into its own strengths.
* A department launched in July 2015 that integrates the utilization of big data and its capabilities into a single specialized function.
Progress on Strategic Priorities in the Strategic Plan
Steady Progress on the Three Strategic Priorities
Strengthening the Current Base and the Foundations for Medium- to
Long-Term Growth
As the President and CEO of Astellas, my duties are to lay the groundwork for Astellas to
incorporate new initiatives in the manner described above and to transform these new initiatives
into the Company’s own strengths. I also have a duty to constantly consider and decide on trade-
offs between what to incorporate as new initiatives and what to discontinue in their place. If we
only incorporate new initiatives without discontinuing other operations, management will become
inefficient. Astellas will always flexibly review its own operations and take decisive measures with
speed, such as by reshaping its business portfolio. In fact, this commitment is embodied by one of
our strategic themes, “Pursuing Operational Excellence.” In the fiscal year ended March 31, 2017, we
accelerated these initiatives through the transfer of our global dermatology business and 16
long-listed products manufactured and marketed in Japan.
With regard to “Maximizing the Product Value,” we saw steady growth in the oncology field
driven by the prostate cancer treatment XTANDI and in the overactive bladder (OAB) franchise. In
other areas, there was a steady expansion in products underpinning growth in each region. Overall,
performance is progressing largely as planned.
In “Creating Innovation,” development projects in late-stage clinical development are
advancing steadily, beginning with gilteritinib. In addition, we launched new products such as
Repatha, a treatment for hypercholesterolemia, in Japan. Moreover, we are pushing ahead with
initiatives that will contribute to patients over the medium and long terms, including advancing
R&D in new therapeutic areas and treatment modalities, including muscle diseases,
ophthalmology, and next-generation vaccines, along with expanding late-stage development
assets through the acquisition of Ganymed Pharmaceuticals AG and Ogeda SA.
15
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 Measures to Address Compliance
A Stronger Focus on Building a Foundation to Ensure Trust
We regard compliance as a crucial undertaking to maintain Astellas’ sustained growth and the trust
of stakeholders into the future. First and foremost, all members of Astellas must conduct
themselves based on high ethics, besides ensuring compliance with laws and regulations as a
matter of course. In addition, as the responsibility of a company undertaking business in over 50
countries around the world, we must encourage the business partners with whom we work with in
each country to conduct themselves in accordance with Astellas’ high ethical standards. To realize
these initiatives at a higher level, we unified the Astellas Group Code of Conduct on a global basis
and reconfigured the Ethics & Compliance Department as a global organization completely
independent of the operating divisions.
We are a consistent supporter of the United Nations Global Compact, and have incorporated
its 10 principles covering the four fields of human rights, labor, the environment and anti-
Reference
Ethics & Compliance
P67
Contribution to the
Sustainable
Development Goals
P71
Access to Health
P72
corruption into our daily business activities.
Measures to Address Access to Health Issues
Promoting This Initiative Proactively in Cooperation with External Partners
To address Access to Health issues, which is a global priority, we continue to make contributions by
harnessing our technologies, expertise and resources in each of the following four areas: (1)
Creating innovation, which is our core business, (2) Enhancing availability, (3) Strengthening
healthcare systems, and (4) Improving health literacy. In January 2017, we participated in Access
Accelerated, a global initiative to enhance access to the prevention, diagnosis, and treatment of
non-communicable diseases in low income countries and lower middle income countries. Going
forward, we will expand these activities in cooperation with governments, other pharmaceutical
companies, and third-party bodies.
To Our Stakeholders
Achieve Long-Term Growth by Capturing Change and Turning It into
Value for Patients
The business environment surrounding the pharmaceutical industry is in constant flux. Astellas will
achieve long-term growth by capturing this change and turning it into value for patients. I would
like our stakeholders to constantly evaluate whether Astellas is definitely evolving into the
realization of its vision. We aim to create new value based on dialogue with our stakeholders by
implementing even higher quality management.
Yoshihiko Hatanaka
Representative Director,
President and CEO
16
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Medium-Term Strategy
Focusing on three strategic priorities for realizing sustainable growth over the medium and
long terms
Overview of Strategic Plan 2015-2017
Maximizing the product value
Enhancing capabilities to
deliver innovative medicines
Advancing into
new opportunities
Creating innovation
Exploring and capturing external business opportunities through acquisition, collaboration, and in-licensing
Net sales
Pursuing operational excellence
2015.3
2016.3
2017.3
2018.3
Under Strategic Plan 2015-2017, covering the three years
from fiscal 2015 to fiscal 2017, we will work on three
strategic priorities. We target “Maximizing the Product
Value,” including XTANDI and our overactive bladder (OAB)
franchise, “Creating Innovation” to sustainably create
innovative drugs, and “Pursuing Operational Excellence” in
order to enhance our ability to address the changing
business environment. By steadily implementing these, we
are working to overcome the impact of the substance
patent expiries for our OAB treatment Vesicare and our
anticancer product Tarceva in the period of 2018 to 2020,
and aim to achieve sustainable growth.
Financial Guidance
Astellas has recognized return on equity attributable to
owners of the parent (ROE) as an important management
indicator. Under Strategic Plan 2015-2017, we aim to
achieve ROE of 15% or more by seeking to maximize our
earnings capabilities while ensuring that we enhance
capital efficiency. We also aim to maintain and improve
this level after the strategic plan period.
We prioritize the maximization of our earnings
capabilities by maximizing the product value as a way of
achieving growth in sales, while promoting measures to
optimize cost of sales and SG&A expenses. In this way, we
seek to maximize operating profit prior to deduction of
R&D expenses. We plan to direct sufficient resources to
investment in R&D to existing therapeutic areas as well as
new opportunities, while also working to improve our
operating margin.
Moreover, we are pursuing balance sheet
management and actively targeting shareholder returns,
to enhance capital efficiency.
17
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 Financial guidance regarding the figures during the
period of the current strategic plan is as follows.
Financial Guidance in Strategic Plan 2015-2017
Expanding Sales in the Major Therapeutic Areas
Astellas is working to expand sales in therapeutic areas
which have major products, including oncology and
OAB franchises.
ROE
15% or more
Maintain and improve this level
after the strategic plan period
Consolidated
Sales
Core Operating
Profit
CAGR (%): Mid-single-digit
CAGR that exceeds sales CAGR
R&D Expenses
Higher than 17% against sales
Core EPS*1
CAGR that exceeds core operating
profit CAGR
DOE*2
6% or more
*1 Core earnings per share
*2 Dividend on equity attributable to owners of the parent
Maximizing the Product Value
Targeting Medium- to Long-Term Growth by
Expanding Mainstay Products and New Product
Group Sales
To ensure sustainable growth during and after the current
strategic plan, Astellas will maximize the value of the products
that have been realized through its investments to date.
In particular, Astellas will prioritize the investment of
resources in its mainstay products and new product group
centered on XTANDI and the OAB franchise. In this way,
during the strategic plan, we forecast that the relative
composition ratio in total sales will decrease for key
products for which patents will expire by 2020. Nurturing
the major and new product groups early is an important
measure to overcome the impacts from patent expiry.
Oncology Franchise Our efforts are focused on
maximizing the value of XTANDI, our growth driver. We will
work to expand the geographical sales area of XTANDI,
while also working for label expansion to chemotherapy-
naïve prostate cancer and early penetration in each
country. Moreover, we will steadily advance clinical trials
with the aim of expanding indications for earlier stages of
prostate cancer.
OAB Franchise To overcome the anticipated impact
from the patent expiry of Vesicare and continue to increase
the value of our franchise, we will work intensively to drive
market penetration of Betanis/Myrbetriq/BETMIGA as a
new option for OAB treatment. In the final year of the
strategic plan, sales of Betanis/Myrbetriq/BETMIGA are
expected to have increased to account for approximately
half of the overall sales of the OAB franchise.
Other Areas The transplantation franchise has
established a strong presence with the
immunosuppressant Prograf. We expect continued growth
in Prograf in emerging countries, despite declines in the
Americas, EMEA, and Japan, where the substance patent
has expired.
In resource allocation, we will prioritize new products
in each region, aiming to achieve sales expansion at an
early stage. In Japan, we will work to steadily achieve
market penetration of new products including Suglat for
type 2 diabetes, Repatha for hypercholesterolemia, and
LINZESS which was launched for irritable bowel syndrome
with constipation in March 2017.
Major Initiatives in Year Ended March 31, 2017
• Growth of XTANDI
• Expansion of Betanis/Myrbetriq/BETMIGA in the OAB
Franchise
• Maximization of product value in other areas
P43
P45
P47
18
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Creating Innovation
Enhancing Capabilities to Deliver Innovative
Medicines through Acquisition of Cutting-Edge
Science and Optimal Resource Allocation
Astellas aims to continuously generate innovation through
the acquisition of cutting-edge science and optimal
resource allocation. Astellas is promoting open innovation
by building a Network Research System. This system
appoints optimal personnel and researchers from both
inside and outside the Company to undertake dynamic
research activities in the best possible environment, and
based on the world’s most innovative science. By
introducing a process named FASTEN to manage R&D
projects along one of three different tracks, Astellas has
achieved positive outcomes such as shortening of R&D
duration and increased cost efficiency.
In addition to the fields we have focused on to date,
namely urology, oncology, immunology, nephrology, and
neuroscience, we have selected muscle diseases and
ophthalmology as new focused disease areas for research
where we will concentrate our resources. There are high
unmet medical needs in these therapeutic areas, and we
aim to deliver new medicines while seeking alliance
opportunities with external partners.
Focused Disease Areas and Technologies/Modalities
Enhancing Capabilities to Deliver Innovative Medicines
Core
technologies
New technologies/
New modalities
Small
molecule
Antibody
Fusion
protein
Next-
generation
vaccines
Gene
therapy
Cell
therapy
Network
Research
System
Greater utilization
of external R&D
resources
Take on challenges
in new therapeutic
areas and drug
discovery
technologies
Best Science
Best Talent
Best Place
FASTEN
(FAST-Ex-New-standard)
Highest
resource
priority
FAST
TRACK
P
O
C
(
P
r
o
o
f
o
f
C
o
n
c
e
p
t
)
L
a
u
n
c
h
NEW
STANDARD
TRACK
Fastest POC
Utilize
external
resources
Ex. TRACK
Existing TAs
Oncology
Urology
Immunology
Nephrology
Neuroscience
New TAs
Muscle
Diseases
Ophthalmology
TAs: Therapeutic areas
19
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017
Pursuing New Opportunities
Astellas will make sufficient investments in opportunities
that pave the way for long-term growth, including new
therapeutic areas and the use of new technologies and
modalities, and medical solutions that leverage our
strengths, centered on the innovative drug business.
Newly selecting muscle diseases and ophthalmology
as focused disease areas for research, Astellas is
undertaking groundbreaking research through
partnerships with external entities. In the muscle disease
area, we are targeting ways to control the progression
of disease or achieve causal therapies. In the
ophthalmology area, we are targeting disorders of the
posterior eye segment for which no standard drug
treatments are available.
Astellas is also advancing initiatives leveraging new
technologies and modalities. In addition to working to
develop next-generation vaccines, we have commenced
cell therapy research in earnest. At the Astellas Institute for
Regenerative Medicine, Astellas is proactively promoting
research and development program of cell therapy in the
ophthalmology and other field.
Major Initiatives in Year Ended March 31, 2017
• Strengthening our oncology franchise and expanding
our development pipeline
• Achieving many milestones in clinical development
P53
P57
Pursuing Operational Excellence
Raising the Quality of Operations in Anticipation
of Change
Astellas strives to improve the quality and efficiency of
operations by keeping a close eye on changes in the
business environment from a number of perspectives, and
implementing measures in anticipation of these changes.
Astellas will optimize the allocation of management
resources in conjunction with making effective use of
external resources. We are constantly reviewing our
organization and functions to optimize our business
processes, cost structures and other aspects. From the
perspective of compliance, we will actively address laws,
regulations and social norms while working to further
increase the reliability of our products.
Major Initiatives in Year Ended March 31, 2017
• Enhance organizational structure
(Enhancement of global Ethics & Compliance function)
• Optimizing the allocation of resources
(Transfer of business of U.S. manufacturing subsidiary
and long-listed products in Japan)
P63
Advancing into New Opportunities
Our Approach to Operational Excellence
e m e d i c a l
a l a
s o l utions by combining a v
n d e x t e rnal healthcare capabilitie
arie
t
y
s
In n o v a ti v
of in t e r n
New therapeutic areas
Rx business
Advancing
into new
opportunities
Existing
therapeutic areas
Advancing
into new
opportunities
New technologies/
New modalities
Optimal reallocation of resources
Effective
utilization
of external
resources
Operational
Excellence
Continually
enhance
organizational
structure
Active response to
various regulations
and social norms
(compliance)
Strengthen core
capabilities
20
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 CFO Message
We will focus on optimal resource allocation and
establishing the best business structure to
achieve sustainable growth, responding to
changes in the business environment.
Chikashi Takeda Chief Financial Officer
Putting Highest Priority on Business
Investments for Future Growth
Astellas prioritizes allocating funds to business investments
for future growth in order to achieve a sustainable increase
in enterprise value.
The highest priority is on the investments to promptly
advance R&D projects that could create high added value,
and to acquire promising new drug candidates or cutting-
edge technologies. We will also invest in activities to
support growth such as leveraging real-world data, while
also allocating sufficient funds to investments to deal with
new risks, including enhancement of compliance. We will
review resource allocation from scratch as appropriate
based on environment changes. For example, we will
reduce or stop investments for areas that have already
matured and are not expected to grow in the future, or for
activities that do not lead to a competitive advantage.
Through these activities, we will strive to allocate optimal
management resources as a whole.
Looking at cash on hand, in addition to the working
capital needed to fund day-to-day operations, we will
Details of Shareholder Returns
Dividends per share*1 (left axis)
Profit for the year*2 (right axis)
maintain a certain level of cash on hand, in order to
respond flexibly to the need to make strategic investments
for future growth. Moreover, we are prepared for cases
where funding requirements exceed Astellas’ internal
funding capacity so that we can finance smoothly.
Further Enhancing the Level of Returns to
Shareholders
Astellas will target a stable and continuous increase in dividends
based on the medium- to long-term growth prospects for
consolidated earnings by taking into account dividend on
equity attributable to owners of parent (DOE). During Strategic
Plan 2015-2017, we are targeting DOE of 6% or more.
We will implement share buybacks flexibly as needed
based on an overall consideration of the business
environment, investment plans, and the level of cash on
hand, among other factors, with a view to further
enhancing capital efficiency and the level of returns to
shareholders. Our policy is to cancel acquired treasury
stock, in principle, except for the portion needed for stock
activities such as execution of existing stock options.
(yen)
40
30
20
10
0
(billion yen)
250
200
150
100
50
0
34
36
(billion yen)
Total dividends
Acquisition of own shares
Total return ratio (%)
2006.3 2007.3 2008.3 2009.3 2010.3 2011.3 2012.3 2013.3 2014.3 2015.3 2016.3 2017.3
2018.3
(Forecast)
39.3
46.2
82
42.3
219.9
200
55.2
81.8
77
56.9
123.4
106
58.2
27.0
70
57.7
–
85
57.7
–
74
59.4
49.4
118
60.6
30.0
100
66.0
58.2
92
68.5
119.3
97
71.3
91.4
74
74.4
*1 The Company conducted a stock split of common stock at a ratio of 5 for 1 with an effective date of April 1, 2014. Figures are calculated based on the number of shares
issued after the stock split (excluding treasury shares) on the assumption that the stock split was conducted at the beginning of fiscal 2005.
*2 From fiscal 2013, figures are in accordance with International Financial Reporting Standards (IFRS).
21
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 CSR-Based Management
Create and protect value for both Astellas and society by fulfilling social responsibility
Astellas’ Interaction with Society
Enhance
the sustainability
of society
CSR-based
management
Society
Astellas
Trust from society
Enhance
the sustainability
of Astellas
Raison D’être
Contribute toward improving the health of people
around the world through the provision of
innovative and reliable pharmaceutical products
Mission
Sustainable enhancement
of enterprise value
Fulfilling Our Social Responsibility Means
Realizing Our Business Philosophy
Value Creation and Protection for Both Astellas
and Society
Astellas recognizes its corporate social responsibility (CSR)
is its responsibility for any impacts that its decisions and
business activities have on society and the environment.
Astellas is helping to enhance the sustainability of
society by fulfilling its social responsibilities as a
pharmaceutical company by, for example, providing
pharmaceutical products that satisfy unmet medical
needs. We believe that we earn trust from society for both
the Company and our products as a result of these
activities, and that this trust enhances our sustainability.
This positive cycle will lead to the realization of our
mission, “sustainable enhancement of enterprise value”
through fulfillment of our raison d’être “contribute toward
improving the health of people around the world through
the provision of innovative and reliable pharmaceutical
products.” For Astellas, fulfilling our social responsibility
means realizing our business philosophy.
CSR for Astellas has two aspects: value creation and value
protection.
Value Creation Through its business activities, Astellas is
creating value for society by addressing social issues such
as unmet medical needs, and by returning profits to
stakeholders. By reinvesting the profit we gain through
business activities, we strengthen our capabilities in
research and development. In addition, by winning trust
from government and business partners in each country,
we create new business opportunities. This process creates
value for Astellas.
Value Protection Astellas seeks to preserve biodiversity
by reducing the environmental burden associated with its
business activities, while maintaining social order by
ensuring compliance and preventing corruption. These
activities will lead to the protection of value for society. In
addition, Astellas protects its enterprise value by
mitigating reputation risk and elevating its corporate
brand through these activities.
22
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Identification and Prioritization of Material
Issues in CSR Activities
Astellas identifies and prioritizes material issues in CSR
activities, and uses these material issues to guide its CSR-
based management.
Referring to various principles and guidelines, Astellas
has identified material issues from among the issues to be
addressed as prerequisites of its business activities and social
priorities including global healthcare issues. Making reference
to expectations and requests from a broad range of
stakeholders, we classified and prioritized the material issues
into three categories by evaluating their societal significance
and relevance to our business (CSR Materiality Matrix).
In addition, we are currently verifying the
appropriateness of the material issues established in fiscal
2014, and are considering revising those issues based on
progress with initiatives, changes in society and other factors.
Activities and Monitoring of Material Issues
To solve material issues through its CSR activities, Astellas’
relevant divisions draw up annual and medium-term
activity plans for each material issue, and work to address
the material issues based on those plans. Moreover, the
CSR Committee* monitors activities and results, along with
the status of progress against plans.
* The CSR Committee discusses policies and plans for important activities in fulfilling
the Company’s social responsibilities. The committee is chaired by the Chief
Administrative Officer & Chief Ethics & Compliance Officer, and comprises the
heads of the relevant divisions in Japan, the Americas, EMEA and Asia & Oceania.
Materiality Determination Process
Step1
Identify Issues
Astellas’ material issues are identified with reference to various principles and guidelines (such
as ISO 26000, the UN Global Compact’s ten principles and the SASB* Materiality Map),
communications with stakeholders, and evaluation items for socially responsible investment
(SRI) indices, etc.
* SASB: Sustainability Accounting Standards Board. A U.S. non-profit organization exploring disclosure standards for
non-financial information on an industry-by-industry basis. SASB has prepared industry-specific materiality maps by evaluating
the materiality of 43 factors related to the environment, society and governance.
Step2
Prioritize
We will prioritize Astellas’ material issues from the dual perspectives of societal significance and
relevance to our business.
Step3
Review
Astellas’ material issues will be periodically reviewed and verified. They will be modified
depending on the attainment level of initiatives implemented and/or any changes in
society’s demands.
23
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 CSR Materiality Matrix
For more details, please refer to
WEB
https://www.astellas.com/en/sustainability/materiality/
V
e
r
y
H
g
h
i
S
o
c
i
e
t
a
l
i
i
S
g
n
fi
c
a
n
c
e
• Child labor and
forced labor
• Water usage
reduction
• Air pollution
reduction
• Biodiversity
• Philanthropic
community
support
i
H
g
h
High
Important
Very Important
Most Important
• Societal benefit-driven product development
• Development of innovative products
• Socially responsible R&D
• Socially responsible marketing and
ethical advertising
• Fair pricing
• Proper use of products
• Product quality assurance
• Anti-counterfeit efforts
• Diversity and equal opportunity
• Training and development of employees
• Health, safety and welfare of employees
• Compliance with laws and regulations
• Business ethics and fair competition
• Establishment and implementation of
CSR policies
• Customer privacy
• Shareholder engagement
• Transparent reporting of Board
independence and its structure
• Affordable pricing for patients
• Improvement of healthcare
infrastructure and services to solve
ATH issues*
• CSR procurement
• Socially responsible manufacturing
• Recruitment and retention of employees
• Stakeholder engagement
• Information disclosure
• Universal design for products
• Customer satisfaction
• Reduction of environmental impact
throughout lifecycle of our products
• Environmental and social impacts of
business operations
• Climate change risk
• Compensation and benefits
• Labor relations and union practices
• Risk mitigation and immediate remedy of
environmental accidents
• Efficient use of energy and reduction of
greenhouse gas emissions
• Waste management and hazardous water
reduction
• Patient assistance and advocacy
• Advancement of medical science
• Disclosure of executive compensation
• Appropriate lobbying and
political contributions
Relevance to Astellas’ Business
Very High
* ATH issues: There are many people with insufficient access to the healthcare they need due to the lack of available treatments, poverty, challenges in healthcare systems and
limited healthcare information. Astellas recognizes this problem as the Access to Health issue and works to improve Access to Health by engaging in various initiatives.
24
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017
Corporate Governance
The Company’s raison d'être is to contribute to improving
the health of people around the world through the
provision of innovative and reliable pharmaceutical
products. The Company aims to sustainably enhance
enterprise value as its mission.
Corporate governance takes an important role in
realizing the sustainable enhancement of enterprise value.
We work to ensure and strengthen the effectiveness of
corporate governance from the following perspectives:
1) Ensuring transparency, appropriateness and agility
of management and
2) Fulfillment of our fiduciary duties and
accountability to shareholders and appropriate
collaboration with all stakeholders.
Corporate Governance System
Characteristics
• The Company adopts the organizational structure of a
“Company with an Audit & Supervisory Board.” Outside
Directors and outside Audit & Supervisory Board
Members constitute the majority of the Board of Directors
and the Audit & Supervisory Board, respectively.
• The Board of Directors principally serves the oversight
function of business execution and also makes decisions
on important business execution.
• As advisory bodies to the Board of Directors, the Company
established the Nomination Committee and the
Compensation Committee, each of which are composed
of a majority of outside Directors.
• Enhancing Systems Involving Business Execution
• Executive Committee
• Japan Management Committee
• Appoints Executive Officers responsible for specific
divisions and functions
The Board of Directors established the Corporate
Decision Authority Policy to ensure the agility of
management and clarify the responsibility and
authority for the execution of business by Executive
Officers and others.
• Matrix Management
(
c
o
o
r
d
n
a
t
i
o
n
i
)
25
Corporate Governance System
The Company recognizes the Annual Shareholders Meeting as
an important forum for constructive dialogue with shareholders.
Election/Dismissal
Election/Dismissal
General Shareholders’ Meeting
• The following measures are taken to invigorate the meeting for shareholders and encourage the exercise of voting rights.
(1) To ensure sufficient time for consideration of resolutions, the convocation notice is dispatched three weeks before the meeting date.
It is also published before dispatch on the Timely Disclosure Network (TDnet) provided by the Tokyo Stock Exchange and on the Company’s website.
(2) Holding the Annual Shareholders Meeting avoiding dates when meetings of other companies are concentrated (since 2004).
(3) Adoption of an electronic voting platform (since 2006). (4) Providing an English translation of the convocation notice.
• The Board comprises an appropriate number of Directors, in consideration of diversity and balance
from the perspectives of expertise and experience, and is chaired by the Director and Chairman of
• Discusses matters concerning the election and
Election/Dismissal
Board of Directors
• Primarily performs an oversight function over business execution, ensuring that management is
transparent and appropriate. It also makes decisions on important business execution, while
establishing the Corporate Decision Authority Policy, clarifying the business execution responsibility
and authority of the respective Executive Officers and ensuring management agility.
Role
Composition
the Board. Note that when the Director and Chairman of the Board is unable to fulfill their duties
due to an accident or vacancy of the post, another Director, in the order prescribed in the Board of
Directors Policy, shall assume the role.
• The board has a majority of outside Directors to enable it to make decisions from a broader
viewpoint and oversee business execution objectively.
Audit
Six Directors, of whom majority of four are outside Directors.
Administration
Directors
Responsibilities
• As members of the Board of Directors, Directors participate in management decision-making through
resolutions to the Board, in addition to overseeing the performance of duties of other Directors.
• To fully exercise their expected capabilities, Directors are expected to contribute to the sustained
enhancement of enterprise value by collecting the information necessary for the execution of their
duties and engaging actively in discussions.
• Outside Directors are expected to enhance the appropriateness of management by overseeing the
execution of business from an independent standpoint, while utilizing their individual experience
and knowledge to offer advice from a standpoint different from that of internal Directors.
Election
• Subject to appointment via resolution of the Annual Shareholders Meeting.
Proposal/Report
Appointment/
Dismissal, Supervision
• As a general rule, meetings are held once a month, with extraordinary meetings held as necessary.
Composition
Nomination Committee/
Compensation Committee
Role
• Established as advisory bodies to the Board of
Directors to improve the transparency and
objectivity of the deliberation process
regarding election and dismissal of Directors,
etc., and the remuneration system.
dismissal of Directors, Audit & Supervisory
Board Members, and the appointment and
removal of Executive Officers, etc., and reports
the results to the Board of Directors.
• Discusses matters concerning remuneration of
Directors, Executive Officers and others, and
reports the results to the Board of Directors.
• These committees are composed of members
elected by the Board of Directors.
• The majority of each committee’s members
are outside Directors.
• These Committees are chaired by an outside
Director.
President/
Executive Committee
Executive Vice President/
Japan Management Committee
This Committee discusses matters important to
management of the Group overall, and is chaired by
the President.
This Committee discusses matters important to
management of the Company and its Group companies
in Japan, and is chaired by the Executive Vice President.
Election/Dismissal
Accounting Auditor
• Ernst & Young ShinNihon
LLC serves as the Company’s
Accounting Auditor.
• The Accounting Auditor
and the Company’s Audit &
Supervisory Board Members
maintain close cooperation
by meeting several times a
year, verifying their annual
auditing plans as well as
sharing the results of audits
and important audit
information.
Audit &
Supervisory Board
Role
• The Audit & Supervisory
Board is the only deliberation
and decision-making body for
forming opinions regarding
the audits by Audit &
Supervisory Board Members.
Where necessary, the Audit &
Supervisory Board provides its
opinions to Directors or the
Board of Directors. However,
resolutions of the Audit &
Supervisory Board do not
obstruct the execution by each
Audit & Supervisory Board
Member of their authority.
Composition
• To further enhance the
independence and neutrality
of the auditing system,
outside Audit & Supervisory
Board Members comprise a
majority of Audit &
Supervisory Board Members.
Five Audit & Supervisory Board
members, of whom majority
of three are outside Audit &
Supervisory Board Members
Administration
• As a general rule, meetings
are held once a month, with
extraordinary meetings held
as necessary.
Audit
Business execution
Internal Auditing
Department
Proposal/Report
Direction/Supervision
Officers responsible for each function/Corporate Executives/Functional Heads
Internal audit
Report
Business execution/Direction/Supervision
Divisions
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 The Company’s raison d'être is to contribute to improving
Corporate Governance System
the health of people around the world through the
provision of innovative and reliable pharmaceutical
products. The Company aims to sustainably enhance
enterprise value as its mission.
Corporate governance takes an important role in
realizing the sustainable enhancement of enterprise value.
We work to ensure and strengthen the effectiveness of
corporate governance from the following perspectives:
1) Ensuring transparency, appropriateness and agility
of management and
2) Fulfillment of our fiduciary duties and
accountability to shareholders and appropriate
collaboration with all stakeholders.
Corporate Governance System
Characteristics
• The Company adopts the organizational structure of a
“Company with an Audit & Supervisory Board.” Outside
Directors and outside Audit & Supervisory Board
Members constitute the majority of the Board of Directors
and the Audit & Supervisory Board, respectively.
• The Board of Directors principally serves the oversight
function of business execution and also makes decisions
on important business execution.
• As advisory bodies to the Board of Directors, the Company
established the Nomination Committee and the
Compensation Committee, each of which are composed
of a majority of outside Directors.
• Enhancing Systems Involving Business Execution
• Executive Committee
• Japan Management Committee
• Appoints Executive Officers responsible for specific
divisions and functions
The Board of Directors established the Corporate
Decision Authority Policy to ensure the agility of
management and clarify the responsibility and
authority for the execution of business by Executive
Officers and others.
• Matrix Management
(
c
o
o
r
d
i
n
a
t
i
o
n
)
The Company recognizes the Annual Shareholders Meeting as
an important forum for constructive dialogue with shareholders.
Election/Dismissal
Election/Dismissal
Accounting Auditor
• Ernst & Young ShinNihon
LLC serves as the Company’s
Accounting Auditor.
• The Accounting Auditor
and the Company’s Audit &
Supervisory Board Members
maintain close cooperation
by meeting several times a
year, verifying their annual
auditing plans as well as
sharing the results of audits
and important audit
information.
Audit &
Supervisory Board
Role
• The Audit & Supervisory
Board is the only deliberation
and decision-making body for
forming opinions regarding
the audits by Audit &
Supervisory Board Members.
Where necessary, the Audit &
Supervisory Board provides its
opinions to Directors or the
Board of Directors. However,
resolutions of the Audit &
Supervisory Board do not
obstruct the execution by each
Audit & Supervisory Board
Member of their authority.
Composition
• To further enhance the
independence and neutrality
of the auditing system,
outside Audit & Supervisory
Board Members comprise a
majority of Audit &
Supervisory Board Members.
Five Audit & Supervisory Board
members, of whom majority
of three are outside Audit &
Supervisory Board Members
Administration
• As a general rule, meetings
are held once a month, with
extraordinary meetings held
as necessary.
Audit
Business execution
Internal Auditing
Department
General Shareholders’ Meeting
• The following measures are taken to invigorate the meeting for shareholders and encourage the exercise of voting rights.
(1) To ensure sufficient time for consideration of resolutions, the convocation notice is dispatched three weeks before the meeting date.
It is also published before dispatch on the Timely Disclosure Network (TDnet) provided by the Tokyo Stock Exchange and on the Company’s website.
(2) Holding the Annual Shareholders Meeting avoiding dates when meetings of other companies are concentrated (since 2004).
(3) Adoption of an electronic voting platform (since 2006). (4) Providing an English translation of the convocation notice.
Election/Dismissal
Board of Directors
Role
• Primarily performs an oversight function over business execution, ensuring that management is
transparent and appropriate. It also makes decisions on important business execution, while
establishing the Corporate Decision Authority Policy, clarifying the business execution responsibility
and authority of the respective Executive Officers and ensuring management agility.
Composition
• The Board comprises an appropriate number of Directors, in consideration of diversity and balance
from the perspectives of expertise and experience, and is chaired by the Director and Chairman of
the Board. Note that when the Director and Chairman of the Board is unable to fulfill their duties
due to an accident or vacancy of the post, another Director, in the order prescribed in the Board of
Directors Policy, shall assume the role.
• The board has a majority of outside Directors to enable it to make decisions from a broader
viewpoint and oversee business execution objectively.
Audit
Six Directors, of whom majority of four are outside Directors.
Administration
• As a general rule, meetings are held once a month, with extraordinary meetings held as necessary.
Directors
Responsibilities
• As members of the Board of Directors, Directors participate in management decision-making through
resolutions to the Board, in addition to overseeing the performance of duties of other Directors.
• To fully exercise their expected capabilities, Directors are expected to contribute to the sustained
enhancement of enterprise value by collecting the information necessary for the execution of their
duties and engaging actively in discussions.
• Outside Directors are expected to enhance the appropriateness of management by overseeing the
execution of business from an independent standpoint, while utilizing their individual experience
and knowledge to offer advice from a standpoint different from that of internal Directors.
Election
• Subject to appointment via resolution of the Annual Shareholders Meeting.
Proposal/Report
Appointment/
Dismissal, Supervision
Nomination Committee/
Compensation Committee
Role
• Established as advisory bodies to the Board of
Directors to improve the transparency and
objectivity of the deliberation process
regarding election and dismissal of Directors,
etc., and the remuneration system.
• Discusses matters concerning the election and
dismissal of Directors, Audit & Supervisory
Board Members, and the appointment and
removal of Executive Officers, etc., and reports
the results to the Board of Directors.
• Discusses matters concerning remuneration of
Directors, Executive Officers and others, and
reports the results to the Board of Directors.
Composition
• These committees are composed of members
elected by the Board of Directors.
• The majority of each committee’s members
are outside Directors.
• These Committees are chaired by an outside
Director.
President/
Executive Committee
Executive Vice President/
Japan Management Committee
This Committee discusses matters important to
management of the Group overall, and is chaired by
the President.
This Committee discusses matters important to
management of the Company and its Group companies
in Japan, and is chaired by the Executive Vice President.
Election/Dismissal
Proposal/Report
Direction/Supervision
Officers responsible for each function/Corporate Executives/Functional Heads
Internal audit
Report
Business execution/Direction/Supervision
Divisions
26
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Progress in Enhancing Effectiveness
Start of Efforts to Evaluate Effectiveness
The Company continues to work to ensure and enhance
the effectiveness of its corporate governance system in
terms of the transparency, appropriateness and agility of
management; the fulfillment of its fiduciary duties and
accountability to shareholders as well as appropriate
collaboration with all stakeholders.
Since Astellas launch in April 2005, we have worked to
increase the speed of execution by delegating authority to
the management team, in the belief that prompt and
accurate decision-making will result in the enhancement
of enterprise value. In the year following our launch, the
Company appointed a majority of outside Directors to its
Board of Directors, and subsequently established the
Nomination Committee and Compensation Committee,
part of our ongoing efforts at structural reform.
With the implementation of Japan’s Corporate
Governance Code in June 2015, we also took the
opportunity to further enhance the Company’s corporate
governance structure. In September 2015, the Company
formulated its Corporate Governance Guidelines as the
basis for implementing the individual principles of the
code. Through these efforts, the Company is working to
enhance the effectiveness of its corporate governance.
In fiscal 2015, the Company’s Board of Directors began the
process of analyzing and evaluating the overall
effectiveness of the Board of Directors. The results of that
evaluation for fiscal 2016 are as follows.
The Chairman of the Board of Directors conducted a
survey based on a questionnaire to all Directors and Audit
& Supervisory Board Members, primarily concerning the
oversight function of the Board of Directors. Based on the
results of this survey, the Board of Directors performed its
analysis and evaluation.
The Board of Directors was found to function
appropriately, with highly transparent and lively
discussions by the Directors, including independent
outside Directors. The overall effectiveness of the Board of
Directors was sufficiently ensured.
The Company has accelerated business execution by
focusing the function of the Board of Directors solely on
the appropriate oversight of the management team and
Major Corporate Governance Reforms Implemented to Date
Date
Change
Objective
New Board of Directors launched
• Board of Directors comprised of 4 Executive Directors, 2 non-Executive Directors and 2 outside
Directors
April 2005
Launch of Astellas
• Board of Directors specializes in supervising the management team and decision-making
regarding legal and most important matters
Ensure management transparency
and appropriateness
Authority delegated to the management team
• To the extent legally allowable, delegate as much authority as possible to the management team
Ensure management agility
Outside Directors represent a majority of the Board of Directors
• 9 Directors, of whom 5 are outside Directors
Reduction in number of Directors
• 7 Directors, of whom 4 are outside Directors
Ensure management transparency
and appropriateness
Ensure management agility
Established the Nomination Committee and the Compensation Committee
• 5 committee members, of whom 3 are outside Directors
Ensure management transparency
and appropriateness
Shortened term of appointment for Directors
• Term of appointment shortened from two years to one year
Clarify management
responsibilities
Elimination of advisor system
• Prior to that, counselor system also eliminated
Ensure management transparency
Change in chairmanship of the Nomination and the Compensation Committees
• Each Committee chaired by outside Director
Ensure management transparency
and appropriateness
Increase outside Audit & Supervisory Board Members
• From 2 to 3, resulting in outside members representing a majority of the total of 5 Audit &
Supervisory Board Members
Strengthen independence and
neutrality of the auditing system
June 2006
June 2007
June 2010
June 2011
June 2015
27
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 decision-making on matters legally required to be resolved
and matters of primary importance, as well as delegating
authority to the management team. To enhance the
oversight function, the Company has increased the
number of outside Directors, established the Nomination
Committee and the Compensation Committee, and
shortened the term of appointment for Directors. The
Board of Directors regularly collects the requisite
information such as environmental changes from the
management team, and has determined strategies of the
Company based on such information. The Board of
Directors also receives timely reports from the
management side on the establishment and operation of
a risk management system, and ensures that necessary
information and time for discussions are secured for oversight.
To enhance the effectiveness of discussions, the Board of
Directors will continue to improve on the issues below
which were identified in this evaluation.
• Based on discussions regarding optimization of functions
carried out by the Board of Directors in fiscal 2016, the
Board of Directors will review matters for deliberation
and reporting by the Board of Directors. At the same
time, it will reaffirm and review as required the roles and
authority of other committees.
• In determining corporate strategy, the Board of Directors
will work to enhance a shared recognition of the
assumptions such as changes in the internal and external
environments, and conduct multi-faceted discussions that
give additional consideration to various stakeholders.
• The Board of Directors will further strengthen frameworks
for systematic risk assessment, while further facilitating
comprehensive identification of Company-wide risk.
Please refer to the following for the Corporate Governance Guidelines.
WEB
https://www.astellas.com/system/files/
governance_guideline_en_0_0.pdf
A System of Remuneration for Directors and
Audit & Supervisory Board Members That
Contributes to Sustainable Improvements in
Enterprise Value
The compensation paid to Directors and Audit &
Supervisory Board Members of the Company is
designed to enable the Company to attract and retain
talent, and maintain sufficient compensation
standards and systems to meet the duties and
responsibilities of the positions. The Company has
improved the objectivity of decisions on remuneration
levels by using survey data issued by outside research
companies and other measures.
Progress of Response to the Corporate Governance Code (Items complied since fiscal 2016)
The Company implements all the principles of the Corporate Governance Code.
Corporate Governance Code
Activities in Astellas
Principle 3-1: Full Disclosure
In addition to making information disclosure in compliance with relevant laws
and regulations, companies should disclose and proactively provide the
information listed below in order to enhance transparency and fairness in
decision-making and ensure effective corporate governance.
v) Explanations with respect to the individual appointments and nominations
when the Board appoints senior management and nominates candidates for
Director and Audit & Supervisory Board Members.
The Company has disclosed the reasons for its selection of candidates for outside
Directors and outside Audit & Supervisory Board Members. Beginning in fiscal
2017, the Company added the candidates for internal Directors and internal Audit
& Supervisory Board Members to this list, disclosing the reasons for selecting
those candidates in the Annual Shareholders Meeting convocation notice.
Notice of Convocation of the Annual Shareholders Meeting
https://www.astellas.com/en/ir/stock_bond/pdf/ncsm12_en.pdf
Page 31 of this annual report shows expected roles of outside Directors and
outside Audit & Supervisory Board Members.
Principle 4-11: Preconditions for Board and Audit & Supervisory Board
Effectiveness
(Omit 1st paragraph)
The Board should endeavor to improve its function by analyzing and
evaluating effectiveness of the board as a whole.
Supplementary Principle 4.11.3
Each year the board should analyze and evaluate its effectiveness as a whole,
taking into consideration the relevant matters, including the self-evaluations of
each director. A summary of the results should be disclosed.
The Company has implemented a questionnaire at irregular intervals for outside
Directors and strived to improve operations of the Board of Directors while taking
into account these opinions. From fiscal 2016, through the implementation of
self-assessment by each Director and other means, the Board of Directors
analyzes and evaluates the overall effectiveness of the Board of Directors and
discloses a summary of the results every year.
Corporate Governance Report
https://www.astellas.com/en/corporate/pdf/governance_en_20170620.pdf
28
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Remuneration for internal Directors is fundamentally
based upon contributions to sustainable improvements in
business performance and enterprise value, and is
composed of a fixed amount basic remuneration, bonuses
and stock compensation. The Company appropriately links
remuneration with business performance. In fiscal 2015,
the Company introduced a performance-linked stock
compensation scheme. Through this program, the Company
is raising the awareness of Directors and executive officers
regarding their responsibility to contribute to sustainable
improvements in business performance and enterprise
value. This program grants the Company stock based on
the performance-linked coefficient regarding the level of
attainment of the medium-term management targets.
Medium-term performance targets include predetermined
goals for sales, core operating margin, core ROE, etc., over
a three-year time span.
Remuneration for outside Directors and Audit &
Supervisory Board Members (including outside Audit &
Supervisory Board Members) consists solely of a fixed
base salary.
Remuneration for each Director are determined by
resolution of the Board of Directors within a total ceiling
amount approved by the General Meeting of Shareholders,
and remuneration for each Audit & Supervisory Board
Member is determined through deliberations of the Audit
& Supervisory Board Members within a total ceiling
amount approved by the General Meeting of Shareholders.
Through the deliberations of the Compensation Committee,
the Company enhances the transparency and objectivity
of the deliberation process for remuneration for Directors.
Remuneration for Directors and Audit & Supervisory Board
Members in Fiscal 2016
(¥ million)
Category
Total
amount of
remuneration
Type of remuneration
Basic
remuneration
Bonus
Stock
remuneration
Directors (excluding
outside Directors): 3
Outside Directors: 4
Audit & Supervisory
Board Members
(excluding outside
Audit & Supervisory
Board Members): 3
Outside Audit &
Supervisory Board
Members: 4
404
55
88
41
178
118
55
—
88
—
41
—
108
—
—
—
The total amount of remuneration shown here is the amount paid as remuneration
for the performance of duties during fiscal 2016, and includes the amount paid to
one Director and two Audit & Supervisory Board Members (including one outside
Audit & Supervisory Board Member) who retired during fiscal 2016.
Enhancing the Management Structure
The Company has established a global management
structure, and continues to work to strengthen it.
Astellas establishes the Executive Committee as a
body for discussion on significant issues in the global
management of the Group, and the Japan Management
Committee as a body for discussion on significant
corporate governance issues of the Company and its
affiliates in Japan.
In order to build an optimal management system
capable of agile and appropriate decision-making, we
have been promoting a system called Matrix Management,
under which we manage each division and function of
Drug Discovery Research, Medical & Development, and
Pharmaceutical Technology based on their respective
functions from a global viewpoint across geographical
regions, while the Sales & Marketing Divisions are
managed on a regional basis.
Enhancement of management functions from a
global viewpoint is pursued in the area of corporate
functions as well. In order to further strengthen
compliance, the Ethics & Compliance function was
established in April 2016, under a global compliance
structure wherein Ethics & Compliance functions in each
region (Japan, the Americas, EMEA, and Asia & Oceania)
report to the Head of Ethics & Compliance. Furthermore, in
April 2017, a new global Legal function that manages the
regional legal functions was established. The General
Counsel reports directly to CEO.
In order to develop a system for more appropriate
execution of business, the Company has established
various committees comprising cross-functional members.
These committees include the Corporate Disclosure
Committee where matters including disclosure of
corporate information are discussed, the CSR Committee
that discusses policies and plans of important activities for
the purpose of fulfilling the Company’s social
responsibilities (such as issues on the environment, health
and safety, and social contribution activities), the Global
Benefit Risk Committee to discuss benefit and risk
information of products as well as measures to deal with
such benefit and risk, the Global Compliance Committee
where matters including global compliance policies and
plans are discussed, and the Global Risk Management
Office to promote identifying global risks and
implementing optimum risk management.
29
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 Risk Management
Identifying and Mitigating Risks Relating to
the Performance of Business Activities
As a global pharmaceutical company in a highly regulated
industry, Astellas faces numerous risks that could impact
our business results and society. To conduct risk
management properly as a whole group, Astellas has
established Global Risk Management and Regional Risk
Management Programs in each region that identify risks
relating to appropriate and efficient business conduct
(risks relating to the performance of business activities).
Each department and unit of the Company and the
Astellas Group companies will proactively put the
Company’s risk management initiatives into practice and
promote risk mitigation within the Group and the proper
response to such risks.
The Global Risk Management Program established the
Global Risk Management Secretariat to identify risks
relating to the performance of Astellas’ business activities
through interviews with Executive Committee (EC)
members and functional heads. Risk owners are then
assigned and are responsible for developing and
implementing risk mitigation plans. These plans are
regularly updated and mitigation progress is reported to
senior management at the EC.
At the regional level, the Regional Risk Management
Office of each Astellas region identifies the regional risks
Global Risk Management Structure
relating to the performance of business activities and
conducts risk management. The risks identified by the
Regional Risk Management Offices that must be managed
at the global level are incorporated into the Global Risk
Management Program as necessary.
Overview of Global Risk Management
Interview EC members and functional heads and analyze results
Global Risk Management Secretariat should:
• Conduct interviews with EC members and functional heads
• Analyze interview results and make proposals to the EC
Identify global risk and assign global risk owners
EC should:
• Evaluate the global risk identified • Assign global risk owners
Assess current controls and develop global risk mitigation plans
Global risk owners should:
• Assess assigned global risk • Identify current risk controls
• Develop global risk mitigation plans and make proposals to the EC
Implement additional risk control measures and report progress
Global risk owners should:
• Implement risk mitigation plans, including additional risk response
measures over 1 to 3 years • Report half-year progress to the EC
Global risk owner
Assign
Report
Advise
Report results
Global risk
Regional risk
Departments
Board of Directors
Report status
Executive Committee
Global Risk Management
Share status
Report status of each area
Report and propose significant items in each area
Regional Risk Management
(Japan, Americas, EMEA, Asia & Oceania)
Advise
Report status
Departments in each region
30
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Directors and Audit & Supervisory
Board Members
(Front row, from left) Yoshiharu Aizawa, Keiko Yamagami, Yoshihiko Hatanaka, Toshiko Oka, Noriyuki Uematsu
(Back row, from left) Mamoru Sekiyama, Etsuko Okajima, Kenji Yasukawa, Hiroko Sakai, Hitoshi Kanamori, Tomokazu Fujisawa
Expected Role of Outside Directors and Outside Audit & Supervisory Board Members
Expected Role
Etsuko Okajima has been engaged in corporate management as a business manager of a human resource consulting
company, and has abundant management experience and extensive insight. She currently plays a key role as an outside
Director for management of the Company from an independent standpoint. The Company is confident that she will draw
on her abundant experience of corporate management in management of the Company in the future as well.
Yoshiharu Aizawa has been engaged in medical treatment while successively holding important posts at Kitasato University
as a medical scientist, and has abundant specialized knowledge and experience. He currently plays a key role as an outside
Director for management of the Company from an independent standpoint. The Company is confident that he will draw
on his abundant specialized knowledge and experience in management of the Company in the future as well.
Mamoru Sekiyama has been engaged in corporate management as a business manager of a general trading company over
many years, and has abundant global experience and extensive insight. The Company is confident that he will be able to
apply his abundant specialized knowledge and experience in corporate management and other strengths to the
management of the Company from an independent standpoint.
After successively holding important posts such as Public Prosecutor at the Supreme Public Prosecutors Office, Keiko
Yamagami has been engaged in corporate legal affairs as an attorney-at-law, and has abundant expertise and experience.
The Company is confident that she will be able to apply her abundant specialized knowledge and experience to the
management of the Company from an independent standpoint.
Toshiko Oka has been engaged in corporate management as a business manager of a management consulting firm, and
has abundant management experience and extensive insight. She currently plays a key role as an outside Audit &
Supervisory Board Member from an independent standpoint. The Company is confident that she will draw on her
abundant experience in corporate management in auditing the Company in the future as well.
Attendance at Meetings of
the Board of Directors and
Audit & Supervisory
Board During Fiscal 2016
14/14 times
14/14 times
Inaugurated
in June 2017
Inaugurated
in June 2017
14/14 Board of
Directors meetings
15/15 Audit & Supervisory
Board meetings
After successively holding important posts such as Public Prosecutor at the Tokyo District Public Prosecutors Office, Hitoshi
Kanamori has been engaged in corporate legal affairs as an attorney-at-law, and has abundant expertise and experience. He
currently plays a key role as an outside Audit & Supervisory Board Member from an independent standpoint. The Company
is confident that he will draw on his abundant specialized knowledge and experience in auditing the Company in the
future as well.
14/14 Board of
Directors meetings
15/15 Audit & Supervisory
Board meetings
With many years of experience as a certified public accountant, Noriyuki Uematsu has thorough knowledge of corporate
consulting and auditing, and is also engaged in corporate management as a business manager of a consulting company
relating to business accounting and tax accounting services. He currently plays a key role as an outside Audit & Superrisory
Board Member from an independent standpoint. The Company is confident that he will draw on his abundant specialized
knowledge and experience in auditing the Company in the future as well.
11/11 Board of
Directors meetings
11/11 Audit & Supervisory
Board meetings
Position
Name
Outside
Directors
Etsuko
Okajima
Yoshiharu
Aizawa
Mamoru
Sekiyama
Keiko
Yamagami
Toshiko
Oka
Hitoshi
Kanamori
Noriyuki
Uematsu
Outside
Audit &
Supervisory
Board
Members
31
Profile of Directors and Audit & Supervisory Board Members
Representative Director, Executive Vice President,
Chief Strategy Officer and Chief Commercial Officer
1998: General Manager, Power Project Dept.-III,
Representative Director, President and CEO
Yoshihiko Hatanaka
1980: Joined Fujisawa Pharmaceutical Co., Ltd.
2003: Director, Corporate Planning, Fujisawa Pharmaceutical
Co., Ltd.
2005: Vice President, Corporate Planning, Corporate Strategy
Division, the Company
2005: Corporate Executive, Vice President, Corporate
Planning, Corporate Strategy, the Company
2006: Corporate Executive of the Company and
President & CEO, Astellas US LLC and
President & CEO, Astellas Pharma US, Inc.
2008: Senior Corporate Executive of the Company and
President & CEO, Astellas US LLC and
President & CEO, Astellas Pharma US, Inc.
2009: Senior Corporate Executive, Chief Strategy Officer and
Chief Financial Officer (CSTO & CFO), the Company
2011: Representative Director, President and CEO, the Company
(present post)
(CSTO & CCO)
Kenji Yasukawa, Ph. D.
1986: Joined the Company
2005: Vice President, Project Management, Urology, the
Company
2010: Corporate Executive of the Company and Therapeutic
Area Head, Urology, Astellas Pharma Europe B.V.
2010: Corporate Executive of the Company and Therapeutic
Area Head, Urology, Astellas Pharma Global
Development, Inc.
2011: Corporate Executive, Vice President, Product &
Portfolio Strategy, the Company
2012: Corporate Executive, Chief Strategy Officer (CSTO),
2012: Senior Corporate Executive, Chief Strategy Officer
the Company
(CSTO), the Company
2017: Senior Corporate Executive, Chief Strategy Officer and
Chief Commercial Officer (CSTO & CCO), the Company
2017: Representative Director, Executive Vice President,
Chief Strategy Officer and Chief Commercial Officer
(CSTO & CCO), the Company (present post)
Outside Directors
Etsuko Okajima
1989: Joined Mitsubishi Corporation
2001: Joined McKinsey & Company, Inc., Japan
2002: Joined GLOBIS Management Bank, Inc.
2004: Executive Officer, GLOBIS Corporation
2005: President and Representative Director,
GLOBIS Management Bank, Inc.
2007: Established ProNova Inc.
Yoshiharu Aizawa, M.D., Ph.D.
Hiroko Sakai
1975: Fellow, Department of Internal Medicine, School of
1983: Joined the Company
Medicine, Keio University
2012: Vice President, Clinical and Research Quality Assurance,
1980: Assistant Professor, Department of Preventive Medicine
QA, RA and Pharmacovigilance Department, the
and Public Health, School of Medicine, Kitasato University
Company
1983: Associate Professor, Department of Preventive Medicine
2014: Vice President, Clinical and Research Quality Assurance,
and Public Health, School of Medicine, Kitasato University
the Company
1994: Professor, Department of Preventive Medicine and
2016: Assistant to President & CEO, the Company
Public Health, School of Medicine, Kitasato University
2016: Audit & Supervisory Board Member, the Company
2004: Chairperson, School of Medicine, Kitasato University
(present post)
2006: Dean, School of Medicine, Kitasato University
2009: Vice President, Kitasato University
2010: Executive Trustee, The Kitasato Institute
2012: Professor Emeritus, Kitasato University (present post)
2015: Director, the Company (present post)
Mamoru Sekiyama
1974: Joined Marubeni Corporation
1997: General Manager, Power Project Dept.-I,
Marubeni Corporation
Marubeni Corporation
1999: Deputy General Manager, Power Project Div.; General
Manager, Power Project Dept. I, Marubeni Corporation
2001: Senior Operating Officer, Utility Infrastructure Div.;
General Manager, Overseas Power Project Dept.,
Marubeni Corporation
2002: Corporate Vice President, Chief Operating Officer,
Plant, Power & Infrastructure Div., Marubeni Corporation
2005: Corporate Senior Vice President, Chief Operating Officer,
Plant, Power & Infrastructure Projects Div., Marubeni
2006: Corporate Senior Vice President, Member of the Board,
Corporation
Marubeni Corporation
2007: Corporate Executive Vice President, Member of the
Outside Audit & Supervisory Board Members
Toshiko Oka
1986: Joined Tohmatsu Touche Ross Consulting Limited
(currently ABeam Consulting Ltd.)
2000: Joined Asahi Arthur Andersen Limited
2002: Principal, Deloitte Tohmatsu Consulting Co., Ltd.
(currently ABeam Consulting Ltd.)
2005: President and Representative Director, ABeam
Consulting Ltd. (currently PwC Advisory LLC)
2008: Outside Director, Netyear Group Corporation
2014: Audit & Supervisory Board Member, the Company
(present post)
(present post)
2015: Outside Corporate Auditor, HAPPINET CORPORATION
2016: Chief Executive Officer, PricewaterhouseCoopers Deals
Advisory LLC (currently PwC Advisory LLC)
2016: Partner, PwC Advisory LLC
2016: CEO, Oka & Company Ltd. (present post)
2016: Outside Director, Mitsubishi Corporation (present post)
2016: Outside Director, Hitachi Metals, Ltd. (present post)
Hitoshi Kanamori
Board, Marubeni Corporation
1984: Public Prosecutor, Tokyo District Public Prosecutors Office
2009: Senior Executive Vice President, Member of the Board,
1985: Public Prosecutor, Yamagata District Public
Marubeni Corporation
Prosecutors Office
2013: Vice Chairman, Marubeni Corporation
1988: Public Prosecutor, Niigata District Public Prosecutors
2015: Corporate Adviser, Marubeni Corporation (present post)
Office
Chairman, Marubeni Power Systems Corporation
1990: Public Prosecutor, Tokyo District Public Prosecutors Office
2017: Director, the Company (present post)
1992: Registered as an attorney-at-law (Tokyo Bar Association)
Keiko Yamagami
Prosecutors Office
1987: Public Prosecutor, Yokohama District Public
(present post)
1993: Partner, SANNO LAW OFFICE (present post)
2005: Visiting Professor, University of Tsukuba Law School
2015: Audit & Supervisory Board Member, the Company
2002: Coordinator, the Legislative Division, Criminal Affairs
Bureau, Ministry of Justice
2005: Counselor, the Legislative Division, Criminal Affairs
Bureau, Ministry of Justice
2005: Public Prosecutor, Supreme Public Prosecutors Office
2007: Deputy Director of Public Peace Department, Tokyo
District Public Prosecutors Office
2008: Deputy Director of Trial Department, Tokyo District
Noriyuki Uematsu
1985: Joined Tohmatsu & Aoki Audit Corporation
1997: Joined Deloitte Tohmatsu Consulting Co., Ltd.
(current ABeam Consulting Ltd.)
1999: Global Partner for manufacturing industry and
Managing Director in Kyushu area, Deloitte Tohmatsu
Consulting Co., Ltd. (current ABeam Consulting Ltd.)
President and Representative Director, ProNova Inc.
Public Prosecutors Office
(present post)
2009: Trial Director, Yokohama District Public Prosecutors Office
2003: Joined DENTSU INC.
2008: Established Uematsu & Co.
2014: Director, the Company (present post)
2014: Extarnal Director, MARUI GROUP CO., LTD (present post)
2015: External Director, SEPTENI HOLDINGS CO., LTD.
(present post)
(present post)
2010: Registered as an attorney-at-law
(Dai-ichi Tokyo Bar Association)
Managing Director, Uematsu & Co. (present post)
2011: President & Representative Director, SU Consultant
Lawyer honorary member, Tokyo Seiwa Law Office
Co., Ltd. (present post)
2016: Outside Director, Link and Motivation Inc. (present post)
2017: Director, the Company (present post)
2012: Outside Audit & Supervisory Board Member, NJK
Corporation (present post)
2015: Outside Audit & Supervisory Board Member,
Kamakura Shinsho, Ltd.
2016: Outside Director and Audit & Supervisory Committee
Member, Kamakura Shinsho, Ltd. (present post)
2016: Audit & Supervisory Board Member, the Company
(present post)
Audit & Supervisory Board Members
Tomokazu Fujisawa
1984: Joined Fujisawa Pharmaceutical Co., Ltd.
1999: Director of Planning, Medical Supply Business, Fujisawa
Pharmaceutical Co., Ltd.
2006: Assistant to Senior Vice President, Corporate Finance &
Accounting and Project Leader of J-SOX Project,
the Company
2007: Project Leader of J-SOX Project, the Company
2013: Vice President, Internal Auditing, the Company
2014: Assistant to President and CEO, the Company
2014: Audit & Supervisory Board Member, the Company
(present post)
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017
Profile of Directors and Audit & Supervisory Board Members
Representative Director, President and CEO
Yoshihiko Hatanaka
1980: Joined Fujisawa Pharmaceutical Co., Ltd.
2003: Director, Corporate Planning, Fujisawa Pharmaceutical
Co., Ltd.
2005: Vice President, Corporate Planning, Corporate Strategy
Division, the Company
2005: Corporate Executive, Vice President, Corporate
Planning, Corporate Strategy, the Company
2006: Corporate Executive of the Company and
President & CEO, Astellas US LLC and
President & CEO, Astellas Pharma US, Inc.
2008: Senior Corporate Executive of the Company and
President & CEO, Astellas US LLC and
President & CEO, Astellas Pharma US, Inc.
2009: Senior Corporate Executive, Chief Strategy Officer and
Chief Financial Officer (CSTO & CFO), the Company
2011: Representative Director, President and CEO, the Company
(present post)
Representative Director, Executive Vice President,
Chief Strategy Officer and Chief Commercial Officer
(CSTO & CCO)
Kenji Yasukawa, Ph. D.
1986: Joined the Company
2005: Vice President, Project Management, Urology, the
Company
2010: Corporate Executive of the Company and Therapeutic
Area Head, Urology, Astellas Pharma Europe B.V.
2010: Corporate Executive of the Company and Therapeutic
Area Head, Urology, Astellas Pharma Global
Development, Inc.
2011: Corporate Executive, Vice President, Product &
Portfolio Strategy, the Company
2012: Corporate Executive, Chief Strategy Officer (CSTO),
the Company
2012: Senior Corporate Executive, Chief Strategy Officer
(CSTO), the Company
2017: Senior Corporate Executive, Chief Strategy Officer and
Chief Commercial Officer (CSTO & CCO), the Company
2017: Representative Director, Executive Vice President,
Chief Strategy Officer and Chief Commercial Officer
(CSTO & CCO), the Company (present post)
Outside Directors
Etsuko Okajima
1989: Joined Mitsubishi Corporation
2001: Joined McKinsey & Company, Inc., Japan
2002: Joined GLOBIS Management Bank, Inc.
2004: Executive Officer, GLOBIS Corporation
2005: President and Representative Director,
GLOBIS Management Bank, Inc.
2007: Established ProNova Inc.
President and Representative Director, ProNova Inc.
(present post)
2014: Director, the Company (present post)
2014: Extarnal Director, MARUI GROUP CO., LTD (present post)
2015: External Director, SEPTENI HOLDINGS CO., LTD.
(present post)
Yoshiharu Aizawa, M.D., Ph.D.
1975: Fellow, Department of Internal Medicine, School of
Medicine, Keio University
1980: Assistant Professor, Department of Preventive Medicine
and Public Health, School of Medicine, Kitasato University
1983: Associate Professor, Department of Preventive Medicine
and Public Health, School of Medicine, Kitasato University
Hiroko Sakai
1983: Joined the Company
2012: Vice President, Clinical and Research Quality Assurance,
QA, RA and Pharmacovigilance Department, the
Company
2014: Vice President, Clinical and Research Quality Assurance,
the Company
1994: Professor, Department of Preventive Medicine and
Public Health, School of Medicine, Kitasato University
2004: Chairperson, School of Medicine, Kitasato University
2006: Dean, School of Medicine, Kitasato University
2009: Vice President, Kitasato University
2010: Executive Trustee, The Kitasato Institute
2012: Professor Emeritus, Kitasato University (present post)
2015: Director, the Company (present post)
Mamoru Sekiyama
1974: Joined Marubeni Corporation
1997: General Manager, Power Project Dept.-I,
Marubeni Corporation
1998: General Manager, Power Project Dept.-III,
Marubeni Corporation
1999: Deputy General Manager, Power Project Div.; General
Manager, Power Project Dept. I, Marubeni Corporation
2016: Assistant to President & CEO, the Company
2016: Audit & Supervisory Board Member, the Company
(present post)
Outside Audit & Supervisory Board Members
Toshiko Oka
1986: Joined Tohmatsu Touche Ross Consulting Limited
(currently ABeam Consulting Ltd.)
2000: Joined Asahi Arthur Andersen Limited
2002: Principal, Deloitte Tohmatsu Consulting Co., Ltd.
(currently ABeam Consulting Ltd.)
2005: President and Representative Director, ABeam
Consulting Ltd. (currently PwC Advisory LLC)
2008: Outside Director, Netyear Group Corporation
2014: Audit & Supervisory Board Member, the Company
(present post)
2015: Outside Corporate Auditor, HAPPINET CORPORATION
2001: Senior Operating Officer, Utility Infrastructure Div.;
(present post)
General Manager, Overseas Power Project Dept.,
Marubeni Corporation
2002: Corporate Vice President, Chief Operating Officer,
Plant, Power & Infrastructure Div., Marubeni Corporation
2005: Corporate Senior Vice President, Chief Operating Officer,
Plant, Power & Infrastructure Projects Div., Marubeni
Corporation
2006: Corporate Senior Vice President, Member of the Board,
Marubeni Corporation
2007: Corporate Executive Vice President, Member of the
Board, Marubeni Corporation
2009: Senior Executive Vice President, Member of the Board,
Marubeni Corporation
2013: Vice Chairman, Marubeni Corporation
2015: Corporate Adviser, Marubeni Corporation (present post)
Chairman, Marubeni Power Systems Corporation
2017: Director, the Company (present post)
Keiko Yamagami
1987: Public Prosecutor, Yokohama District Public
Prosecutors Office
2002: Coordinator, the Legislative Division, Criminal Affairs
Bureau, Ministry of Justice
2005: Counselor, the Legislative Division, Criminal Affairs
Bureau, Ministry of Justice
2005: Public Prosecutor, Supreme Public Prosecutors Office
2007: Deputy Director of Public Peace Department, Tokyo
District Public Prosecutors Office
2008: Deputy Director of Trial Department, Tokyo District
Public Prosecutors Office
2009: Trial Director, Yokohama District Public Prosecutors Office
2010: Registered as an attorney-at-law
(Dai-ichi Tokyo Bar Association)
Lawyer honorary member, Tokyo Seiwa Law Office
(present post)
2016: Chief Executive Officer, PricewaterhouseCoopers Deals
Advisory LLC (currently PwC Advisory LLC)
2016: Partner, PwC Advisory LLC
2016: CEO, Oka & Company Ltd. (present post)
2016: Outside Director, Mitsubishi Corporation (present post)
2016: Outside Director, Hitachi Metals, Ltd. (present post)
Hitoshi Kanamori
1984: Public Prosecutor, Tokyo District Public Prosecutors Office
1985: Public Prosecutor, Yamagata District Public
Prosecutors Office
1988: Public Prosecutor, Niigata District Public Prosecutors
Office
1990: Public Prosecutor, Tokyo District Public Prosecutors Office
1992: Registered as an attorney-at-law (Tokyo Bar Association)
1993: Partner, SANNO LAW OFFICE (present post)
2005: Visiting Professor, University of Tsukuba Law School
2015: Audit & Supervisory Board Member, the Company
(present post)
Noriyuki Uematsu
1985: Joined Tohmatsu & Aoki Audit Corporation
1997: Joined Deloitte Tohmatsu Consulting Co., Ltd.
(current ABeam Consulting Ltd.)
1999: Global Partner for manufacturing industry and
Managing Director in Kyushu area, Deloitte Tohmatsu
Consulting Co., Ltd. (current ABeam Consulting Ltd.)
2003: Joined DENTSU INC.
2008: Established Uematsu & Co.
Managing Director, Uematsu & Co. (present post)
2011: President & Representative Director, SU Consultant
Co., Ltd. (present post)
2012: Outside Audit & Supervisory Board Member, NJK
Corporation (present post)
2015: Outside Audit & Supervisory Board Member,
Kamakura Shinsho, Ltd.
2016: Outside Director and Audit & Supervisory Committee
Member, Kamakura Shinsho, Ltd. (present post)
2016: Audit & Supervisory Board Member, the Company
(present post)
32
2016: Outside Director, Link and Motivation Inc. (present post)
2017: Director, the Company (present post)
Audit & Supervisory Board Members
Tomokazu Fujisawa
1984: Joined Fujisawa Pharmaceutical Co., Ltd.
1999: Director of Planning, Medical Supply Business, Fujisawa
Pharmaceutical Co., Ltd.
2006: Assistant to Senior Vice President, Corporate Finance &
Accounting and Project Leader of J-SOX Project,
the Company
2007: Project Leader of J-SOX Project, the Company
2013: Vice President, Internal Auditing, the Company
2014: Assistant to President and CEO, the Company
2014: Audit & Supervisory Board Member, the Company
(present post)
(Front row, from left) Yoshiharu Aizawa, Keiko Yamagami, Yoshihiko Hatanaka, Toshiko Oka, Noriyuki Uematsu
(Back row, from left) Mamoru Sekiyama, Etsuko Okajima, Kenji Yasukawa, Hiroko Sakai, Hitoshi Kanamori, Tomokazu Fujisawa
Expected Role of Outside Directors and Outside Audit & Supervisory Board Members
Position
Name
Outside
Directors
Etsuko
Okajima
Expected Role
Etsuko Okajima has been engaged in corporate management as a business manager of a human resource consulting
company, and has abundant management experience and extensive insight. She currently plays a key role as an outside
Director for management of the Company from an independent standpoint. The Company is confident that she will draw
on her abundant experience of corporate management in management of the Company in the future as well.
Yoshiharu
Aizawa
Yoshiharu Aizawa has been engaged in medical treatment while successively holding important posts at Kitasato University
as a medical scientist, and has abundant specialized knowledge and experience. He currently plays a key role as an outside
Director for management of the Company from an independent standpoint. The Company is confident that he will draw
on his abundant specialized knowledge and experience in management of the Company in the future as well.
Mamoru
Sekiyama
Mamoru Sekiyama has been engaged in corporate management as a business manager of a general trading company over
many years, and has abundant global experience and extensive insight. The Company is confident that he will be able to
apply his abundant specialized knowledge and experience in corporate management and other strengths to the
management of the Company from an independent standpoint.
Keiko
Yamagami
After successively holding important posts such as Public Prosecutor at the Supreme Public Prosecutors Office, Keiko
Yamagami has been engaged in corporate legal affairs as an attorney-at-law, and has abundant expertise and experience.
The Company is confident that she will be able to apply her abundant specialized knowledge and experience to the
management of the Company from an independent standpoint.
Toshiko
Oka
Toshiko Oka has been engaged in corporate management as a business manager of a management consulting firm, and
has abundant management experience and extensive insight. She currently plays a key role as an outside Audit &
Supervisory Board Member from an independent standpoint. The Company is confident that she will draw on her
abundant experience in corporate management in auditing the Company in the future as well.
Hitoshi
Kanamori
After successively holding important posts such as Public Prosecutor at the Tokyo District Public Prosecutors Office, Hitoshi
Kanamori has been engaged in corporate legal affairs as an attorney-at-law, and has abundant expertise and experience. He
currently plays a key role as an outside Audit & Supervisory Board Member from an independent standpoint. The Company
is confident that he will draw on his abundant specialized knowledge and experience in auditing the Company in the
future as well.
Noriyuki
Uematsu
With many years of experience as a certified public accountant, Noriyuki Uematsu has thorough knowledge of corporate
consulting and auditing, and is also engaged in corporate management as a business manager of a consulting company
relating to business accounting and tax accounting services. He currently plays a key role as an outside Audit & Superrisory
Board Member from an independent standpoint. The Company is confident that he will draw on his abundant specialized
knowledge and experience in auditing the Company in the future as well.
Outside
Audit &
Supervisory
Board
Members
Attendance at Meetings of
the Board of Directors and
Audit & Supervisory
Board During Fiscal 2016
14/14 times
14/14 times
Inaugurated
in June 2017
Inaugurated
in June 2017
14/14 Board of
Directors meetings
15/15 Audit & Supervisory
Board meetings
14/14 Board of
Directors meetings
15/15 Audit & Supervisory
Board meetings
11/11 Board of
Directors meetings
11/11 Audit & Supervisory
Board meetings
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017
Interview with an Outside Director
I will contribute to enhancing the corporate
governance, to fostering the continuous
creation of innovation and to
strengthening human resources and
organizational capabilities.
Etsuko Okajima
Outside Director
President and Representative Director, ProNova Inc.
Professor, Graduate School of Management, GLOBIS University
Ms. Okajima works as a consultant specializing in enhancement of
management teams. Leveraging her extensive experience in corporate
management, she has served as an outside Director of Astellas since 2014.
Q: In your view, what roles should you fulfill as an outside Director to improve enterprise value and how are you making a contribution?
A: I strive to supervise business execution from an objective viewpoint by taking full advantage
of my expertise in human resource development.
At Astellas, all outside Directors are expected to contribute as professionals from objective points
of view. I am engaged in developing the next generation of management teams with my expertise
in strategic human resource development as the president of a human resource consulting firm.
Thus, I am committed to making a significant contribution especially to discussions on succession
planning in the Nomination Committee, and to the supervision of personnel assignments and
human resource development to create innovation.
In my daily discussions as an outside Director, I recognize that the Company’s management
should reflect objective perspectives, such as whether anything has been overlooked internally
and what will be the impartial judgements. Notably, in terms of increasing enterprise value by
creating innovation, it is crucial to evaluate risks and to supervise whether necessary risks are
appropriately taken in resource allocation.
It tends to be difficult to judge the extent of the risks that a company should take from the
standpoint of outside Directors. In this respect, Astellas has a system that enables the outside Directors
to monitor the situation by providing information to them on projects in consideration which are in
the stage prior to being shared at Board of Directors meetings. In addition, I believe that the briefings
given by the executives are vital to judging risk. For example, in discussions on M&As, President and
CEO Hatanaka and other executives provide briefings in their own words on the reasons for implementing
the project, the determination of management and their perspectives on risk, including the
background of the project. Through this explanation and sound discussion over sufficient periods of
time, we, outside Directors, deepen our understanding and awareness of the Company’s tolerance
of risk and how positively management is willing to assume the risk. To date, we have communicated
and discussed with Astellas’ management team so that we can confidently place fundamental trust
in their management philosophy and their risk-taking capacity. In the course of examining each
proposal, we are able to reconfirm the thinking of the management team to provide our
perspective. Through this process, we strive to maximize our supervisory roles as outside Directors.
33
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 Q: What are the initiatives at Astellas which are designed to enhance the effectiveness of the Board of Directors?
A: Astellas continues to drive the evolution of the composition and operation of the Board of
Directors, and the outside Directors are well-informed.
I have had the opportunity to examine many different companies. I believe that Astellas’ Board of
Directors clearly stands out in terms of ensuring reliable management to create innovation. My
belief is based on two main reasons.
The first reason is that Astellas continues to drive evolution in the composition and operation
of the Board of Directors, in order to reach its clearly stated goal of realizing its business philosophy.
Astellas’ management team has extensively looked at how the Board of Directors should be
structured and operated to create innovation, including delegating authority to executives, and
has reflected this resolve in the ways of working and management of the Board of Directors. For
example, outside Directors have been the majority of the Board of Directors for many years and
one or two of them are replaced every year. I believe that this approach helps to bring diverse and
ongoing innovation through disciplined member turnover, in conjunction with maintaining the
quality of discussions amongst the Board of Directors.
The second reason is that Astellas has enhanced the information it provides to the outside
Directors. Astellas properly provides the information needed by all board members to discuss
matters using the same wording and concepts shared in meetings of the Board of Directors. I
believe that this helps to enhance the effectiveness of the monitoring of business execution,
besides increasing the quality of discussions as a matter of course. Twice a year, Astellas holds
Board of Directors meetings at various business sites other than the Headquarters Office including
locations outside of Japan. This provides a valuable opportunity to directly obtain real information
related to my field of specialty regarding issues such as the capabilities and situations of local
employees and the relationship between management and local employees. I feel that this
opportunity is very helpful in the course of fulfilling my duties as an outside Director.
Q: Could you discuss the features of succession planning at Astellas and your assessment of this process?
A: Astellas is strategically developing people from an early stage who have been fairly selected.
Astellas is strategically developing the next generation of business leaders. It also emphasizes
fairness in the selection and development of those candidates. Based on these two points, I value
the leading system of Astellas’ succession planning.
In preparation for various environmental changes both within and outside the Company,
Astellas identifies and captures high-potential employees who are candidates for the next
generation of management well in advance. It then strategically assigns and transfers these
personnel within the organization. Over the past few years, I have advised that this type of human
resource development must begin at an early stage of people’s careers, and I feel that this
discussion is ongoing now. Astellas intentionally assigns high-potential human resources to
positions of responsibility from an early stage in their careers and gives them the opportunity to
gain experience under pressure. I refer to this process as “pushing people beyond their comfort
zone.” Through these assignments and appointments, Astellas develops human resources. Astellas
also emphasizes the fair selection of candidates, looking at multiple factors beyond tenure to find
the best fit for the job. From my perspective as a human resource specialist, Astellas is following a
reliable process.
34
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 I believe that the importance of ensuring fairness in human resource development will only
continue to further increase. In recent years, Astellas has proactively executed M&A deals. In order
to attract talented human resources, including members who have joined the Group through M&A
activity, and to harness their talent, it is critical for Astellas to treat all personnel fairly without any
bias with respect to age or company background. I have been able to share this recognition with
the management team, and I feel that we have held good discussions in both meetings of the
Board of Directors and the Nomination Committee.
Q: Could you discuss your expectations for Astellas as an outside Director?
A: I expect Astellas to further develop “dynamic” systems in order to create innovation.
Astellas needs to continue creating innovation to meet the expectations of its stakeholders, and
this is my expectation as well.
From the viewpoint of organizational development, which lies in my field of expertise, creating
innovation requires implementation of diversified perspectives in making decisions and newly
connecting factors which are as different as possible. To do that, it is crucial to incorporate
“dynamic” systems into the organization. Astellas is already implementing these approaches to
develop “dynamic” systems, i.e., taking steps to ensure that innovation is not hindered by a fixed
organizational structure or by the impediments of sectionalism/narrow viewpoints. As I said before,
Astellas regards personnel assignment as an important pillar of human resource development, and
encourages strategic and proactive personnel transfers. In addition, Astellas has made various
efforts to avoid fixed organizations through such means as promoting flexible collaboration with
external partners and cross-functional collaboration. I expect these measures to contribute
immensely to creating innovation.
I believe the agenda for the future is to develop more “dynamic” systems in the Board of
Directors. One specific example would be to further increase the diversity of the members of the
Board of Directors, including the appointment of foreign nationals to the board.
I am determined to trigger “dynamic” evolution through my comments in the Board of
Directors discussions and in the Nomination Committee meetings. By doing so, I intend to
continue contributing to the enhancement of corporate governance at Astellas.
TOPIC
Astellas Selected as one of the 2016 Prize Winners
Corporate Governance of the Year 2016 Award
Astellas has been selected as one of the winners in the
Corporate Governance of the Year Awards for 2016
organized by the Japan Association of Corporate Directors.
Corporate Governance of the Year Awards are
held to recognize companies that are achieving sound
medium- to long-term growth by implementing good
corporate governance. Considering that one year has
passed since the Corporate Governance Code entered
force, the nomination process emphasized not only
formal structures, but also the actual implementation
of corporate governance systems.
A member of the Nomination Committee for the
awards commended Astellas’ corporate governance,
noting that the Company has firmly instilled
corporate governance in management and has a
well-developed corporate governance system in
place that facilitates prompt decision-making.
Without becoming complacent with the status
quo, Astellas will continue to strengthen corporate
governance so that it can continue to improve its
enterprise value.
35
Corporate Strategy and Corporate GovernanceAstellas Pharma Inc. ANNUAL REPORT 2017 Business Review
Further Enhancing Value Creation and
Value Protection through
Our Business Activities
Targeting medium- to long-term growth, Astellas is steadily advancing the three strategic priorities of
“Maximizing the Product Value,” “Creating Innovation,” and “Pursuing Operational Excellence.”
Through these initiatives, we will realize the sustainable enhancement of enterprise value and fulfill
our corporate social responsibility.
36
Astellas Pharma Inc. ANNUAL REPORT 2017 Executive Committee (as of July 2017)
The Executive Committee discusses important matters of management across Astellas. It is chaired by the Representative Director,
President and CEO, and comprises top management and General Counsel as standing members. Extended members include the
officers responsible for research, development and pharmaceutical technology capabilities together with the officers responsible
for each region, and these members participate in any necessary discussions at the request of the chairman.
Standing Members
Fumiaki Sakurai
Chief Administrative Officer &
Chief Ethics & Compliance Officer
Chikashi Takeda
Chief Financial Officer
Yoshihiko Hatanaka
Representative Director,
President and CEO
Linda Friedman
General Counsel
Kenji Yasukawa, Ph. D.
Representative Director,
Executive Vice President,
Chief Strategy Officer &
Chief Commercial Officer
Sef Kurstjens,
M.D., Ph. D.
Chief Medical
Officer
Extended Members
Nobuaki
Tanaka
President, Japan
Sales & Marketing
Masatoshi
Kuroda
President, Asia &
Oceania Business
James
Robinson
President, Americas
Operations
Yukio
Matsui
President, EMEA
Operations
Wataru
Uchida, Ph.D.
President, Drug
Discovery Research
Mitsunori
Matsuda
President,
Pharmaceutical
Technology
Bernie Zeiher,
M.D.
President,
Development
Global Heads
Martin
Golden
Head of Marketing
Strategy
37
Charlotte Kremer,
M.D.
Head of Medical Affairs
Songlin Xue,
M.D., Ph.D.
Head of
Pharmacovigilance
Bill Fitzsimmons,
Pharm.D.
Head of Regulatory Affairs and Clinical
and Research Quality Assurance
Kunihiko
Kokubo
Head of Quality
Assurance
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Top Management Discussion
Speaking with the CSTO&CCO Maximizing the Product Value
Achieving Sustained Growth through Long-Term
Portfolio Management
Kenji Yasukawa, Ph.D.
Representative Director, Executive Vice President, Chief Strategy Officer & Chief Commercial Officer (CSTO&CCO)
Q: How will you expand the growth drivers to overcome the patent cliff?
A: We analyze the internal and external environment rigorously and continue to review our
portfolio with a long-term view.
The patent cliff, impacts on business performance due to patent expiry of major products, is an
issue that we must overcome by undertaking long-term portfolio management. Every year, Astellas
rigorously analyzes the internal and external environment and updates its long-term strategy. In
the process, we select fields where we can succeed in tandem with continuously revising our
product portfolio and pipeline.
XTANDI and the OAB treatment franchise, our current growth drivers, are in the stage to
steadily execute the strategies we drew up at launch, and we have made largely solid progress.
Looking at our future growth drivers, we have a number of projects in late-stage clinical
development, such as gilteritinib and roxadustat. Moreover, the acquisitions of Ganymed
Pharmaceuticals AG and Ogeda SA added exciting projects in our pipeline. We will also invest in
the cell therapy program which we obtained from acquired Ocata Therapeutics, Inc. We expect
these projects to contribute to our medium-term growth. Astellas has a portfolio fully capable of
achieving sustained growth over the next 5 to 10 years.
Q: As drug prices come under increasing pressure, how will you raise product value?
A: We will seek to obtain an understanding from various stakeholders by striving to effectively
prove the value our products deliver.
In the areas of serious diseases and fields with unmet medical needs, Astellas will continue to
provide high value by turning innovative science into new medicines promptly. In order to
continuously create new value, drug prices must reflect the value of drugs, in conjunction with
ensuring patients’ access to drugs. To do so, Astellas must prove the value of drugs to stakeholders.
Until now, we have proven the value of drugs through conducting numerous clinical trials,
including comparisons with existing drugs and the use in various types of patient populations.
However, the need to conduct multiple trials has been one factor behind surging drug prices.
Going forward, it will become increasingly important to prove the value of new drugs efficiently by
utilizing regulatory systems for obtaining early approval of innovative drugs, real-world data and
other methods. As this will require arrangements such as the introduction of new systems, Astellas
will also work to gain the mutual understanding of society toward these developments.
38
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Speaking with the CMO Creating Innovation
Focusing on the Creation of Innovative New Drugs
for Diseases in Areas of High Unmet Medical Needs
Sef Kurstjens, M.D., Ph.D. Chief Medical Officer (CMO)
Q: How do you evaluate the current pipeline? What are your key priorities for enhancing the pipeline?
A: Astellas has demonstrated healthy growth and significantly strengthened its pipeline in
recent years. To continue this trajectory, it is critical we do not become complacent and
continue building out our expanding pipeline in our current and emerging therapeutic areas.
At Astellas, our research and development efforts are focused predominantly in areas of high
unmet medical need, in life-threatening diseases, with the potential to deliver first-in-class
therapies. For the past decade, Astellas has demonstrated healthy growth, developing
groundbreaking new medicines in urology, transplantation, infectious diseases and oncology, our
largest focus area. We currently have more than 30 new molecular/biological entities in the
pipeline, and have significantly grown our presence in oncology. We have a number of late-stage
assets across the pipeline with data readouts expected in the coming year. While there has been
demonstrable progress, we are not complacent and understand there is still a lot of work to do. We
will continue to refine our current therapeutic areas, move assets forward in our emerging
therapeutic areas, and build out our expanding pipeline.
Q: How have you been improving R&D productivity?
A: Throughout the R&D process, from bench to clinic, and into the marketplace, we focus on
the best science, empower the best talent to pursue it, in the best location to optimize the
chances of success for every molecule in development.
Our approach to driving the speed of innovation is three-pronged: First, we have built speed and
efficiency into our in-house, pre-Proof of Concept activities, with the initiation of our FASTEN
program. Gilteritinib is a good example of how we’ve applied FASTEN to a development program.
Second, we employ open innovation as a strategy to access the best science and scientists globally.
Third, we continue to look for external mid- to late-stage assets that fit our strategic criteria through
in-licensing, partnering or acquisition opportunities to continue to build our pipeline.
Separate, but also important to improving productivity, is ensuring we design the best
organization and fully engage our staff, utilizing the Astellas Way to create a common purpose and
culture for our organization.
39
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Speaking with the CAO&CECO Pursuing Operational Excellence
Human Resource Development That
Leverages Diversity Drives Creating Innovation
Fumiaki Sakurai Chief Administrative Officer & Chief Ethics & Compliance Officer (CAO&CECO)
Q: Could you share your perspectives on human resource development aimed at creating innovation?
A: We will create value by deliberately fostering constructive interaction and debate among
employees with diverse values.
Creating innovation is a universal theme for all employees, not just the departments involved in
drug creation. Since its founding in 2005 through a merger of two leading Japanese pharmaceutical
companies, Astellas has always pursued the best approaches and methods available in the world.
One key to creating value is to respect the diverse values of various people. The breakthroughs that
create opportunities are found in approaches that seem, at first glance, to be highly risky and
unique. At times, diversity can give rise to opposing viewpoints. However, innovation is created
when these differences are embraced and reconciled through communication.
Based on this belief, Astellas provides opportunities for employees to grow by creatively
tackling challenging duties through its personnel assignment process, which is one of the key
pillars of human resource development. In human resource development, we provide
opportunities for diverse employees from around the world to engage in a healthy rivalry and
sharpen their thinking, and training programs where participants and top management can
discuss and debate ideas on the same level. By deliberately creating situations where employees
with diverse values engage in constructive interaction and debate, we will work to develop talent
who can create innovation.
Q: What is the aim of strengthening the compliance structure?
A: The aim is to earn the trust and confidence of stakeholders as Astellas’ business expands globally.
Stakeholders have always expected an extremely high standard of ethics from the pharmaceutical
industry, which has a direct bearing on people’s lives. Moreover, as Astellas’ business expands
globally, the requirements and rules are becoming more and more complex. In this environment,
in order to preserve Astellas’ enterprise value while earning the trust of stakeholders, every Astellas
employee must take action based on high ethics as a matter of course. In addition, we must also
engage in a steady dialogue with our business partners to ensure that they practice the same level
of compliance as Astellas. We have unified the Astellas Group Code of Conduct on a global basis.
Along with this, the Department of Ethics & Compliance was reconfigured into a global organization
independent of the operating divisions. Astellas has appointed individuals to be responsible for
compliance at all of its subsidiaries, and is working to further strengthen the organization.
40
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Value Creation and Value Protection Activities
Astellas will turn innovative science into value for patients
through its value creation process.
We believe that creating value for society through
business activities will help Astellas to maintain trust from
society and to capture new business opportunities,
leading to creation of enterprise value. Protecting value for
society will help Astellas to reduce its reputational risk and
to elevate its corporate brand, leading to the protection of
enterprise value.
Value Creation Activities
Value Protection Activities
Maximizing the
Product Value
(Manufacturing to Sales
and Procurement)
• Enhancing the main franchise areas (oncology, OAB, etc.)
• Launching new products and expanding indications and adding new formulations
• Building an optimal sales structure in response to the market characteristics of
each country/region
• Measures to prevent medical malpractice and to improve the distinguishability of
pharmaceuticals
• Improving the pharmacovigilance system
• Introducing universal design into product packaging
• Increasing public awareness of diseases
• Continuously executing a high level of
investment in R&D
• Actively incorporating cutting-edge science and
technology through a Network Research System
• Promoting rapid and
efficient development
• Acquiring promising
candidate compounds
• Patient centricity in drug development
• Joint research into therapies and vaccines against tropical diseases
• Expanded access to investigational medicines
• Managing intellectual property to maintain corporate competitiveness and improve
Access to Health
• Continually enhancing organizational structure
• Optimal reallocation of resources
• Effective utilization of external resources
• Nurturing and promoting the success of diverse human resources
• Developing rewarding and safe work environments
• Strengthening the corporate governance framework
• Contributing to strengthening healthcare systems in developing countries
• Using renewable energy
• Strengthening the corporate governance framework
• Reducing greenhouse gas (GHG) emissions
• Initiatives for biodiversity
Social
Preserving the environment
and biodiversity
Social
Improving Access to Health
Enterprise
Earning trust from society
Related Information
P43-52
Creating
Innovation
(Research and
Development)
Related Information
P53-62
Pursuing
Operational
Excellence
(Raising the Quality
and Efficiency of
Operations)
Related Information
P30, 63-70
Other Activities
Related Information
P25-29, 71-80
41
• Gathering and providing information that helps to
ensure proper use of products
• Anti-counterfeiting activities
• Anti-doping measures
• Strengthening the quality assurance system
• Stable supply and quality control
• Promoting CSR procurement
Social Social Value Enterprise Enterprise Value
Main Types of Social and
Enterprise Value Created and Protected
Social
Improving the health condition of
patients through medicines that satisfy
unmet medical needs
Social
Returns to stakeholders
Enterprise
Funds to sustain growth
• Conducting R&D based on compliance with relevant
laws and regulations and ethical considerations
• Protection of human rights, privacy and confidentiality
of personal information of research subject and
assurance of reliability in clinical trials
Social
Improving sustainability by solving social
issues through business activities
Social
Improving the quality of healthcare by
creating innovative medicines
Enterprise
Creating business opportunities by
solving social issues related to health
• Improving the internal control system
• Strengthening the risk management system
• Enhancing the awareness of employees toward ethics
and compliance and the structure to promote ethics
and compliance
• Anti-bribery and anti-corruption initiatives
• Commitment to fair competition
• Ensuring occupational safety and health
Social Maintaining social order by promoting
ethics and compliance
Enterprise
Enhancing corporate competitiveness and
productivity through human resource
development
Enterprise
Enhancing corporate competitiveness and
productivity by increasing the quality and
efficiency of operations
Enterprise
Earning trust from society
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Maximizing the
Product Value
(Manufacturing to Sales
and Procurement)
• Enhancing the main franchise areas (oncology, OAB, etc.)
• Launching new products and expanding indications and adding new formulations
• Building an optimal sales structure in response to the market characteristics of
• Measures to prevent medical malpractice and to improve the distinguishability of
each country/region
pharmaceuticals
• Improving the pharmacovigilance system
Related Information
• Introducing universal design into product packaging
P43-52
• Increasing public awareness of diseases
Creating
Innovation
(Research and
Development)
• Continuously executing a high level of
investment in R&D
• Actively incorporating cutting-edge science and
technology through a Network Research System
• Patient centricity in drug development
• Promoting rapid and
efficient development
• Acquiring promising
candidate compounds
• Joint research into therapies and vaccines against tropical diseases
• Expanded access to investigational medicines
Related Information
• Managing intellectual property to maintain corporate competitiveness and improve
P53-62
Access to Health
• Continually enhancing organizational structure
• Optimal reallocation of resources
• Effective utilization of external resources
• Nurturing and promoting the success of diverse human resources
• Developing rewarding and safe work environments
Pursuing
Operational
Excellence
(Raising the Quality
and Efficiency of
Operations)
Related Information
P30, 63-70
Other Activities
Value Creation Activities
Value Protection Activities
• Gathering and providing information that helps to
ensure proper use of products
• Anti-counterfeiting activities
• Anti-doping measures
• Strengthening the quality assurance system
• Stable supply and quality control
• Promoting CSR procurement
Social Social Value Enterprise Enterprise Value
Main Types of Social and
Enterprise Value Created and Protected
Social
Improving the health condition of
patients through medicines that satisfy
unmet medical needs
Social
Returns to stakeholders
Enterprise
Funds to sustain growth
• Conducting R&D based on compliance with relevant
laws and regulations and ethical considerations
• Protection of human rights, privacy and confidentiality
of personal information of research subject and
assurance of reliability in clinical trials
Social
Social
Improving sustainability by solving social
issues through business activities
Improving the quality of healthcare by
creating innovative medicines
Enterprise
Creating business opportunities by
solving social issues related to health
• Improving the internal control system
• Strengthening the risk management system
• Enhancing the awareness of employees toward ethics
and compliance and the structure to promote ethics
and compliance
• Anti-bribery and anti-corruption initiatives
• Commitment to fair competition
• Ensuring occupational safety and health
Social Maintaining social order by promoting
ethics and compliance
Enterprise
Enterprise
Enhancing corporate competitiveness and
productivity through human resource
development
Enhancing corporate competitiveness and
productivity by increasing the quality and
efficiency of operations
Enterprise
Earning trust from society
• Strengthening the corporate governance framework
• Contributing to strengthening healthcare systems in developing countries
Related Information
P25-29, 71-80
• Using renewable energy
• Strengthening the corporate governance framework
• Reducing greenhouse gas (GHG) emissions
• Initiatives for biodiversity
Social
Preserving the environment
and biodiversity
Social
Improving Access to Health
Enterprise
Earning trust from society
42
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Maximizing the Product Value
Maximizing the Product Value
Review of Operations by Therapeutic Area
in oncology. Currently, we are working to expand sales of
XTANDI to new regions, as we work to expand the
indication in each country and further increase the market
penetration of this drug to chemotherapy-naïve patients.
Leveraging our strengths including robust data obtained
in clinical trials and our solid presence in the urology field,
we aim to become the market leader in this category.
Fiscal 2016 Performance
Total sales of Astellas’ four oncology products decreased by
3.9% to ¥307.7 billion, due partly to the impact of foreign
exchange rates. Excluding the foreign exchange impact,
sales rose by around 6%.
Sales of XTANDI were ¥252.1 billion, mostly flat year
on year. Excluding the foreign exchange impact, sales
increased by around 10%. Tarceva-related revenues were
down 24.7% at ¥35.2 billion. Eligard is currently marketed
in EMEA and Asia & Oceania. Sales declined 9.6% to ¥15.9
billion. Sales of Gonax, which is marketed in Japan,
increased 15.9% to ¥4.5 billion.
Sales of XTANDI by Region
Americas
Japan
EMEA
(¥ billion)
400.0
300.0
+0%
252.1
2.4
200.0
70.7
100.0
152.9
Asia & Oceania
+10%
252.1
85.3
4.0
277.7
101.5
7.0
139.4
143.4
0
26.2
2016.3
23.4
2017.3
25.8
2018.3
(Forecast)
Astellas is working to steadily grow and maximize the
value of products developed through its investments
over the years, including its growth drivers XTANDI and
Betanis/Myrbetriq/BETMIGA.
Oncology
Business Environment and Basic Strategy
Given that cancer is one of the leading causes of death,
oncology has urgent unmet patient needs. It is also an area
that has seen the development of a steady string of new
drugs in line with scientific advancement. Astellas is
focused on the oncology field as one of its core business
areas. We currently have four oncology products: the
prostate cancer treatments XTANDI, Eligard and Gonax,
and Tarceva for the treatment of non-small cell lung cancer
and pancreatic cancer.
XTANDI stands out as a significant growth driver for us
Sales by Product
Eligard
XTANDI
Gonax
Tarceva
-4%
320.3
46.8
17.6
3.9
307.7
35.2
4.5
15.9
252.1
252.1
2016.3
2017.3
(¥ billion)
400.0
300.0
200.0
100.0
0
43
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Overview of Main Products
XTANDI This product is a once-daily oral androgen
receptor inhibitor. XTANDI has been sold since 2012 in
various regions for prostate cancer patients who had
previously received chemotherapy. As of March 2017,
XTANDI is sold in around 70 countries and regions. It was
also approved in key countries for the treatment of
chemotherapy-naïve prostate cancer patients.
Looking at regional sales of XTANDI in fiscal 2016,
sales in Japan decreased 10.6% year on year to ¥23.4
billion, due partly to the impact of NHI drug price revisions.
Sales in the Americas rose 1.1% to US$1,286 million. In this
region, U.S. sales decreased 1.6% to US$1,215 million.
Although sales volume increased in the U.S., the main
reason for the lower sales was an increase in drugs
supplied free of charge through patient access programs,
which are not recorded as sales. In the EMEA region, sales
rose by 34.7% to €718 million. XTANDI is gaining traction
among chemotherapy-naïve prostate cancer patients. In
the Asia & Oceania region, sales increased 66.5% to ¥4.0
billion, with sales growing primarily in Australia and Taiwan.
Clinical study data comparing XTANDI and bicalutamide
were reflected in the European label in April 2016 and the
U.S. label in October 2016.
In the U.S., Astellas and Pfizer Group co-promote
XTANDI and share profits equally. In all countries excluding
the U.S., Astellas develops and commercializes XTANDI,
while paying Pfizer Group royalties based on sales.
Eligard Eligard, a treatment for prostate cancer, is a
luteinizing hormone-releasing hormone (LHRH) agonist
that is marketed under license from TOLMAR Inc.
In EMEA, sales increased by 0.6% to €132 million in
fiscal 2016. In Asia & Oceania, sales rose 17.8% to ¥0.2 billion.
Gonax Gonax, a treatment for prostate cancer, is a
gonadotrophin-releasing hormone (GnRH)-receptor
blocker with a subcutaneously injectable formulation
in-licensed from Ferring Pharmaceuticals. It is sold by
Astellas in Japan. In fiscal 2016, sales rose 15.9% to ¥4.5
billion. We will step up efforts to increase the market
penetration of Gonax, along with that of XTANDI.
Tarceva Tarceva, a treatment for non-small cell lung
cancer and pancreatic cancer, is a small-molecule drug
developed to target the epidermal growth factor receptor
(EGFR) that plays a key role in cancer formation and
growth. In fiscal 2016, Tarceva-related revenues decreased
by 16.5% to US$325 million, mainly due to intensifying
competition with other drugs.
In the U.S., we have been co-promoting Tarceva with
Genentech, Inc., with earnings split equally between
bothcompanies. We also have a license agreement with F.
Hoffmann-La Roche Ltd in other countries, and receive
royalties based on sales. These revenues are recorded as
sales in the Americas.
XTANDI
44
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Maximizing the Product Value
Urology and Nephrology
Business Environment and Basic Strategy
Astellas has established a strong presence in the urology
area through the sale of Harnal, a treatment for functional
symptoms of benign prostatic hyperplasia, as well as the
overactive bladder (OAB) treatments Vesicare and Betanis/
Myrbetriq/BETMIGA.
OAB treatments have now become one of Astellas’
core growth drivers. We will maintain the position of
Vesicare as the first choice among anticholinergics—the
standard therapy for OAB. Moreover, Betanis/Myrbetriq/
BETMIGA has earned a strong reputation as a new
treatment option with a different mechanism of action
from Vesicare. In anticipation of the expiry of patent
protection for Vesicare in various regions from 2018
onward, we will allocate more resources than ever to
Betanis/Myrbetriq/BETMIGA as we focus on achieving
further market penetration, in order to maximize the value
of the OAB franchise as a whole. Considering the large
number of potential subjects in the OAB treatment market,
we will work to contribute to the treatment of many more
patients by raising public awareness of this condition.
Moreover, the nephrology area offers prospects for
synergies with Astellas’ existing products and therapeutic
areas, including urology. Accordingly, the development of
several projects is now under way.
Total Sales of the OAB Franchise (By Product)
Betanis/Myrbetriq/BETMIGA
Vesicare
(¥ billion)
300.0
200.0
100.0
0
217.4
81.7
135.6
-1%
+10%
214.9
98.8
237.4
122.8
116.1
114.6
2016.3
2017.3
2018.3
(Forecast)
Fiscal 2016 Performance
In fiscal 2016, aggregate sales of our OAB franchise,
including Vesicare and Betanis/Myrbetriq/BETMIGA,
decreased by 1.1% to ¥214.9 billion, partly due to the
impact of foreign exchange rates. Excluding the foreign
exchange impact, sales increased by around 7%.
Overview of Main Products
Betanis/Myrbetriq/BETMIGA This drug is an OAB
treatment. It is a beta-3 adrenergic receptor agonist that
helps to relieve symptoms associated with OAB such as
urinary urgency, frequent urination, and urinary
incontinence. It is sold in around 50 countries and regions
worldwide under the brand name of Betanis in Japan,
Myrbetriq in the Americas, and BETMIGA in EMEA and Asia
& Oceania.
As an OAB treatment with a new mechanism of action,
Betanis/Myrbetriq/BETMIGA has been achieving increased
market penetration. In fiscal 2016, aggregate sales
increased in every region despite the impact of foreign
exchange rates, with sales growing sharply by 21.0% to
¥98.8 billion. In Japan, sales of Betanis increased by 22.0%
to ¥25.9 billion. Betanis’ annual share of the OAB treatment
market was approximately 32% (on a value basis). In the
Americas, Myrbetriq sales continued to grow, up 34.2% to
US$510 million. Myrbetriq’s annual share of the U.S. OAB
treatment market reached approximately 31% (on a value
basis). In the EMEA region, sales of BETMIGA increased by
17.8% to €119 million. In EMEA, BETMIGA’s annual share of
the OAB treatment market reached approximately 13% (on
a value basis). In Asia & Oceania, BETMIGA sales increased
sharply by 144.8% to ¥3.5 billion.
Betanis/Myrbetriq/BETMIGA
45
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Vesicare Vesicare, an OAB treatment, is an
anticholinergic drug sold in approximately 80 countries
and regions. It has continued to retain a high share in each
region as the first choice of therapy in the OAB area.
In fiscal 2016, sales of Vesicare decreased 14.4% to
¥116.1 billion. Looking at regional sales of Vesicare, sales in
Japan declined 3.3% to ¥25.6 billion, sales in the Americas
decreased 7.7% to US$490 million, sales in EMEA declined
10.2% to €270 million, and sales in Asia & Oceania fell 5.2%
to ¥5.0 billion.
Vesicare
Harnal/Omnic This product is sold in approximately 100
countries and regions, and has established itself as a
standard treatment of urinary disorders associated with
benign prostatic hyperplasia (BPH).
Sales declined 10.8% to ¥47.7 billion in fiscal 2016.
Regionally, sales in Japan decreased 27.5% to ¥9.2 billion.
In EMEA, sales, including bulk royalty revenue, declined
1.0% to €138 million. Sales in Asia & Oceania decreased
2.0% to ¥21.1 billion.
Immunology
Business Environment and Basic Strategy
In the immunology area, Astellas is contributing to the field
of transplantation through the immunosuppressant Prograf.
The transplantation franchise is a vital earnings base
globally and Astellas will continue to focus on the franchise.
Fiscal 2016 Performance
Sales of Prograf decreased 8.5% to ¥186.2 billion in fiscal
2016, due partly to the impact of foreign exchange rates.
Excluding the foreign exchange impact, sales were mostly
unchanged year on year. Although global Prograf sales are
being impacted by generics in Japan, the Americas and
EMEA, sales in Asia & Oceania continue to show strong
growth on an adjusted basis excluding the impact of
foreign exchange rates.
Overview of Main Products
Prograf and Advagraf/Graceptor/ASTAGRAF This drug
is an immunosuppressant used to suppress organ
transplant rejection. Although the patent for this drug has
already expired in major countries, it is sold in
approximately 100 countries and regions and has made a
significant global contribution to the field of
transplantation.
46
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Maximizing the Product Value
Looking at regional sales in fiscal 2016, sales in Japan
decreased 1.9% to ¥48.8 billion, due partly to the impact of
NHI drug price revisions, despite continued growth in the
once-daily formulation of Graceptor. Sales in EMEA via
in-house distribution channels rose 0.4% to €590 million,
mainly supported by expanded sales of the once-daily
formulation of Advagraf. Sales in Asia & Oceania fell 2.9% to
¥37.3 billion, due partly to the impact of foreign exchange
rates. On a basis excluding the foreign exchange impact,
sales increased by around 11%. Meanwhile, sales in the
Americas declined 12.6% to US$252 million, mainly due to
the impact of generics.
Cimzia Cimzia, an adult rheumatoid arthritis treatment,
is an anti-TNF (tumor necrosis factor)-alpha antibody that
is co-promoted in Japan with UCB Japan Co., Ltd. Sales
increased 17.9% to ¥7.7 billion in fiscal 2016. Astellas will
continue focusing on specialist physicians, in order to
increase the prevalence of Cimzia in patients with
rheumatoid arthritis at the early disease stages and
patients with severe inflammation and symptoms.
Sales of Prograf (By Region)
(Including Advagraf/Graceptor/ASTAGRAF XL/Prograf XL)
Japan
Americas
EMEA
Asia & Oceania
Export
-9%
203.6
38.4
2.8
+0%
186.2
37.3
2.6
77.9
34.6
49.8
70.1
27.3
48.8
2016.3
2017.3
186.7
1.9
39.6
68.7
28.1
48.5
2018.3
(Forecast)
(¥ billion)
300.0
200.0
100.0
0
47
Other Areas
Overview of Main Products (Global Products)
Funguard/MYCAMINE This drug is a candin-type
antifungal agent used for the treatment of fungal infections.
It is sold in approximately 60 countries and regions.
In fiscal 2016, global sales of the product decreased
3.3% to ¥40.3 billion, partly due to the impact of foreign
exchange rates.
In terms of regional sales, sales in Japan decreased
3.7% to ¥11.2 billion. Meanwhile, sales in the Americas rose
3.9% to US$113 million. In EMEA, sales increased 7.6% to
€91 million and in Asia & Oceania, sales increased 4.8% to
¥6.0 billion.
Overview of Main Products (Japan)
Micardis/Micombi/Micamlo Micardis, a hypertension
treatment, is a once-daily oral angiotensin II receptor
blocker (ARB). In Japan, Astellas is co-promoting the
Micardis product line with Nippon Boehringer Ingelheim
Co., Ltd. Sales of drugs in the Micardis product line,
including combination drugs such as Micombi and
Micamlo, decreased by 4.1% to ¥93.2 billion in fiscal 2016,
partly due to the impact of NHI drug price revisions. The
total share of the Micardis line of drugs in the ARB market
was around 23% (on a value basis).
In November 2016, Astellas launched Micatrio
Combination Tablets* in Japan as a combination drug of
Micardis, long-acting calcium channel blocker (CCB)
amlodipine besylate, and the thiazide diuretic
hydrochlorothiazide (HCTZ).
Furthermore, the substance patent for this product
expired in Japan in January 2017.
* Official guidance on points to consider regarding the use of Micatrio
Combination Tablets under National Health Insurance coverage was issued by
the Medical Affairs Division of the Ministry of Health, Labour and Welfare.
(Medical Affairs Division 1226 No.8; December 26, 2016)
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Celecox Celecox, an anti-inflammatory analgesic agent,
is a selective cyclooxygenase-2 (COX-2) inhibitor that is
co-promoted with Pfizer Japan Inc. In fiscal 2016, sales of
Celecox increased 2.2% to ¥47.6 billion. Celecox’s share of
the market for oral anti-inflammatory analgesic agents was
around 64% (on a value basis) based on the strong
reputation of its product features. Going forward, we will
target an even higher share of the market for oral anti-
inflammatory analgesic agents.
Symbicort Symbicort, a treatment for adult bronchial
asthma, is a combination drug of an inhaled corticosteroid
and a rapid and long-acting beta-2 agonist. Astellas is
co-promoting Symbicort with AstraZeneca K.K. in Japan. In
fiscal 2016, sales of Symbicort increased 5.0% to ¥39.3
billion. Symbicort’s share of the market in Japan for adult
inhaled steroid treatment including combination drugs
was around 37% (on a value basis). We aim for further
penetration of the product in the growing market due to
factors including the dissemination of treatment guidelines.
Bonoteo Bonoteo is an oral bisphosphonate
osteoporosis treatment. In fiscal 2016, sales of Bonoteo
decreased 2.2% to ¥13.8 billion. Amid slowing growth in
the market for oral bisphosphonate drugs, Bonoteo’s share
of the Japanese market for bisphosphonate agents was
around 23% (on a value basis). Astellas will continue
emphasizing the patient convenience offered by this drug,
as well as its high clinical effect, with the aim of capturing
market share.
Suglat Suglat, a type 2 diabetes treatment, is Japan’s first
selective sodium-glucose co-transporter 2 (SGLT2)
inhibitor. In Japan, Astellas is co-promoting Suglat with
Kotobuki Pharmaceutical Co., Ltd. and MSD K.K. Supported
by growth in the market for selective SGLT2 inhibitors in
Japan, sales of Suglat grew 30.2% to ¥9.5 billion in fiscal
2016. Suglat’s share of the market for selective SGLT2
inhibitors in Japan was around 27% (on a value basis).
In May 2017, Astellas filed an application for
manufacturing and marketing approval of a combination
drug of Suglat and the DPP-4 inhibitor sitagliptin
phosphate hydrate, with the indication of type 2 diabetes,
in Japan.
In April 2016, Astellas launched Repatha, the
Repatha
first proprotein convertase subtilisin/kexin type 9 (PCSK9)
inhibitor in Japan, indicated for the treatment of familial
hypercholesterolemia or hypercholesterolemia*. It is being
co-promoted by Astellas and Amgen Astellas BioPharma
K.K. We are working to steadily increase market
penetration of Repatha by carrying out activities to supply
information on this drug, with an emphasis on
encouraging proper drug use.
In May 2017, self-injectable of Repatha became
eligible for National Health Insurance coverage and limits
on the prescription period were removed.
* The approved indication is as follows: “Familial hypercholesterolemia,
hypercholesterolemia, only when patients who have high risk of cardiovascular
events and do not adequately respond to HMG-CoA reductase inhibitors.
* Official guidance on points to consider regarding the use of Repatha under
National Health Insurance coverage was issued by the Medical Affairs Division of
the Ministry of Health, Labour and Welfare. (Medical Affairs Division 0331 No.9;
March 31, 2017).
LINZESS LINZESS was launched in March 2017 as Japan’s
first drug indicated for the treatment of irritable bowel
syndrome with constipation (IBS-C). Astellas was granted
the exclusive rights to develop and commercialize LINZESS
in Japan from Ironwood Pharmaceuticals, Inc., and hopes
to contribute to the treatment of IBS-C patients by
building on its platform for Irribow, a treatment for
diarrhea-predominant irritable bowel syndrome.
Overview of Main Products (U.S.)
Lexiscan Lexiscan is a pharmacologic stress agent
in-licensed from Gilead Palo Alto, Inc. In fiscal 2016, sales of
Lexiscan increased 4.3% to US$660 million.
CRESEMBA CRESEMBA is an azole antifungal in-licensed
from Basilea Pharmaceutica International Ltd. and
launched in the U.S. in April 2015. In fiscal 2016, sales of
CRESEMBA grew steadily, increasing 147.9% to US$53
million. We will continue working to increase market
penetration of this drug, which provides a new option for
treating severe fungal infections.
48
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Maximizing the Product Value
Business Environment and Strategy by Region
Japan
Americas
Nobuaki Tanaka President, Japan Sales & Marketing
James Robinson President, Americas Operations
In Japan, the government is accelerating measures to
optimize healthcare expenditures, and healthcare delivery
systems are also changing due to the concept of
community medical care. Meanwhile, advances in
information technology and artificial intelligence are
expected to significantly alter the healthcare environment.
We want to proactively transform these healthcare-
environment changes into opportunities, and carry out
even higher value-added information-providing activities.
Taking action, to date Astellas has been carrying out a
variety of reforms regarding our organization and our
Medical Representatives (MRs). Our sales promotion
structure currently involves two approaches. One is based
on each individual medical institution, whereby the MRs
work to understand customer needs in each medical
region and provide prompt, accurate information. The
other is that the MRs assigned to specific therapeutic areas
in the highly specialized fields of oncology and immunology
are providing more detailed information tailored to the
specific treatment needs of individual patients.
Our domestic product portfolio has also continued to
change. The number of highly specialized products such
as XTANDI and Repatha is increasing, and the new product
LINZESS has been launched. From fiscal 2017, however,
Micardis will begin to see the impact of generics. Astellas
will transform these kinds of internal and external
environmental changes into opportunities, and continue
to evolve toward a patient-centric, optimized sales
promotion structure, and by providing high-value-added
products together with the relevant information, aiming to
enhance our presence even further.
The U.S. healthcare system is rapidly evolving and
requiring a balance of priorities between fostering
innovation and ensuring patient access to healthcare. We
have been working to address this by engaging in
constructive dialogue with various stakeholders including
patients, payers and providers.
The recent changes in the business environment
faced by pharmaceutical companies in the Americas are
expected to continue in the fiscal year ending March 31,
2018. Pharmaceutical companies will need to fulfill
increasingly stronger requests from stakeholders to clearly
present the value of our products. Meanwhile, we believe
that new opportunities will emerge from trends such as
the rising importance of preventive care and advances in
the digital health field.
Going forward, the Americas Operations team is
focused on a new plan to streamline operations and
concentrate resources on areas of growth. Guided by this
plan, we will continue our aim to drive growth across the
entire Americas region.
In our core therapeutic areas, we will continue to
focus on achieving growth in our oncology and urology
franchises, while also gaining efficiencies in immunology,
transplant and cardiology. In oncology, our highly
experienced teams are advancing sales promotion
activities for XTANDI. In addition, we have strengthened
collaboration with urology medical representatives from
the Pfizer Group. It is believed that many patients with
metastatic castration-resistant prostate cancer are not
diagnosed with this condition at the right stage of the
disease. In response, Astellas is working to provide
physicians with information concerning appropriate
diagnosis and treatment.
49
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 EMEA
Asia &
Oceania
Yukio Matsui President, EMEA Operations
Masatoshi Kuroda President, Asia & Oceania Business
In the EMEA region, the business environment is expected
to come under mounting pressure, mainly based on
various governments’ policies to curb medical
expenditures and increasing insurance reimbursement
challenges. Moreover, operations in the EMEA region are
becoming increasingly complex because of the different
market environments in various countries, ranging from
emerging nations such as Russia and the Gulf Cooperation
Council (GCC) states to the five major European countries,
including the U.K. and Germany.
In this environment, Astellas is working to establish
optimal sales strategies for each country, in conjunction
with optimizing the allocation of resources and
maximizing the product value, with the aim of achieving
sustained growth. Going forward, Astellas will continue to
serve patients by delivering innovative pharmaceuticals in
major therapeutic areas.
In oncology, Astellas will focus on increasing uptake of
XTANDI among patients with earlier stages of prostate
cancer, with the aim of driving further growth in XTANDI.
XTANDI is currently marketed in more than 35 countries in
the EMEA region. Astellas will continue working to launch
XTANDI sales in new markets. In the OAB franchise, Astellas
has stepped up its activities to establish BETMIGA as the
first choice of therapy.
Another priority for Astellas is to develop systems that
will strengthen compliance. Compliance requirements
have been increasing year after year in countries in the
EMEA region. Astellas will address these requests by taking
actions such as appointing compliance officers at each
sales affiliate.
Significant market growth is expected to continue in the
Asia & Oceania region, and Astellas currently has 11 sales
affiliates covering 13 countries and regions. To ensure the
growth in that market is incorporated in our own growth,
we aim to provide high-value-added pharmaceutical
products and further expand our business. We have high
expectations that in addition to XTANDI and BETMIGA,
Feburic, which is for hyperuricemia, will be among the new
products supporting our growth going forward. We hope
that by delivering these products to patients as quickly as
possible, we will be able to maximize their value. In Asia,
meanwhile, we are also focused on growing the
transplantation franchise, a market that continues to expand.
In April 2016, Astellas established an umbrella
organization for the South East and South Asia regions
(SESA Umbrella Organization), which are seeing significant
economic growth, and business there has steadily
expanded. Our strategy is to further improve the quality
and efficiency of our business there by treating the entire
region as a single major market, and working to optimize
the allocation of management resources.
We will also work to further enhance our management
and administration systems. We are strengthening our
compliance systems by assigning dedicated compliance
officers to all of our sales affiliates. In terms of human
resource utilization, we are proactively promoting the
hiring of a diverse, talented workforce and the acquisition
of outside human resources. In addition, in April 2017, we
have launched a new organization that will allow us to
focus even more on human resource development and
build an even stronger business foundation.
50
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Maximizing the Product Value
CSR Activities from Manufacturing to Sales
Quality and Reliability Assurance
development with the potential to be used in doping, and to
prevent the misuse of such compounds.
Anti-Counterfeiting Activities
Improving the Pharmacovigilance System
Counterfeit medicines getting into legitimate supply
chains not only leads to the loss of opportunities for
patients to receive medical treatment, but could also have
adverse health consequences. This has become a serious
problem worldwide.
Astellas operates the Anti-Counterfeit Committee, led
by the technology and quality assurance divisions, and has
a product security division. These parts of Astellas conduct
monitoring and surveys, and implement countermeasures
targeting not only counterfeit medicines, but also
diversion, smuggling, theft and related activities. When
selling products, Astellas systematically introduces
effective anti-counterfeit technologies, including product
serialization as stipulated by regulations, based on
pharmaceutical laws and regulations and risks in each
market where products are sold, as well as product
characteristics. In addition, Astellas carries out educational
activities to prevent the spread of counterfeit medicines in
collaboration with members of the pharmaceutical
industry and organizations such as the WHO, the PSI* and
the Transported Asset Protection Association. We also
proactively endeavor to support and cooperate with
national governments and judicial authorities to crack
down on counterfeit medicines.
Astellas published its Position on Counterfeit
Medicines online in September 2016.
* PSI: The Pharmaceutical Security Institute (PSI) is a not-for-profit organization
established to strengthen global anti-counterfeiting efforts. A total of 33
pharmaceutical manufacturers are currently members of the PSI.
Product Recalls
Astellas has a recall system in place that is activated when
the safety, efficacy or quality of a product is brought into
question. The system ensures relevant information is
promptly passed on to medical institutions and other
affected parties, and that a recall of the product in
question is instigated. Astellas voluntarily initiated three
product recalls in fiscal 2016. As of April 2017, no reports of
any related health impairments had been received.
Anti-Doping Measures
To contribute to the eradication of doping and improvement
of public health, in October 2016, Astellas concluded an
agreement with the World Anti-Doping Agency (WADA)
relating to international cooperation aimed at preventing
the abuse of pharmaceuticals in sports. Separately, Astellas
continues to work to identify compounds under
51
Astellas is continuously improving its pharmacovigilance
(PV) system by strengthening collaboration between the
internal PV function and other relevant departments,
affiliates and licensing partners. This is to support the
provision of trustworthy products and their proper use,
along with regulatory compliance.
Astellas regularly provides product safety awareness
training not only to staff closely involved with the PV
function but also to all employees and contractors
including affiliate staff to maintain and strengthen
collection of safety information appropriately and timely.
Moreover, Astellas continues to enhance the system to
collect safety information from broader sources. For
external service providers outsourced by departments
other than the PV organization, Astellas updated contracts
to reflect requirements for safety information collection
as necessary.
In addition, Astellas is exploring utilizing real-world
data such as large healthcare databases for safety signal
detection of Astellas products to minimize risk by
enhancing collaboration between PV and other functions.
Strengthening of Quality Assurance Systems
at Affiliates
Astellas has constructed a robust global quality assurance
system to ensure the supply of pharmaceuticals of
uniformly high quality to patients worldwide.
The past quality assurance system comprised the four
main regions of Japan, the Americas, EMEA and Asia &
Oceania. We are trying to incorporate quality assurance
activities taken by each affiliate into this global quality
assurance structure. Through this change, we are
developing quality management systems consistent with
our quality assurance policy on a global, Company-wide
basis. This will reinforce our sales affiliates globally receive
proper support in improving quality and training personnel.
Technology Development & Manufacturing
Stable Supply and Quality Control
Astellas places highest priority on ensuring stable
manufacture and supply of safe and effective
pharmaceuticals to patients. To ensure this, we have
established our own Good Manufacturing Practice (GMP)-
compliant quality standards as the basis for consistently
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 achieving the highest levels of quality control. We apply
these standards to manufacturing facilities and equipment,
and to all stages from raw material procurement and
storage to manufacturing processes and shipment.
Measures to Prevent Medical Malpractice and
Improve the Distinguishability of Pharmaceuticals
Astellas strives to supply user-oriented products designed
so that patients and healthcare professionals do not
mistake one pharmaceutical for another.
To prevent medical malpractice in this respect,
through measures including printing product names
directly on capsules and tablets, as well as printing
product names and dosages on packaging sheets (blister
sheets) so that the product name and dosage can be easily
identified even after the blister sheet is split apart. For
example, the different dosages of Vesicare OD are color-
coded, and the name and dosage are printed directly on
the tablets to improve distinguishability. In addition, the
blister sheets are printed using easily readable colors and
fonts to help prevent mistakes and make the products
more readily distinguishable.
Vesicare OD tablets
Provision of Product Information
Ensuring Proper Use
In fiscal 2016, a new policy was created in accordance with
the Global Policy on Medical Affairs and Commercial
Activities, which prevents commercial departments from
providing off-label information to external customers. This
is the first Astellas Medical Affairs policy on the standards
and principles that govern appropriate scientific exchange
between Medical Affairs colleagues, healthcare
professionals, and healthcare organizations.
Responding to Inquiries
Astellas believes that it has a responsibility to provide
accurate medical information in response to inquiries from
patients and medical professionals.
In countries throughout the globe, we have Medical
Information Call Centers that respond to a variety of
inquiries. In fiscal 2016, we responded to approximately
115,000 calls.
Astellas makes continuous efforts to improve its
medical information services, with the aim of providing
accurate, appropriate and consistent information. As part
of these efforts, Astellas launched a new global medical
information system where global content is developed
and shared. The system is also useful for analyzing matters
of high interest based on the documented inquiries. By
sharing the findings of these analyses with the relevant
departments, Astellas seeks to more accurately provide
information to patients and medical professionals.
Procurement
Promoting CSR Procurement
Astellas considers it important to fulfill its social
responsibility across the entire supply chain, including
suppliers. To achieve this goal, Astellas has formulated the
Astellas Business Partner Code of Conduct, which requires
business partners to do their business in accordance with
CSR measures. We also conduct global questionnaire-
based surveys based on the code, along with requesting
our business partners to sign the Acknowledgement of
Astellas Business Partner Code of Conduct. As of March 31,
2017, we had obtained survey responses from
approximately 850 companies, covering suppliers of direct
materials, as well as major suppliers of indirect materials
and major facility and equipment suppliers.
Furthermore, we conduct on-site audits of suppliers in
countries that pose a high CSR procurement risk.
Please refer to the following URL for information about related CSR
activities from manufacturing to sales.
• Quality Assurance Policies
• Introduction of Universal Design into Product Packaging
WEB
https://www.astellas.com/en/sustainability/
business-activities/
Please refer to the following URL for information about our policies &
position statements.
WEB
https://www.astellas.com/en/about/
policies-and-position-statements/
52
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Creating Innovation
Creating Innovation
Research and Clinical Development
Astellas is efficiently advancing research and development
by building systems to continuously create innovative
medicines, along with challenging new opportunities,
including new therapeutic areas and technologies.
Oncology
Gilteritinib
Gilteritinib is a FLT3/AXL inhibitor which is being developed
for acute myeloid leukemia (AML). Gilteritinib inhibits both
FLT3, a receptor-type tyrosine kinase known to be involved
in cancer cell proliferation, and AXL which is reported to
be associated with resistance to some forms of chemotherapy.
Considering the five-year survival rate for AML estimated
to be approximately 25%*, the arrival of a promising new
treatment has been awaited. The clinical data obtained so
far suggested the efficacy and safety of gilteritinib in
patients with FLT3 mutations who are known to have poor
prognosis. Astellas is exploring a potential of gilteritinib in
a broad range of the treatment paradigm for AML.
Astellas is currently conducting multiple Phase 3 trials
including ADMIRAL study in relapsed or refractory
Gilteritinib in AML Treatment Landscape and
Development Progress
FLT3-positive AML
High-intensity induction therapy
Low-intensity chemo
Chemo
consolidation
Transplantation
Ongoing
Maintenance
Maintenance
Ongoing
Ongoing
Salvage therapy
Ongoing
FLT3-positive AML patients, which is the most difficult AML
patient segment to treat. Gilteritinib has been granted for
SAKIGAKE designation in Japan. Astellas is working to
further reduce the total development period by allocating
resources to gilteritinib as a prioritized project.
* NIH, National Cancer Institute, Cancer Stat Facts, Acute Myeloid Leukemia (AML)
Enfortumab Vedotin
Enfortumab vedotin is an antibody drug conjugate (ADC)
targeting Nectin-4, a cell adhesion molecule. While it is
stable in blood, it is designed to kill only the targeted
cancer cells after it is internalized into cancer cells
expressing Nectin-4.
In urothelial cancer, a target indication of enfortumab
vedotin, it is reported that some patients are confirmed for
metastasis at the time of initial diagnosis and the five-year
survival rate is low. A high relapse rate is reported even if
diagnosed and treated at an early stage. A promising new
treatment is awaited.
Currently, Phase 2 trial in patients previously treated
with checkpoint inhibitor (CPI) therapy is under preparation.
Research Initiatives
In the oncology field, the interest to cancer immunotherapy
targeting immune checkpoints has been increasing
recently. On the other hand, it has been pointed out that
immune checkpoint inhibitors are ineffective for certain
types of cancer and a segment of the patient population.
Astellas believes that immunooncology is a
strategically important approach.
As one of the initiatives in this therapeutic area,
Astellas launched a partnership with Potenza Therapeutics,
Inc. in 2015. To address the cancer types which do not
respond to the current cancer immunotherapy, Astellas is
pursuing research and development of a next-generation
cancer immunotherapy with different targets than current
treatments. Two programs are underway to enter into the
clinical development phase.
53
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Urology and Nephrology
Roxadustat
Roxadustat is a hypoxia-inducible factor (HIF) prolyl
hydroxylase (PH) inhibitor with oral administration. Astellas
is developing roxadustat for anemia associated with
chronic kidney disease (CKD) in dialysis and non-dialysis.
For filing and reimbursement in the EU, a total of six Phase
3 studies are being conducted. Another six Phase 3 studies
are being conducted in Japan.
HIF-PH, thereby enhancing the production of red blood
cells and improving anemia.
Roxadustat has a different mechanism of action than
conventional treatments and can be administered orally. It
is thus expected to become a new treatment option
which could provide both effectiveness and convenience
for patients.
ASP8232
ASP8232 is a VAP-1 inhibitor being developed for diabetic
nephropathy. Astellas has obtained the results of Phase 2
trial and is preparing for a subsequent trial.
Anemia is one of the common complications of CKD.
Diabetic nephropathy is one of major underlying
It is said that the progression of anemia in CKD leads to
end-stage renal disease and increases the mortality rate.
Therefore, monitoring the hemoglobin (Hb) levels in
patients with anemia in CKD is a crucial issue in the
treatment of renal dysfunction.
Roxadustat is thought to increase HIF, which is
involved in the production of red blood cells, by inhibiting
diseases for dialysis treatment. It is a common
complication of diabetes. It is said that around half of
patients suffering from diabetes for more than 20 years
associate with diabetic nephropathy. With existing
treatment methods limited to dialysis and kidney
transplantation, there is a need for a new treatment.
TOPIC
Acquisition of Late-Stage Development Compound in Oncology
IMAB362
Oncology is one of the important franchises that will
drive the growth of Astellas. Through the acquisition
of Ganymed Pharmaceuticals AG, Astellas has
acquired multiple oncology pipeline assets in pre-
clinical and clinical stages including IMAB362, which
is being developed for the indication of
gastroesophageal adenocarcinoma.
IMAB362 is an antibody targeting Claudin 18.2, a
transmembrane protein that forms a tight junction
connecting and binding membranes of two adjoining
cells. Claudin 18.2 is expressed locally in stomach cells
for normal cells. Claudin 18.2 is expressed in various
cancers, 80% in gastrointestinal adenocarcinomas and
60%* in pancreatic, biliary duct, ovarian and lung cancer.
Phase 2b clinical trial (FAST) of IMAB362 showed
that IMAB362 extended the median progression-free
survival and the median overall survival. In the patient
subgroup with high expression levels of Claudin 18.2,
IMAB362 group resulted in nearly doubling the
overall survival compared with the control group. The
most frequent adverse events observed during the
study were vomiting, nausea and neutropenia.
Astellas is preparing for Phase 3 trial of IMAB362.
Through this acquisition, Astellas will further
strengthen its oncology franchise.
* Al-Batran et al., 2016 American Society of Clinical Oncology
54
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Creating Innovation
Immunology
ASP0113
ASP0113 is a DNA vaccine being developed as a treatment
to prevent cytomegalovirus (CMV) infection in hematopoietic
cell transplant (HCT) patients. Currently, Astellas is
conducting Phase 3 trial of ASP0113 in HCT patients.
CMV infection and CMV reactivation are opportunistic
infections commonly observed after hematopoietic cell
transplantation and potentially lead to death in severe cases.
From the standpoint of strengthening the control of infections,
a prophylactic vaccine without safety concern is anticipated.
ASP0113 builds immunity to CMV-derived antigen
proteins by expressing CMV-derived antigen proteins in
the body and inducing both cellular and humoral immune
responses. ASP0113 is expected to suppress CMV infection
and complications associated with CMV infection after
hematopoietic cell transplantation.
Peficitinib
Peficitinib is a JAK inhibitor being developed for rheumatoid
arthritis. Phase 3 clinical trials are currently being
conducted in Japan. Astellas expects to obtain the results
of these trials within fiscal year 2017. Rheumatoid arthritis
is a chronic inflammatory autoimmune disease due to an
immune disorder. The current standard treatments for
rheumatoid arthritis are biologics including TNF-α drugs.
Peficitinib has a different mechanism of action than
other immunosuppressants. Peficitinib is thus expected to
be a new drug treatment option which could be safe and
convenient for patients.
DNA Vaccine Using LAMP-vax Technology
LAMP-vax technology is expected to serve as a drug
discovery platform for creating drug products aimed for
treatment or prophylaxis of a wide range of allergic
diseases by enhancing the therapeutic effectiveness of
DNA vaccines and changing the types of allergens
encoded in plasmid DNA. Multiple development
compounds using LAMP-vax technology are currently in
non-clinical and clinical stages.
Phase 1 trial of ASP0892 is currently being conducted
in the U.S. targeting peanut allergy, and it has been
granted Fast Track designation by the Food and Drug
Administration (FDA). Peanut allergy can be a fatal food-
related allergy with potential of life-threatening
anaphylaxis induced by trace exposure. There is no
55
currently approved treatment and prophylaxis drugs for
peanut allergy.
Astellas is developing ASP4070 targeting allergies
induced by Japanese red cedar pollen. Phase 2 trial of
ASP4070 has been initiated in Japan in 2017. It is said that
about one in four Japanese people suffer from allergies to
Japanese red cedar pollen. The currently available
treatment is mainly symptomatic treatments. ASP4070 is
expected to become a fundamental treatment that will
relieve allergy symptoms or achieve symptomatic remission
over the long term with only a short-term administration.
Drug Discovery Platform Using LAMP-vax Technology
Food allergy
ASP0892 for
peanut allergy
P1 study
Seasonal pollen allergy
ASP4070
for pollinosis
caused by
Japanese red
cedar
P2 study
Perennial allergy
Pre-clinical
e.g. house dust mite, cat, etc.
Research Initiatives
In immunology, Astellas is working to develop an
innovative drug discovery platform that will enable
antigen-specific immune control. Astellas is also
researching safe and fundamental treatments for allergies,
autoimmune diseases, and infectious diseases. With regard
to autoimmune diseases for which the specific antigens
have been identified, through joint research with Kanyos
Bio, Inc., Astellas has begun research that applies unique
technologies for the induction of antigen-specific immune
tolerance using red blood cells. For diseases in which
specific organs are impaired by the excessive responses of
immune systems due to specific antigens, regardless of
whether the condition involves the body’s autoimmune
or non-autoimmune systems, Astellas is promoting
research and development activities using a unique
technology targeting red blood cells that induces immune
tolerance by removing T cells that cause excessive
antigen-specific responses.
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 New Therapeutic Areas and Others
Astellas Institute for Regenerative Medicine (AIRM)
AIRM (Company name was changed after acquisition of
Ocata Therapeutics, Inc.) possesses the world’s highest
level of technology and expertise in research and
development capabilities of cell therapy, taking a leading
position in this field. AIRM seeks to realize cutting-edge
drug discovery based on leading cell therapy approaches,
thereby contributing to ophthalmology treatments with
high unmet medical needs.
Muscle Diseases
In the muscle diseases area, CK-2127107, a fast skeletal
troponin activator, has entered the clinical stage. Astellas is
currently proceeding with Phase 2 trials for three diseases
related to the atrophy of skeletal muscles: spinal muscular
atrophy, amyotrophic lateral sclerosis, and chronic
obstructive pulmonary disease. Of those three diseases,
the trial targeting spinal muscular atrophy is in the most
advanced clinical stage. Spinal muscular atrophy is a
serious disease in which the progression of muscular
atrophy can trigger respiratory failure and motor
impairment. Astellas is working to provide a new
treatment option for these diseases.
Currently, AIRM is promoting development activities
In addition, Astellas is steadily proceeding with
targeting age-related macular degeneration and Stargardt
macular degeneration with a focus on retinal pigment
epithelium (RPE) cells, which are vital to the survival of
visual cells and the maintenance of their functions. For
both diseases, it is currently in the Phase 2 trial stage.
preparations to initiate clinical trials of MTB-1, a
mitochondrial gene expression regulator, including
convening an advisory meeting of a neuromuscular
disease commitee. MTB-1 is a development candidate
under collaboration with Mitobridge, Inc.
Fezolinetant
TOPIC
Anticipated to Provide a New Treatment Option to Replace Current Hormone
Replacement Therapy
Through the acquisition of Ogeda SA, Astellas obtained
fezolinetant, a selective NK3 antagonist currently being
developed for menopause-related vasomotor symptoms
(VMS: hot flashes and night sweats). Astellas is
currently conducting Phase 2b trial of fezolinetant.
It is reported that MR-VMS is recognized in nearly
80%* of post-menopausal women. Given that existing
hormone replacement treatments present safety
concerns, a safe and effective non-hormonal therapy
is awaited as a new treatment option. In a Phase 2a
study, fezolinetant showed good results in terms of
improvement in the frequency and extent of hot
flashes. Based on these results, Astellas expects
fezolinetant to become a first-in-class, non-hormonal
treatment for MR-VMS.
Astellas has built up strengths through the
development of many small molecule drugs that
improve patients’ quality of life, including treatments
in the OAB area and promoting the development of
fezolinetant to provide a new treatment option to the
patients with MR-VMS. In addition, since both MR-
VMS and OAB affect middle-aged and elderly women,
Astellas expects to capture synergies with its
strengths in the OAB area which have been
developed over the years.
* UpToDate – Clinical manifestations and diagnosis of menopause
(Literature review current through June 2017)
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IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Creating Innovation
R&D Topics During the Year
Major Progress in Clinical Development (Approval and Filing)
Japan
Europe
United States
XTANDI for the treatment of prostate cancer
Astellas received regulatory approval for inclusion of TERRAIN trial* data in the European label and
updated the label.
* Head-to-head trial of enzalutamide versus bicalutamide
Quetiapine fumarate (extended-release tablets)
Astellas filed an application for approval of the indication of improvement of depressive symptoms
associated with bipolar disorder.
Kiklin Granules for the treatment of hyperphosphatemia
Astellas received regulatory approval of Kiklin Granules for the indication of treatment of
hyperphosphatemia in patients with chronic kidney disease (launched in December 2016).
XTANDI (generic name: enzalutamide) for the treatment of prostate cancer
Astellas filed an application for approval of XTANDI tablets.
Micatrio Combination Tablets for the treatment of hypertension
Astellas received regulatory approval for a combination drug* containing the three ingredients of a
renin-angiotensin inhibitor, a calcium channel blocker (CCB) and small dose diuretic (launched in
November 2016).
* Official guidance on points to consider regarding the use of Micatrio Combination Tablets under National Health Insurance coverage was issued by
the Medical Economic Division, Health Insurance Bureau, Ministry of Health, Labour and Welfare. (Medical Economics Division 1226 No.8; December
26, 2016)
XTANDI for the treatment of prostate cancer
Astellas received regulatory approval for inclusion of TERRAIN trial* data in the U.S. label and updated
the label.
LINZESS for the treatment of irritable bowel syndrome with constipation
Astellas received regulatory approval for the indication of irritable bowel syndrome with constipation
(launched in March 2017).
Anti-Sclerostin monoclonal antibody romosozumab
Amgen Astellas BioPharma K.K. filed an application for approval of the indication of osteoporosis for those
at high risk of fracture.
4
5
6
7
8
9
10
11
12
1
2
3
2016
2017
57
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Capturing New Opportunities
Other Therapeutic Areas
Oncology
Antibody Drugs in Oncology
In December 2016, Astellas acquired Ganymed
Pharmaceuticals AG and made it a wholly owned
subsidiary of Astellas. Ganymed Pharmaceuticals AG has
several oncology pipeline assets in pre-clinical and clinical
stages, including IMAB362, which is being developed as a
treatment of gastroesophageal adenocarcinoma. The
acquisition of the late-stage antibody program will further
strengthen Astellas’ oncology franchise.
Reference Research and Clinical Development
P53
Immunology
New Vaccine Targeting Streptococcus pneumoniae
(pneumococcus)
In February 2017, Astellas entered into an exclusive license
agreement with Affinivax, Inc. for the worldwide
development and commercialization of a vaccine
targeting pneumococcal diseases. This pneumococcal
vaccine is being developed using Affinivax, Inc.’s
proprietary vaccine technology platform, Multiple Antigen
Presenting System (MAPS).
Muscle Diseases
Expansion of Global Collaboration on Skeletal
Muscle Activators
In July 2016, Astellas and Cytokinetics, Inc. amended their
collaboration agreement on skeletal muscle activators to
expand the agreement to include amyotrophic lateral
sclerosis (ALS). The companies decided to include ALS for
the development of the fast skeletal troponin activator
CK-2127107. In addition, Cytokinetics, Inc. granted Astellas
an option right for the development and
commercialization of tirasemtiv, an investigational skeletal
muscle activator being developed by Cytokinetics, Inc.
Moreover, the companies agreed to extend their joint
research focused on the discovery of next-generation
skeletal muscle activators through 2017.
Reference Research and Clinical Development
P56
Treatment for Chronic Tympanic Membrane
Perforation
In January 2017, Astellas signed an exclusive license
agreement with Auration Biotech, Inc. for the worldwide
development and commercialization of AU-935, which is
being developed as a simple ear topical application for the
treatment of chronic tympanic membrane perforation.
Acquisition of Ogeda SA
In March 2017, Astellas entered into an agreement to
acquire Ogeda SA. In May 2017, the acquisition was
completed, making Ogeda SA a wholly owned subsidiary
of Astellas. Ogeda SA has multiple small molecule
compounds targeting G protein-coupled receptors in the
pre-clinical and clinical stages, including fezolinetant,
which is being developed for the treatment of
menopause-related vasomotor symptoms. Through the
acquisition of Ogeda SA, Astellas expanded its pipeline
and reinforced its medium- to long-term growth.
Reference Research and Clinical Development
P56
Other
Termination of Agreement for Cell Culture Based
Influenza Vaccine Programs
In March 2017, Astellas terminated the agreement
executed as of September 2010 between Astellas and
UMN Pharma Inc. for the co-development and Astellas’
exclusive commercialization of ASP7374 and ASP7373, the
cell culture based influenza vaccine programs in Japan.
Accordingly, Astellas returned to UMN Pharma Inc. all
rights granted under the agreement.
58
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Creating Innovation
Status of R&D Pipeline (As of April 2017, partly updated)
Code No.
Generic Name
Oncology
MDV3100
enzalutamide
ASP2215
gilteritinib
ASP3550
degarelix
AGS-16C3F
IMAB362
ASG-22ME
enfortumab vedotin
AMG 103
blinatumomab
ASG-15ME
ASP5878
ASP4132
AGS67E
AGS62P1
Classification
Target Disease
Phase / Area
Dosage
Form
Licensor*1
Remarks
Androgen receptor
inhibitor
Metastatic castration-resistant
prostate cancer (Tablet)
Castration-resistant prostate
cancer (Tablet)
Non-metastatic castration-
resistant prostate cancer
Prostate cancer in patients with
non-metastatic biochemical
recurrence
Oral
Pfizer
Filed (Mar. 2016)
Europe
Filed (Sept. 2016)
Japan
Phase-III US, Europe, Asia
Phase-III US, Europe, Asia
Metastatic hormone-sensitive
prostate cancer
Phase-III
US, Europe, Japan, Asia
Hepatocellular carcinoma
Phase-II US, Europe, Asia
FLT3/AXL inhibitor
Acute myeloid leukemia
GnRH antagonist
Prostate cancer
(3-month formulation)
Phase-III
US, Europe, Japan, Asia
Oral
In-house
Phase-III Japan
Injection Ferring
ADC targeting ENPP3
Renal cell carcinoma
Phase-II US, Europe
Injection In-house (ADC technology
New
formulation
New
formulation
New indication
New indication
New indication
New indication
New
formulation
Phase-II Europe
Injection In-house (Ganymed
in-licensed from Seattle
Genetics)
Anti-Claudin 18.2
monoclonal antibody
Gastroesophageal
adenocarcinoma
ADC targeting nectin-4
Urothelial cancer
Phase-II US
Phase-I Japan
Anti-CD19 BiTE antibody Acute lymphoblastic leukemia
Phase-II Japan
Urothelial cancer
Cancer
Cancer
Lymphoid malignancies
Phase-I
Phase-I
Phase-I
Phase-I
Pharmaceuticals)
Injection In-house (co-development
with Seattle Genetics)
Injection Amgen (co-development
with AABP*2)
Injection In-house (co-development
with Seattle Genetics)
Oral
Oral
In-house
In-house
Injection In-house (ADC technology
in-licensed from Seattle
Genetics)
Acute myeloid leukemia
Phase-I
Injection In-house (ADC technology,
EuCODE license from
Ambrx)
Urology and Nephrology
Muscarine M3 receptor
antagonist
Neurogenic detrusor overactivity
in pediatric patients
Filed (Feb. 2017) US
Filed (Apr. 2017) Europe
Oral
In-house
New indication
(pediatric)
Concomitant use of
solifenacin and
mirabegron
HIF stabilizer
Urinary frequency, urinary
incontinence or urgency
associated with overactive bladder
Anemia associated with chronic
kidney disease in patients not on
dialysis and on dialysis
Phase-III US, Europe, Asia Oral
In-house
Phase-III Europe
Phase-III Japan
Oral
FibroGen
Beta 3 receptor agonist Neurogenic detrusor overactivity
Phase-III Europe
Oral
In-house
HIF stabilizer
Renal anemia
in pediatric patients
VAP-1 inhibitor
Diabetic nephropathy
Nerve growth factor
(NGF) neutralization
antibody
Bladder pain syndrome /
Interstitial cystitis
Phase-II Europe
Phase-I Japan
Phase-II Europe
Phase-II Europe
Underactive bladder
Nocturia
Underactive bladder
Underactive bladder
Phase-I
Phase-I
Phase-I
Phase-I
Oral
FibroGen
Oral
In-house
Injection In-house
Oral
Oral
Oral
Oral
In-house
In-house
In-house
In-house
New indication
(pediatric)
YM905
solifenacin
EB178
solifenacin/
mirabegron
ASP1517 (FG-4592)
roxadustat
YM178
mirabegron
YM311
(FG-2216)
ASP8232
ASP6294
ASP6282
ASP7398
ASP8302
ASP7713
59
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Code No.
Generic Name
Classification
Target Disease
Phase / Area
Dosage
Form
Licensor*1
Remarks
Immunology and Neuroscience
FK949E
quetiapine
ASP0113
(VCL-CB01)
ASP015K
peficitinib
ASKP1240
bleselumab
ASP1707
ASP7962
ASP8062
ASP0819
Serotonin / dopamine
antagonist
DNA vaccine for
cytomegalovirus
Improvement of depressive
symptoms associated with bipolar
disorder (Extended-release tablet)
Filed (Aug. 2016)
Japan
Cytomegalovirus reactivation in
hematopoietic cell transplant
recipients
Phase-III
US, Europe, Japan
Oral
AstraZeneca
Injection Vical
JAK inhibitor
Rheumatoid arthritis
Anti-CD40 monoclonal
antibody
Recurrence of focal segmental
glomerulosclerosis in de novo
kidney transplant recipients
GnRH antagonist
Rheumatoid arthritis
Osteoarthritis
Fibromyalgia
TrkA inhibitor
GABAB receptor positive
allosteric modulator
Calcium2+-activated
K+ channel opener
Phase-III Japan, Asia
Phase-II US, Europe
Oral
In-house
Phase-II US
Injection Kyowa Hakko Kirin
Phase-II Japan
Phase-II Europe
Phase-II US
Oral
Oral
Oral
In-house
In-house
In-house
Fibromyalgia
Phase-II US
Oral
In-house
ASP3662
11beta-HSD1 inhibitor
Agitation associated with
Alzheimer’s disease
ASP4070
(JRC2-LAMP-vax)
DNA vaccine for
Japanese red cedar
Pollinosis caused by Japanese red
cedar
Phase-II US
Oral
In-house
Phase-II Japan
Injection Immunomic Therapeutics
ASP5094
ASP4345
ASP7266
ASP0892
ASP1807 (CC8464)
Others
AMG 785
romosozumab
ipragliflozin/
sitagliptin
Rheumatoid arthritis
Cognitive impairment associated
with schizophrenia
Severe asthma
Peanut allergy
Neuropathic pain
Phase-I
Phase-I
Phase-I
Phase-I
Phase-I
Injection In-house
Oral
In-house
Injection In-house
Injection Immunomic Therapeutics
Oral
Chromocell
Anti-Sclerostin
monoclonal antibody
Osteoporosis for those at high risk
of fracture
Filed (Dec. 2016) Japan
Fixed dose combination
of ipragliflozin and
sitagliptin
Type 2 diabetes mellitus
Filed (May 2017) Japan
Injection Amgen (co-development
with AABP*2)
In-house (co-development
with MSD and Kotobuki)
Oral
fidaxomicin
Macrocyclic antibiotic
Infectious enteritis (bacterial
target: Clostridium difficile)
Clostridium difficile infection in
pediatric patients
Phase-III Japan
Oral
Merck
Phase-III Europe
ASP1941
ipragliflozin
ASP0456
linaclotide
ASP1707
CK-2127107
SGLT2 inhibitor
Type 1 diabetes mellitus
Phase-III Japan
Oral
In-house (co-development
with Kotobuki
Pharmaceutical)
Guanylate cyclase-C
receptor agonist
Chronic constipation
Phase-III Japan
Oral
Ironwood
New indication
GnRH antagonist
Endometriosis
Phase-II Europe, Japan
New indication
(pediatric)
New indication
Fast skeletal troponin
activator
Spinal muscular atrophy
Chronic obstructive pulmonary
disease
Amyotrophic lateral sclerosis
Dry age-related macular
degeneration,
Stargardt’s macular degeneration
Phase-II US
Phase-II US
Phase-II US
Phase-II US
RPE cell program
Cell therapy
(Retinal pigment
epithelium cell)
*1 Compounds with “In-house” in this column include ones discovered by collaborative research.
*2 AABP: Amgen Astellas BioPharma
Oral
Oral
In-house
Cytokinetics
Injection In-house (Astellas Institute
for Regenerative Medicine)
60
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Creating Innovation
CSR Activities in Research and Development
Research
Ethical Considerations in Research on Human
Subjects and Specimens Derived from Humans
Astellas conducts research on human subjects, and obtains
and conducts research on specimens derived from humans,
after appropriately obtaining the consent of the trial subjects
in accordance with the Declaration of Helsinki* as well as
the laws, regulations and guidelines of relevant countries.
In Japan, Astellas provides training for researchers in
areas such as bioethics, genomic research and related
clinical studies, based on a strong commitment to
respecting the human rights of research subjects,
protecting the privacy and confidentiality of their personal
information, and assuring the reliability of the research.
The Astellas Research Ethics Committee has been
established to determine the ethical acceptability and
scientific propriety of research plans in a fair and impartial
manner, taking account of information on potential
conflicts of interest involving research institutions,
researchers and other parties. In fiscal 2016, this
committee met 12 times, deliberated on 31 issues, and
conducted 179 brief reviews.
* Declaration of Helsinki: A statement of ethical principles for medical research
involving human subjects, addressed to physicians and others who are involved
in medical research on human subjects.
Ethical Considerations in Animal Testing
Astellas has established a Global Policy for Animal Care and
Use, and conducts animal testing based on this policy. We
have established the Corporate Institutional Animal Care and
Use Committee, in which outside members also participate
as committee members, at our animal testing facilities.
Astellas’ initiatives in animal testing are recognized by
AAALAC International*. As a result, all of our animal testing
facilities have acquired accreditation from AAALAC
International.
* AAALAC International: The Association for Assessment and Accreditation of
Laboratory Animal Care International. An international organization that
promotes the humane treatment of animals through international accreditation
and assessment programs. Studies are undertaken from both scientific and
ethical standpoints to verify the quality of animal control and use programs.
Biosafety Control
Astellas performs experiments using genetically modified
organisms, or materials containing pathogens, under the
World Health Organization Laboratory Biosafety Manual*1
and the Centers for Disease Control (CDC) and Prevention /
National Institute of Health Biosafety in Microbiological
and Biomedical Laboratories*2, as well as the laws of
individual countries.
In Japan, Astellas has established biosafety
management rules in compliance with the Cartagena
Act*3 and related ministerial ordinances, and has detailed
procedures in place for handling experimental materials. In
addition, we have set up the Biosafety Committee at each
facility as a body to review whether the experiments meet
the standards required by these rules.
In addition, laboratory personnel receive regular
training courses once a year, in order to rigorously enforce
safe and proper biosafety management and use of these
organisms and suchlike. 1,010 participants received the
training in fiscal 2016. In the U.S., we use such
experimental materials based on the rules established by
the occupational health and safety authorities.
*1 Laboratory Biosafety Manual 3rd Edition
*2 Biosafety in Microbiological and Biomedical Laboratories 5th Edition
*3 Cartagena Act: Law concerning the conservation and sustainable use of
biological diversity through regulations on the use of genetically modified
organisms and suchlike.
Use of Genetic Resources
Astellas is committed to full compliance with the relevant
laws and regulations of countries supplying genetic
resources, and to the proper distribution of any contractually
defined profits from the use of such resources, based on
the concept of genetic resources utilization and the
associated distribution of profits set out in the Convention
on Biological Diversity*1 and Nagoya Protocol*2.
*1 The Convention of Biological Diversity: International convention on the
sustainable use and conservation of biological diversity
*2 Nagoya Protocol: Protocol on access to genetic resources and the fair and
equitable sharing of benefits arising from their utilization
Treatment of Intellectual Property
Appropriate protection of intellectual property is critical to
Astellas in order to address unmet medical needs and
maintain a competitive advantage. Astellas has established
a Policy on Intellectual Property. In view of the importance
of improving people’s access to healthcare, we are
committed to not filing or enforcing patents in countries
facing significant economic challenges. These select
countries are decided by referring to those designated as
Least Developed Countries (LDCs) defined by the United
Nations or Low Income Countries (LICs) defined by
World Bank.
61
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Clinical Development
Protection of Human Rights, Privacy and
Confidentiality of Personal Information of Research
Subjects, and Assurance of Reliability in Clinical Trials
In clinical trials, we investigate new drug candidates
developed through drug discovery research in further
detail, and assess the efficacy and safety of the new drug
candidates in patients.
Under the Declaration of Helsinki, clinical trials must
be ethically planned and safely conducted with full
consideration to protecting the human rights and privacy
of clinical trial subjects. Astellas ensures full compliance
with Good Clinical Practice (GCP) and all relevant laws and
regulations so that new drug candidates are developed
into drugs that can be used confidently by patients. Plans
for clinical trials conducted by Astellas are evaluated and
approved for ethical acceptability and scientific validity by
internal and external committees.
In conducting clinical trials, Astellas confirms that
clinical trial subjects have provided informed consent,
having received a full explanation of the purpose and
methods of the trial, its expected benefits and
disadvantages, matters related to compensation for health
impairment and other details. Moreover, we implement
education and training for any employees or staff members
involved in clinical trials, and monitor medical institutions
that perform clinical trials to ensure full GCP compliance.
In addition, we manage trial data appropriately to
protect the privacy of clinical trial subjects. Periodic
assessments are also made to check that any outsourced
clinical trials are conducted in accordance with the
same standards.
Disclosure of Information on Clinical Trials and
Their Results
Astellas has formulated a global policy on the disclosure of
clinical trial data and results to enhance the transparency
of information gained from clinical studies while
maximizing its value, and to ensure this leads to the
advancement of science and the promotion of innovation.
Specifically, Astellas provides patient-level data that
have been anonymized in accordance with applicable laws
and regulations through an external website*1 to those
scientists and healthcare professionals requesting it.
Doctors and the public can access summaries of clinical
trial findings via the Astellas website. We are also
developing a website to give patients access to special
summaries of study results prepared for non-experts*2.
*1 Patient-level data are provided through the following website:
http://www.clinicalstudydatarequest.com
*2 Results of the clinical trials are provided through the following website:
http://www.astellasclinicalstudyresults.com/Welcome.aspx
Patient Centricity in Drug Development
Real-world considerations in clinical trials are increasingly
important in ensuring that our studies are aligned with
current medical practices and patient needs.
We are trying to incorporate insights from real-world
data into our clinical trials by understanding how
healthcare is provided to patients.
Patient centricity is now a focus for regulatory
authorities and the pharmaceutical industry. The patient-
centric approach is being discussed at all points in the
drug development value chain, from discovery through
commercialization. Efforts are being made to include
patient input in how to optimally design trials, recruit
participants, and identify relevant endpoints that patients
care most about.
Astellas employs various methods to incorporate
patient-centric approaches into clinical programs. For
example, we use patient-reported outcomes (PROs) such
as questionnaires and patient diaries to assess patients’
health conditions. In addition, we use real-world data for
estimation of target population based on the morbidity
rate or ineligible cases in screening, and feasibility of
studies in clinical trial facilities. Also, patient input is used
to assess feasibility of clinical trials. Through these
activities, we try to improve recruitment, retention and
relevance of data. We are also working with patient
advocacy organizations where appropriate to assess
protocol feasibility including frequency of visits,
procedures and PRO elements.
Please refer to the following URL for information about related CSR
activities in research and development.
• Ethical Considerations in Stem Cell Research and Development
• Expanded Access to Investigational Medicines
WEB
https://www.astellas.com/en/sustainability/
business-activities/
Please refer to the following URL for information about our policies &
position statements.
WEB
https://www.astellas.com/en/about/
policies-and-position-statements/
62
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017
Pursuing Operational Excellence
Pursuing Operational Excellence
Initiatives in the Fiscal Year Ended March 31, 2017
organizational operation structure, Astellas decided that
Astellas Business Service Co., Ltd. a subsidiary which
performs shared administrative support, would be
dissolved at the end of September 2017.
Establishment of a Jointly-Operated Logistics
Center and Logistics Platform in Japan
On the logistics front, in February 2017, Astellas, Takeda
Pharmaceutical Company Limited, Teva Takeda Pharma
Ltd., and Teva Takeda Yakuhin Ltd. concluded a
memorandum of understanding concerning the
establishment of a jointly-operated logistics center in
Hokkaido.
Through this agreement, the four companies will
establish a structure for the joint storage and distribution
of pharmaceuticals, with the objective of further ensuring
stable supplies, qualities and efficient transportation of
pharmaceuticals in emergency situations, such as a
natural disaster.
Transfer of 16 Long-Listed Products in Japan and
Other Initiatives
In March 2017, Astellas and LTL Pharma Co., Ltd. entered
into an Asset Purchase Agreement, under which Astellas
will transfer its marketing authorization for 16 long-listed
products in Japan, supply business of active pharmaceutical
ingredients/bulk of these products to third parties in Japan
and outside of Japan and royalty business of these
products to LTL Pharma. Through this agreement, Astellas
will reallocate the funds generated by the transfer of assets
into businesses and products that will drive our
competitive advantage, thereby aiming to achieve
sustained growth.
In other initiatives, in December 2016, Astellas entered
into a definitive agreement with Grünenthal, under which
Astellas will transfer the exclusive rights for Qutenza in
Europe, the Middle East and Africa to Grünenthal. In
February 2017, Astellas also entered into an agreement
providing Kyowa Pharmaceutical Industry Co., Ltd. the
exclusive right to distribute and promote extended-release
tablets of quetiapine fumarate in Japan, pending approval
of the new drug application submitted in Japan.
In order to further increase both the quality and
efficiency of operations, Astellas continues to
implement initiatives that anticipate changes in the
business environment from a number of perspectives,
such as optimal reallocation of resources, effective
utilization of external resources, continual enhancement
of the organizational structure, active response to
various regulations and social norms (compliance), and
strengthening of core capabilities.
With regard to the organizational structure, Astellas is
working to strengthen its global management functions.
Astellas set up a global compliance function in April 2016
with the aim of further strengthening compliance, thereby
building a global compliance framework in which the
regional compliance functions in Japan, the Americas,
EMEA and Asia & Oceania report to the head of Ethics &
Compliance. Additionally, in April 2017, Astellas created a
new function designed to globally manage legal and
intellectual property functions in each region.
In addition, Astellas implemented the following
initiatives in the fiscal year ended March 31, 2017.
Transfer of a U.S. Manufacturing Subsidiary
In the areas of manufacturing and technology, Astellas
strives to promote the establishment of a stable
manufacturing system that will efficiently realize the steady
supply of high-quality drugs through the effective use of
external resources. As part of these efforts, in August 2016,
Astellas transferred all the shares of Astellas Pharma
Technologies, Inc. (APT) to Avara Norman Pharmaceutical
Services, Inc. (Avara). The manufacturing of pharmaceuticals
previously undertaken by APT will be continued through
outsourcing to Avara on a contract basis.
Outsourcing of Facility and Equipment
Management Support in Japan
Astellas has decided to outsource certain operational and
management support duties, such as facility and
equipment management support at Group companies in
Japan. Through collaboration with external partners with
specialized capabilities, Astellas aims to receive high-
quality services and promote efficiency. In addition to the
outsourcing, as a result of reassessment of the
63
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Our People, Our Organization
Astellas recognizes employees as important
stakeholders and we sincerely strive to fulfill our social
responsibilities. Astellas employees play the most
valuable role in shaping the Company and creating new
levels of enterprise value. We are working to train
employees and strengthen their competitiveness.
Astellas is fostering a corporate culture that aims to
align the aspirations of its diverse employees in one
direction to realize its business philosophy.
HR Vision
Astellas has formulated a Human Resources (HR) Vision
shared globally to define its aspirations for its human
resources and for its organization. Making Astellas’ vision a
reality requires individual employees to understand the HR
Vision and to act based on the Astellas Way.
Astellas redoubled its efforts to disseminate the HR
Vision in fiscal 2016. Specifically, this involved translating
the HR Vision into various languages, conducting training
and meetings for managers, and implementing initiatives,
Overview of the HR Vision
Towards Realizing the Corporate Vision
One Astellas with the Astellas Way
Our People
Our Organization
Embrace Change and Challenge
Value Diversity and Inclusion
Serve Others
Act with Integrity
Resilient
Inspired
Aligned
Ethical
HR MANAGEMENT
DEVELOP
EMPLOYER
OF
CHOICE
ATTRACT
RETAIN
including personnel measures, to spread understanding
among all employees. Astellas Pharma Hong Kong won
the 2016 ERB Manpower Developer Award.
Astellas will improve human resources and
organizational capabilities by spreading and implementing
the HR Vision and Astellas Way. Moreover, we will bring
together individuals from diverse backgrounds within the
Company to surmount national, regional and
organizational barriers, foster mutual respect, enhance our
organizational capabilities, and unite our people to
continuously achieve innovation.
The Astellas Way
—Five Messages for One Astellas—
Patient Focus:
Ask yourself if your decisions and actions contribute
to improving patient health.
Ownership:
Embrace change and always challenge
by taking ownership.
Results:
Commit to results each time you face a challenge, and
consider fresh approaches to achieving them.
Openness:
Maximize your creativity through diversity
and open communication.
Integrity:
Act with integrity by always considering the implications of
your actions, and then take responsibility for the outcomes.
Providing Opportunities for Employees to
Succeed Globally
Astellas provides employees with opportunities to succeed
globally. In Japan, we have developed an internal
recruitment system to revitalize our organization and
motivate employees to develop their own abilities and
grow, while encouraging our people to succeed in roles at
various overseas bases by proactively appointing
employees to be assigned abroad from each division. In
addition, we accept long-term and short-term assignees
from Group companies outside Japan. In these and other
ways, we are working to promote global interaction
among our people at the divisional level.
64
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Pursuing Operational Excellence
Diversity Management
Astellas is working to promote diversity so that diverse people
can play a role in our Company, irrespective of race,
nationality, gender, or age. Respect for the diverse values of
our employees will be reflected in various ways in our
business activities to encourage creativity in our organization.
We also believe that it will help to attract talented people as
employees and enhance our competitiveness.
For Astellas, promoting the career advancement of
women in Japan is a high priority, particularly because the
country has a low ratio of women in management
positions compared to other regions. We aim to develop a
work environment in which life events will not hinder
career advancement, and have established a target to raise
our ratio of female managers in Japan to 10% or higher (at
Astellas Pharma Inc.) by 2020 on a non-consolidated basis.
Male/Female Employee Ratio per Region and Ratio of Female
Managers (Fiscal 2016)
Japan
Americas
EMEA
Asia &
Oceania
Total
Astellas continues to monitor the turnover rate of
employees as an indicator for gauging the extent to which
the Company provides a rewarding and safe place to work.
* Accessibility Consortium of Enterprises (ACE): A general incorporated association
that was formed to conduct activities such as the establishment of a new
employment model for people with disabilities who contribute to the growth of
companies.
Number of Employees per Region and Turnover Rate
2015.3*2
2016.3
2017.3*3
Japan
Number of employees
Turnover rate*1
Americas
Number of employees
Turnover rate
7,241
7.5%
2,975
10.4%
EMEA
Number of employees
4,628
Asia & Oceania
Turnover rate
15.6%
Number of employees
2,269
Turnover rate
13.4%
7,056
1.1%
3,062
12.9%
4,726
11.9%
2,373
12.9%
7,029
1.2%
3,016
17.7%
4,672
14.3%
2,485
13.3%
Total
Number of employees
17,113
17,217
17,202
Turnover rate
11.0%
7.8%
9.4%
*1 The turnover rate in Japan excludes people retiring at the mandatory
retirement age and employees moving outside of the Group due to transfer of
Group businesses.
Male
Female
Ratio of female
managers
71.7%
46.2%
42.1%
49.4%
56.0%
*2 The increase in the total turnover rate in fiscal 2014 is mainly due to the
28.3%
53.8%
57.9%
50.6%
44.0%
7.8%
48.4%
50.9%
46.1%
32.6%
introduction of an early retirement plan in Japan.
*3 The Increase in the total turnover rate in fiscal 2016 is mainly due to the transfer
of Astellas Pharma Technologies, Inc. (APT) to Avara Norman Pharmaceutical
Services, Inc.
Developing Rewarding and Safe Work
Environments
Astellas is working to ensure rewarding and safe work
environments where employees are able to concentrate
on their duties. This is to ensure that every employee is
able to maximize their abilities and creativity on the job. In
Japan, we have been promoting workstyle reforms since
2015 in order to raise enterprise value and provide
employees with rich individual lives. This is all in an effort
to strike an equilibrium that enables each person to
improve their own work-life balance while establishing
high levels of productivity and creativity. Our efforts to
promote inclusive employment and decent work, one of
the United Nations’ Sustainable Development Goals
(SDGs), include initiatives for upgrading the work
environment we provide for people with disabilities. We
have been a participating member of Japan’s Accessibility
Consortium for Enterprises (ACE)*. The support we provide
people to overcome disabilities includes an app we have
introduced for hearing-impaired employees that
instantaneously converts voice data into written words.
Ensuring Occupational Health and Safety
We have the Astellas Environment, Health & Safety Policy
in place to prevent work-related accidents and minimize
those caused by workplace mishaps and hazards. Under
this policy, each facility is independently building
Environment, Health & Safety management systems and
promoting associated initiatives. We are also working to
ensure occupational safety from many different
perspectives based on the information we share on
accidents and near misses that have occurred at our
workplaces around the world.
Between January and December 2016, there were five
work-related injuries requiring leaves of absence in Japan.
Of these five injuries, the longest leave of absence was
nine days. There were four injuries requiring leaves of
absence at our overseas plants, of which the longest leave
of absence was 93 days. In view of the lengthy leaves
resulting from injuries in Japan and at our overseas plants,
we will strive to reduce our occupational safety risks with
the goal of holding our severity rate of work-related
injuries under 0.005 on a global basis.
65
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Incidence of Work-Related Injuries in Japan
2014.1-12
2015.1-12
2016.1-12
Respect for Human Rights
Number of injuries
requiring leave of absence
Frequency rate of
work-related injuries*1
Severity rate of
work-related injuries*2
5
2
5
0.34
0.14
0.34
0.002
0.007
0.001
Incidence of Work-Related Injuries at Overseas Plants*3
2015.1-12
2016.1-12
Number of injuries
requiring leave of absence
Frequency rate of
work-related injuries*1
Severity rate of
work-related injuries*2
2
1.11
0.047
4
2.40
0.065
*1 Frequency rate of work-related injuries: This rate shows the number of
employee deaths or injuries resulting from work-related accidents causing
leaves of absence per million hours of work. The larger the number, the more
frequently work-related injuries occur.
*2 Severity rate of work-related injuries: This rate shows the number of days absent
from work due to work-related injuries per thousand hours of work. The larger
the number, the more serious the injury.
*3 From 2015 onward, we began disclosing consolidated data for all five overseas
plants.
Astellas disclosed its Position on Human Rights in April 2017.
Wherever we operate, Astellas is committed to complying
with internationally recognized basic human rights and labor
standards as well as applicable local labor and employment
laws, and to implementing and upholding the UN Guiding
Principles on Business and Human Rights. Also, Astellas has
identified four rights to which we pay particular attention as
human rights in clinical trials and other research and
development activities, product safety and counterfeit drugs,
Access to Health and human rights in the workplace.
Under the U.K. Modern Slavery Act 2015, we publish a
Slavery and Human Trafficking Statement for each financial
year, describing what steps we have taken to address this risk
in our own operations or our supply chains.
We have been globally confirming the awareness of
human rights issues in the workplace and the status of
human rights activities at our Group companies by
conducting written surveys. In fiscal 2016, there were no
urgent human rights issues or other issues of common,
worldwide concern reported in the survey.
For details on our people, our organization, please visit the
following website:
WEB
https://www.astellas.com/en/sustainability/employees/
Message from Senior Vice President, Human Resources and Facilities, Astellas US LLC
We conduct initiatives to encourage women’s success.
In July 2016, Astellas US LLC hosted the first ever Women
in Action conference, which drew more than 1,600
attendees, including female employees of Astellas
Americas and local female students in STEM education.
The aim of this event was to develop women’s
leadership and confidence and to help them overcome
difficulties and succeed. In addition to the lecture, Astellas
held experiential workshops on how to communicate
opinions in conversation and the skills needed to be more
effective in managing crucial conversations.
This conference underscored the value the
company places on the contributions of women and a
commitment to encouraging female empowerment. We
are proud of the recognition that we have received in
Professional Woman’s Magazine and Working Mother
Magazine’s 100 Best Companies in the U.S. for our
commitment to establishing a corporate culture
supportive of working mothers and their families.
The Women in Action event is an example of how
we are maximizing creativity
through diversity and open
communication as part of the
Astellas Way.
* STEM education is teaching that
emphasizes science, technology,
engineering and mathematics.
Collette Taylor
Senior Vice President, Human
Resources and Facilities
Astellas US LLC
66
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Business Review Pursuing Operational Excellence
Ethics & Compliance
Astellas believes that acting in accordance with the
highest ethical standards, which includes obeying the
letter and spirit of the law, is the cornerstone of all its
activities. Accordingly, the Astellas Charter of Corporate
Conduct which is shared globally, expresses the
Company’s ethical business philosophy in terms of
specific corporate behavior. In addition, the Astellas
Group Code of Conduct is a global code for all directors,
officers and employees around the world, establishing
that they are expected to comply with laws and
regulations and maintain high ethical standards in the
performance of their job responsibilities for Astellas.
Astellas promotes compliance and acts in
accordance with the highest ethical standards through
the development, implementation and continuous
enhancement of policies, processes, and our global
compliance structures and thereby maintains the trust
of society and enhances enterprise value.
Structure to Promote Ethics and Compliance
Astellas continues to enhance a robust compliance
structure that includes a Chief Ethics & Compliance Officer
(CECO) and Global Compliance Committee chaired by the
CECO and comprised of the Head of Ethics & Compliance
and senior business leadership.
Two global compliance functions, Anti-Bribery/
Anti-Corruption Compliance and Data Privacy, were
created in April 2016 and April 2017, respectively. In
addition, an Ethics & Compliance Group Operations
function was established in fiscal 2016. This function
oversees and coordinates various compliance activities to
ensure consistency in approach on a global basis. These
activities include training and communications, risk
assessment, monitoring, investigations, and managing
policies and procedures.
As our business expands globally, we continue to seek
opportunities for global alignment and collaboration
between functional lines, and maintain consistently high
standards of compliance in everything we do. Astellas is
committed to supporting every employee in their efforts
to conduct business with the highest integrity and in an
ethical and legal manner.
Global Compliance Structure (as of April 2017)
Chief Ethics & Compliance Officer (CECO)
Head of Ethics & Compliance
Global Compliance Committee
Anti-Bribery/Anti-Corruption
Data Privacy
Japan & East Asia
South East, South Asia,
Hong Kong, and Oceania
Americas
EMEA
Ethics & Compliance Head
Ethics & Compliance Head
Ethics & Compliance Head
Ethics & Compliance Head
Compliance Committee
Compliance Committee
Compliance Committee
Compliance Committee
Ethics & Compliance Group Operations
67
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Initiative Promoting Compliance
Compliance Training
Training and communication about new policies and
procedures as well as updates to existing policies and
procedures help to nurture a compliance mindset among
all employees. All new Ethics & Compliance employees are
required to undergo comprehensive onboarding training
and all new Ethics & Compliance leaders receive training
on specific topics including healthcare compliance, anti-
bribery and anti-corruption compliance, investigation
processes, conflict of interest, data privacy and transparency
reporting. A wide variety of platforms, including online
and in-person sessions, are used to train employees on
various topics related to their job responsibilities.
Integrity in Action Program
In fiscal 2016, messages about integrity, ethics and
compliance were delivered to employees through various
means in order to enhance their ethics and compliance
awareness. For example, an Integrity in Action program
was implemented globally and conducted at each regional
headquarters and multiple affiliate offices in fiscal 2016.
These programs bring subject matter experts from local,
regional and global Ethics & Compliance functions to
regional and affiliate offices where employees receive
informative and impactful information about various
compliance related matters. Business leaders provide Tone
from the TOP by reinforcing the compliance messages
through their presentations.
Establishing and Encouraging a Speak-Up Culture
Following the establishment of a stand-alone Ethics &
Compliance organization in April 2016, one of the first
initiatives undertaken was to establish and enhance,
throughout the entire organization, a speak-up culture
that encourages all employees to bring to the Company’s
attention potential issues and concerns that may give rise
to more serious compliance problems if not addressed
promptly and effectively. The importance of an effective
speak-up culture is communicated regularly to all
employees not only by the Ethics & Compliance function
but also by senior leadership at the local, regional and
global levels throughout the organization. In part due to
this emphasis on a vibrant speak-up culture, Astellas has
seen an increase in compliance reports from fiscal 2015 to
fiscal 2016.
Implementation of a Global Conflict of
Interest Policy
The foundation of an effective and robust Ethics &
Compliance program is based on how a company
approaches its own internal behavior even when no
violation of law may have occurred. In these situations,
often referred to as conflicts of interest, a company must
assess its approach to ethics and compliance when no one
is looking. Doing so with integrity and ethics in these
situations informs and predicts how a company approaches
ethics and compliance when everyone is looking.
Conflicts of interest arise when outside activities or
other personal interests impair an employee’s objectivity
or judgment when performing his/her job responsibilities.
Conflicts of interest also arise in situations where there is a
potential conflict between an employee’s personal interests
and the interests of Astellas. During fiscal 2016, Astellas
implemented an enhanced global Conflict of Interest
Policy and, in fiscal 2017, will be initiating comprehensive
training on the enhanced policy across the organization.
This policy and the accompanying training communicate
to every Astellas employee the ethical values of the
Company, its expectation that we will conduct all our
business with the highest degree of integrity, and its
commitment to compliance.
Helpline for Employees
Astellas has external compliance reporting helplines
available for employees in each region that enable
employees to report and receive advice on how to react in
the event they discover actual or suspected misconduct.
These helplines are available in employees’ local
languages. In many countries, an external helpline has also
been put into place, and employees also receive regular
reminders and periodic training on how to use the
helplines. In Japan, a separate sexual harassment helpline
is also available.
Astellas fosters an environment that encourages
employees to use the helplines. There is a strict policy of
non-retaliation against those who raise a concern or report
a suspected compliance breach in good faith, even if the
concern or report is not substantiated.
In fiscal 2016, our helplines received consultation
requests in each region. Matters raised included potential
harassment and promotional code violations. In response,
we conducted thorough investigations and took
appropriate actions.
68
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Business Review Pursuing Operational Excellence
Monitoring System for Compliance Issues
Developing a Consistent Global Internal
Compliance Risk Assessment Capability
Astellas, like most multinational pharmaceutical
companies, confronts a myriad of different compliance
risks across its global operations. These include anti-
bribery/anti-corruption compliance risk, data privacy risk,
healthcare compliance risk, and cybersecurity risk. The
ability to efficiently and effectively assess risk in these and
other areas at the local, regional and global levels is a
foundational element of any compliance program and
enables companies like Astellas to more quickly identify and
better respond to existing and emerging compliance risks.
Establishing a globally consistent process for
conducting its own internal compliance risk assessments
allows management at Astellas to better allocate resources
that are focused on areas of high compliance risk based on
the best available information. Internal compliance risk
assessments that are conducted at the local affiliate level
are supported by resources provided at both the regional
and global levels.
Internal compliance risk assessments evaluate both
the external (or market risk) environment as well as those
activities conducted by Astellas that create the highest
level of risk for the Company. The internal activities
assessed include those where value in any form is
transferred to healthcare professionals, interactions
between the Company and government officials/healthcare
professionals, fair competition between companies, data
privacy, clinical research and gifts/hospitality. The Ethics &
Compliance function at Astellas works closely with the
business throughout the internal compliance risk
assessment process and helps develop and support any
risk mitigation plans developed to address the identified risks.
Tracking and Investigating Reports of
Compliance Violations
In fiscal 2016, Astellas continued to enhance its process for
tracking all reports of potential compliance violations no
matter how they were received by the Company. These
reports are analyzed by Ethics & Compliance to determine if
any trends or patterns in misconduct are occurring anywhere
in the organization. These reports and any analyses are
also shared with senior leadership to ensure there is
visibility and awareness of potentially problematic activity.
Astellas defined these processes in a global policy on
investigations and two global standard operating
procedures. Training on the policy and the procedures has
been provided to Ethics & Compliance personnel and other
Astellas employees responsible for conducting internal
compliance investigations. Ethics & Compliance often
coordinates with Legal and Human Resources throughout
the course of any compliance-related investigations.
Astellas is committed to conducting all compliance
investigations fairly, objectively, consistently and efficiently
with any disciplinary action taken being proportional to
any substantiated misconduct. Astellas has a strict policy
prohibiting any retaliation against any employee who
brings to the Company’s attention a suspected or actual
compliance violation in good faith even if the allegation is
ultimately unsubstantiated.
Anti-Bribery and Anti-Corruption Initiatives
As business has become increasingly globalized,
countries around the world have been enhancing their
efforts to prevent corruption and bribery. Enforcement
authorities have prosecuted cases involving direct
corruption and bribery as well as cases involving bribery
that occurred through the actions of a business partner or
third-party agent. Astellas continues to strengthen its
compliance awareness to prevent bribery and corruption
not only at Astellas but also by third parties with whom we
conduct business.
In its continued effort to prevent bribery in the
conduct of its business, Astellas has established a global
anti-bribery and anti-corruption compliance position that
works with Ethics & Compliance and business functions at
the regional and local levels to ensure compliance with
the Astellas Group Code of Conduct, the Global Anti-
Bribery and Anti-Corruption Policy, and other policies and
procedures that address the transfer of value from Astellas
to government officials and healthcare professionals.
To foster a deeper understanding of this issue among
its employees, Astellas regularly provides training on various
anti-corruption and anti-bribery compliance initiatives.
69
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Commitment to Fair Competition
Astellas is committed to conducting its business in a fair
and competitive environment and does not collude or
reach any agreements with its competitors regarding sales
conditions, such as prices, sales plans and strategies, and
market and customer shares. Astellas limits its
engagement with competitors and avoids any
conversation concerning these topics when engagement
is necessary, as it might be construed to reflect such an
agreement even when there is none. If a competitor brings
up these subjects in conversation, we refuse to discuss it,
end the conversation immediately and unequivocally, and
report the incident to the legal department.
In fiscal 2016, there were no incidences of government
authorities taking legal action against Astellas for anti-
competitive, anti-trust, or monopolistic practices, or of
authorities imposing significant fines or other sanctions for
non-compliance with laws and regulations.
For further information on Astellas’ ethics and compliance activities,
please visit the following website:
WEB
https://www.astellas.com/en/about/
compliance-initiatives/
Message from the Vice President, Head of Ethics & Compliance Americas and Ethics & Compliance
Group Operations Lead
Establishing an Effective and Impactful Group Operations Function in
Ethics & Compliance
The Ethics & Compliance (E&C) Group Operations team
was created following the establishment of the stand-
alone E&C function on April 1, 2016. The purpose of
having a global group operations function is to drive
efficiencies and consistencies of E&C function across
country, region and global levels.
The E&C Group Operations team is responsible for
setting strategy, planning and coordination for training,
communications, risk assessment, monitoring,
investigations, policies, procedures and program
governance. The Group Operations team works with its
E&C counterparts at all levels and across all regions to
ensure there is a consistent approach to how these
activities are conducted.
One of the biggest challenges facing the E&C
Group Operations team is finding a way to reflect and
allow for regional and local differences and customs. In
this respect close collaboration between the E&C affiliate
leads, regional E&C teams and the E&C Group Operations
team will ensure that our compliance practices adhere
to global standards and best practices but also are
reasonably adapted to local and regional differences.
Tatjana Dragovic
Vice President,
Head of Ethics & Compliance Americas
and Ethics & Compliance Group
Operations Lead
70
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Contribution to the Sustainable Development Goals
Adopted by the United Nations General Assembly in
2015, the Sustainable Development Goals (SDGs) are a
set of collective targets for the world to achieve by 2030.
Referring to the SDG Compass, Astellas has
identified issues for priority action, based on the
evaluation of positive and negative SDG-related impacts
across the entire value chain. Going forward, Astellas
plans to contribute to the attainment of the SDGs
through various business activities, focusing primarily
on “Goal 3: Good Health and Well-Being.”
Focus on Improving Access to Health in
Four Areas
In regard to “Goal 3: Good Health and Well-Being” under the
SDGs, Astellas is addressing this goal from the viewpoint of
improving access to healthcare. There are many people
with insufficient access to the healthcare they need due to
the lack of available treatments, poverty, challenges in
healthcare systems and limited healthcare information.
Astellas recognizes this problem as the Access to Health
issue. Astellas has identified four areas where it is working
to address Access to Health issues by making full use of
the strengths and technology that Astellas has. The four
areas are (1) Creating innovation, (2) Enhancing availability,
(3) Strengthening healthcare systems, and (4) Improving
health literacy. In doing so, Astellas will make maximum
use of its partnerships in the manner of Goal 17.
In creating innovation, Astellas is working to create
innovative medicines and medical solutions in disease
areas with low treatment satisfaction and to deliver them
to patients around the world. For example, Astellas has
been conducting collaborative research with the National
Institute of Advanced Industrial Science and Technology to
discover new drugs for the treatment of Chagas disease,
and collaborative research with the Institute of Medical
Science, the University of Tokyo in developing the rice-
based oral vaccine MucoRice-CTB against infectious
diseases such as cholera and enterotoxigenic Escherichia
coli (E.coli). Furthermore,
Astellas is working closely with partners to develop a
pediatric formulation of praziquantel tablets for the
treatment of schistosomiasis.
To help enhance availability, we have established
programs to assist patients facing severe financial constraints
with the cost of dispensing pharmaceutical products. We
also support patients by not filing or enforcing patents in
countries facing significant economic challenges.
As part of strengthening healthcare systems and
improving health literacy, Astellas has participated in the
Access Accelerated global partnership. This initiative aims
to contribute to achieving one of the SDG targets of
reducing by one-third premature mortality from non-
communicable diseases by 2030.
In other SDG-related initiatives, Astellas is supporting
the Action on Fistula program in Kenya.
Astellas aims to contribute through various business
activities to achieving SDGs. Astellas views such programs as
part of fulfilling society’s expectations while at the same time
enhancing competitiveness and enterprise value sustainably.
Examples of Astellas’ Activities for Achieving SDGs
SDGs
Theme
Examples of Astellas’ Activities
Goal 3
Good Health and Well-Being
Creation of innovative medicines and healthcare solutions; joint research into treatments and vaccines
for tropical diseases
Goal 5
Goal 6
Gender Equality
Greater proportion of women in managerial roles in Japan
Clean Water and Sanitation
Reduced water usage; management of wastewater
Goal 8
Decent Work and Economic Growth
Cultivation of productive workplaces; employee training and education; promotion of occupational
health and safety
Goal 9
Industry Innovation and Infrastructure
Creating innovation through the Network Research System
Goal 12
Responsible Consumption and Production
Eco-conscious production
Goal 13
Climate Action
Reduction of greenhouse gas emissions
Goal 15
Life on Land
Maintenance/preservation of biodiversity
Goal 17
Partnerships for the Goals
Participating partner in Global Health Innovative Technology (GHIT) Fund
71
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Access to Health
The following describes more in detail the initiatives in
which Astellas is participating to address Access to
Health issues. Astellas believes that the relationships
with governments and the local partners it develops
through these initiatives will generate synergies with its
business activities over the long term.
working with the UICC to develop initiatives to improve
the quality of treatment for cancer patients living in
selected cities of developing countries to try to boost
survival rates.
* For details about Access Accelerated, please visit the following website:
http://www.accessaccelerated.org/
Participation in Access Accelerated to Improve
Access to Healthcare
Astellas has participated in Access Accelerated since
January 2017. Access Accelerated is a global initiative
aimed at improving access to non-communicable disease
prevention, diagnosis and treatment in low and lower-
middle income countries. More than 20 international
pharmaceutical companies are partners in the program,
working alongside organizations such as the World Bank
and the Union for International Cancer Control (UICC).
Non-communicable diseases (NCDs) are any diseases
not caused by human-to-human transmission of an
infectious agent. Leading NCDs include cancer,
cardiovascular disease, chronic respiratory disease, diabetes
and mental health disorders. Many NCDs are caused by
unhealthy eating, lack of exercise, smoking or excessive
drinking, and could be prevented by lifestyle improvement.
NCDs are not just on the increase in developed
countries, but the number of patients suffering from NCDs
is also increasing in developing countries.
The rising incidence of NCDs not only puts pressure
on the healthcare budgets of developing countries, but
also leads to economic losses when patients cannot work
due to illness.
Access Accelerated has more than 100 programs that
channel long-term investments by companies into the
improvement of access to prevention, diagnosis and
treatment of NCDs. The effectiveness of these programs is
being evaluated using a rigorous metrics framework
developed with the cooperation of Boston University. The
Action on Fistula program that we support is one of the
specific programs highlighted on the Access Accelerated
website*. In cooperation with corporate partners and the
World Bank Group, we are also engaged in solving
national-level health issues in Africa. In addition, we are
Collaborative Research to Discover
Anti-Protozoan Parasite Drugs
Since April 2016, Astellas has been conducting joint
research with the National Institute of Advanced Industrial
Science and Technology (AIST) into Chagas disease, one of
the neglected tropical diseases (NTDs*1) caused by
protozoan parasites that belong to trypanosomatidae.
New drugs are needed to treat this condition. From 2012
to March 2016, Astellas worked in collaboration with five
research institutions in Japan and an international non-
profit organization*2 to discover new drugs for the
treatment of NTDs caused by protozoan parasites
belonging to trypanosomatidae. Astellas and AIST are now
utilizing the knowledge gained in this collaborative
research to conduct joint research into Chagas disease,
focusing on validating if genes crucial to the survival of the
protozoan parasite can be identified quickly and accurately
using genome editing technology.
*1 Neglected tropical diseases (NTDs): NTDs are infections caused by parasites and
bacteria which are rampant mainly among underprivileged people in tropical
areas of developing countries. It is estimated that over one billion people
worldwide are suffering from these infections.
*2 Collaborative research had been undertaken with the University of Tokyo, the
Tokyo Institute of Technology, Nagasaki University, the High Energy Accelerator
Research Organization, AIST and the international non-profit organization
Drugs for Neglected Diseases initiative (DNDi).
72
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 international non-profit organizations, Astellas is
developing a pediatric formulation of praziquantel.
The pediatric formulation newly developed by Astellas
uses its original drug formulation technology. The pediatric
formulation was designed to be smaller than the existing
tablet and orally dispersible so that it can be taken even
without water, due to a reduction of bitterness. In addition,
the pediatric formulation can be manufactured using
simple production technology, while holding down
production costs, and the tablets are stable even in the hot
and humid environment of tropical areas. Astellas has
transferred the technology and expertise needed to
develop the pediatric formulations to consortium partners
in Brazil and Germany, thereby helping to produce drug
products used for clinical trials and to build local
pharmaceutical manufacturing capabilities.
The consortium is conducting Phase II clinical trials and
has received a third funding from the GHIT Fund in December
2016 for future Phase III clinical trials. Astellas continues to
provide its expertise and technology to the consortium.
Newly developed pediatric formulation (top) and existing formulation (bottom)
Members of the consortium developing the pediatric formulation of praziquantel
©Lygature 2016
Collaborative Research on a Rice-Based
Oral Vaccine
Since June 2016, Astellas has been conducting collaborative
research with the Institute of Medical Science, the
University of Tokyo (IMSUT) on the rice-based oral vaccine
MucoRice-CTB against diarrheal diseases caused by
cholera and enterotoxigenic Escherichia coli (E.coli).
In developing countries, diarrhea caused by
pathogenic bacteria, such as Vibrio cholerae and
enterotoxigenic E.coli, is a major cause of death among
infants and young children. However, existing cholera
vaccines present several issues, including the need to store
and transport the vaccines at a constant low temperature,
and their ineffectiveness against enterotoxigenic E.coli.
MucoRice-CTB is stable at room temperature and easily
produced. Therefore, it is expected to meet the unmet
medical needs of existing cholera vaccines.
IMSUT provides investigational medicines, study data,
etc., which are necessary for phase 1 and 2 of clinical trials
of MucoRice-CTB for cholera and enterotoxigenic E.coli,
and Astellas is responsible for conducting and managing
the clinical trials.
In May 2017, IMSUT and Astellas signed an agreement
for expansion of the scope of collaborative research
utilizing MucoRice to viral gastroenteritis diarrhea
including norovirus infection.
Furthermore, through these collaborative research
projects, IMSUT and Astellas will attempt to develop the
new platform technology to create innovative new drugs
to address unmet medical needs.
Development of Pediatric Formulation
for Schistosomiasis
Schistosomiasis is one of the most prevalent parasitic
diseases in developing countries centered on Africa and
South America. The disease has a particularly high
incidence rate among children. The existing “gold standard”
treatment for schistosomiasis is praziquantel. However,
one challenge is that praziquantel tablets are difficult to
administer to preschool-age children, including infants
and toddlers, mainly due to the risk of choking stemming
from the tablets’ large size and the drug’s bitter taste.
Having set up a consortium with other
pharmaceutical companies, research institutions and
73
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Action on Fistula
Action on Fistula*1, a program focused on urology, is a
ground-breaking partnership between the Fistula
Foundation and Astellas that was set up to transform the
lives of more than 1,200 women in Kenya living with
obstetric fistula*2.
The program, supported by an unrestricted grant of
€1.5 million from Astellas to the Fistula Foundation in the
three years from 2014 to 2017, aimed to improve the lives
of obstetric fistula patients while simultaneously training
doctors who will be able to provide surgical treatment
in Kenya.
Since its launch, the program has significantly
increased the surgical capacity in Kenya to treat the
condition, by training six fistula surgeons to the global
competency standards set forth by the International
Federation of Gynecology and Obstetrics (FIGO). It has also
set up a Fistula Treatment Network to extend access to
services, with six treatment centers enrolled and providing
fistula surgeries on a routine basis. This has enabled Action
on Fistula to successfully treat over 2,400 fistula patients,
doubling the initial target set. The initiative also built a
major outreach program with community workers to
identify and bring women in for treatment.
Kenyan NGO (WADADIA) and community members share information about
Action on Fistula
©Georgina Goodwin 2017
Progress in the Action on Fistula Program
(May 2014-March 2017)
Patients successfully treated with
reconstructive surgery
2,471 patients
Trained and certified doctors to
the standard level of competency
6 Kenyan doctors
Centers in the Fistula
Treatment Network
6 centers
FIGO-accredited fistula
training center
Established the Gynocare Women’s and
Fistula Hospital
In May 2017, Astellas pledged its continuous support
Kenyan counties* reached
43 counties
Trained community
outreach workers
243 outreach workers
Conducted outreach activities
7,469 activities
Community members reached
with fistula messages
477,599 community members
* Kenya is divided into 47 counties. There are several units of governance below
the county level. These units include subcounties, wards, and villages.
to the Fistula Foundation as the second phase of Action on
Fistula by 2020, considering the remarkable achievement of
the first phase. In three years from 2017 to 2020, this new
program will provide surgeries to an additional 2,000
women with obstetric fistula and will continue to build
capacity to deliver ongoing treatment. In addition, the new
program will establish support groups throughout Kenya to
help enable survivors to return to their communities.
*1 For more information about the program visit www.astellas.eu/action-on-fistula
*2 An obstetric fistula is a hole that develops between the vagina and rectum or
bladder, causing incontinence. It is caused by prolonged and obstructed hard
labor which lasts for several days, when emergency care is unavailable.
Untreated, fistulas can lead to chronic medical problems including ulcerations,
kidney disease and nerve damage in the legs. Because of incontinence, women
with fistula can be socially marginalized. They are often abandoned by their
husbands and family. As a result, fistulas can cause poverty in some cases. The
United Nations Population Fund estimates 3,000 new cases of obstetric fistulas
occur annually in Kenya.
74
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Social Contribution
Astellas is cooperating with a range of stakeholders in
an effort to address social issues which affect people
throughout the world.
AECEP Overseas Volunteer Program
In fiscal 2016, Astellas launched a new social contribution
program called the Astellas Emerging Countries
Empowerment Program (AECEP).
AECEP is a program for addressing social issues in
emerging countries in partnership with enterprises and
non-governmental organizations (NGO) in which Astellas
employees utilize their respective expertise, skills and
experience. Volunteer employees participating in the
program (“participants”) travel to an emerging country
after a preparation period of one and half months. They
then carry out initiatives in the country for a limited time
of three and a half months to address social issues and
generate results that meet the expectations of the partner
enterprise or NGO.
Partners are selected from among enterprises and
NGOs involved in addressing medical, health and safety
issues or environmental problems. Participants get directly
involved in local social issues and learn many things
through collaborating with leaders and community
members who are strongly committed to solving the
issues. At the same time, participants maximize their use of
the experience and abilities they have cultivated through
work at Astellas to help make the partner activities more
effective, and to build or improve their systems. Engaging
in social contributions in this kind of equal, interactive
relationship is the major characteristic of AECEP.
In fiscal 2016, the first year of the program, three
employees were selected as participants from among
numerous applicants. The participants were assigned to
organizations in Indonesia and Cambodia, and they worked
in the areas of health, medicine, poverty, and the environment.
They cooperated with the local organizations while
overcoming various difficulties, and managed to successfully
generate results that drew the praise of our partners.
The invaluable experiences that can be obtained
through AECEP—getting away from daily work and
75
pursuing one’s own potential in an emerging country
while newly creating value for society—also have major
significance for Astellas from the standpoint of human
resource development.
“Embrace Change and Challenge” is included in the
“Our People” section of our HR Vision, and Astellas will also
continue promoting AECEP for this reason: to help develop
human resources with a long-term, strategic thinking
ability who are truly capable of taking on challenges with a
sense of ownership.
An Astellas employee (right end) taking part in awareness-raising activities in a
Cambodian farming village in connection with cooking stoves that are
healthier and better for the environment
Craftswomen from the island of Flores in Indonesia and an Astellas employee
who visited for fieldwork (right end)
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Support for Patients
Astellas conducts a variety of activities to provide
assistance to patients fighting illnesses, and to their family
members, on a global basis.
Astellas promotes Peer Support Training Sessions in
Japan as part of efforts to support the self-reliance and
development of patient associations. Peer Support
Training Sessions are held for a wide range of participants,
including patients and their families, along with those who
have recently formed patient associations. In these training
sessions, activities include programs for participants to
learn attentive listening skills, which enable colleagues
who have faced the same issues or have experienced the
same problems to serve as consulting partners to one
another. In fiscal 2016, Peer Support Training Sessions were
held in 3 locations across Japan, and were attended by 32
organizations and 42 people.
Group-Wide Volunteer Activities for Changing
Tomorrow Day
Astellas Group employees around the world are
encouraging a diverse range of volunteer activities as part
of Changing Tomorrow Day based on the themes of
promoting healthcare and maintaining the environment,
thereby contributing to their local communities. In fiscal
2016, more than 6,600 employees participated.
Changing Tomorrow Day Held in Fiscal 2016
Region
Participants
Volunteering
hours
Number of
locations
Number of
countries
Japan
Americas
EMEA
Asia & Oceania
Total
3,286
2,198
410
724
6,618
2,904
8,831
2,770
2,584
17,089
132
89
16
13
250
1
3
16
10
30
Message from an AECEP Participant
I became more acutely aware of the significance of social contribution through
joint work with an NGO.
In Indonesia, an increase in unwanted pregnancies,
maternal death, sexually transmitted diseases among
young people and people becoming infected with HIV/
AIDS due to a lack of knowledge or low level of
awareness have become major issues.
The Indonesian NGO I was assigned to is actively
engaged in addressing these issues. Their main activities
are providing education on family planning and
reproductive health as well as treatments for infectious
diseases and abortion procedures at a low cost. They are
also planning to establish a pharmacy that will enable
local community members to purchase medical supplies
and daily necessities more conveniently, and this will
provide a stable source of income for their activities. This
is the project I was involved in.
I found myself bewildered at first in many respects,
due to the differences in culture and workstyles. As I had
started the project nearly from scratch, I was pretty
worried about repeated trial-and-error. However, I was
satisfied that in the three and a half months I was able to
produce results. Moreover, the fact that I was able to
create something new was a big confidence boost. I
very much admire their sincere and committed efforts to
addressing social problems. My desire to contribute to
patients and medical professionals continues to be
strengthened. The people at the organization told me
that they had learned a lot from the passion and attitude
I have towards my work, and I think the experience was
stimulating for all of us.
In my current work in recruiting and hiring, I draw
on my experience volunteering to communicate to
students the social role of a pharmaceutical company,
and I strive to hire people with passion.
Yumiko Otsu
Human Resources
76
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Environmental Preservation
Astellas understands that maintaining a healthy global
environment is an essential theme for maintaining sound
business activities and building a sustainable society.
Going forward, Astellas will strive to realize its vision
for being a responsible corporation based on a long-
term timeframe that keeps future generations in mind
and a global perspective. At the same time, we will
continue efforts to address regional social issues and
pursue corporate activities in harmony with the global
environment.
Environmental Action Plan
Having determined its basic policy on the environment
and identified aspirational guidelines, Astellas formulated
its Environmental Action Plan, which outlines short- to
medium-term activity targets, and has continued pursuing
initiatives to achieve its numerical targets. Going forward,
we will review the plan based on various factors, including
progress status and social circumstances, and add new
initiatives and/or set more challenging targets.
Among the numerical targets of the Environmental
Action Plan, Astellas has achieved all the items with a final
target year of fiscal 2015. Accordingly, we have set new
targets for water resources productivity and waste
generated per unit of sales, and have begun working
towards these targets from fiscal 2016.
Initiatives for Realizing a Low-Carbon Society
Reducing Astellas’ Greenhouse Gas Emissions
Astellas endeavors to reduce the greenhouse gas (GHG)
emissions accompanying its own activities in order to help
realize a low-carbon society.
Global GHG emissions accompanying Astellas’
business activities (actual emissions) totaled 216 kilotons,
with activities generating approximately 83% of those
emissions covered by the Environmental Action Plan.
In fiscal 2016, GHG emissions covered by the
Environmental Action Plan (actual emissions) were 179
kilotons. This represented a decrease of 23.7% (55 kilotons)
from fiscal 2005.
In Japan, there was a reduction of 5 kilotons due to
improvement in the electricity CO2 emissions coefficient
compared to the previous fiscal year, a reduction of 13
kilotons due to the closure of the Kashima R&D Center and
the transfer of the Kiyosu Plant. However, there was an
increase of 10 kilotons due to an increase in business
activities such as the operation of new facilities. The
difference between the coefficients for actual emissions
and for use in evaluating progress against the
Environmental Action Plan was 0.201 kg-CO2/kWh. As a
result of the difference between these coefficients, actual
emissions were 23 kilotons greater than emissions in the
Environmental Action Plan.
GHG emissions at overseas production sites decreased
4 kilotons, as a result of the transfer of the Norman Plant to
a third-party company in August 2016.
Environmental Action Plan Performance in Fiscal 2016 (Summary)
Environmental Action Plan
1. Measures to Address Climate Change
(Base year: Fiscal 2005)
Reduce greenhouse gas (GHG) emissions by 35% or more by the end of fiscal 2020
- Japan: Reduce GHG emissions by 30% or more
- Overseas plants: Reduce GHG emissions by 45% or more
2. Measures for the Conservation of Natural
Resources (Research and production sites)
(Base year: Fiscal 2005)
1) Enhance water resource productivity by around 2.5 times the fiscal 2005 result by the end of
fiscal 2020
Indicator: Sales (¥ billion)/Volume of water resources withdrawn (1,000 m3)
2) Improve waste generated per unit of sales to around 20% of the fiscal 2005 result by the end of
fiscal 2020
Indicator: Volume of waste generated (tons)/Sales (¥ billion)
3. Biodiversity (Base year: Fiscal 2005)
Triple the biodiversity index by fiscal 2020
Note: Among the GHG emissions in Japan, CO2 emissions generated through electricity usage are calculated using the following two types of coefficients:
(1) A coefficient of 0.330 kg-CO2/kWh is used to calculate results needed to evaluate progress against the Environmental Action Plan and make investment decisions and
implement countermeasures to bridge the gap between results and targets. The figures shown in the table above represent the results calculated using this coefficient.
(2) GHG emissions (actual emissions) for each fiscal year presented in series are calculated using the Electric Power Council for a Low Carbon Society’s actual end-use GHG
emissions coefficient (hereinafter, “the electricity CO2 emissions coefficient”) for the previous fiscal year. The figures for the GHG emissions shown in this report
represent results calculated using this coefficient. (A coefficient of 0.531 kg-CO2/kWh was used in fiscal 2016.)
77
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017
In accordance with GHG Protocol Scope 2 Guidance,
an international guideline for the calculation of GHG
emissions, Astellas has adopted the market-based method
as the calculation method for actual emissions and for
Scope 2 emissions (indirect emissions) in the CDP Climate
Change 2017 questionnaire.
Astellas is now able to monitor GHG emissions from
almost all of its activities. However, given that the
coefficient for the calculation of CO2 emissions due to
electricity use in Japan has diverged from actual
conditions, Astellas plans to formulate an Environmental
Action Plan based on actual emissions in fiscal 2017.
Remaining mindful of the international community’s vision
for 2050, Astellas intends to set numerical targets as
milestones for realizing this vision.
Breakdown of Greenhouse Gas Emissions (Actual Emissions)
(kilotons)
Overseas manufacturing
11
Regional headquarters
6
Overseas sales
affiliates
2
Total
216 kilotons
Breakdown
of Others
Others
38
Action plan
boundary
Japan
168
Overseas sales
fleets
23
Overseas R&D centers
7
Note: The above graph is based on the energy consumption data disclosed on the
URL below. “Others” represents items outside the scope of the
Environmental Action Plan, and includes principal office buildings, R&D
centers, and office buildings of sales affiliates and sales fleets outside Japan.
https://www.astellas.com/en/csr/environment/energy_sub_01.html
Greenhouse Gas Emissions (Actual Emissions)
Japan: All Japanese facilities and sales fleets /
Overseas: All five production facilities
Japan
Five production facilities overseas
Ratio to FY2005 level
(kilotons)
400
100
200
234
57
177
0
57
2006.3
86.9
89.5
82.5
78.9
76.3
193
203
210
185
179
157
168
173
170
168
36
36
2013.3 2014.3 2015.3 2016.3 2017.3
14
35
11
(%)
100
50
66.7
156
128
*
23
0
28
2016.3
Based on
Action Plan
Monitoring Greenhouse Gas Emissions in the
Supply Chain
In recent years, it has become increasingly important to
monitor and announce not only GHG emissions by the
Company, but also GHG emissions in the supply chain,
including transportation of employees, raw materials
purchasing, product distribution, and waste disposal.
Recognizing these social implications, we started
making efforts in fiscal 2011 to ascertain our GHG
emissions associated with the use of transportation
systems by employees in Japan for commuting or for
overseas business trips, and transportation of products
and wastes. Going forward, we intend to continue taking
effective steps to expand the reporting boundary.
Monitoring Status of Greenhouse Gas Emissions
Scope 3 Other indirect emissions Upstream activities
Purchased goods
and services
111,352 tons
Capital goods
67,645 tons
Fuel- and energy-related activities
(not included in Scope 1 or Scope 2) 27,464 tons
Transportation and distribution*1
Raw materials
transported
by tanker trucks
237 tons
Plant
Warehouse
228 tons
Distribution
warehouse
955 tons
Warehouse
Wholesaler
2,620 tons
Waste generated
in operations
4,461 tons
Commuting
(Train)
671 tons
Business travel
(aircraft use)
37,933 tons
Commuting
(Bus)
122 tons
Commuting
(Car)
1,774 tons
Scope 1*2 Direct emissions
Scope 2*2*3
Indirect emissions
67,647 tons
Sales fleets
27,287 tons
94,934 tons
(total)
121,366 tons
Scope 3 Other indirect emissions Downstream activities
Use of products sold
No emissions
End-of-life treatment
of sold products
705 tons
*1 Product shipments are handled by outside contractors.
*2 Global basis (Japan: all business premises and sales fleets / Overseas: all
production facilities, sales fleets, principal offices, R&D centers and sales
affiliates)
*3 Emissions refer to actual emissions.
* The difference between the actual emissions and emissions evaluated in the
Environmental Action Plan reflects differences in coefficients used in Japan (see
the note on page 77) and changes in calculation methods used at overseas
production sites.
78
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Using Renewable Energy
The direct use of renewable energy such as solar and wind
power is one of the most effective ways of addressing
climate change. Therefore, we intend to actively
incorporate technologies that can be feasibly introduced.
We operate a wind turbine system with a maximum
output of 800 kW at the Kerry Plant in Ireland, which
generated 1,607 MWh in 2016. Furthermore, the Kerry
Plant’s woodchip biomass boiler (maximum output of 1.8
MW) also used 34,984 GJ of heat. These two initiatives
reduced our GHG emissions by 3,093 tons.
In Japan, we have installed photovoltaic panel system
at the Tsukuba Research Center. In fiscal 2016, the system
generated 47 MWh of electricity, reducing our GHG
emissions by 25 tons. Given that Astellas’ plants in Japan
are not suitably located for wind power generation, we will
consider introducing other forms of renewable energy in
the country.
Astellas’ overseas plants are taking initiatives to
designate and purchase electricity generated from
renewable energy such as wind and hydroelectric power.
Of the electricity purchased in fiscal 2016, renewable
energy comprised 12,237 MWh at the Norman Plant,
12,603 MWh at the Meppel Plant, 6,200 MWh at the Dublin
Plant, and 6,815 MWh at the Kerry Plant.
In addition, we are using geothermal heat in certain
parts of the Yaizu Pharmaceutical Research Center as well
as at our U.S. regional headquarters and Leiden
(Netherlands) base. The Leiden base, which can quantify
geothermal energy, used 1,236 GJ of geothermal heat,
resulting in a reduction of 146 tons in GHG emissions.
Initiatives for Resource Recycling
Astellas seeks to contribute solutions to the social issues
involved in establishing a recycling-oriented society. We
have therefore been striving to reduce water withdrawal
and landfill waste. As a result, we were able to achieve our
numerical targets for these items whose final target year is
fiscal 2015. From fiscal 2016 onward, we will evaluate our
progress using two new targets added to the
Environmental Action Plan: water resources productivity
and waste generated per unit of sales.
The Astellas Group on a global basis does not
currently draw water from river systems in areas where
depletion of water resources is a concern, but as water
shortages may become a problem in the future, owing to
climate change, we are taking steps to minimize our
dependence on such resources, and also regard this as an
effective means of ensuring business continuity.
New Targets Added to the Environmental Action Plan
Water resources productivity (For research and production sites)
Indicator
Sales (¥ billion)/Water resources withdrawn (1,000 m3)
Numerical
Targets
Enhance water resources productivity by around 2.5
times the fiscal 2005 result by the end of fiscal 2020
Waste generated per unit of sales (For research and production sites)
Indicator
Volume of waste generated (tons)/Sales (¥ billion)
Numerical
Targets
Improve the waste generated per unit of sales to around
20% of the fiscal 2005 result by the end of fiscal 2020
Water Resources Productivity*
Achieved
0.15
2.89
Result
2017.3
0.13
2.5
or over
Target
2021.3
0.05
1
Base
2006.3
* Water Resource Productivity (WRP) =
Sales (billion yen)
Volume of water resource used (1,000m3)
Waste Generated Per Unit of Sales*
50.9
100%
Base
2006.3
almost achieved
10.2
20%
or below
Target
2021.3
10.5
21%
Result
2017.3
* Waste Generated per unit of Sales (WGS) =
Volume of waste generated (tons)
Sales (billion yen)
79
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Initiatives for Biodiversity
Astellas works to preserve biodiversity by proactively
reducing the impact of its business activities in all fields on
the ecosystem. At the same time, we actively contribute to
the creation of a society that coexists with the natural
world, enabling the preservation of biodiversity and the
sustainable use of the benefits of healthy ecosystems.
Astellas has created a Biodiversity Index* by assessing
the three main factors responsible for the deterioration of
biodiversity, namely environmental pollution, resource
consumption and climate change. Going forward, we will
continue improving in each category while working
toward achieving the target set for fiscal 2020, which is
three times the fiscal 2005 level.
The Biodiversity Index for fiscal 2016 was 3.12 times
that of fiscal 2005, reaching the target. The denominator
components such as pollution load and resource
consumption declined, in addition to a decrease in GHG
emissions. At the same time, the numerator of net sales
decreased in fiscal 2016. As a result, the overall Biodiversity
Index decreased 0.06 points from the previous year. Since
we only recently revised the Environmental Action Plan,
we have decided to continue our activities without
revising the Biodiversity Index target.
* For details on the calculation method, please visit the following website:
https://www.astellas.com/jp/csr/environment/biodiversity_sub_02.html
3.18
3.12
Target
3.00
Biodiversity Index
Ratio to FY2005 level
4.00
3.00
2.68
2.27
2.00
1.97
1.00
1.00
0
2006.3 2013.3 2014.3 2015.3 2016.3 2017.3 2021.3
For details on environmental preservation, please visit the following
website:
WEB
https://www.astellas.com/en/sustainability/environment/
Message from Environment, Health and Safety Management
We will steadily address laws and regulations and implement Environment,
Health and Safety measures.
It is a great honor to be appointed as the Executive
Director Environment, Health & Safety in EMEA, Astellas
B.V., which was established in 2016.
Astellas has an Astellas Environment, Health &
Safety Policy, which sets forth our basic approach to the
environment and the health & safety of our employees,
and the Astellas Environment, Health & Safety Guidelines,
which articulate our medium- to long-term vision. This
policy and the guidelines are implemented according to
conditions in each region under the leadership of General
Affairs at Head Office. In the EMEA, a region with many
different languages and cultures as well as laws and
regulations, my primary role is to work in close coordination
with General Affairs to steadily implement regulatory
responses, strengthen EHS-related governance and
conduct EHS impact evaluations and improvements.
In summer 2016, I attended EHS audits of Astellas’
European plants that were implemented by General
Affairs at Head Office. In these audits, we evaluated each
plant’s status of compliance with laws and regulations
and the implementation status of voluntary activities
based on guidelines. Through this opportunity, I
recognized anew that the Astellas Group is required to
implement a high level of EHS management, not just in
EMEA but also throughout the world.
Going forward, I would like to
take our EHS activities to an even
higher level by strengthening
governance from my standpoint
as a promoter of EHS activities in
EMEA, thereby meeting the
expectations of stakeholders.
Sibo de Jong
EHS in EMEA, Astellas B.V.
Executive Director
80
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Dialogue with Stakeholders
Astellas conducts business activities within a diverse
network of relationships, including with patients and
many others, and our activities are supported by
these relationships. We regard stakeholders such as
patients and healthcare professionals, employees, and
shareholders and investors as particularly important
stakeholders because they are significantly impacted
by our business activities.
Interacting with these stakeholders who support
our business activities in good faith and
understanding their expectations and needs is
essential to acquiring their trust and sustainably
Main Opportunities for Communication with Stakeholders
Patients and
Healthcare
Professionals
• Provision of product information to healthcare
professionals through MRs
• Provision and collection of medical and scientific
information to healthcare professionals through MSLs
• Responding to product inquiries
increasing our enterprise value.
We therefore use various opportunities to
communicate with stakeholders. In addition, to
promote constructive dialogue with our stakeholders,
we appropriately disclose information to all groups in
a way that is both timely and impartial.
By continuing to conduct communication through
disclosure and dialogue, we will further raise our
transparency as a company and strive to sustainably
increase enterprise value while simultaneously raising
the overall sustainability of society.
Business
Partners
• Supplier surveys based on the Astellas Business
Partner Code of Conduct
• Regular dialogue between management and
Employees
employees
• Internal and external compliance helplines
Local
Communities
• Roundtable talks with neighboring residents and local
government bodies
• Volunteer activities by employees
Shareholders
and Investors
• General Shareholders’ Meeting, investor briefings on
announcement of financial results, management
plans, etc.
• Responding to inquiries about business conditions
Other
• Exchange of opinions with government agencies
• Participation in various external activities such as
economic groups and industry associations
For details, please visit the following website:
WEB
https://www.astellas.com/en/sustainability/stakeholder-communications/
Dialogue with Patients
Patient Advocates Advisory Committee Providing Critical Guidance
to Inform Decision-Making
Astellas is committed to ensuring the voices of
patients are reflected in all that we do. As part of our
efforts to better understand and meet the needs of
patients and caregivers, we established the Astellas
Patient Advocates Advisory Committee in 2016 in the
United States. Comprised of leaders from 13 patient
advocacy organizations, the committee provides
feedback regarding our existing and emerging
healthcare services, and helps us identify needs,
priorities and interests of patients and caregivers.
The advisory committee contributes critical
insight to help ensure that we are appropriately
considering the needs of patients and caregivers at
each stage of drug development. In addition, the
committee members have been providing insightful
feedback to our Medical Affairs leadership on ways to
best convey medical information to patients, and
have been helping inform program decisions within
our real-world informatics function.
81
Business ReviewAstellas Pharma Inc. ANNUAL REPORT 2017 Financial Information and Data
11-Year Financial Summary
Financial Review
Consolidated Financial Statements
Consolidated Statement of Income
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Independent Auditor’s Report
Investor Information
Corporate Data/
Principal Subsidiaries and Affiliates
83
85
94
99
154
155
156
82
Astellas Pharma Inc. ANNUAL REPORT 2017
11-Year Financial Summary
Astellas has adopted the International Financial Reporting Standards (IFRS), effective from fiscal
2013 (March 2014). Results for each category and earnings per share are presented on a core basis
for the fiscal years since March 2014.
For the year
Sales
Cost of sales
SG&A expenses*2
R&D expenses*2
R&D ratio (%)
Operating income/profit
Operating margin (%)
Net income/Profit for the year
At year-end
Total assets
Total net assets/Total equity
Per share data*3
Net income/Profit for the year
Total net assets/Total equity
Dividends
Major indicators
ROE (%)
DOE (%)
Equity ratio (%)
Free cash flow
(¥ billion, US$ million)
Average exchange rate (US$/¥)
(€/¥)
2007.3
J-GAAP
2008.3
J-GAAP
2009.3
J-GAAP
2010.3
J-GAAP
(¥ billion)
2011.3
J-GAAP
2012.3
J-GAAP
2013.3
J-GAAP
2014.3
IFRS
2015.3
IFRS
2016.3
IFRS
2017.3
IFRS
2017.3
IFRS
(¥ billion)
(US$ million)*1
¥920.6
¥972.6
¥965.7
¥974.9
¥953.9
¥969.4
¥1,005.6
¥1,139.9
¥1,247.3
¥1,372.7
¥1,311.7
$11,711
284.1
446.0
167.9
18.2
190.5
20.7
131.3
279.3
417.3
134.5
13.8
275.9
28.4
177.4
264.4
450.9
159.1
16.5
250.4
25.9
171.0
289.2
499.2
195.6
20.1
186.4
19.1
122.3
296.0
538.8
217.3
22.8
119.2
12.5
67.7
1,470.7
1,099.0
1,439.2
1,110.9
1,348.4
1,030.2
1,364.2
1,053.9
1,335.1
1,021.1
1,400.6
1,018.1
1,445.6
1,062.0
1,653.1
1,268.5
1,793.6
1,317.9
1,799.3
1,259.2
1,820.9
1,271.8
¥244.07
2,135.34
80.00
11.3
3.7
74.7
200.4
117
150
¥349.89
2,228.34
110.00
16.1
5.0
77.1
178.5
114
162
¥356.11
2,189.26
120.00
16.0
5.4
76.3
168.8
101
143
¥261.84
2,278.77
125.00
11.7
5.6
77.1
118.6
93
131
(¥)
¥146.49
2,207.70
125.00
6.5
5.6
76.4
(142.0)
86
113
318.6
519.2
189.8
19.6
131.5
13.6
78.2
¥169.38
2,200.64
125.00
7.7
5.7
72.6
146.7
79
109
324.1
527.6
182.0
18.1
153.9
15.3
82.9
¥36.08
469.92
130.00
8.0
5.7
73.3
95.5
83
107
330.6
397.0
191.5
16.8
186.3
16.3
132.8
¥59.11
568.53
135.00
7.4
5.0
76.7
187.4
100
134
333.2
452.5
206.6
16.6
216.5
17.4
153.2
¥69.37
600.93
30.00
10.5
5.1
73.5
116.2
110
139
335.6
500.4
225.7
16.4
267.5
19.5
198.8
¥92.12
592.58
32.00
15.0
5.4
70.0
166.7
120
133
320.5
470.8
208.1
15.9
274.6
20.9
213.3
¥101.15
615.89
34.00
17.3
5.6
69.8
162.2
108
119
2,862
4,203
1,858
2,451
—
—
1,905
16,258
11,355
$0.90
5.50
0.30
—
—
—
—
—
1,448
(¥)
(US$)
*1 US dollars have been converted at the rate of ¥112 to US$1, the approximate exchange rate on March 31, 2017.
*2 SG&A expenses under J-GAAP (from fiscal 2006 to fiscal 2012) include R&D expenses.
*3 Astellas conducted a stock split of common stock at a ratio of 5 for 1 with an effective date of April 1, 2014. Net income/profit for the year per share and total net assets/total
equity per share are calculated based on the number of shares issued after the stock split (excluding treasury shares) on the assumption that the stock split was conducted at
the beginning of fiscal 2012. Moreover, the number of shares outstanding has also been calculated on the assumption that the stock split was conducted at the beginning of
fiscal 2012.
83
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 For the year
Sales
Cost of sales
SG&A expenses*2
R&D expenses*2
R&D ratio (%)
Operating income/profit
Operating margin (%)
Net income/Profit for the year
At year-end
Total assets
Total net assets/Total equity
Per share data*3
Net income/Profit for the year
Total net assets/Total equity
Dividends
Major indicators
ROE (%)
DOE (%)
Equity ratio (%)
Free cash flow
(¥ billion, US$ million)
Average exchange rate (US$/¥)
(€/¥)
284.1
446.0
167.9
18.2
190.5
20.7
131.3
¥244.07
2,135.34
80.00
11.3
3.7
74.7
200.4
117
150
279.3
417.3
134.5
13.8
275.9
28.4
177.4
¥349.89
2,228.34
110.00
16.1
5.0
77.1
178.5
114
162
264.4
450.9
159.1
16.5
250.4
25.9
171.0
¥356.11
2,189.26
120.00
16.0
5.4
76.3
168.8
101
143
289.2
499.2
195.6
20.1
186.4
19.1
122.3
¥261.84
2,278.77
125.00
11.7
5.6
77.1
118.6
93
131
(¥ billion)
2011.3
J-GAAP
296.0
538.8
217.3
22.8
119.2
12.5
67.7
(¥)
¥146.49
2,207.70
125.00
6.5
5.6
76.4
(142.0)
86
113
2007.3
J-GAAP
2008.3
J-GAAP
2009.3
J-GAAP
2010.3
J-GAAP
2012.3
J-GAAP
2013.3
J-GAAP
2014.3
IFRS
2015.3
IFRS
2016.3
IFRS
2017.3
IFRS
2017.3
IFRS
(¥ billion)
(US$ million)*1
¥920.6
¥972.6
¥965.7
¥974.9
¥953.9
¥969.4
¥1,005.6
¥1,139.9
¥1,247.3
¥1,372.7
¥1,311.7
$11,711
318.6
519.2
189.8
19.6
131.5
13.6
78.2
324.1
527.6
182.0
18.1
153.9
15.3
82.9
330.6
397.0
191.5
16.8
186.3
16.3
132.8
333.2
452.5
206.6
16.6
216.5
17.4
153.2
335.6
500.4
225.7
16.4
267.5
19.5
198.8
320.5
470.8
208.1
15.9
274.6
20.9
213.3
1,470.7
1,099.0
1,439.2
1,110.9
1,348.4
1,030.2
1,364.2
1,053.9
1,335.1
1,021.1
1,400.6
1,018.1
1,445.6
1,062.0
1,653.1
1,268.5
1,793.6
1,317.9
1,799.3
1,259.2
1,820.9
1,271.8
2,862
4,203
1,858
—
2,451
—
1,905
16,258
11,355
(¥)
(US$)
¥169.38
2,200.64
125.00
7.7
5.7
72.6
146.7
79
109
¥36.08
469.92
130.00
8.0
5.7
73.3
95.5
83
107
¥59.11
568.53
135.00
7.4
5.0
76.7
187.4
100
134
¥69.37
600.93
30.00
10.5
5.1
73.5
116.2
110
139
¥92.12
592.58
32.00
15.0
5.4
70.0
166.7
120
133
¥101.15
615.89
34.00
17.3
5.6
69.8
162.2
108
119
$0.90
5.50
0.30
—
—
—
1,448
—
—
84
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Financial Review
Overview of the Year Ended
March 31, 2017 (Fiscal 2016)
In its consolidated operating results (core basis) for fiscal
2016 Astellas posted a decrease in sales and increases in
core operating profit and core profit for the year.
Consolidated Financial Results (Core Basis)
Sales
Operating profit
Profit for the year
(¥ billion)
2016.3
2017.3
1,372.7
267.5
198.8
1,311.7
274.6
213.3
Astellas discloses financial results on a core basis as an
indicator of its recurring profitability. Certain items reported
in financial results on a full basis that are deemed to be
non-recurring items by Astellas are excluded as non-core
items from these financial results on a core basis. These
adjusted items include impairment losses, gain (loss) on
sales of property, plant and equipment, restructuring costs,
loss on disaster, a large amount of losses on compensation
or settlement of litigation and other legal disputes, and
other items that we judge should be excluded.
Foreign Exchange Impact for Fiscal 2016
The exchange rates for yen in fiscal 2016 are shown in the
table below. Movements in the rates led to a ¥94.7 billion
decrease in the value of sales and a ¥36.3 billion decrease
in core operating profit.
Foreign Exchange Rates (Average)
US$1
€1
(¥)
2016.3
2017.3
120
133
108
119
Fluctuation in Foreign Exchange Rates from April to March
2016.3
2017.3
¥7
(Strengthening of yen)
¥0
(Strengthening of yen)
¥3
(Strengthening of yen)
¥8
(Strengthening of yen)
US$1
€1
85
Sales
In fiscal 2016, consolidated sales decreased 4.4% year on
year to ¥1,311.7 billion. Sales decreased mainly due to the
impact of NHI drug price revisions implemented in Japan
in April 2016, in addition to the impact of foreign
exchange rates, despite steady growth in sales of core
products. In terms of global products, due to the impact
of foreign exchange rates, sales of XTANDI for the
treatment of prostate cancer increased slightly, while
combined sales of overactive bladder (OAB) treatments
Vesicare and Betanis/Myrbetriq/BETMIGA decreased.
However, excluding the impact of foreign exchange rates,
sales of each product grew steadily. Additionally, sales of
Prograf, an immunosuppressant, decreased.
Sales by Region
Sales in Japan decreased 3.3% year on year to ¥480.8
billion. Of these, sales in the Japanese market decreased
by 6.3% to ¥452.7 billion.
In addition to the OAB treatments Vesicare and
Betanis, products such as the anti-inflammatory and
anti-pain treatment Celecox, Symbicort for the treatment
of adult bronchial asthma and Suglat for the treatment of
type 2 diabetes achieved sales growth. On the other hand,
sales contracted for XTANDI due to the impact of NHI drug
price revisions. Sales of vaccines declined mainly due to
the continued impact of shipment restraints by the
manufacturer in fiscal 2015 (shipments of some products
have already recommenced). In addition, sales of products
including Lipitor for the treatment of hypercholesterolemia
and Gaster for the treatment of peptic ulcer and gastritis
declined, mainly due to the impact of generics.
Sales in the Americas decreased 9.4% year on year to
¥412.4 billion. Sales on a U.S. dollar basis increased 0.5% to
US$3,805 million.
Sales of XTANDI, the OAB treatments VESIcare and
Myrbetriq, and the pharmacologic stress agent Lexiscan
increased on a U.S. dollar basis, while the sales of each
product decreased due to the impact of foreign exchange
rates. Sales of Prograf decreased, but the azole antifungal
CRESEMBA contributed to sales.
Sales in EMEA increased 0.5% year on year to ¥330.8
billion. Sales on a euro basis increased 12.1% to €2,785 million.
Sales of XTANDI grew. Sales of the OAB treatments
Vesicare and BETMIGA, as well as sales of Prograf, decreased,
mainly due to the impact of foreign exchange rates.
Sales in Asia & Oceania decreased 3.8% year on year to
¥87.7 billion.
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 XTANDI and the OAB treatments Vesicare and
BETMIGA showed growth in sales. Sales of Prograf and
Harnal for the treatment of functional symptoms of benign
prostatic hyperplasia declined due partly to the impact of
foreign exchange rates.
Sales by Region
Consolidated
Japan
Americas
EMEA
Asia & Oceania
(¥ billion)
2016.3
2017.3
1,372.7
1,311.7
497.2
455.1
329.3
91.1
480.8
412.4
330.8
87.7
Selling, General and Administrative (SG&A)
Expenses, Research and Development (R&D)
Expenses and Amortisation of Intangible Assets
SG&A expenses decreased 5.9% to ¥470.8 billion and R&D
expenses decreased 7.8% to ¥208.1 billion, mainly due to
the impact of foreign exchange rates. The ratio of R&D
expenses to sales fell 0.6 of a percentage point to 15.9%.
Amortisation of intangible assets was ¥35.8 billion,
down 15.5% year on year.
SG&A Expenses, R&D Expenses and
Amortisation of Intangible Assets
Note: Sales by geographical area are calculated according to the location of sellers.
Americas•EMEA (Foreign Currency)
Americas (US$ million)
EMEA (€ million)
2016.3
2017.3
3,788
2,484
3,805
2,785
SG&A expenses
SG&A ratio (%)
Advertising and sales
promotional expenses
Personnel expenses
Other
R&D expenses
R&D ratio (%)
Cost of Sales and Gross Profit
Amortisation of intangible assets
Cost of sales decreased 4.5% to ¥320.5 billion. The cost of
sales ratio stood at 24.4%, mostly unchanged from the
previous fiscal year.
Gross profit decreased by 4.4% to ¥991.2 billion in line
with the decrease in sales.
Cost of Sales and Gross Profit
Sales
Cost of sales
Cost of sales ratio (%)
Gross profit
Gross profit ratio (%)
(¥ billion)
2016.3
2017.3
1,372.7
335.6
24.4
1,037.1
75.6
1,311.7
320.5
24.4
991.2
75.6
(¥ billion)
2016.3
2017.3
500.4
36.5
169.1
186.1
145.1
225.7
16.4
42.4
470.8
35.9
144.1
177.0
149.7
208.1
15.9
35.8
86
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Operating Profit (Core Basis)
Profit for the Year (Core Basis)
As a result of the above mentioned factors, core operating
profit increased 2.7% to ¥274.6 billion. The operating
margin increased 1.4 percentage points to 20.9%.
Core profit for the year increased by 7.3% to ¥213.3 billion.
Basic core earnings per share increased by 9.8% year
on year to ¥101.15.
Operating Profit (Core Basis)
Profit for the Year (Core Basis)
Sales
Operating profit
Operating margin (%)
(¥ billion)
2016.3
2017.3
1,372.7
267.5
19.5
1,311.7
274.6
20.9
(¥ billion)
2016.3
2017.3
Profit before tax
Income tax expense
Profit for the year
Ratio of profit for the year to
sales (%)
268.6
69.8
198.8
14.5
274.9
61.6
213.3
16.3
(¥ billion)
Reconciliation of Full Basis to Core Basis
Account item
Sales
Cost of sales
Gross profit
SG&A expenses
R&D expenses
Amortisation of intangible assets
Share of losses of associates and joint ventures
Other income*1
Other expense*1
Operating profit
Finance income*2
Finance expense*2
Profit before tax
Income tax expense
Profit for the year
2016.3
2017.3
Full basis
Adjustment
Core basis
Full basis
Adjustment
Core basis
1,372.7
335.6
1,037.1
500.4
225.7
42.4
(1.2)
1.7
20.2
249.0
14.4
1.6
261.8
68.1
193.7
—
—
—
—
—
—
—
(1.7)
(20.2)
18.5
(12.3)
(0.6)
6.8
1.7
5.1
1,372.7
335.6
1,037.1
500.4
225.7
42.4
(1.2)
—
—
267.5
2.1
1.0
268.6
69.8
198.8
1,311.7
320.5
991.2
470.8
208.1
35.8
(1.9)
9.6
23.3
260.8
22.9
2.0
281.8
63.1
218.7
—
—
—
—
—
—
—
(9.6)
(23.3)
13.7
(21.3)
(0.7)
(6.9)
(1.5)
(5.4)
1,311.7
320.5
991.2
470.8
208.1
35.8
(1.9)
—
—
274.6
1.7
1.3
274.9
61.6
213.3
*1 “Other income” and “other expense” are excluded from full basis results. “Other income” and “other expense” include gain (loss) on sale and disposal of property, plant and
equipment, impairment losses for other intangible assets, loss on restructuring and foreign exchange gains (losses), etc.
*2 Gain (loss) on sale of available-for-sale (AFS) financial assets and impairment losses on AFS financial assets included in “finance income” and “finance expense” are excluded
from core results as non-core items.
87
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Consolidated Financial Results (Full Basis)
Average exchange rate (US$)
(€)
Consolidated Financial Results (Full Basis)
In its consolidated operating results on a full basis for fiscal
2016, Astellas posted a decrease in sales and increases in
operating profit, profit before tax and profit for the year.
The full basis financial results include “other income”
(including net foreign exchange gains), “other expense”
(including impairment losses, loss on sales of property,
plant and equipment, restructuring costs, and net foreign
exchange losses), and gain on sales of available-for-sale
financial assets (included in “finance income”) which are
excluded from the core basis financial results.
“Other income” for FY2016 was ¥9.6 billion (¥1.7 billion
in the previous fiscal year). “Other expense” for FY2016 was
¥23.3 billion (¥20.2 billion in the previous fiscal year). Gain
on sales of available-for-sale financial assets for FY2016
was ¥21.3 billion (¥12.3 billion in the previous fiscal year).
Sales
Operating profit
Profit before tax
Profit for the year
(¥ billion)
2016.3
2017.3
1,372.7
1,311.7
249.0
261.8
193.7
260.8
281.8
218.7
Business Combinations
Astellas is investing proactively to capture new business
opportunities and working to create innovation, as we are
enhancing our capabilities to deliver innovative medicines.
As part of these efforts, Astellas acquired 100% of the
equity in Ganymed Pharmaceuticals AG (“Ganymed”), a
biopharmaceutical company in Germany, for €422 million
in December 2016 to further enhance its oncology
franchise. In addition, Ganymed shareholders will become
eligible to receive up to €860 million in further contingent
payments based on progress in the development of
IMAB362, Ganymed’s clinical program.
Moreover, in May 2017, Astellas acquired 100% of the
equity in Ogeda SA (“Ogeda”), a drug discovery company
in Belgium, for €0.5 billion to further expand its pipeline.
Ogeda shareholders will be eligible to receive up to €0.3
billion in further contingent payments based on progress
in the development of fezolinetant, Ogeda’s clinical program.
P57
Reference R&D Topics during the Year
Consolidated Forecasts for the Year Ending
March 31, 2018 (Fiscal 2017) (Announced in April 2017)
Consolidated business forecasts for fiscal 2017 are
presented on a core basis in the table below.
Fiscal 2017 Forecasts (Core Basis)
Sales
Operating profit
Profit for the year
2017.3
1,311.7
274.6
213.3
(¥ billion)
2018.3
(Forecast)
1,279.0
254.0
195.0
(¥)
2017.3
2018.3
(Forecast)
108
119
110
120
We project decreases in sales, core operating profit
and core profit for the year, compared with fiscal 2016. In
fiscal 2017, we expect negative impacts on sales and
profits from the transfer of the global dermatology
business implemented in April 2016, and the transfer of
long-listed products in Japan for which an agreement was
concluded in March 2017. Excluding the factors associated
with these business transfers and the impact of foreign
exchange rates, core operating profit is projected to
increase year on year. We assume the yen will weaken
against the U.S. dollar and the euro compared with fiscal
2016. Accordingly, we expect foreign exchange factors to
have a ¥10.8 billion positive impact on sales and a ¥1.3
billion positive impact on core operating profit.
Sales
In fiscal 2017, we forecast a 2.5% year-on-year decrease in
sales to ¥1,279.0 billion. Negative impacts due to the
transfer of the dermatology business and the transfer of
long-listed products in Japan are anticipated, although
continuous sales growth is expected for our core products
XTANDI and the OAB treatments Vesicare and Betanis/
Myrbetriq/BETMIGA. Sales of Micardis (including Micombi
and Micamlo) are also expected to decrease following the
expiry of its patent period in Japan in January 2017.
Reference Review of Operations by Therapeutic Area
P43
88
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017
Forecast by Region
Forecast by Region
Sales in Japan are forecast to decrease 11.2% year on year
to ¥426.9 billion. Of these, sales in the Japanese market are
forecast to decrease 13.6% to ¥391.0 billion.
2017.3
(¥ billion)
2018.3
(Forecast)
In addition to sales of XTANDI and the OAB treatments
Consolidated
1,311.7
1,279.0
Vesicare and Betanis, sales of mainstay products such as
Suglat and Symbicort are anticipated to continue to grow.
However, sales in the Japanese market are projected to
decrease mainly based on the expiry of the patent period
for Micardis (including Micombi and Micamlo) and the
impact of the transfer of long-listed products in Japan.
Sales in the Americas are forecast to increase 4.4% to
¥430.7 billion on a yen basis and to increase 2.9% year on
year to US$3,915 million on a U.S. dollar basis.
Although sales of XTANDI in the U.S. are expected to
remain mostly unchanged, XTANDI sales are projected to
increase in the Americas as a whole, driven by sales growth
outside the U.S. In addition, sales of the OAB treatments
VESIcare and Myrbetriq, as well as CRESEMBA, are projected
to increase. On the other hand, sales of the candin-type
antifungal agent MYCAMINE are projected to decrease.
Sales in EMEA are forecast to decrease 3.5% to ¥319.3
billion on a yen basis and to decrease 4.4% year on year to
€2,661 million on a euro basis. However, excluding the
impact of the transfer of the dermatology business, sales
are expected to increase from fiscal 2016.
Sales of XTANDI and the OAB treatments Vesicare and
BETMIGA are expected to increase. Meanwhile, sales of
MYCAMINE are projected to decrease.
Sales in Asia & Oceania are forecast to increase 16.4%
year on year to ¥102.1 billion.
Besides sales of XTANDI, sales of products such as the
OAB treatments Vesicare and BETMIGA, as well as MYCAMINE,
are expected to continue increasing. In addition, sales of
Prograf and Harnal are anticipated to increase.
Japan
Americas
EMEA
Asia & Oceania
480.8
412.4
330.8
87.7
426.9
430.7
319.3
102.1
Note: Sales by geographical area are calculated according to the location of sellers.
Americas•EMEA (Foreign Currency)
Americas (US$ million)
EMEA (€ million)
2017.3
2018.3
(Forecast)
3,805
2,785
3,915
2,661
Operating Profit and Profit for the Year (Core Basis)
Although the cost of sales ratio is expected to fall as a
result of changes in the product mix and other factors,
gross profit is anticipated to decrease owing to a decrease
in sales.
Looking at SG&A expenses, although the ratio of SG&A
expenses to sales is expected to increase, SG&A expenses
are expected to remain mostly unchanged from fiscal 2016
mainly based on continuing efforts to streamline expenses.
We project a 4.7% increase in R&D expenses to ¥218.0
billion, mainly based on investment in late-stage
development programs and the development expenses of
the acquired companies. The ratio of R&D expenses to sales
is projected at 17.0% (compared with 15.9% in fiscal 2016).
As a result, we forecast a 7.5% decrease in core
operating profit to ¥254.0 billion. However, excluding the
negative impact on profit from the transfer of the
dermatology business, the transfer of long-listed products
and foreign exchange rates, we expect core operating
profit to increase from fiscal 2016.
Core profit for the year is expected to decrease 8.6%
year on year to ¥195.0 billion. Basic core earnings per share
is projected to decrease 6.6% year on year to ¥94.43.
89
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Sales of Main Products by Region
Japan
EMEA
2016.3
2017.3
(¥ billion)
2018.3
(Forecast)
2016.3
2017.3
(€ million)
2018.3
(Forecast)
Sales in the Japanese
market*1
483.0
452.7
391.0
XTANDI
Vesicare
Betanis
Harnal
Prograf
Funguard
Micardis
Micombi
Micamlo
Celecox
Symbicort
Bonoteo
Geninax
Vaccines
ARGAMATE
Gonax
Cimzia
Suglat
Lipitor
Myslee
Gaster*2
Seroquel
Americas
26.2
26.5
21.2
12.7
49.8
11.7
97.2
10.1
26.0
46.6
37.4
14.1
10.8
41.1
6.2
3.9
6.6
7.3
30.9
17.9
14.7
10.5
23.4
25.6
25.9
9.2
48.8
11.2
93.2
9.4
26.2
47.6
39.3
13.8
10.1
34.5
5.8
4.5
7.7
9.5
23.2
14.7
10.7
7.5
25.8
24.5
31.9
6.9
48.5
11.3
52.2
48.3
41.3
13.3
10.2
28.9
5.9
4.8
9.3
12.8
18.0
13.0
5.5
2016.3
2017.3
3,788
1,272
1,235
3,805
1,286
1,215
37
389
281
108
530
380
288
634
109
91
22
71
325
238
87
490
510
252
660
113
97
53
(US$ million)
2018.3
(Forecast)
3,915
1,304
1,212
92
478
618
256
657
88
96
77
Sales in the Americas
XTANDI
US
Outside of the US
Tarceva
US
Outside of the US
VESIcare
Myrbetriq
Prograf
Scan*3
MYCAMINE
AmBisome
CRESEMBA
Sales in EMEA
2,484
2,785
2,661
XTANDI
Eligard
Vesicare
BETMIGA
Omnic
Sales by Astellas
Bulk and royalties
Prograf and Advagraf
Sales by Astellas
Advagraf
Exports to third parties
MYCAMINE
Asia & Oceania
Sales in Asia & Oceania
Prograf
Harnal
Vesicare
BETMIGA
MYCAMINE
XTANDI
Eligard
533
131
300
101
139
116
23
609
588
234
21
85
718
132
270
119
138
118
19
612
590
252
22
91
846
143
261
147
140
124
15
588
572
16
70
2016.3
2017.3
(¥ billion)
2018.3
(Forecast)
91.1
38.4
21.5
5.3
1.4
5.7
2.4
0.2
87.7
37.3
21.1
5.0
3.5
6.0
4.0
0.2
102.1
39.6
23.4
5.8
5.2
6.8
7.0
0.4
*1 Sales of products in Japan are shown on a gross sales basis.
*2 Products covered by the Asset Purchase Agreement entered into with LTL
Pharma Co., Ltd. in March 2017
*3 Sales of Adenoscan and Lexiscan
90
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Current assets decreased ¥20.9 billion to ¥876.7 billion
at the fiscal year-end. Cash and cash equivalents were
¥340.9 billion, down ¥19.1 billion from the previous fiscal
year-end.
Equity
Total equity as of March 31, 2017 was ¥1,271.8 billion, an
increase of ¥12.6 billion from a year earlier.
While profit for the year stood at ¥218.7 billion,
Astellas paid ¥70.1 billion in dividends of surplus and
acquired ¥92.2 billion in treasury shares.
We cancelled treasury shares worth ¥110.2 billion (68
million shares) in June 2016.
Liabilities
Total liabilities as of March 31, 2017 amounted to ¥549.1
billion, up ¥9.0 billion from a year earlier.
Total non-current liabilities rose ¥22.5 billion to ¥149.2
billion. Current liabilities decreased ¥13.5 billion to ¥399.9 billion.
Liquidity and Financing
Astellas is strengthening its global business foundations
with a focus on the strategic initiatives of “Maximizing the
Product Value,” “Creating Innovation,” and “Pursuing
Operational Excellence.” In addition, Astellas will actively
introduce new products and otherwise pursue strategic
business investment opportunities to further reinforce its
product lineup.
In regard to the liquidity of funds, liquidity is
maintained to enable Astellas to target a certain amount
of strategic investment opportunities, while also supplying
working capital and funding capital expenditures.
As outlined in the section on business risks, Astellas’
operations face a varied set of risks that are particular to
the ethical pharmaceutical business. The Group’s financial
policy is to maintain a healthy balance sheet at all times so
that it can finance smoothly at low costs, particularly in the
event that funding requirements exceed Astellas’ internal
funding capacity in the course of developing business.
Number of Employees
As of March 31, 2017, Astellas employed 17,202 people
worldwide, a year-on-year decrease of 15. The total
number of Medical Representatives (MRs) was
approximately 5,750.
In Japan, the number of employees was 7,029, down
27 from the previous fiscal year-end. In the Americas, the
regional head count was 3,016 employees, down 46 from
the previous fiscal year-end. In EMEA, we had 4,672
employees, down 54 year on year. In Asia & Oceania, we
had 2,485 employees, up 112 from the previous fiscal
year-end.
Number of Employees by Region
Total
Japan
Americas
EMEA
Asia & Oceania
Number of MRs
Total (Global)
(persons)
2016.3
2017.3
17,217
17,202
7,056
3,062
4,726
2,373
7,029
3,016
4,672
2,485
(persons)
2016.3
2017.3
6,000
5,750
Assets, Liabilities and Equity
An overview of the consolidated statement of financial
position as of March 31, 2017 and the main changes from
the end of the previous fiscal year are shown below.
Assets
Total assets as of March 31, 2017 amounted to ¥1,820.9
billion, up ¥21.6 billion from a year earlier.
Non-current assets increased ¥42.4 billion to ¥944.2
billion at the fiscal year-end. Goodwill and other intangible
assets increased ¥22.9 billion and ¥84.5 billion,
respectively, due to the completion of the acquisition of
Ganymed Pharmaceuticals AG of Germany in fiscal 2016.
As a result, goodwill was ¥175.3 billion, up ¥22.2 billion
from the previous fiscal year-end, and other intangible
assets were ¥387.4 billion, up ¥51.2 billion from the
previous fiscal year-end.
91
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Cash Flows
Net cash flows from operating activities amounted to
¥235.6 billion, a decrease of ¥78.1 billion in year-on-year
terms. The main components included income tax paid of
¥72.0 billion.
Cash Flows from Investing Activities
Net cash flows used in investing activities totaled ¥73.4
billion, down ¥73.7 billion from the previous fiscal year.
Looking at the main outflows, acquisition of
subsidiaries used cash of ¥50.9 billion due to the
acquisition of Ganymed, purchases of property, plant and
equipment used cash of ¥29.0 billion, and purchases of
intangible assets used cash of ¥19.6 billion. On the other
hand, proceeds from sales of available-for-sale financial
assets provided cash of ¥28.6 billion.
Cash Flows from Financing Activities
Net cash flows used in financing activities totaled ¥166.2
billion, down ¥27.3 billion from the previous fiscal year.
Dividends paid to owners of the parent totaled ¥70.1
billion, an increase in outflow of ¥0.5 billion year on year.
Other outflows included ¥92.2 billion used for the
acquisition of Astellas’ own shares.
As a result of the above, the balance of cash and cash
equivalents as of March 31, 2017 amounted to ¥340.9
billion, a decrease of ¥19.1 billion compared with the
previous fiscal year-end.
Capital Expenditures
Astellas made capital expenditures with the aim of
augmenting and renewing its research facilities and
equipment as well as production facilities and equipment.
Capital expenditures in fiscal 2016 totaled ¥23.9 billion,
down 29.8% year on year (accrual basis).
Earnings per Share, Dividends and Equity
Attributable to Owners of the Parent
Per Share Data
Earnings per share
Basic
Diluted
Basic (core basis)
Dividends
Equity per share attributable to
owners of the parent
2016.3
2017.3
(¥)
89.75
89.62
92.12
32.00
592.58
103.69
103.55
101.15
34.00
615.89
Policy on Shareholder Returns
Astellas is working to boost shareholder returns through
sustained growth in enterprise value.
While prioritizing the reinvestment of funds in the
business to foster growth, Astellas strives to achieve stable
and sustained growth in dividends, based on medium- to
long-term consolidated earnings growth and taking
dividend on equity attributable to owners of the parent
(DOE) into consideration. Furthermore, Astellas will flexibly
purchase treasury stock as necessary to improve capital
efficiency and the level of returns to shareholders.
Common Stock
Common Stock
(thousands of shares)
2016.3
2017.3
Total number of issued shares*
2,221,823
2,153,823
Treasury shares*
96,844
88,817
Treasury Shares
Number of shares bought back*
2016.3
2017.3
68,000
thousand
60,000
thousand
Acquisition cost
¥119.3 billion
¥91.4 billion
In fiscal 2017, capital expenditures are forecast to
Cancellation of treasury shares*
38,000
thousand
68,000
thousand
increase 4.6% to ¥25.0 billion.
* Excludes purchases of shares constituting less than a trading unit
As a part of profit distribution to its shareholders and as
measures of its capital policy, Astellas implemented
acquisition of its own shares from the stock market,
purchasing 60 million shares, worth ¥91.4 billion, during
the fiscal year ended March 31, 2017.
Furthermore, we cancelled 85 million shares of
treasury stock in May 2017.
92
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 While the Astellas Group strives to ensure that its
actions do not infringe the IP rights of other parties, there
is a risk of litigation in the event of any inadvertent
violations. Such litigation could also impact the Astellas
Group’s business results significantly.
Risks Relating to Product Side Effects and Safety
Any problems arising due to serious side effects or other
safety issues that are caused by the Astellas Group’s
products could impact the Astellas Group’s business results
significantly.
Environment-Related Risks
The Astellas Group is careful to observe laws and
regulations relating to environmental or health and safety
issues and has instituted internal standards that aim to
exceed most statutory requirements. Despite such
precautions, the costs involved in the unlikely event of a
business-related incident causing a serious breach of
compliance in this area could impact the Astellas Group’s
business results significantly.
Foreign Exchange Rate Fluctuations
The Astellas Group’s business results and financial position
are subject to the impact of exchange rate fluctuations due
to the Astellas Group’s extensive international operations.
In addition to the risks outlined above, the Astellas
Group is exposed to a wide range of business-related risks,
including but not limited to (1) general commercial litigation,
(2) delays or suspension of manufacturing activities due to
natural disasters or other factors, and (3) partial
dependence on licensing or sales agreements relating to
pharmaceuticals developed by other companies.
ROE and DOE
Return on equity (ROE) was 17.3%, up 2.3 percentage
points from fiscal 2015. DOE was 5.6%, up 0.2 of a
percentage point from fiscal 2015.
Business Risks
The main risks that could significantly impact the business
results and financial position of the Astellas Group are
outlined below.
Inherent Uncertainties in Pharmaceutical R&D
In general, the probability of discovering a promising
compound through drug discovery research is not high.
Further, it takes a large amount of investments and a great
deal of time to successfully launch a new product after
discovery of a new compound. However, it may be
necessary to discontinue clinical development if the
effectiveness of a drug is not proven as initially expected,
or if safety issues arise. In addition, pharmaceuticals are
subject to legal restrictions in each country, so that
authorization from local regulatory authorities is a
prerequisite for a product launch in each country. It is
difficult to accurately foresee if and when approvals for
new products can be obtained.
The Astellas Group’s R&D activities are subject to these
inherent risks.
Sales-Related Risk
The pharmaceutical industry operates in a highly
competitive environment characterized by rapid
technological innovation. The Astellas Group faces fierce
competition from drug makers and generics
manufacturers based in Japan or overseas. The launch of
competitive products by rivals could impact the Astellas
Group’s business results significantly.
Intellectual Property (IP) Risk
The Astellas Group’s ethical pharmaceuticals business
benefits from the protection of many patents. Although
the Astellas Group manages IP rights properly and is
vigilant against third-party violation of such rights, the
adverse impact on the Astellas Group’s business results of
actual IP violations may still be substantial. The Astellas
Group’s business results are also subject to the outcome of
litigation undertaken by the Astellas Group to protect
patents where infringement has occurred.
93
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Consolidated Financial Statements
Consolidated Statement of Income
Astellas Pharma Inc. and Subsidiaries
For the year ended 31 March 2017
Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Research and development expenses
Amortisation of intangible assets
Share of losses of associates and joint ventures
Other income
Other expense
Operating profit
Finance income
Finance expense
Profit before tax
Income tax expense
Profit for the year
Profit attributable to:
Owners of the parent
Earnings per share
Basic
Diluted
(Millions of yen)
(Millions of U.S. dollars)
Note
6
2016
2017
2017
¥1,372,706
¥1,311,665
$11,711
(335,596)
1,037,110
(500,359)
(225,665)
(42,387)
(1,243)
1,689
(20,159)
248,986
14,411
(1,627)
261,770
(68,083)
(320,503)
991,162
(470,777)
(208,129)
(35,837)
(1,864)
9,594
(23,318)
260,830
22,916
(1,976)
281,769
(63,069)
(2,862)
8,850
(4,203)
(1,858)
(320)
(17)
86
(208)
2,329
205
(18)
2,516
(563)
¥ 193,687
¥ 218,701
$ 1,953
¥ 193,687
¥ 218,701
$ 1,953
(Yen)
(U.S. dollars)
¥ 89.75
¥ 103.69
89.62
103.55
$ 0.93
0.92
17
7
8
10
11
12
13
13
Consolidated Statement of Comprehensive Income
Astellas Pharma Inc. and Subsidiaries
For the year ended 31 March 2017
(Millions of yen)
(Millions of U.S. dollars)
Note
2016
2017
2017
¥193,687
¥218,701
$1,953
Profit for the year
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurements of defined benefit plans
Subtotal
Items that may be reclassified subsequently to profit or loss
Foreign currency translation adjustments
Fair value movements on available-for-sale financial assets
14
14
Subtotal
Other comprehensive income, net of tax
Total comprehensive income
Total comprehensive income attributable to:
Owners of the parent
(6,276)
(6,276)
(45,172)
(11,358)
(56,529)
(62,806)
¥130,881
2,962
2,962
(32,544)
(14,474)
(47,018)
(44,056)
¥174,644
26
26
(291)
(129)
(420)
(393)
$1,559
¥130,881
¥174,644
$1,559
94
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Consolidated Statement of Financial Position
Astellas Pharma Inc. and Subsidiaries
As of 31 March 2017
(Millions of yen)
(Millions of U.S. dollars)
Note
2016
2017
2017
Assets
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Trade and other receivables
Investments in associates and joint ventures
Deferred tax assets
Other financial assets
Other non-current assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Income tax receivable
Other financial assets
Other current assets
Cash and cash equivalents
Subtotal
Assets held for sale
Total current assets
15
16
17
22
18
19
20
21
22
19
20
23
24
¥ 200,955
¥ 191,115
153,121
336,261
24,103
2,435
80,733
89,424
14,769
175,350
387,419
22,263
2,988
90,349
61,597
13,154
$ 1,706
1,566
3,459
199
27
807
550
117
901,801
944,235
8,431
161,691
327,599
16,403
14,394
17,221
360,030
897,337
200
897,537
182,537
309,817
10,986
13,554
18,849
340,923
876,665
—
876,665
1,630
2,766
98
121
168
3,044
7,827
—
7,827
Total assets
¥1,799,338
¥1,820,901
$16,258
95
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Equity and liabilities
Equity
Share capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of the parent
Total equity
Liabilities
Non-current liabilities
Trade and other payables
Deferred tax liabilities
Retirement benefit liabilities
Provisions
Other financial liabilities
Other non-current liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Income tax payable
Provisions
Other financial liabilities
Other current liabilities
Total current liabilities
Total liabilities
25
25
25
25
32
18
28
29
30
31
32
29
30
31
(Millions of yen)
(Millions of U.S. dollars)
Note
2016
2017
2017
¥ 103,001
¥ 103,001
$ 920
176,903
(157,111)
973,054
163,363
1,259,209
1,259,209
177,091
(138,207)
1,013,923
116,002
1,271,810
1,271,810
149,235
1,332
1,599
—
39,797
7,083
722
77,569
126,769
181,559
19,312
89,858
1,505
121,126
413,359
540,129
440
25,343
36,614
4,921
28,389
53,528
182,826
10,900
96,589
2,992
106,548
399,856
549,091
Total equity and liabilities
¥1,799,338
¥1,820,901
1,581
(1,234)
9,053
1,036
11,355
11,355
4
226
327
44
253
478
1,632
97
862
27
951
3,570
4,903
$16,258
96
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Consolidated Statement of Changes in Equity
Astellas Pharma Inc. and Subsidiaries
For the year ended 31 March 2017
(Millions of yen)
Equity attributable to owners of the parent
Note
Share capital
Capital surplus
Treasury shares
Retained
earnings
Subscription
rights to shares
Other components of equity
Foreign currency
translation
adjustments
Fair value
movements on
available-for-sale
financial assets
Remeasurements
of defined
benefit plans
Total
Total
Total equity
¥103,001
¥176,822
¥ (86,997)
¥ 905,083
¥2,241
¥177,306
¥40,461
¥ —
¥220,007
¥1,317,916
¥1,317,916
As of 1 April 2015
Comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
Transactions with owners of the parent
Acquisition of treasury shares
Disposals of treasury shares
Cancellation of treasury shares
Dividends
Share-based payments
Transfers
Total transactions with owners
of the parent
As of 31 March 2016
Comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
Transactions with owners of the parent
Acquisition of treasury shares
Disposals of treasury shares
Cancellation of treasury shares
Dividends
Share-based payments
Transfers
Total transactions with owners
of the parent
25
25
25
26
27
25
25
25
26
27
103,001
176,903
(157,111)
973,054
2,126
132,134
29,103
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
81
—
81
—
—
—
(120,127)
436
49,577
—
—
—
193,687
—
193,687
—
(248)
(49,577)
(69,615)
—
(6,276)
—
—
—
—
(187)
—
—
73
—
(70,114)
(125,717)
(115)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(78)
—
—
266
—
188
—
—
—
218,701
—
218,701
(92,193)
877
—
(456)
110,219
(110,219)
—
—
—
(70,119)
—
2,962
—
—
—
—
(342)
—
—
—
—
18,903
(177,831)
(342)
—
(45,172)
(45,172)
—
(11,358)
(11,358)
—
(6,276)
(6,276)
—
193,687
193,687
(62,806)
(62,806)
(62,806)
(62,806)
130,881
130,881
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,276
6,276
—
—
—
(120,127)
(120,127)
(187)
—
—
73
6,276
1
—
1
—
(69,615)
(69,615)
154
—
154
—
6,161
(189,588)
(189,588)
163,363
1,259,209
1,259,209
—
218,701
218,701
(32,544)
(14,474)
(32,544)
(14,474)
2,962
2,962
(44,056)
(44,056)
(44,056)
(44,056)
174,644
174,644
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(92,193)
(92,193)
(342)
—
—
—
1
—
1
—
(70,119)
(70,119)
266
—
266
—
(2,962)
(2,962)
(2,962)
(3,304)
(162,044)
(162,044)
As of 31 March 2017
¥103,001
¥177,091
¥(138,207) ¥1,013,923
¥1,784
¥ 99,590
¥14,629
¥ —
¥116,002 ¥1,271,810 ¥1,271,810
(Millions of U.S. dollars)
Equity attributable to owners of the parent
Note
Share capital
Capital surplus
Treasury shares
Retained
earnings
Subscription
rights to shares
Other components of equity
Foreign currency
translation
adjustments
Fair value
movements on
available-for-sale
financial assets
Remeasurements
of defined
benefit plans
Total
Total
Total equity
As of 31 March 2016
Comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
Transactions with owners of the parent
Acquisition of treasury shares
Disposals of treasury shares
Cancellation of treasury shares
Dividends
Share-based payments
Transfers
Total transactions with owners
of the parent
25
25
25
26
27
$920
$1,579
$(1,403)
$8,688
$19
$1,180
$260
$ —
$1,459
$11,243
$11,243
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(1)
—
—
2
—
2
—
—
—
(823)
8
984
—
—
—
1,953
—
1,953
—
(4)
(984)
(626)
—
26
169
(1,588)
—
—
—
—
(3)
—
—
—
—
(3)
—
(291)
(291)
—
(129)
(129)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
26
26
—
—
—
—
—
(26)
(26)
—
(393)
(393)
—
(3)
—
—
—
(26)
(30)
1,953
(393)
1,559
1,953
(393)
1,559
(823)
(823)
0
—
0
—
(626)
(626)
2
—
2
—
(1,447)
(1,447)
As of 31 March 2017
$920
$1,581
$(1,234)
$9,053
$16
$ 889
$131
$ —
$1,036
$11,355
$11,355
97
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Consolidated Statement of Cash Flows
Astellas Pharma Inc. and Subsidiaries
For the year ended 31 March 2017
Cash flows from operating activities
Profit before tax
Depreciation and amortisation
Impairment losses and reversal of impairment losses
Finance income and expense
(Increase) decrease in inventories
(Increase) decrease in trade and other receivables
Increase (decrease) in trade and other payables
Other
Cash generated from operations
Income tax paid
Net cash flows from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Purchases of available-for-sale financial assets
Proceeds from sales of available-for-sale financial assets
Acquisition of subsidiaries, net of cash acquired
Interest and dividends received
Other
Net cash flows used in investing activities
Cash flows from financing activities
Acquisition of treasury shares
Dividends paid to owners of the parent
Other
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
(Millions of yen)
(Millions of U.S. dollars)
Note
2016
2017
2017
¥261,770
¥281,769
$2,516
69,188
9,310
(12,784)
(11,873)
(15,649)
(32,391)
136,578
404,149
(90,412)
313,737
(33,512)
1,753
(84,605)
(749)
16,747
(42,653)
2,797
(6,827)
(147,050)
(120,127)
(69,615)
(3,736)
(193,478)
(9,609)
(36,401)
396,430
¥360,030
63,791
16,340
(20,940)
(26,644)
5,057
15,651
(27,409)
307,616
(72,004)
235,612
(29,010)
1,262
(19,638)
(484)
28,642
(50,915)
1,618
(4,858)
(73,383)
(92,193)
(70,119)
(3,841)
(166,153)
(15,183)
(19,107)
360,030
¥340,923
37
25
26
23
23
570
146
(187)
(238)
45
140
(245)
2,747
(643)
2,104
(259)
11
(175)
(4)
256
(455)
14
(43)
(655)
(823)
(626)
(34)
(1,484)
(136)
(171)
3,215
$3,044
98
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Notes to Consolidated Financial Statements
Astellas Pharma Inc. and Subsidiaries
For the year ended 31 March 2017
■ 1. Reporting Entity
Astellas Pharma Inc. and its subsidiaries (collectively,
Company are publicly traded on the Tokyo Stock
the “Group”) are engaged in the manufacture and sales
Exchange (First Section).
of pharmaceutical products. The parent company of the
The Group’s consolidated financial statements for
Group, Astellas Pharma Inc. (the “Company”), is
the year ended 31 March 2017 were authorised for
incorporated in Japan, and the registered address of
issue on 19 June 2017 by Yoshihiko Hatanaka,
headquarters and principal business offices are
Representative Director, President and Chief Executive
available on the Company’s website
Officer, and Chikashi Takeda, Corporate Executive and
(https://www.astellas.com/en/). Also, shares of the
Chief Financial Officer.
■ 2. Basis of Preparation
(1) Compliance with IFRS
also presented in U.S. dollars by translating Japanese
The consolidated financial statements of the Group have
yen amounts at the exchange rate of ¥112 to U.S. $1,
been prepared in accordance with International
the approximate rate of exchange at the end of 31
Financial Reporting Standards (“IFRS”) issued by the
March 2017. Such translations should not be construed
International Accounting Standards Board.
as representations that the Japanese yen amounts
could be converted into U.S. dollars at the above or any
(2) Basis of measurement
other rate.
The Group’s consolidated financial statements have
been prepared on a historical cost basis, except for
financial instruments measured at fair value.
(4) New or amended IFRS standards and
interpretations not yet adopted
The following is a list of new or amended IFRS
(3) Presentation currency
standards and interpretations that the Group has not
The Group’s consolidated financial statements are
adopted among those issued by the date of the approval
presented in Japanese yen, which is also the
of the Group’s consolidated financial statements. Also,
Company’s functional currency, and figures are rounded
the effects on the Group due to the application of the
to the nearest million yen, except as otherwise
standards or interpretations listed below are still under
indicated.
consideration and cannot be estimated at this time.
For the convenience of readers outside Japan, the
accompanying consolidated financial statements are
Effective date
(fiscal years
The Group’s
application date
Summaries of new or amended IFRS
IFRSs
beginning on or after)
(fiscal year ending)
standards and interpretations
1 January 2018
31 March 2019
measurement of financial assets and financial
Amendments related to classification and
IFRS 9
Financial
Instruments
Revenue from
IFRS 15
Contracts with
1 January 2018
31 March 2019
Customers
IFRS 16
Leases
1 January 2019
31 March 2020
99
liabilities, impairment, and hedge accounting
Comprehensive framework for revenue
recognition
Amendments related to accounting treatment
for leases
■ 3. Significant Accounting Policies
The significant accounting policies of the Group set forth
interest in the joint venture using the equity method
below are applied continuously to all periods indicated in
in the same way as associates.
the consolidated financial statements.
(1) Basis of consolidation
(i) Subsidiaries
(2) Business combinations
Business combinations are accounted for using the
acquisition method.
Subsidiaries are entities controlled by the Group. The
The consideration transferred is measured at fair
Group controls an entity when the Group has power
value and calculated as the aggregate of the fair values
over the entity, is exposed to, or has rights, to variable
of the assets transferred, liabilities assumed, and the
returns from its involvement with the entity, and has the
equity interests issued by the Group. The consideration
ability to affect those returns through its power over the
transferred also includes any assets or liabilities
entity. Subsidiaries are fully consolidated from the date
resulting from a contingent consideration arrangement.
on which control is transferred to the Group, and they
The identifiable assets acquired, the liabilities and
are deconsolidated from the date on which the Group
contingent liabilities assumed that meet the recognition
loses control.
All intragroup assets and liabilities, transactions and
unrealised gains or losses arising from intragroup
transactions are eliminated on consolidation.
(ii) Associates
principles of IFRS 3 “Business Combinations” are
measured at their acquisition-date fair values, except:
Deferred tax assets or liabilities, liabilities (or assets,
if any) related to employee benefits, and liabilities
related to share-based payment transactions are
Associates are entities over which the Group has
recognised and measured in accordance with IAS 12
significant influence on their financial and operating
“Income Taxes”, IAS 19 “Employee Benefits”, and
policies but does not have control or joint control. If the
IFRS 2 “Share-based Payment”, respectively; and
Group owns between 20% and 50% of the voting power
Non-current assets and disposal groups classified as
of an entity, it is presumed that the Group has significant
held for sale are measured in accordance with IFRS
influence over the entity. The Group accounts for
5 “Non-current Assets Held for Sale and
investments in associates using the equity method.
(iii) Joint arrangements
A joint arrangement is an arrangement in which the
Group has joint control. Joint control is the contractually
agreed sharing of control of an arrangement, which
exists only when decisions about the activities that
significantly affect the returns of the arrangement
Discontinued Operations”.
The excess of the aggregate of the consideration
transferred and the amount recognised for non-
controlling interest in the acquiree over the acquisition-
date fair value of the identifiable net assets acquired is
recorded as goodwill. If the excess is negative, then a
gain from a bargain purchase is immediately recognised
require the unanimous consent of the parties sharing
in profit or loss.
control. Joint arrangements in which the Group has an
interest are classified and accounted for as follows:
Joint operation—when the Group has rights to the
assets and obligations for the liabilities relating to an
arrangement, it accounts for each of its assets,
liabilities, revenue and expenses, in relation to its
interest in the joint operation.
Joint venture—when the Group has rights only to the
net assets of the arrangement, it accounts for its
Acquisition-related costs incurred in connection with
business combinations, such as finder’s fees and
advisory fees, are expensed when incurred.
(3) Foreign currency translation
(i) Functional and presentation currency
The financial statements of an entity of the Group are
prepared using the functional currency of the entity. The
consolidated financial statements of the Group are
100
presented in Japanese yen, which is the functional
delivery of goods to customers. Sales discounts,
currency of the Company.
(ii) Transactions in foreign currencies
charge-backs and other rebates are recognised as
accounts payable, provisions or as deductions from
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing
accounts receivable.
(ii) Royalty income
at the dates of the transactions or an approximation of
Some of the Group’s revenues are generated from the
the rate.
agreements under which third parties have been
At the end of each reporting period, monetary assets
granted rights to produce or market products or rights to
and liabilities denominated in foreign currencies are
use technologies. Royalty income is recognised on an
translated into the functional currency using the
accrual basis in accordance with the substance of the
exchange rates at the closing date and exchange
relevant agreement. Revenue associated with milestone
differences arising from translation are recognised in
agreements is recognised upon achievement of the
profit or loss.
(iii) Foreign operations
milestones defined in the respective agreements.
Upfront payments and license fees received for
Assets and liabilities of foreign operations are translated
agreements where the rights or obligations still exist are
into Japanese yen using the exchange rate at the end of
initially recognised as deferred income and then
fiscal year. Income and expenses are translated into
recognised in income as earned over the period of the
Japanese yen using the average exchange rate for the
development collaboration or the manufacturing
period.
obligation.
Exchange differences arising on translating the
financial statements of foreign operations are
(5) Research and development expenses
recognised in other comprehensive income. On the
Expenditure on research and development of an internal
disposal of the interest in a foreign operation, the
project is fully expensed as “Research and development
cumulative amount of the exchange differences is
expenses” in the consolidated statement of income
reclassified to profit or loss.
when incurred.
(4) Sales
(i) Sale of goods
Internally generated development expenses are
recognised as an intangible asset only if the
capitalisation criteria under IAS 38 are satisfied.
Sales are measured at the fair value of the
Therefore, internal expenditure incurred for ongoing
consideration received or receivable, less discounts,
internal development projects is not capitalised until
charge-backs and other rebates, excluding sales taxes
marketing approval is obtained from the regulatory
and value added taxes. Also, the Group recognises the
authorities in a major market, which is considered the
sales amount of transactions in which the Group is
time at which the criteria of capitalisation under IAS 38
acting as an agent on a net basis.
are met.
Revenue from the sale of goods is recognised when
In addition to the Group’s internal research and
all of the following conditions have been satisfied,
development activities, the Group has entered into
namely, the significant risks and rewards of ownership
research and development collaboration agreements
of the goods have been transferred to the buyers, the
with some alliance partners. The expenses and income
Group retains neither continuing managerial
associated with the settlement of the expenditure
involvement nor effective control over the goods sold, it
incurred for the research and development collaboration
is probable that the economic benefits will flow to the
activities are accounted for as research and
Group, and the amount of revenue and costs associated
development expenses on an accrual basis in the same
with the transaction can be reliably measured.
way as research and development expenses incurred
Therefore, revenue is usually recognised at the time of
within the Group.
101
(6) Finance income and finance expense
difference and it is probable that the temporary
Finance income mainly comprises interest income,
difference will not reverse in the foreseeable future.
dividend income, and gain on sales of financial
Deferred tax assets are recognised to the extent that
instruments. Interest income is recognised using the
it is probable that taxable profits will be available against
effective interest method. Dividend income is recognised
which deductible temporary differences, unused tax
when the right to receive payment is established.
losses, and unused tax credits can be utilised.
Financial expenses mainly comprise interest
Deferred tax assets and deferred tax liabilities are
expense, fees, loss on sales of financial instruments,
measured at the tax rates that are expected to apply to
and impairment losses for financial assets.
the period when the asset is realised or the liability is
(7) Income tax
settled, based on tax rates and tax laws that have been
enacted or substantively enacted by the end of the fiscal
Income tax expense is comprised of current and
year.
deferred taxes, and recognised in profit or loss, except
Deferred tax assets and deferred tax liabilities are
for taxes related to business combinations and to items
offset if the Group has a legally enforceable right to
that are recognised in other comprehensive income or
offset current tax assets against current tax liabilities,
directly in equity.
and they are related to income taxes levied by the same
Current taxes are calculated at the amount expected
taxation authority on either the same taxable entity or
to be paid to or recovered from the taxation authority by
different taxable entities which intend to settle current
applying the statutory tax rate and tax laws enacted or
tax assets and current tax liabilities on a net basis.
substantially enacted at the end of the fiscal year.
Deferred tax assets and deferred tax liabilities are
(8) Earnings per share
recognised for temporary differences between the
Basic earnings per share are calculated by dividing
carrying amounts of certain assets or liabilities in the
profit for the year attributable to owners of the parent by
consolidated statement of financial position and their tax
the weighted-average number of ordinary shares
base. However, deferred tax assets and liabilities are
outstanding during the year, adjusting treasury shares.
not recognised for:
taxable temporary differences arising from the initial
recognition of goodwill.
For the purpose of calculating diluted earnings per
share, profit for the year attributable to owners of the
parent and the weighted average number of shares
taxable or deductible temporary differences arising
outstanding, adjusting treasury shares, is calculated for
from the initial recognition of assets and liabilities in
the effects of all dilutive potential ordinary shares.
a transaction other than a business combination that
affects neither accounting profit nor taxable profit
(9) Property, plant and equipment
(tax loss).
Property, plant and equipment is measured by using the
deductible temporary differences associated with
cost model and is stated at cost less accumulated
investments in subsidiaries, associates and interests
depreciation and accumulated impairment losses. The
in joint arrangements when it is not probable that the
cost of items of property, plant and equipment includes
temporary difference will reverse in the foreseeable
costs directly attributable to the acquisition and the initial
future or there will not be sufficient taxable profits
estimate of costs of dismantling and removing the items
against which the deductible temporary differences
and restoring the site on which they are located.
can be utilised.
Costs incurred after initial recognition are recognised
taxable temporary differences associated with
as an asset, as appropriate, only when it is probable that
investments in subsidiaries, associates, and interests
future economic benefits associated with the asset will
in joint arrangements when the Group is able to
flow to the Group and its cost can be reliably measured.
control the timing of the reversal of the temporary
Costs of day-to-day servicing for items of property, plant
102
and equipment, such as repairs and maintenance,
arrangement at the date of commencement of the lease.
expensed when incurred.
The substance of the arrangement is determined based
When an item of property, plant and equipment has
on the following factors:
a significant component, such component is accounted
(a) whether the fulfillment of the arrangement is
for as a separate item of property, plant and equipment.
dependent on the use of a specific asset or assets
Depreciation of an asset begins when it is available for
and,
use. The depreciable amount of items of property, plant
(b) whether the arrangement conveys a right to use the
and equipment is depreciated on a straight-line basis
asset.
over the estimated useful lives of each component. The
depreciable amount of an asset is determined by
(11) Goodwill
deducting its residual value from its cost.
Measurement of goodwill on initial recognition is
described in “(2) Business combinations”. After initial
The estimated useful lives of major classes of property,
recognition, goodwill is carried at cost less any
plant and equipment are as follows:
accumulated impairment losses.
Buildings and structures
Machinery and vehicles
Tools, furniture and fixtures
2 to 60 years
2 to 20 years
2 to 20 years
The useful lives, residual values, and depreciation
methods of property, plant and equipment are reviewed
at the end of fiscal year, and changed, if any.
(10) Leases
Leases are classified as finance leases whenever
substantially all the risks and rewards incidental to
Impairment of goodwill is described in “(13)
Impairment of property, plant and equipment, goodwill,
and other intangible assets”.
(12) Other intangible assets
Other intangible assets are identifiable non-monetary
assets without physical substance, other than goodwill,
including patents and technologies, marketing rights,
and in-process research and development (IPR&D)
acquired in a business combination or acquired
ownership of an asset are transferred to the Group. All
separately.
other leases are classified as operating leases.
Under finance lease transactions, leased assets and
lease obligations are initially recognised at the lower of
the fair value of the leased property or the present value
of the minimum lease payments, each determined at the
inception of the lease. Leased assets are depreciated
on a straight-line basis over the shorter of their
estimated useful lives or lease terms. Minimum lease
payments made under finance leases are allocated to
finance expense and the repayment amount of the lease
obligations. The finance expense is allocated to each
period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of
liabilities.
Under operating lease transactions, lease payments
are recognised as an expense on a straight-line basis
over the lease term.
Other intangible assets acquired separately are
measured at cost upon initial recognition, and those
acquired in a business combination are measured at fair
value at the acquisition date. After initial recognition, the
Group applies the cost model and other intangible
assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.
Other intangible assets are amortised over their
estimated useful lives (2-25 years) on a straight-line
basis beginning at the time when they are available for
use. Amortisation of other intangible assets acquired
through business combinations or through the in-
licensing of products or technologies is presented in the
consolidated statement of income under “Amortisation of
intangible assets”. The estimated useful life of other
intangible assets is the shorter of the period of legal
protection or its economic life, and it is also regularly
The Group determines whether an arrangement is,
reviewed.
or contains a lease, based on the substance of the
Among rights related to products or research and
103
development through the in-licensing of products or
The recoverable amount is the higher of fair value
technologies or acquired through business
less costs of disposal and value in use. In measuring the
combinations, those that are still in the research and
value in use, the estimated future cash flows are
development stage or have not yet obtained marketing
discounted to the present value using a discount rate
approval from the regulatory authorities are recognised
that reflects the time value of money and the risks
under “Other intangible assets” as IPR&D.
specific to the asset. The discount rate used for
Subsequent expenditure, including initial upfront and
calculating the recoverable amount is set at a rate
milestone payments to the third parties, on an acquired
appropriate to each geographical area of operations.
IPR&D is capitalised if, and only if, it is probable that the
If the recoverable amount of an asset or a cash-
expected future economic benefits that are attributable
generating unit is less than its carrying amount, the
to the asset will flow to the Group and the asset is
carrying amount of the asset or the cash-generating unit
identifiable.
An intangible asset recognised as IPR&D is not
amortised because it is not yet available for use, but
is reduced to its recoverable amount, and the reduction
is recognised in profit or loss as an impairment loss.
(ii) Impairment of goodwill
instead, it is tested for impairment whenever there is an
Goodwill is allocated to each of the cash-generating
indication of impairment or at least on an annual basis
units, or groups of cash-generating units, that is
irrespective of whether there is any indication.
expected to benefit from the synergies of the business
Once marketing approval from the regulatory
combination, and it is tested for impairment annually and
authorities is obtained and the asset is available for use,
whenever there is an indication that the cash-generating
IPR&D is transferred to “Patents and technologies” or
unit may be impaired. If, at the time of the impairment
“Marketing rights” and amortisation begins from that
test, the recoverable amount of a cash-generating unit is
time on a straight-line basis over its useful life.
less than its carrying amount, the carrying amount of the
cash-generating unit is reduced to its recoverable
(13) Impairment of property, plant and
amount, and the reduction is recognised in profit or loss
equipment, goodwill, and other intangible
assets
(i) Impairment of property, plant and equipment and
other intangible assets
as an impairment loss.
Impairment loss is allocated to reduce the carrying
amount of any goodwill allocated to the cash-generating
unit or group of cash-generating units and then to the
At the end of each quarter, the Group assesses whether
other assets on a pro rata basis of the carrying amount
there is any indication that its property, plant and
of each asset in the cash-generating unit or group of
equipment and other intangible assets may be impaired.
If there is an indication of impairment, the
cash-generating units.
(iii) Reversal of impairment loss
recoverable amount of the asset is estimated. Other
At the end of each quarter, the Group assesses whether
intangible assets not yet available for use or with
there is any indication that an impairment loss
indefinite useful lives are tested for impairment annually
recognised in prior years for other intangible assets may
irrespective of whether there is any indication of
no longer exist or may have decreased. If such
impairment.
indication exists, the recoverable amount of the asset or
When it is not possible to estimate the recoverable
the cash-generating unit is estimated. If the recoverable
amount of an individual asset, the Group estimates the
amount of the asset or the cash-generating unit is
recoverable amount of the cash-generating unit to which
greater than its carrying amount, a reversal of an
the asset belongs. A cash-generating unit is the smallest
impairment loss is recognised, to the extent the
identifiable group of assets that generates cash inflows
increased carrying amount does not exceed the lower of
that are largely independent of the cash inflows from
the recoverable amount or the carrying amount (net of
other assets or groups of assets.
depreciation or amortisation) that would have been
104
determined had no impairment loss been recognised in
investments are measured at amortised cost using the
prior years.
effective interest method, less any impairment loss.
Any impairment loss recognised for goodwill is not
Interest income using the effective interest method is
reversed in a subsequent period.
(14) Financial instruments
(i) Initial recognition
recognised in profit or loss.
(c) Loans and receivables
Non-derivative financial assets with fixed or
determinable payments not quoted in an active market
Financial assets and financial liabilities are recognised
are classified as loans and receivables.
on the trade date when the Group becomes a party to
Subsequent to initial recognition, loans and
the contractual provisions of the instrument.
receivables are measured at amortised cost using the
Financial assets and financial liabilities are
effective interest method, less any impairment loss.
measured at fair value at initial recognition. Transaction
Amortisation incurred under the effective interest
costs directly attributable to the acquisition of financial
method is recognised in profit or loss.
assets or issuance of financial liabilities, other than
(d) Available-for-sale financial assets
financial assets measured at fair value through profit or
Non-derivative financial assets designated as available-
loss (“financial assets at FVTPL”) and financial liabilities
for-sale financial assets or not classified as FVTPL,
measured at fair value through profit or loss (“financial
held-to-maturity investments or loans and receivables
liabilities at FVTPL”), are added to the fair value of the
are classified as available-for-sale financial assets.
financial assets or deducted from the fair value of
Subsequent to initial recognition, available-for-sale
financial liabilities on initial recognition.
financial assets are measured at fair value, and any gain
Transaction costs directly attributable to the
or loss resulting from changes in fair value is recognised
acquisition of financial assets at FVTPL and financial
in other comprehensive income. Dividends on available-
liabilities at FVTPL are recognised in profit or loss.
(ii) Non-derivative financial assets
for-sale financial assets are recognised in profit or loss.
When available-for-sale financial assets are
Non-derivative financial assets are classified into
derecognised or determined to be impaired, the
“financial assets at FVTPL”, “held-to-maturity
cumulative gain or loss that had been recognised in
investments”, “loans and receivables” and “available-for-
other comprehensive income is reclassified to profit or
sale financial assets”. The classification is determined
based on the nature and purpose of the financial assets
loss.
(iii) Impairment of financial assets other than FVTPL
at the time of initial recognition.
(a) Financial assets at FVTPL
Financial assets, other than those at FVTPL, are
assessed for any objective evidence of impairment at
The Group classifies financial assets as FVTPL when
the end of each quarter. Financial assets are impaired
the financial assets are either held for trading or
when there is objective evidence of impairment as a
designated as FVTPL at initial recognition.
result of one or more events that occurred after the
Financial assets at FVTPL are measured at fair
initial recognition of the financial assets and these
value, and any gain or loss resulting from changes in fair
events have adversely affected the estimated future
value, dividends, and interest income are recognised in
cash flows of the financial assets that can be reliably
profit or loss.
estimated.
(b) Held-to-maturity investments
Non-derivative financial assets with fixed or
determinable payments and fixed maturity dates that the
Group has the positive intent and ability to hold to
Objective evidence of impairment of financial assets
includes:
・significant financial difficulty of the issuer or obligor;
・breach of contract, such as a default or delinquency in
maturity are classified as held-to-maturity investments.
interest or principal payments;
Subsequent to initial recognition, held-to-maturity
105
・probability that the borrower will enter bankruptcy or
(v) Non-derivative financial liabilities
other financial reorganisation; or
Non-derivative financial liabilities are classified into
・disappearance of an active market for the financial
“Financial liabilities at FVTPL” and “Financial liabilities
assets.
measured at amortised cost”. The classification is
In the case of equity instruments classified as
determined based on the nature and purpose of the
available-for-sale, a significant or prolonged decline in
financial liabilities at the time of initial recognition.
the fair value of the equity instrument below its cost
(a) Financial liabilities at FVTPL
would be considered as objective evidence of
The Group classifies financial liabilities as FVTPL when
impairment.
the financial liabilities are designated as FVTPL at initial
The Group assesses the existence of objective
recognition.
evidence of impairment for loans and receivables and
Financial liabilities at FVTPL are measured at fair
held-to-maturity financial assets, individually for
value, and any gain or loss resulting from changes in fair
separately significant assets or collectively for assets
value and interest expense are recognised in profit or
with no individual significance. When there is objective
loss.
evidence of impairment on those financial assets, the
(b) Financial liabilities measured at amortised cost
difference between the asset’s carrying amount and the
Non-derivative financial liabilities not classified as
present value of estimated future cash flows discounted
FVTPL are classified as financial liabilities measured at
at the financial asset’s original effective interest rate is
amortised cost.
recognised in profit or loss as an impairment loss.
Subsequent to initial recognition, financial liabilities
The impairment loss for loans and receivables are
measured at amortised cost are measured at amortised
recognised through the allowance for doubtful accounts,
and the carrying amount of a loan and receivable is
cost using the effective interest method.
(vi) Derecognition of financial liabilities
written off against the allowance account when it is
The Group derecognises financial liabilities when the
subsequently considered uncollectible. When an event
obligations of the financial liabilities are extinguished or
occurring after the impairment was recognised causes
when the obligations are discharged, cancelled, or
the amount of the impairment loss to decrease, a
reversal of the impairment loss is recognised in profit or
expired.
(vii) Derivatives
loss.
The Group is engaged in derivative transactions and
When there is objective evidence that an available-
mainly uses forward foreign exchange contracts to
for-sale financial asset is impaired, the cumulative loss
manage its exposure to risks from changes in foreign
that had been recognised in other comprehensive
exchange rates.
income is transferred to profit or loss. Any subsequent
Derivatives are initially recognised at fair value of the
recovery in the fair value of impaired equity instruments
date when the derivative contracts are entered into and
classified as available-for-sale financial assets is
are subsequently measured at their fair values at the
recognised in other comprehensive income.
(iv) Derecognition of financial assets
end of each quarter.
Changes in the fair value of derivatives are
When the contractual rights with respect to the cash
recognised in profit or loss, except for the following. If
flows from a financial asset expire or the contractual
the hedging relationship qualifies for hedge accounting,
rights to receive the cash flows from a financial asset
the gain or loss on the hedging instrument of cash flow
have been transferred and substantially all the risks and
hedges or hedges of a net investment in a foreign
rewards of ownership of the financial asset are
operation that are determined to be effective hedges are
transferred, the Group derecognises the financial asset.
recognised in other comprehensive income. The
amounts that had been recognised in other
comprehensive income for cash flow hedges and
106
hedges of a net investment in a foreign operation shall
be reclassified from equity to profit or loss in the same
(18) Equity
(i) Ordinary shares
period or periods during which the hedged items affect
Proceeds from the issuance of ordinary shares by the
profit or loss and on the disposal or partial disposal of
Company are included in share capital and capital
the foreign operation, respectively.
surplus. Transaction costs of issuing ordinary shares
Financial assets and financial liabilities arising from
derivatives are classified as either financial assets at
(net of tax) are deducted from capital surplus.
(ii) Treasury shares
FVTPL or financial liabilities at FVTPL.
When the Company reacquires its own ordinary shares,
the amount of the consideration paid including
(15) Cash and cash equivalents
transaction costs is deducted from equity. When the
Cash and cash equivalents comprise cash on hand,
Company sells treasury shares, the difference between
demand deposits, and highly liquid short-term
the carrying amount and the consideration received from
investments with maturities of three months or less from
the sale is recognised in equity.
the date of acquisition which are subject to an
insignificant risk of changes in value.
(19) Share-based payment
(16) Inventories
The Group operates an equity-settled share-based
payment plan and a cash-settled share-based payment
Inventories are measured at the lower of cost and net
realisable value. The cost of inventories includes costs
plan as share-based payment plans.
(i) Equity-settled share-based payment plan
of purchase, costs of conversion and all other costs
Under the equity-settled share-based payment plan,
incurred in bringing the inventories to their present
services received are measured at the fair value of the
location and condition. Net realisable value is calculated
equity instruments at the grant date, and are recognised
as the estimated selling price in the ordinary course of
as expenses from the grant date over the vesting period,
business less the estimated costs of completion and
estimated costs necessary to sell. Cost of inventories is
with a corresponding increase in equity.
(ii) Cash-settled share-based payment plan
calculated mainly using the first-in, first-out (FIFO)
Under the cash-settled share-based payment plan,
method.
(17) Assets held for sale
services received are measured at the fair value of the
liabilities incurred and recognised as expenses over the
vesting period, with a corresponding increase in
Non-current assets or disposal groups are classified as
liabilities. Until the liabilities are settled, the fair value of
“Assets held for sale” if their carrying amounts will be
liabilities are remeasured at the end of each quarter and
recovered principally through a sale transaction rather
at the settlement date, with changes in fair value
than through continuing use. To be classified as assets
recognised in profit or loss.
held for sale, the asset must be available for immediate
sale in its present condition, and the sale must be highly
probable. Specifically, management of the Group must
(20) Employee benefits
(i) Retirement benefits
have a firm commitment to execute the plan to sell the
The Group operates defined benefit and defined
asset and the sale is expected to be completed within
contribution retirement plans for its employees.
one year from the date of classification, as a general
(a) Defined benefit plans
rule. Assets held for sale are measured at the lower of
Net defined benefit assets or liabilities are calculated as
their carrying amounts and fair values less costs to sell,
the present value of the defined benefit obligation less
and they are not depreciated or amortised while they are
the fair value of plan assets and they are recognised in
classified as held for sale.
107
the consolidated statement of financial position as
assets or liabilities. The defined benefit obligation is
calculated by using the projected unit credit method.
obligations can be made.
The present value of the defined benefit obligation is
calculated by the expected future payments using
(21) Provisions
discount rate. The discount rate is determined by
Provisions are recognised when the Group has present
reference to market yield on high-quality corporate
legal or constructive obligations as a result of past
bonds having maturity terms consistent with the
events, it is probable that outflows of resources
estimated term of the related pension obligations.
embodying economic benefits will be required to settle
Service cost and net interest expense (income) on
the obligations, and reliable estimates of the obligations
the net defined benefit liabilities (assets) are recognised
can be made.
in profit or loss.
When the effect of the time value of money is
Actuarial gains and losses, the return on plan
material, provisions are measured at the present value
assets, excluding amounts included in net interest, and
of the expenditures expected to be required to settle the
any change in the effect of the asset ceiling are
obligations.
recognised immediately in other comprehensive income
under “Remeasurements of defined benefit plans”, and
(22) Government grants
transferred from other components of equity to retained
Government grants are recognised and measured at fair
earnings immediately.
(b) Defined contribution plans
value, if there is reasonable assurance that the Group
will comply with the conditions attached to them and that
Contributions paid for defined contribution plans are
the grants will be received.
expensed in the period in which the employees provide
Government grants that are intended to compensate
the related service.
(ii) Short-term employee benefits
for specific costs are recognised as income in the period
in which the Group recognises the corresponding
Short-term employee benefits are expensed when the
expenses. Government grants related to assets are
related service is provided. Bonus accrual is recognised
recognised as deferred income and then recognised in
as a liability when the Group has present legal or
profit over the expected useful life of the relevant asset
constructive obligations resulting from past service
on a regular basis.
rendered by the employees and reliable estimates of the
■ 4. Significant Accounting Estimates, Judgments and Assumptions
The preparation of the consolidated financial statements
carrying amounts of assets and liabilities in the next
requires management of the Group to make estimates,
judgments and assumptions that affect the application of
fiscal year are as follows:
Impairment of property, plant and equipment,
accounting policies and the reported amounts of assets,
goodwill and other intangible assets (Notes 15, 16
liabilities, income, and expenses.
and 17)
Given their nature, actual results may differ from
Provisions (Note 29)
those estimates.
Retirement benefits (Note 28)
The estimates and underlying assumptions are
Recoverability of deferred tax assets (Note 18)
reviewed on an ongoing basis, and the effects resulting
Income tax expense (Note 12)
from revisions of accounting estimates are recognised in
Financial instruments measured at fair value which
the period in which the estimates are revised and in
have no market price in active markets (Notes 33
future periods affected by the revision.
and 37)
Estimates and underlying assumptions representing
a significant risk of causing a material adjustment to the
108
■ 5. Segment Information
The main activities of the Group are the manufacture and sale of pharmaceutical products, and there are no separate
operating segments. Therefore, the Group has a single reporting segment, “Pharmaceutical”.
Information about products and services
Sales by type of product and service are as follows:
XTANDI
Prograf
Vesicare
Other
Total
Information about geographical areas
Sales and non-current assets by geographical areas are as follows:
Sales by geographical areas
Japan
Americas
U.S.A. (included in Americas)
EMEA
Asia and Oceania
Total
(Millions of yen)
2016
2017
¥ 252,075
¥ 252,078
203,556
135,638
781,438
186,156
116,075
757,356
¥1,372,706
¥1,311,665
(Millions of yen)
2016
2017
¥ 489,969
¥ 464,082
452,697
429,518
334,572
95,467
412,625
388,539
343,401
91,558
¥1,372,706
¥1,311,665
(Note) Sales by geographical areas are categorised by country or areas based on the geographical location of customers.
Non-current assets by geographical areas (Property, plant and equipment, goodwill and other intangible assets)
Japan
Americas
U.S.A. (included in Americas)
EMEA
Asia and Oceania
Total
(Millions of yen)
2016
2017
¥370,894
¥356,907
281,063
280,831
34,505
3,874
253,277
252,943
139,544
4,155
¥690,336
¥753,883
(Note) Due to the completion of the purchase price allocation for the acquisition of Ocata Therapeutics, Inc. (The company name was changed to Astellas
Institute for Regenerative Medicine in May 2016.), the Group retrospectively revised the corresponding balances in the above non-current assets by
geographical areas table as of 31 March, 2016. For details, please refer to Note “37. Business Combinations”.
109
Information about major customers
External customer that accounts for 10% or more of consolidated sales of the Group is as follows:
McKesson Corporation
■ 6. Sales
The breakdown of sales is as follows:
Sales of pharmaceutical products
Royalty income
Other
Total sales
■ 7. Other Income
The breakdown of other income is as follows:
Net foreign exchange gains
Other
Total other income
Segment
2016
2017
Pharmaceutical
¥156,245
¥150,184
(Millions of yen)
(Millions of yen)
2016
2017
¥1,314,247
¥1,225,070
24,560
33,899
57,433
29,162
¥1,372,706
¥1,311,665
(Millions of yen)
2016
2017
¥ －
1,689
¥1,689
¥6,946
2,649
¥9,594
(Note) The amount of “Net foreign exchange gains” for the year ended 31 March 2017 includes foreign exchange losses resulting from forward foreign
exchange contracts (¥10,285 million).
110
■ 8. Other Expense
The breakdown of other expense is as follows:
Impairment losses for property, plant and equipment
Impairment losses for other intangible assets
Net foreign exchange losses
Other
Total other expense
(Millions of yen)
2016
2017
¥ 8,837
681
6,996
3,645
¥ 7,877
10,188
－
5,253
¥20,159
¥23,318
(Note) 1. The main item of “Impairment losses for property, plant and equipment” for the year ended 31 March 2016 was due to the closure of the Kashima
R&D Center (Osaka Prefecture).
2. “Impairment losses for property, plant and equipment” for the year ended 31 March 2017 mainly resulted from the recognition of impairment losses
for buildings and certain other assets held by a U.S. subsidiary in connection with the sale of shares of this subsidiary to another company.
3. “Impairment losses for other intangible assets” for the year ended 31 March 2017 were principally due to an impairment loss on patents due to
lower-than-expected profitability and to the discontinuation of development activities for projects.
4. The amount of “Net foreign exchange losses” for the year ended 31 March 2016 includes foreign exchange losses resulting from forward foreign
exchange contracts (¥9,585 million).
■ 9. Employee Benefit Expenses
The breakdown of employee benefit expenses is as follows:
Rewards and salaries
Bonuses
Social security and welfare expenses
Retirement benefit expenses—Defined contribution plan
Retirement benefit expenses—Defined benefit plan
Restructuring and termination benefits
Other employee benefit expenses
Total employee benefit expenses
(Millions of yen)
2016
2017
¥154,695
¥143,538
58,069
32,290
14,934
6,611
3,792
2,684
56,341
30,600
14,243
6,804
8,064
2,821
¥273,075
¥262,411
(Note) Employee benefit expenses are included in “Cost of sales”, “Selling, general and administrative expenses”, “Research and development expenses”
and “Other expense” in the consolidated statement of income.
111
■ 10. Finance Income
The breakdown of finance income is as follows:
Interest income
Cash and cash equivalents
Other
Dividend income
Available-for-sale financial assets
Gain on sales
Available-for-sale financial assets
Other
Other
Total finance income
■ 11. Finance Expense
The breakdown of finance expense is as follows:
Impairment losses
Available-for-sale financial assets
Other
Total finance expense
■ 12. Income Tax Expense
The breakdown of income tax expense recognised in profit or loss is as follows:
Current income tax expense
Deferred income tax expense
Income tax expense reported in the consolidated statement of income
(Millions of yen)
2016
2017
¥ 785
¥ 906
200
1,067
72
618
12,278
21,265
19
61
13
41
¥14,411
¥22,916
(Millions of yen)
2016
2017
¥ 370
1,257
¥1,627
¥ 642
1,334
¥1,976
(Millions of yen)
2016
2017
¥ 85,402
(17,319)
¥ 68,083
¥68,322
(5,253)
¥63,069
(Note) Deferred income tax expense increased by ¥1,627 million for the year ended 31 March 2016, due to the effect of changes in the tax rate in Japan.
112
Income tax recognised in other comprehensive income is as follows:
2016
Tax benefit
(expense) Net of tax
2017
Tax benefit
(expense) Net of tax
Before tax
Before tax
(Millions of yen)
Remeasurements of defined
benefit plans
¥ (9,714)
¥ 3,437
¥ (6,276)
¥ 4,211
¥(1,249)
¥ 2,962
Foreign currency translation
adjustments
Fair value movements on
(45,172)
－
(45,172)
(32,544)
－
(32,544)
available-for-sale financial assets
(17,933)
6,575
(11,358)
(20,931)
6,457
(14,474)
Total other comprehensive
income
¥(72,818)
¥10,012
¥(62,806)
¥(49,264)
¥ 5,208
¥(44,056)
Reconciliation of effective tax rate
The Company is subject mainly to corporate tax,
were 32.8% and 30.7%, respectively. Foreign
inhabitant tax, and enterprise tax on its income and the
subsidiaries are subject to income taxes on their income
effective statutory tax rates calculated based on those
in their respective countries of domicile.
taxes for the years ended 31 March 2016 and 2017
Effective statutory tax rate
Tax credit for research and development expenses
Non-deductible expenses
Difference in tax rates applied to foreign subsidiaries
Undistributed earnings of foreign subsidiaries
Effect of change in tax rate in Japan
Other
Actual tax rate
2016
2017
32.8%
(3.6)
2.5
(5.2)
0.9
0.6
(2.0)
26.0%
30.7%
(1.7)
2.6
(7.8)
0.3
－
(1.8)
22.4%
113
■ 13. Earnings per Share
The basis of calculation of basic earnings per share and diluted earnings per share is as follows:
Basis of calculating basic earnings per share
Profit attributable to owners of the parent
Profit not attributable to ordinary shareholders of the parent
Profit used to calculate basic earnings per share
(Millions of yen, except as otherwise indicated)
2016
2017
¥ 193,687
－
¥ 218,701
－
193,687
218,701
Weighted average number of shares during the year (Thousands of shares)
2,158,131
2,109,149
Basis of calculating diluted earnings per share
Profit used to calculate basic earnings per share
Adjustment
Profit used to calculate diluted earnings per share
¥ 193,687
－
¥ 218,701
－
193,687
218,701
Weighted average number of shares during the year (Thousands of shares)
2,158,131
2,109,149
Subscription rights to shares (Thousands of shares)
3,175
2,830
Weighted average number of diluted ordinary shares during the year
(Thousands of shares)
2,161,306
2,111,979
Earnings per share (attributable to owners of the parent):
Basic (Yen)
Diluted (Yen)
¥ 89.75
¥ 103.69
89.62
103.55
■ 14. Other Comprehensive Income
Reclassification adjustments of other comprehensive income are as follows:
Other comprehensive income that may be reclassified subsequently to profit or loss
Foreign currency translation adjustments
Amount arising during the year
Reclassification adjustment
Subtotal
Fair value movements on available-for-sale financial assets
Amount arising during the year
Reclassification adjustment
Subtotal
Other comprehensive income that may be reclassified subsequently to
profit or loss before tax effect
Tax effect
(Millions of yen)
2016
2017
¥(45,172)
－
¥(32,615)
71
(45,172)
(32,544)
(6,012)
(11,920)
(17,933)
(94)
(20,836)
(20,931)
(63,104)
(53,475)
6,575
6,457
Other comprehensive income that may be reclassified subsequently to profit or loss, net of tax
¥(56,529)
¥(47,018)
114
■ 15. Property, Plant and Equipment
Movement of cost, accumulated depreciation and impairment losses for property, plant and equipment
The movement of property, plant and equipment for the year ended 31 March 2016 is as follows:
Buildings
and
structures
Machinery
and
vehicles
Tools,
furniture
and fixtures
Land
Construction
in progress
Total
(Millions of yen)
Cost
Balance at 1 April 2015
¥195,798
¥ 150,128
¥ 82,560
Acquisitions
Business combinations
Disposals
Reclassification from
10,347
38
4,989
109
5,966
4
(1,038)
(2,928)
(7,767)
¥18,848
－
－
(704)
¥ 24,793
¥ 472,127
12,725
－
34,027
151
(114)
(12,550)
construction in progress
10,541
6,827
685
398
(18,451)
－
Reclassification to assets
held for sale
Other
(883)
(3,638)
(2,569)
(2,506)
Balance at 31 March 2016
211,164
154,051
Accumulated depreciation and
accumulated impairment losses
(1,527)
(687)
79,235
(331)
(188)
－
(829)
(5,310)
(7,849)
18,023
18,124
480,597
Balance at 1 April 2015
(80,771)
(120,435)
Depreciation
Impairment losses
(7,360)
(8,412)
(or reversal of impairment losses)
(7,174)
Disposals
Reclassification to assets
held for sale
Other
817
883
1,188
(1,240)
2,591
2,394
1,742
(67,688)
(5,180)
91
7,380
1,156
430
Balance at 31 March 2016
(92,416)
(123,360)
(63,811)
Carrying amounts
(306)
－
(305)
306
305
－
－
(58)
－
(269,258)
(20,952)
－
－
－
4
(8,629)
11,094
4,740
3,364
(54)
(279,642)
Balance at 1 April 2015
115,027
29,693
14,872
18,543
24,735
202,869
Balance at 31 March 2016
¥118,748
¥ 30,691
¥ 15,423
¥18,023
¥ 18,069
¥ 200,955
(Note) 1. The increase due to business combinations reflected the acquisition of Ocata Therapeutics, Inc. (The company name was changed to Astellas
Institute for Regenerative Medicine in May 2016.) For details on this business combination, please refer to Note “37. Business Combinations”.
2. “Other” mainly includes exchange differences.
115
The movement of property, plant and equipment for the year ended 31 March 2017 is as follows:
Buildings
and
structures
Machinery
and
vehicles
Tools,
furniture
and fixtures
Land
Construction
in progress
Total
(Millions of yen)
Cost
Balance at 1 April 2016
¥211,164
¥ 154,051
¥ 79,235
Acquisitions
Business combinations
Disposals
Loss of control of subsidiaries
Reclassification from
construction in progress
Other
2,599
－
(1,302)
(8,775)
3,228
(2,193)
2,712
258
(3,658)
(8,696)
12,481
(2,456)
4,591
14
(5,383)
(289)
1,083
(565)
¥18,023
－
－
(0)
(144)
－
(116)
¥ 18,124
¥ 480,597
14,001
－
(65)
(1,457)
23,903
272
(10,408)
(19,360)
(16,792)
－
(485)
(5,816)
Balance at 31 March 2017
204,722
154,692
78,687
17,762
13,325
469,188
Accumulated depreciation and
accumulated impairment losses
Balance at 1 April 2016
(92,416)
(123,360)
Depreciation
Impairment losses
(7,520)
(8,753)
(or reversal of impairment losses)
(4,375)
(2,030)
Disposals
Loss of control of subsidiaries
Other
1,228
8,249
927
3,062
8,448
1,894
(63,811)
(5,598)
(46)
5,297
283
449
Balance at 31 March 2017
(93,907)
(120,739)
(63,427)
Carrying amounts
－
－
(54)
－
(279,642)
(21,872)
(128)
(1,298)
(7,877)
－
128
－
－
52
1,298
2
－
9,639
18,407
3,272
(278,073)
Balance at 1 April 2016
118,748
30,691
15,423
18,023
18,069
200,955
Balance at 31 March 2017
¥110,815
¥ 33,953
¥ 15,260
¥17,762
¥ 13,325
¥ 191,115
(Note) 1. The increase due to business combinations reflected the acquisition of Ganymed Pharmaceuticals AG. For details on this business combination,
please refer to Note “37. Business Combinations”.
2. “Other” mainly includes exchange differences.
The Group recognised impairment losses (or reversal of
Impairment losses (or reversal of impairment losses)
impairment losses) of ¥8,629 million for the year ended
of ¥7,877 million for the year ended 31 March 2017
31 March 2016 and ¥7,877 million for the year ended 31
mainly resulted from the transfer of a U.S. subsidiary to
March 2017, and they are mainly included in “Other
another company. The recoverable amount of the
expense” in the consolidated statement of income.
assets, including buildings, is deemed to be ¥944
Impairment losses (or reversal of impairment losses)
million, calculated at fair value based on the price
of ¥8,629 million for the year ended 31 March 2016
agreed upon for the transfer.
mainly resulted from the closure of the Kashima R&D
Center (Osaka Prefecture) owned by the Company. The
assets, including buildings, are planned to be disposed
of, and the recoverable amount is therefore deemed to
be zero.
116
The carrying amounts of the assets held under finance leases included in “Property, plant and equipment” are as follows:
Buildings and
Machinery and
Tools, furniture and
structures
vehicles
fixtures
Total
(Millions of yen)
Balance at 1 April 2015
Balance at 31 March 2016
Balance at 31 March 2017
¥－
¥－
¥37
¥－
¥95
¥ 6
¥ 991
¥1,133
¥1,630
¥ 991
¥1,228
¥1,672
■ 16. Goodwill
The movement of cost and accumulated impairment losses for goodwill is as follows:
Balance at 1 April 2015
Business combinations
Exchange differences
Balance at 31 March 2016
Business combinations
Exchange differences
Balance at 31 March 2017
Accumulated
Cost
impairment losses Carrying amount
(Millions of yen)
¥136,337
26,955
(10,171)
153,121
23,313
(1,084)
¥175,350
¥－
－
－
－
－
－
¥－
¥136,337
26,955
(10,171)
153,121
23,313
(1,084)
¥175,350
(Note) 1. The increase due to business combinations in the year ended 31 March 2016 reflected the acquisition of Ocata Therapeutics, Inc. (The company
name was changed to the Astellas Institute for Regenerative Medicine in May 2016.) The movement in the year ended 31 March 2016 was
retrospectively revised due to the completion of the purchase price allocation in the year ended 31 March 2017. For details on this business
combination, please refer to Note “37. Business Combinations”.
2. The increase due to business combinations in the year ended 31 March 2017 reflected the acquisition of Ganymed Pharmaceuticals AG. For details
on this business combination, please refer to Note “37. Business Combinations”.
Goodwill recognised in the consolidated statement of
The Group uses a weighted average cost of capital
financial position mainly resulted from the acquisition of
(WACC) determined for each geographical area as a
OSI Pharmaceuticals, Inc. in 2010.
discount rate. The after-tax WACC used for the
The Group, in principle, regards the geographical
impairment test is 8.0% and the pre-tax WACC 12.7%.
business units, which are managed for internal reporting
Also, a growth rate of 2.0% is reflected in calculating
purposes, as cash-generating units.
the terminal value after the three-year business plan.
For the years ended 31 March 2016 and 2017, the
The growth rate reflects the status of the country and
majority of goodwill is mainly allocated to the Americas
the industry to which the cash-generating unit belongs.
cash-generating unit, and the carrying amounts of
The value in use sufficiently exceeds the carrying
goodwill were ¥153,121 million and ¥152,455 million,
amount of the cash-generating unit. Therefore, even if
respectively. For the impairment test, the value in use,
the key assumptions used in the calculation of the value
which is calculated based on the three-year business
in use fluctuate within a reasonable range, the Group
plan approved at the board of directors meeting, is used
assumes that the possibility that the value in use will be
as the recoverable amount.
lower than the carrying amount is remote.
117
■ 17. Other Intangible Assets
Movement of cost, accumulated amortisation and impairment losses for other intangible assets
The movement of other intangible assets for the year ended 31 March 2016 is as follows:
Patents and
Marketing
technologies
rights
IPR&D
Software
Other
Total
(Millions of yen)
Cost
Balance at 1 April 2015
¥ 315,401
¥ 88,125
¥ 98,693
¥ 36,128
¥ 396
¥ 538,743
Acquisitions
Business combinations
Disposals
Reclassification
Other
Balance at 31 March 2016
Accumulated amortisation and
accumulated impairment losses
31,848
－
－
5,926
(11,804)
341,371
15
－
(30,288)
－
(770)
39,742
14,321
－
(5,926)
(954)
9,123
－
(769)
－
(785)
57,081
145,876
43,697
2
－
(7)
－
(72)
319
80,730
14,321
(31,064)
－
(14,386)
588,344
Balance at 1 April 2015
(140,655)
(63,799)
(15,593)
(22,600)
(253)
(242,899)
Amortisation
Impairment losses
Disposals
Other
(32,775)
－
－
7,237
(9,612)
－
30,288
629
－
(680)
－
14
(5,825)
－
664
829
(25)
(1)
6
64
(48,236)
(681)
30,959
8,774
Balance at 31 March 2016
(166,192)
(42,493)
(16,258)
(26,931)
(208)
(252,083)
Carrying amounts
Balance at 1 April 2015
174,746
24,326
83,100
13,528
144
295,844
Balance at 31 March 2016
¥ 175,179
¥ 14,588
¥129,617
¥ 16,766
¥ 111
¥ 336,261
(Note) 1. The increase due to business combinations reflected the acquisition of Ocata Therapeutics, Inc. (The company name was changed to the Astellas
Institute for Regenerative Medicine in May 2016.) The table above was retrospectively revised due to the completion of the purchase price
allocation in the year ended 31 March 2017. For details on this business combination, please refer to Note “37. Business Combinations”.
2. “Other” mainly includes exchange differences.
118
The movement of other intangible assets for the year ended 31 March 2017 is as follows:
Patents and
Marketing
technologies
rights
IPR&D
Software
Other
Total
(Millions of yen)
Cost
Balance at 1 April 2016
¥ 341,371
¥ 57,081
¥145,876
¥ 43,697
¥ 319
¥ 588,344
Acquisitions
Business combinations
Disposals
Reclassification
Other
163
1
－
7,728
(770)
Balance at 31 March 2017
348,492
Accumulated amortisation and
accumulated impairment losses
99
－
(5,127)
－
(1,599)
50,454
10,416
86,020
－
(7,728)
(1,636)
7,400
11
(2,184)
－
(404)
1,550
－
(3)
－
(23)
19,628
86,033
(7,314)
－
(4,433)
232,949
48,520
1,843
682,258
Balance at 1 April 2016
(166,192)
(42,493)
(16,258)
(32,304)
(3,533)
－
(26,931)
(6,073)
(208)
(252,083)
(9)
(41,919)
Amortisation
Impairment losses
(or reversal of impairment losses)
Disposals
Other
(6,054)
－
(224)
1,725
3,402
1,459
(4,064)
－
8
(70)
2,140
829
－
3
10
(8,463)
5,545
2,082
Balance at 31 March 2017
(204,775)
(39,441)
(20,315)
(30,104)
(204)
(294,839)
Carrying amounts
Balance at 1 April 2016
175,179
14,588
129,617
16,766
111
336,261
Balance at 31 March 2017
¥ 143,717
¥ 11,013
¥212,634
¥ 18,416
¥1,639
¥ 387,419
(Note) 1. The increase due to business combinations mainly reflected the acquisition of Ganymed Pharmaceuticals AG. For details on this business
combination, please refer to Note “37. Business Combinations”.
2. “Other” mainly includes exchange differences.
Amortisation of other intangible assets related to the
Impairment losses (or reversal of impairment losses)
rights of product or research and development arising
for other intangible assets are recognised in the
from in-licensing agreements is recognised in the
consolidated statement of income under “Other
consolidated statement of income under “Amortisation of
expense” and “Other income.”
intangible assets”.
119
Impairment test and impairment losses for other intangible assets
For the intangible assets other than goodwill, the Group
For the year ended 31 March 2017, impairment
assesses the necessity of impairment by individual
losses (or reversal of impairment losses) recognised for
asset. Also, intangible assets not yet being amortised
other intangible assets were ¥8,463 million, and details
are tested for impairment annually whether or not there
of the main items are as follows:
is any indication of impairment. For the impairment test,
(1) The Company recognised an impairment loss of
the value in use is mainly used as the recoverable
¥6,054 million, deeming the recoverable amount as
amount. The discount rate is calculated based on the
zero, due to lower-than-expected profitability of
WACC, and the range of post-tax discount rate used for
patents for products sold in Japan. The recoverable
the calculation of the value in use is 6.0% to 9.0%, and
amount was the value in use, calculated based on
that of the pre-tax discount rate is 7.9% to 13.6%.
discounted future cash flows.
As a result of the impairment test, the Group
(2) The Company recognised an impairment loss of
recognised the following impairment losses for the years
¥4,000 million, deeming the recoverable amount as
ended 31 March 2016 and 2017.
zero, due to the exercise of its right to terminate its
For the year ended 31 March 2016, impairment
agreement with UMN Pharma Inc. and the
losses recognised for other intangible assets were ¥681
discontinuation of development activities with respect
million due to the discontinuation of development
to IPR&Ds for ASP7374 and ASP7373, cell culture
activities for IPR&Ds.
Significant intangible assets
based influenza vaccine programs that had been
licensed from UMN Pharma Inc.
Significant intangible assets recognised in the
acquired through the license agreement with
consolidated statement of financial position as of 31
Medivation, Inc., the rights related to the research and
March 2016 are mainly composed of the rights related to
development of YM311/roxadustat acquired through the
the research and development of enzalutamide
license agreement with FibroGen, Inc., and the rights
(XTANDI) acquired through the license agreement with
related to “Tarceva” resulting from the acquisition of OSI
Medivation, Inc., the rights related to “Tarceva” resulting
Pharmaceuticals, Inc. in 2010. The carrying amounts of
from the acquisition of OSI Pharmaceuticals, Inc. in
those intangible assets were ¥84,476 million, ¥67,231
2010 and the rights related to the research and
million, ¥51,656 million, and ¥44,698 million,
development of YM311/roxadustat acquired through the
respectively. The carrying amount of the rights related to
license agreement with FibroGen, Inc. The carrying
IMAB362 resulting from the acquisition of Ganymed
amounts of those intangible assets were ¥73,532
Pharmaceuticals AG reflects provisional fair value, as
million, ¥65,003 million and ¥50,565 million,
the allocation of the fair value of purchase consideration
respectively.
transferred had not been completed. For details, please
Significant intangible assets recognised in the
refer to Note “37. Business Combinations”.
consolidated statement of financial position as of 31
For intangible assets already starting amortisation,
March 2017 are mainly composed of the rights related to
the remaining amortisation period was 3 to 13 years in
IMAB362 resulting from the acquisition of Ganymed
the year ended 31 March 2016 and 2 to 12 years in the
Pharmaceuticals AG in 2016, the rights related to the
year ended 31 March 2017. The intangible assets not
research and development of enzalutamide (XTANDI)
yet being amortised are tested for impairment annually.
120
■ 18. Deferred Taxes
The breakdown and movement of deferred tax assets and deferred tax liabilities are as follows:
For the year ended 31 March 2016
Recognised in
As of
Recognised
other
1 April
in profit or
comprehensive
Business
(Millions of yen)
As of
31 March
2015
loss
income
combinations
Other
2016
Available-for-sale financial assets
¥(17,423)
¥ (207)
¥ 6,575
Retirement benefit assets and liabilities
Property, plant and equipment
Intangible assets
Accrued expenses
Inventories
Tax loss carry-forwards
Other
Total
6,993
1,324
(49,257)
29,059
49,272
3,554
27,641
77
1,042
4,608
(2,157)
3,321
(2,583)
13,217
3,437
－
－
－
－
－
－
¥ －
－
(12)
(4,577)
－
－
8,179
¥ (12)
¥(11,067)
(59)
152
10,448
2,506
1,687
(47,540)
(1,110)
(477)
(513)
25,792
52,116
8,637
39,841
90
(1,108)
¥ 51,162
¥17,319
¥10,012
¥ 3,679
¥(1,439)
¥ 80,733
(Note) The increase in deferred tax assets and deferred tax liabilities due to business combinations reflected the acquisition of Ocata Therapeutics, Inc. (The
company name was changed to Astellas Institute for Regenerative Medicine in May 2016.) The movement in the year ended 31 March 2016 was
retrospectively revised due to the completion of the purchase price allocation in the year ended 31 March 2017. For details on this business
combination, please refer to Note “37. Business Combinations”.
For the year ended 31 March 2017
Recognised in
As of
Recognised
other
1 April
in profit or
comprehensive
Business
(Millions of yen)
As of
31 March
2016
loss
income
combinations
Other
2017
Available-for-sale financial assets
¥(11,067)
¥ (263)
¥ 6,457
Retirement benefit assets and liabilities
Property, plant and equipment
Intangible assets
Accrued expenses
Inventories
Tax loss carry-forwards
Other
Total
10,448
2,506
(47,540)
25,792
52,116
8,637
39,841
315
(1,249)
(1,469)
2,881
(1,572)
3,843
(270)
1,788
－
－
－
－
－
－
¥ －
－
－
(25,806)
－
－
－
－
¥ 66
¥ (4,807)
(172)
(40)
9,343
996
1,199
(69,266)
(214)
(736)
(795)
310
24,007
55,223
7,572
41,939
¥80,733
¥ 5,253
¥ 5,208
¥(25,806)
¥ (382)
¥ 65,007
(Note) The increases in deferred tax assets and deferred tax liabilities due to business combinations reflected the acquisition of Ganymed Pharmaceuticals
AG. For details on this business combination, please refer to Note “37. Business Combinations”.
121
Deductible temporary differences, tax loss carry-forwards, and unused tax credits for which no deferred tax asset is
recognised are as follows:
Deductible temporary differences
Tax loss carry-forwards
Unused tax credits
Total
(Millions of yen)
2016
2017
¥33,600
6,330
1,877
¥41,808
¥31,527
27,036
2,182
¥60,745
The expiration date and amount of tax loss carry-forwards for which no deferred tax asset is recognised are as follows:
Year 1
Year 2
Year 3
Year 4
Year 5 or later
Total
■ 19. Other Financial Assets
The breakdown of other financial assets is as follows:
Other financial assets (non-current)
Financial assets at FVTPL
Loans and other financial assets
Allowance for doubtful accounts
Available-for-sale financial assets
Total other financial assets (non-current)
Other financial assets (current)
Financial assets at FVTPL
Loans and other financial assets
Total other financial assets (current)
Total other financial assets
(Millions of yen)
2016
2017
¥ 180
¥ 632
68
630
158
5,295
¥6,330
62
378
471
25,493
¥27,036
(Millions of yen)
2016
2017
¥ 8,092
11,528
(52)
69,856
89,424
290
14,104
14,394
¥103,818
¥10,762
10,421
(14)
40,428
61,597
－
13,554
13,554
¥75,151
122
■ 20. Other Assets
The breakdown of other assets is as follows:
Other non-current assets
Long-term prepaid expenses
Retirement benefit assets
Other
Total other non-current assets
Other current assets
Prepaid expenses
Other
Total other current assets
■ 21. Inventories
The breakdown of inventories is as follows:
Raw materials and supplies
Work in progress
Merchandise and finished goods
Total
(Millions of yen)
2016
2017
¥12,145
¥10,063
1,784
840
14,769
10,213
7,008
¥17,221
2,372
720
13,154
10,763
8,087
¥18,849
(Millions of yen)
2016
2017
¥ 28,165
¥ 36,225
14,239
119,287
15,389
130,922
¥161,691
¥182,537
The carrying amounts of inventories are measured at
The write-down of inventories recognised as an
the lower of cost and net realisable value.
expense for the years ended 31 March 2016 and 2017
The cost of inventories recognised as an expense in
amounted to ¥3,912 million and ¥3,414 million,
“Cost of sales” for the years ended 31 March 2016 and
respectively.
2017 amounted to ¥288,841 million and ¥274,048
million, respectively.
■ 22. Trade and Other Receivables
The breakdown of trade and other receivables is as follows:
Notes and accounts receivable
Other accounts receivable
Allowance for doubtful accounts
Total trade and other receivables
Non-current assets
Current assets
123
(Millions of yen)
2016
2017
¥313,099
¥297,094
41,423
(2,820)
351,702
24,103
44,792
(9,806)
332,080
22,263
¥327,599
¥309,817
■ 23. Cash and Cash Equivalents
The breakdown of cash and cash equivalents is as follows:
Cash and deposits
Short-term investments (cash equivalents)
Cash and cash equivalents in the consolidated statement of financial position
Cash and cash equivalents in the consolidated statement of cash flows
■ 24. Assets Held for Sale
The breakdown of assets held for sale is as follows:
Assets
Property, plant and equipment
Total
(Millions of yen)
2016
2017
¥346,879
¥331,801
13,151
360,030
¥360,030
9,122
340,923
¥340,923
(Millions of yen)
2016
2017
¥200
¥200
¥－
¥－
■ 25. Equity and Other Components of Equity
(1) Share capital and capital surplus
The movement of the number of issued shares and share capital is as follows:
Number of
Number of ordinary
authorised shares
issued shares
Share capital
Capital surplus
(Thousands of shares)
(Thousands of shares)
(Millions of yen)
(Millions of yen)
9,000,000
－
－
9,000,000
－
－
9,000,000
2,259,823
－
(38,000)
2,221,823
－
(68,000)
2,153,823
¥103,001
－
－
103,001
－
－
¥103,001
¥176,822
81
－
176,903
266
(78)
¥177,091
As of 1 April 2015
Increase
Decrease
As of 31 March 2016
Increase
Decrease
As of 31 March 2017
(Note) Decrease in the number of ordinary issued shares during the years ended 31 March 2016 and 2017 resulted from the cancellation of treasury shares.
124
(2) Treasury shares
The movement of treasury shares is as follows:
As of 1 April 2015
Increase
Decrease
As of 31 March 2016
Increase
Decrease
As of 31 March 2017
(3) Other components of equity
Subscription rights to shares
Number of shares
Amount
(Thousands of shares)
(Millions of yen)
66,681
68,445
(38,282)
96,844
60,513
(68,540)
88,817
¥ 86,997
120,127
(50,013)
157,111
92,193
(111,096)
¥ 138,207
The Company had adopted share option plans through the year ended 31 March 2015, and has issued subscription rights
to shares under the former Commercial Code and the Companies Act of Japan. Contract conditions and amounts are
described in Note “27. Share-based Payment”.
Foreign currency translation adjustments
This is a foreign currency translation difference that occurred when consolidating financial statements of foreign
subsidiaries prepared in a foreign currency.
Fair value movements on available-for-sale financial assets
This is a valuation difference between the fair value and acquisition cost of available-for-sale financial assets, which are
measured at fair values.
■ 26. Dividends
For the year ended 31 March 2016
(1) Dividends paid
Amount of
Dividends
dividends
per share
Resolution
Class of shares
(Millions of yen)
(Yen)
Record date
Effective date
Ordinary general meeting of
Ordinary
31 March
18 June
shareholders held on 17 June 2015
shares
¥35,090
¥16.00
2015
2015
Board of directors meeting
held on 30 October 2015
Ordinary
shares
34,532
16.00
2015
2015
30 September
1 December
(Note) The amount of dividends approved by resolution of the board of directors meeting on 30 October 2015 includes dividends of ¥7 million corresponding
to the Company’s shares held in the executive compensation BIP trust.
125
(2) Dividends whose record date is in the fiscal year ended 31 March 2016 but whose effective date is in the following
fiscal year are as follows:
Amount of
Dividends
dividends
per share
Resolution
Class of shares
(Millions of yen)
(Yen)
Record date
Effective date
Ordinary general meeting of
Ordinary
31 March
shareholders held on 20 June 2016
shares
¥34,007
¥16.00
2016
21 June
2016
(Note) The amount of dividends above includes dividends of ¥7 million corresponding to the Company’s shares held in the executive compensation BIP trust.
For the year ended 31 March 2017
(1) Dividends paid
Amount of
Dividends
dividends
per share
Resolution
Class of shares
(Millions of yen)
(Yen)
Record date
Effective date
Ordinary general meeting of
Ordinary
31 March
21 June
shareholders held on 20 June 2016
shares
¥34,007
¥16.00
2016
2016
Board of directors meeting
held on 28 October 2016
Ordinary
shares
36,134
17.00
2016
2016
30 September
1 December
(Note) 1.The amount of dividends approved by resolution of the board of directors meeting on 20 June 2016 includes dividends of ¥7 million corresponding to
the Company’s shares held in the executive compensation BIP trust.
2.The amount of dividends approved by resolution of the board of directors meeting on 28 October 2016 includes dividends of ¥15 million
corresponding to the Company’s shares held in the executive compensation BIP trust.
(2) Dividends whose record date is in the fiscal year ended 31 March 2017 but whose effective date is in the following
fiscal year are as follows:
Amount of
Dividends
dividends
per share
Resolution
Class of shares
(Millions of yen)
(Yen)
Record date
Effective date
Ordinary general meeting of
Ordinary
31 March
20 June
shareholders held on 19 June 2017
shares
¥35,120
¥17.00
2017
2017
(Note) The amount of dividends above includes dividends of ¥15 million corresponding to the Company’s shares held in the executive compensation BIP
trust.
126
■ 27. Share-based Payment
(1) Share option plans
(i) Outline of share option plans
The Company had adopted share option plans through
rights to shares to individuals approved at the
the year ended 31 March 2015, and has granted share
Company’s board of directors meeting.
options to directors and corporate executives of the
Holders of subscription rights to shares can exercise
Company. The purpose of share option plans is to
their share subscription rights only from the day
improve the sensitivity to the share price and the
following the date of resignation from their position as
Group’s financial results and also increase the value of
director or corporate executive of the Company.
the Group by motivating the members to whom share
Share options not exercised during the exercise
options are granted.
period defined in the allocation contract will be forfeited.
After obtaining approval at the meeting of
The Company accounts for those share option plans
shareholders, share options are granted as subscription
as equity-settled share-based payment transactions.
(ii) Expenses recognised in the consolidated statement of income
Total expenses recognised for share options granted
(Millions of yen)
2016
2017
¥73
¥－
(iii) Movement of the number of share options outstanding and their weighted average exercise price
2016
2017
Weighted average
Weighted average
exercise price
Number of
exercise price
Number of
(Yen)
shares
(Yen)
Outstanding, beginning of the period
Granted
Exercised
Forfeited or expired
Outstanding, end of the period
Options exercisable, end of the period
¥1
－
1
－
1
¥1
3,305,400
－
(282,500)
－
3,022,900
3,022,900
shares
3,022,900
－
(491,400)
－
2,531,500
2,531,500
¥1
－
1
－
1
¥1
(Note) 1. The number of share options is presented as the number of underlying shares.
2. The weighted average share prices of share options at the time of exercise during the years ended 31 March 2016 and 2017 are ¥1,675 and
¥1,525, respectively.
127
(iv) Expiration dates and exercise prices of share options outstanding at the end of the period
Granted on August 2005
Granted on February 2007
Granted on August 2007
Granted on September 2008
Granted on July 2009
Granted on July 2010
Granted on July 2011
Granted on July 2012
Granted on July 2013
Granted on July 2014
Total
Exercise price
Number of shares
Expiration
per share
date
(Yen)
2016
2017
24 June 2025
27 June 2026
26 June 2027
24 June 2028
23 June 2029
23 June 2030
20 June 2031
20 June 2032
19 June 2033
18 June 2034
¥1
1
1
1
1
1
1
1
1
1
−
46,000
123,500
169,500
173,000
348,500
489,000
557,500
557,500
331,500
226,900
46,000
56,500
121,500
129,000
263,500
396,000
485,000
498,000
318,500
217,500
3,022,900
2,531,500
(Note) There are vesting conditions in which share subscription rights are vested according to the service record over approximately one year from the grant
date of the share option to the vesting date.
(2) Performance-linked Stock Compensation Scheme
(i) Outline of the Performance-linked Stock Compensation Scheme
From the fiscal year ended 31 March 2016, the Group
based on the level of attainment of the medium-term
has introduced a Performance-linked Stock
management targets. The Performance-linked Stock
Compensation Scheme for directors and corporate
Compensation Scheme under which the Company’s
executives (excluding outside directors) for the purpose
shares are delivered from the BIP Trust is accounted for
of increasing their awareness of contributing to the
as an equity-settled share-based payment transaction.
sustainable growth in business results and corporate
In addition, the Company will provide cash benefits
value.
determined based on stock price of the Company to
The Scheme employs a framework referred to as the
corporate executives residing overseas based on the
executive compensation BIP (Board Incentive Plan) trust
level of attainment of the medium-term management
(hereinafter the “BIP Trust”) for directors and corporate
targets. The Performance-linked Stock Compensation
executives other than those residing overseas.
Scheme that provides cash benefits from the Company
The BIP Trust acquires the Company’s shares and
is accounted for as a cash-settled share-based payment
delivers those shares to directors and other executives
transaction.
(ii) Expenses recognised in the consolidated statement of income
Total expenses recognised for the Performance-linked
Stock Compensation Scheme
(Millions of yen)
2016
2017
¥88
¥290
128
(iii) Measurement approach for the fair value of the Company’s shares granted during the fiscal year based on the
Performance-linked Stock Compensation Scheme
The weighted average fair value of the Company’s shares granted during the period is calculated based on the following
assumptions.
Share price at the grant date
Vesting period (Note 1)
Expected annual divided (Note 2)
Discount rate (Note 3)
Weighted average fair value
(Note) 1. Refers to the number of years from the grant date until the shares are expected to be delivered.
2. Calculated based on the latest dividends paid.
3. Based on the yield on Japanese government bonds corresponding to the vesting period.
2016
2017
1,695.5 yen
1,603.5 yen
3 years
3 years
32 yen/share
0.0％
34 yen/share
(0.3)％
1,600 yen
1,501 yen
■ 28. Retirement Benefits
The Group, excluding a part of foreign subsidiaries,
benefit plans offered, the defined benefit plan adopted in
offers post-employment benefits such as defined benefit
Japan is a major one, accounting for approximately 80%
plans and defined contribution plans. Among the defined
of the total defined benefit obligations.
(i) Defined benefit plan adopted in Japan as post-employment benefit
The Company and its domestic subsidiaries offer
Contributions of the employer are made monthly and
corporate pension plans and retirement lump-sum
also determined as 4.0% of standard salary, which is
payment plans as defined benefit plans.
calculated based on the estimate of the points granted
The benefits of the defined benefit plan are
during a year to each participant. When the plan assets
determined based on the base compensation calculated
are lower than the minimum funding standard at the end
by accumulated points earned by the time of retirement
of the period, the employer will make additional
and promised rate of return based on the yield of 10
contributions.
year government bonds. Also, the option of receiving
Defined benefit plans are exposed to actuarial risks.
benefits in the form of a pension is available for plan
The Astellas Corporate Pension Fund assigns staff with
participants with 15 years or more enrollments.
professional knowledge and expertise about the
Defined benefit plans are administered by the
composition of plan asset to determine the asset mix
Astellas Corporate Pension Fund. Directors of the
ratio and manages risks by monitoring on a quarterly
pension fund are jointly liable for damages to the fund
basis.
due to their neglect of duties about management of the
funds.
(ii) Defined benefit plans of overseas subsidiaries as post-employment benefits
Among foreign subsidiaries, ones located in the United Kingdom, Germany, Ireland, and some other countries offer
defined benefit plans as post-employment benefits.
129
Assets and liabilities of defined benefit plans recognised in the consolidated statement of financial position are as follows:
As of 31 March 2016
Pension and lump-sum payment
Japan
Overseas
Total
Other
(Millions of yen)
Present value of defined benefit obligations
¥ 125,717
¥31,128
¥ 156,845
Fair value of plan assets
(111,799)
(9,820)
(121,620)
Net defined benefit liability (asset)
¥ 13,918
¥21,308
¥ 35,226
¥2,788
－
¥2,788
Amounts in the consolidated statement of financial
position
Assets (other non-current assets)
Liabilities (retirement benefit liabilities)
¥ (1,784)
15,702
¥ －
21,308
¥ (1,784)
37,010
¥ －
2,788
As of 31 March 2017
Pension and lump-sum payment
Japan
Overseas
Total
Other
(Millions of yen)
Present value of defined benefit obligations
¥ 123,118
¥ 30,816
¥ 153,934
¥2,608
Fair value of plan assets
(111,926)
(10,374)
(122,300)
－
Net defined benefit liability (asset)
¥ 11,192
¥ 20,442
¥ 31,634
¥2,608
Amounts in the consolidated statement of financial
position
Assets (other non-current assets)
¥ (2,372)
¥ －
¥ (2,372)
Liabilities (retirement benefit liabilities)
13,564
20,442
34,006
¥ －
2,608
130
The movement of the present value of defined benefit obligations is as follows:
Balance at 1 April 2015
Current service cost
Interest cost
Remeasurements of defined benefit obligations
−actuarial (gains)/losses arising from changes in
(Millions of yen)
Pension and lump-sum payment
Japan
Overseas
Total
Other
¥117,128
¥33,950
¥151,078
¥2,938
4,687
1,009
1,165
622
5,852
1,630
284
65
demographic assumptions
2,033
(180)
1,853
(3)
−actuarial (gains)/losses arising from changes in
financial assumptions
−other
Past service cost, and gains and losses arising from
settlements
Contributions to the plan by plan participants
Payments from the plan
Effect of changes in foreign exchange rates
Balance at 31 March 2016
Current service cost
Interest cost
Remeasurements of defined benefit obligations
−actuarial (gains)/losses arising from changes in
6,543
257
－
－
(5,940)
－
125,717
5,110
558
(2,760)
217
(12)
83
(1,041)
(916)
31,128
919
637
3,784
474
(12)
83
(6,981)
(916)
156,845
6,029
1,195
(173)
(31)
－
－
(87)
(204)
2,788
255
59
demographic assumptions
(5)
(360)
(365)
(6)
−actuarial (gains)/losses arising from changes in
financial assumptions
−other
Past service cost, and gains and losses arising from
settlements
Contributions to the plan by plan participants
Payments from the plan
Effect of changes in foreign exchange rates
(1,722)
(139)
－
－
(6,400)
－
850
271
(28)
72
(768)
(1,905)
(873)
131
(28)
72
(7,168)
(1,905)
1
(100)
－
－
(51)
(337)
Balance at 31 March 2017
¥123,118
¥30,816
¥153,934
¥2,608
131
The movement of fair value of plan assets is as follows:
Balance at 1 April 2015
Interest income
Remeasurements of the fair value of the plan
assets
(Millions of yen)
Pension and lump-sum payment
Japan
Overseas
Total
Other
¥116,457
¥10,044
¥126,501
1,002
206
1,208
¥－
－
−return on plan assets
(2,777)
(510)
(3,287)
−actuarial losses arising from changes in
financial assumptions
Contributions to the plan
−by employer
−by plan participants
Payments from the plan
Effect of changes in foreign exchange rates
Balance at 31 March 2016
Interest income
Remeasurements of the fair value of the plan
assets
(487)
(36)
(523)
2,758
－
(5,154)
－
111,799
494
719
83
(394)
(291)
9,820
211
3,477
83
(5,548)
(291)
121,620
706
−return on plan assets
2,080
525
2,605
−actuarial gains/(losses) arising from changes
in financial assumptions
Contributions to the plan
−by employer
−by plan participants
Payments from the plan
Effect of changes in foreign exchange rates
411
(17)
394
2,756
－
(5,614)
－
648
63
(198)
(679)
3,404
63
(5,812)
(679)
－
－
－
－
－
－
－
－
－
－
－
－
－
－
Balance at 31 March 2017
¥111,926
¥10,374
¥122,300
¥－
The Group expects to contribute ¥3,653 million to its defined benefit plans in the fiscal year ending 31 March 2018.
132
The breakdown of the fair value of plan assets is as follows:
Japan
Equity
Bonds
Cash and other investments
Total
Overseas
Equity
Bonds
Cash and other investments
Total
Total fair value of plan assets
(i) Japanese plan assets
(Millions of yen)
2016
2017
¥ 22,508
¥ 22,724
37,104
52,188
111,799
4,277
2,381
3,161
9,820
37,396
51,806
111,926
4,337
2,420
3,617
10,374
¥121,620
¥122,300
Equity comprises mainly investment trust funds and it is
not active, and they are categorised as Level 2 within
categorised as Level 2 within the fair value hierarchy.
the fair value hierarchy. Cash and other investments
The fair values of bonds are measured using quoted
include alternative investments.
prices for identical or similar assets in markets that are
(ii) Overseas plan assets
Equity is mainly composed of investments with quoted
fair values of bonds are measured using quoted prices
prices in active markets or with measured value using
for identical or similar assets in markets that are not
quoted prices for identical or similar assets in markets
active, and they are categorised as Level 2 within the
that are not active, and they are mainly categorised as
fair value hierarchy. Cash and other investments include
Level 1 or Level 2 within the fair value hierarchy. The
alternative investments.
Significant actuarial assumptions and sensitivity analysis for each significant actuarial assumption are as follows:
Discount rate (%)
Japan
Overseas
2016
2017
0.4%-0.5%
0.6%-0.8%
1.5%-3.4%
1.8%-2.5%
The impact of a 0.5% increase or decrease in the
other assumptions are held constant. In practice,
discount rate as significant actuarial assumption used
changes in some of the assumptions may occur in a
on the defined benefit obligations as of 31 March 2017
correlated manner. When calculating the sensitivity of
would result in a ¥11,236 million decrease and ¥12,715
the defined benefit obligations, the same method has
million increase, respectively, in the defined benefit
been applied as calculating the defined benefit
obligation.
obligations recognised in the consolidated statement of
The sensitivity analysis does not consider
financial position.
correlations between assumptions, assuming that all
133
The weighted-average duration of the defined benefit obligations is as follows:
Japan
Overseas
2016
2017
13.1 years
13.7 years
19.4 years
18.6 years
■ 29. Provisions
The movement of provisions for the year ended 31 March 2016 is as follows:
Trade-related
Asset retirement
provisions
obligations
Other
Total
¥ 79,107
¥1,946
¥ 9,188
¥ 90,241
(Millions of yen)
Balance at 1 April 2015
Increase during the year
Decrease due to intended use
Reversal during the year
Other
Balance at 31 March 2016
Non-current
Current
Total provisions
79,850
(60,614)
(10,889)
(3,922)
83,531
4,582
78,949
¥ 83,531
45
(35)
－
(8)
1,948
1,948
－
¥1,948
5,122
(1,512)
(653)
(683)
11,462
553
10,909
¥11,462
The movement of provisions for the year ended 31 March 2017 is as follows:
85,016
(62,162)
(11,542)
(4,612)
96,941
7,083
89,858
¥ 96,941
(Millions of yen)
Trade-related
Asset retirement
provisions
obligations
Other
Total
¥ 83,531
¥1,948
¥11,462
¥ 96,941
81,742
(71,488)
(2,429)
2,378
93,734
2,214
91,520
¥ 93,734
7
(7)
－
(11)
1,938
1,938
－
¥1,938
3,648
(9,282)
(634)
646
5,839
769
5,070
85,397
(80,777)
(3,063)
3,013
101,511
4,921
96,589
¥ 5,839
¥101,511
Balance at 1 April 2016
Increase during the year
Decrease due to intended use
Reversal during the year
Other
Balance at 31 March 2017
Non-current
Current
Total provisions
Details of provisions are as follows:
(i) Trade-related provisions
The Group recognises provisions for expenditures
adjustments to customers, based on the conditions of
expected to be incurred after the end of the period
contracts and past experience.
related to sales rebates, discounts, Medicare and
The outflow of economic benefits is expected within
Medicaid of the United States, and other price
one year from the end of the reporting period.
134
(ii) Asset retirement obligations
The Group recognises asset retirement obligations
The outflow of economic benefits is expected after
based on past performance in order to provide for the
one year from the end of the reporting period.
restoration of rented offices.
■ 30. Other Financial Liabilities
The breakdown of other financial liabilities is as follows:
Other financial liabilities (non-current)
Financial liabilities at FVTPL
Contingent consideration
Financial liabilities measured at amortised cost
Finance lease liabilities
Total other financial liabilities (non-current)
Other financial liabilities (current)
Financial liabilities at FVTPL
Forward foreign exchange contracts
Contingent consideration
Financial liabilities measured at amortised cost
Finance lease liabilities
Other
Total other financial liabilities (current)
Total other financial liabilities
The maturity and the present value of finance lease liabilities are as follows:
Minimum lease payments
Not later than one year
Later than one year and not later than five years
Later than five years
Present value of finance lease liabilities
(Millions of yen)
2016
2017
¥ －
¥27,253
722
¥ 722
1,136
¥28,389
¥ 351
－
505
649
¥1,505
¥2,227
¥ 626
1,196
499
671
¥ 2,992
¥31,381
(Millions of yen)
2016
2017
¥ 505
719
3
¥1,226
¥ 499
1,110
26
¥1,635
135
■ 31. Other Liabilities
The breakdown of other liabilities is as follows:
Other non-current liabilities
Other long-term employee benefits
Deferred income
Other
Total other non-current liabilities
Other current liabilities
Accrued bonuses
Accrued paid absences
Other accrued expenses
Deferred income
Other
Total other current liabilities
(Millions of yen)
2016
2017
¥15,316
61,689
564
¥77,569
¥17,727
34,153
1,648
¥53,528
¥30,199
¥30,665
10,517
46,804
28,779
4,827
11,792
43,493
16,443
4,156
¥121,126
¥106,548
(Note) Deferred income under other non-current liabilities and deferred income under other current liabilities include deferred income of ¥57,787 million and
¥28,411 million, respectively, in the year ended 31 March 2016, and ¥30,593 million and ¥14,877 million, respectively, in the year ended 31 March
2017, in connection with the transfer of the global dermatology business to LEO Pharma A/S.
■ 32. Trade and Other Payables
The breakdown of trade and other payables is as follows:
Accounts payable-trade
Other payables
Total trade and other payables
Non-current
Current
■ 33. Financial Instruments
(1) Capital management
(Millions of yen)
2016
2017
¥110,852
¥115,188
72,305
¥183,157
¥ 1,599
181,559
68,078
¥183,266
¥ 440
182,826
The Group’s capital management principle is to maintain
The Group monitors financial indicators in order to
an optimal capital structure by improving capital
maintain an optimal capital structure. Credit ratings are
efficiency and ensuring sound and flexible financial
monitored for financial soundness and flexibility, and so
conditions in order to achieve sustained improvement in
is return on equity attributable to owners of the parent
the enterprise value, which will lead to improved return
(ROE) for capital efficiency.
to shareholders.
The Group is not subject to material capital
regulation.
136
(2) Classification of financial assets and financial liabilities
The breakdown of financial assets and financial liabilities is as follows:
Financial assets
Financial assets at FVTPL
Forward foreign exchange contracts
Other
Loans and receivables
Trade and other receivables
Loans and other financial assets
Available-for-sale financial assets
Cash and cash equivalents
Total financial assets
Financial liabilities
Financial liabilities at FVTPL
Forward foreign exchange contracts
Contingent consideration
Financial liabilities measured at amortised cost
Trade and other payables
Other
Total financial liabilities
(Millions of yen)
2016
2017
¥ 290
8,092
351,702
25,579
69,856
360,030
¥815,549
¥ －
10,762
332,080
23,961
40,428
340,923
¥748,153
¥ 351
－
¥ 626
28,450
183,157
1,875
183,266
2,306
¥185,384
¥214,647
(Note) 1. Financial assets at FVTPL, loans and other financial assets, and available-for-sale financial assets are included in “Other financial assets” in the
consolidated statement of financial position.
2. Financial liabilities at FVTPL and financial liabilities at amortised cost are included in “Other financial liabilities” in the consolidated statement of
financial position.
137
(3) Financial risk management policy
The Group is exposed to financial risks such as
The Group limits the use of derivatives to
credit risks, liquidity risks, and foreign exchange risks in
transactions for the purpose of hedging financial risks
operating businesses, and it manages risks based on its
and does not use derivatives for speculation purposes.
policy to mitigate them.
(i) Credit risk
(a) Credit risk management
(c) Maximum exposure to credit risk
Receivables, such as trade receivables, resulting from
Other than guaranteed obligations, the Group’s
the business activities of the Group are exposed to the
maximum exposure to credit risks without taking into
customer’s credit risk. This risk is managed by grasping
account any collateral held or other credit
the financial condition of the customer and monitoring
enhancements is the carrying amount of financial
the trade receivables balance. Also, the Group reviews
instruments less impairment losses in the consolidated
collectability of trade receivables depending on the
statement of financial position. The Group’s maximum
credit conditions of customers and recognises an
exposure to credit risks of guaranteed obligations as of
allowance for doubtful accounts as necessary.
31 March 2016 and 2017 were ¥1,379 million and ¥444
Securities held by the Group are exposed to the
million, respectively.
issuer’s credit risk, and deposits are exposed to the
credit risk of banks. Also, derivative transactions that the
(d) Collateral
Group conducts in order to hedge financial risks are
The Group has securities and deposits received as
exposed to the credit risk of the financial institutions
collateral for certain trade receivables and other
which are counterparties of those transactions. In regard
receivables. The carrying amount of securities held as
to securities transactions and deposit transactions in
collateral is ¥1,088 million at 31 March 2017 (¥1,478
fund management, the Group only deals with banks and
million at 31 March 2016), and the carrying amount of
issuers with certain credit ratings and manages
deposits received is ¥72 million at 31 March 2017 (¥85
investments within the defined period and credit limit, in
million at 31 March 2016).
accordance with Global Cash Investment Policy. In
addition, regarding derivative transactions, the Group
only deals with financial institutions with certain credit
ratings in accordance with Astellas Global Treasury
Policy.
(b) Concentrations of credit risk
In Japan, like other pharmaceutical companies, the
Group sells its products through a small number of
wholesalers. Sales to the four largest wholesalers
amounted to approximately 75% of the Group’s sales in
Japan, and the amount of trade receivables due from
those four wholesalers are ¥121,505 million at 31 March
2016 and ¥106,464 million at 31 March 2017.
138
The analysis of aging of financial assets that are past due but not impaired is as follows:
Past due but not impaired
Neither
past due
nor
impaired
Within
three
months
Between
three
months and
six months
Between
six months
and one
year
Allowance
for
doubtful
accounts
Over
one year
Total
(Millions of yen)
Balance at 31 March 2016
Trade and other
receivables
¥331,749
¥17,740
¥2,080
¥1,889
¥934
¥(2,689)
¥351,702
Loans and other
financial assets
Total
Balance at 31 March 2017
Trade and other
25,572
1
－
6
－
－
25,579
¥357,321
¥17,740
¥2,080
¥1,895
¥934
¥(2,689)
¥377,281
receivables
¥296,263
¥12,563
¥1,187
¥1,076
¥858
¥(1,250)
¥310,697
Loans and other
financial assets
Total
23,955
1
－
－
6
－
23,961
¥320,218
¥12,564
¥1,187
¥1,076
¥864
¥(1,250)
¥334,658
Financial assets that are individually determined to be impaired are as follows:
Trade and other receivables (gross)
Allowance for doubtful accounts
Trade and other receivables (net)
Loans and other financial assets (gross)
Allowance for doubtful accounts
Loans and other financial assets (net)
The movement of the allowance for doubtful accounts is as follows:
Balance at the beginning of the year
Increase during the year
Decrease due to intended use
Reversal during the year
Other
Balance at the end of the year
139
(Millions of yen)
2016
2017
¥ 132
(132)
¥ －
¥ 52
(52)
¥ －
¥29,939
(8,556)
¥21,383
¥ 14
(14)
¥ －
(Millions of yen)
2016
2017
¥2,509
477
(7)
(33)
(74)
¥2,873
¥2,873
9,704
(229)
(2,351)
(176)
¥9,820
(ii) Liquidity risk
Liquidity risk management
The Group is exposed to liquidity risk that the Group
of financial obligations and respond flexibly to strategic
might have difficulty settling financial obligations.
investment opportunities. Also, the balance is reported
However, the Group is maintaining the liquidity on hand
monthly to the Chief Financial Officer (CFO).
that enables the Group to meet the assumed repayment
Financial liabilities by maturity date are as follows:
As of 31 March 2016
Between
Between
Between
(Millions of yen)
Carrying
Contractual
Within six
six months
one year and
two years
Over
amount
cash flows
months
and one year
two years
and five years
five years
Financial liabilities at FVTPL
Forward foreign exchange
contracts
Subtotal
¥ 351
¥ 351
¥ －
¥ 351
351
351
－
351
¥ －
－
¥ －
－
Financial liabilities measured
at amortised cost
Trade and other payables
183,157
183,157
181,107
¥－
－
－
3
3
1,875
1,875
911
185,033
185,033
182,018
452
242
694
112
308
420
1,486
411
1,897
¥185,384
¥185,384
¥182,018
¥1,045
¥420
¥1,897
¥ 3
Between
Between
Between
(Millions of yen)
Carrying
Contractual
Within six
six months
one year and
two years
Over
amount
cash flows
months
and one year
two years
and five years
five years
Other
Subtotal
Total
As of 31 March 2017
Financial liabilities at FVTPL
Forward foreign exchange
contracts
Subtotal
¥ 626
¥ 626
¥ －
¥ 626
626
626
－
626
¥ －
－
¥ －
－
Financial liabilities measured
at amortised cost
Trade and other payables
183,266
183,266
181,507
Other
Subtotal
Total
2,306
2,306
927
185,571
185,571
182,433
1,319
245
1,564
313
405
718
127
703
830
¥186,197
¥186,197
¥182,433
¥2,190
¥718
¥830
¥－
－
－
26
26
¥26
140
(iii) Foreign exchange risk
Foreign exchange risk management
currencies. Also, the balance of derivative transactions
The Group operates globally and the Group’s business
is reported monthly the Chief Financial Officer (CFO).
results and financial position are exposed to foreign
exchange risks.
Foreign exchange sensitivity analysis
The Group’s long-term basic policy is to mitigate the
The financial impact on profit before tax for the years
foreign exchange risks by controlling the amount of the
ended 31 March 2016 and 2017 in the case of a 10%
Group’s net assets denominated in foreign currencies to
appreciation of Japanese yen, which is the Company’s
the level corresponding to the business scale of each
functional currency, against the U.S. dollar and euro is
area. In the short term, the Group uses derivatives such
as follows.
as forward foreign exchange contracts to reduce the
Also, it is based on the assumption that currencies
impact of exchange rate fluctuations arising from import
other than the ones used for the calculation do not
and export transactions denominated in foreign
fluctuate and other change factors are held constant.
Profit before tax
U.S. dollar
Euro
(Millions of yen)
2016
2017
¥ (190)
(7,912)
¥ (34)
(745)
(Note) The above negative amounts represent the negative impact on profit before tax in the event of a 10% appreciation in Japanese yen.
(4) Fair values of financial instruments
(i) Fair value calculation of financial instruments
Financial assets at FVTPL
Financial liabilities at FVTPL
Financial assets at FVTPL comprise mainly debt
Financial liabilities at FVTPL comprise contingent
securities and forward foreign exchange contracts. The
consideration for business combinations and forward
fair value of those financial instruments is measured
foreign exchange contracts.
based on prices provided by counterparty financial
The fair value of contingent consideration for
institutions.
business combinations is calculated based on the
estimated success probability of development activities
Loans and receivables
and the time value of money.
The carrying amount approximates fair value due to the
The fair value of forward foreign exchange contracts
short period of settlement terms.
is measured based on prices provided by counterparty
financial institutions.
Available-for-sale financial assets
The fair value of marketable securities is based on
Financial liabilities measured at amortised cost
quoted market prices at the end of the period. The fair
Financial liabilities measured at amortised cost comprise
value of unquoted equity shares is measured mainly
trade and other payables and other financial liabilities.
based on the discounted cash flows.
The carrying amount approximates fair value due to the
short period of settlement terms.
Cash and cash equivalents
The carrying amount approximates fair value due to the
short maturities of the instruments.
141
(ii) Financial instruments measured at fair value on a recurring basis
Fair value hierarchy
The levels of the fair value hierarchy are as follows:
− Level 1: Fair value measured using quoted prices
− Level 3: Fair value measured using significant
unobservable inputs for the assets or liabilities.
(unadjusted) in active markets for identical assets
or liabilities;
The level of the fair value hierarchy is determined
− Level 2: Fair value measured using inputs other
based on the lowest level of significant input used for
than quoted prices included within Level 1 that are
the measurement of fair value.
observable for the assets or liabilities, either directly
The Group accounts for transfers between levels of
or indirectly; and
the fair value hierarchy as if they occurred at the end of
each quarter.
The breakdown of financial assets and liabilities measured at fair value on a recurring basis, including their levels in the
fair value hierarchy, is as follows:
As of 31 March 2016
Financial assets
Financial assets at FVTPL
Forward foreign exchange contracts
Other
Subtotal
Available-for-sale financial assets
Quoted equity shares
Unquoted equity shares
Other equity securities
Subtotal
Total financial assets
Financial liabilities
Financial liabilities at FVTPL
Forward foreign exchange contracts
Subtotal
Total financial liabilities
Level 1
Level 2
Level 3
Total
(Millions of yen)
¥ －
－
－
55,995
－
－
55,995
55,995
－
－
¥ 290
6,087
6,377
－
－
－
－
6,377
351
351
¥ －
¥ 290
2,005
2,005
－
13,861
0
13,861
15,866
8,092
8,382
55,995
13,861
0
69,856
78,238
－
－
351
351
¥ －
¥ 351
¥ －
¥ 351
(Note) Financial assets at FVTPL and available-for-sale financial assets, and financial liabilities at FVTPL are included in “Other financial assets” and “Other
financial liabilities” in the consolidated statement of financial position, respectively.
142
As of 31 March 2017
Financial assets
Financial assets at FVTPL
Other
Subtotal
Available-for-sale financial assets
Quoted equity shares
Unquoted equity shares
Other equity securities
Subtotal
Total financial assets
Financial liabilities
Financial liabilities at FVTPL
Forward foreign exchange contracts
Subtotal
Total financial liabilities
Level 1
Level 2
Level 3
Total
(Millions of yen)
¥ －
－
26,170
－
－
26,170
26,170
－
－
¥7,864
7,864
¥ 2,897
2,897
¥10,762
10,762
－
－
－
－
7,864
626
626
－
14,258
0
14,258
17,156
26,170
14,258
0
40,428
51,190
－
－
626
626
¥ －
¥ 626
¥ －
¥ 626
(Note) 1.Financial assets at FVTPL and available-for-sale financial assets, and financial liabilities at FVTPL are included in “Other financial assets” and
“Other financial liabilities” in the consolidated statement of financial position, respectively.
2. The above amounts do not include the contingent consideration for business combinations. For details on the contingent consideration, please refer
to Note “37. Business Combinations”.
143
The movement of fair value of financial assets categorised within Level 3 of the fair value hierarchy is as follows:
For the year ended 31 March 2016
Balance at 1 April 2015
Realised or unrealised gains (losses)
Recognised in profit or loss (Note 1)
Recognised in other comprehensive income
Purchases, issues, sales, and settlements
Purchases
Sales
Transfers to Investments in associates and joint ventures
Transfers to/from Level 3 (Note 2)
Other
Balance at 31 March 2016
Gains or losses recognised during the year in profit or loss
attributable to the change in unrealised gains or losses relating
(Millions of yen)
Financial
assets
at FVTPL
Available-for-
sale financial
assets
Total
¥ 750
¥16,121
¥16,871
(153)
－
1,408
(1)
－
－
－
240
(1,024)
744
(664)
(576)
(657)
(322)
87
(1,024)
2,152
(664)
(576)
(657)
(322)
¥2,005
¥13,861
¥15,866
to those assets held at the end of the period (Note 1)
¥(151)
¥ －
¥ (151)
(Note) 1. This is included in “Finance income” and “Finance expense” of the consolidated statement of income.
2. These financial assets were transferred from Level 3, since a significant input that affects measurement of fair value became observable.
For the year ended 31 March 2017
Balance at 1 April 2016
Realised or unrealised gains (losses)
Recognised in profit or loss (Note)
Recognised in other comprehensive income
Purchases, issues, sales, and settlements
Purchases
Sales
Other
(Millions of yen)
Financial
assets
at FVTPL
Available-for-
sale financial
assets
Total
¥2,005
¥13,861
¥15,866
(60)
－
952
－
1
(150)
280
482
(10)
(204)
(211)
280
1,434
(10)
(203)
Balance at 31 March 2017
¥2,897
¥14,258
¥17,156
Gains or losses recognised during the year in profit or loss
attributable to the change in unrealised gains or losses relating
to those assets held at the end of the period (Note)
¥ (60)
¥ (135)
¥ (196)
(Note) This is included in “Finance income” and “Finance expense” of the consolidated statement of income.
144
The financial assets categorised within Level 3 are
The fair value of unquoted equity shares is
composed mainly of unquoted equity shares.
measured by relevant departments of the Company and
The fair value of significant unquoted equity shares
each Group company in accordance with the Group
is measured using discounted cash flows. The fair value
accounting policy every quarter. The results with
of unquoted equity shares is categorised within Level 3
evidences of changes in fair value are reported to a
because unobservable inputs such as estimates of
superior and, if necessary, to the Executive Committee
future net operating profit after tax and WACC are used
as well.
for the measurement. The WACC used for the
In regards to financial instruments categorised within
measurement of fair value depends on region or
Level 3, there would be no significant change in fair
industry. In the years ended 31 March 2016 and 2017,
value when one or more of the unobservable inputs is
the WACC used for measurement was 8.0%. Generally,
changed to reflect reasonably possible alternative
the fair value would decrease if the WACC capital were
assumptions.
higher.
■ 34. Operating Leases
Future minimum lease payments under non-cancellable operating leases are as follows:
Not later than one year
Later than one year and not later than five years
Later than five years
Total
(Millions of yen)
2016
2017
¥13,017
26,850
2,349
¥42,217
¥13,237
20,776
3,167
¥37,179
Future minimum sublease payments expected to be received under non-cancellable subleases is as follows:
Future minimum sublease payments expected to be received
(Millions of yen)
2016
2017
¥2,286
¥1,819
Minimum lease payments and sublease payments received recognised as expenses are as follows:
Minimum lease payments
Sublease payments received
Total
(Millions of yen)
2016
2017
¥17,634
¥17,050
(229)
(211)
¥17,405
¥16,839
The Group leases buildings, vehicles and other assets
terms of purchase options, and escalation clauses. In
under operating leases.
addition, there are no material restrictions imposed by
The significant leasing arrangements have terms of
the lease arrangements.
renewal, but there exist no contingent rents payable,
145
■ 35. Commitments
The breakdown of commitments for the acquisition of property, plant and equipment and intangible assets is as follows:
Intangible assets
Research and development milestone payments
Sales milestone payments
Total
Property, plant and equipment
(Millions of yen)
2016
2017
¥251,978
¥299,099
153,833
405,812
290,749
589,848
¥ 8,715
¥ 5,114
Commitments for the acquisition of intangible assets
The Group has entered into research and development
“Sales milestone payments” represent obligations to
collaborations and in-license agreements of products and
pay the amount set out in an individual contract
technologies with a number of third parties. These
agreement upon achievement of a milestone determined
agreements may require the Group to make milestone
according to the target of sales.
payments upon the achievement of agreed objectives or
The amounts shown in the table above represent the
when certain conditions are met as defined in the
maximum payments to be made when all milestones are
agreements.
“Research and development milestone payments”
achieved, and they are undiscounted and not risk
adjusted. Since the achievement of the conditions for
represent obligations to pay the amount set out in an
payment is highly uncertain, it is unlikely that they will all
individual contract agreement upon achievement of a
fall due and the amounts of the actual payments may vary
milestone determined according to the stage of research
considerably from those stated in the table.
and development.
■ 36. Related Party Transactions
(1) Major companies the Group controls
A list of major companies the Group controls is presented in “Principal Subsidiaries and Affiliates”.
(2) Compensation of key management personnel
The table below shows, by the type, the compensation of key management personnel:
Rewards and salaries
Share-based payment
Other
Total compensation
(Millions of yen)
2016
2017
¥1,253
¥1,353
98
420
164
430
¥1,771
¥1,947
Key management personnel consist of 21 people (22 during 2016) including Directors, Corporate Audit & Supervisory
Board Members and members of the Executive Committee.
146
■ 37. Business Combinations
For the year ended 31 March 2016
(1) Outline of business combination
(i)Name and business description of the acquiree
Name of the acquiree: Ocata Therapeutics, Inc. (“Ocata”) (The company name was changed to Astellas Institute for
Regenerative Medicine in May 2016.)
Business description: Research and development of new therapies for ophthalmic diseases in the field of regenerative
medicine
(ii) Acquisition date
10 February 2016
(iii) Percentage of voting equity interests acquired
100%
(iv) Acquisition method
Tender offer to purchase all issued and outstanding shares of common stock in cash
(v) Primary reasons for the business combination
The Group strives to create a solid and resilient
Ocata has an advanced technology that can establish
continuity of growth over the mid- to long-term through
fully-differentiated cells from pluripotent stem cells.
the pursuit of the three main strategies of Strategic Plan
Ocata also has strengths in clinical studies for cell
2015-2017 (“the Strategic Plan”) – “Maximizing Product
therapy.
Value,” “Creating Innovation” and “Pursuing Operational
The acquisition of Ocata represents the coming
Excellence.” Especially in “Creating Innovation,” the
together of two companies with significant
Group recognises the importance of advancing into new
accomplishments and a shared commitment to develop
opportunities in addition to enhancing capabilities to
innovative therapies that address the unmet medical
deliver innovative medicines. The Group added muscle
needs of patients suffering from severe ophthalmic
diseases and ophthalmology to its focused disease
diseases. The acquisition also represents a step toward
areas for research and is promoting drug discovery
achieving the Strategic Plan. Further, acquiring Ocata
research in those areas. Further, the Group invests
will enable the Group to establish a presence in
proactively in regenerative medicine, particularly in cell
ophthalmology and a leading position in cell therapy.
therapy and next-generation vaccines as initiatives
involving new technologies and new modalities.
Ocata is a clinical stage biotechnology company
focused on the development and commercialization of
new therapies in the field of regenerative medicine.
Strategic rationale behind the acquisition:
Establish a presence in ophthalmology
Establish a leading position in cell therapy by
obtaining Ocata’s world-class capability
147
(2) The fair values of assets acquired, liabilities assumed and purchase consideration transferred as at the
date of acquisition are as follows:
Property, plant and equipment
Other intangible assets
Deferred tax assets
Cash and cash equivalents
Other assets
Other liabilities
Fair value of assets acquired and liabilities assumed (net)
Goodwill
Total
Fair value of purchase consideration transferred (cash)
(Millions of yen)
¥ 151
14,321
3,679
1,084
41
(2,494)
16,782
26,955
43,737
¥43,737
Certain items had reflected provisional fair values as of
a result, goodwill and deferred tax assets increased by
31 March 2016, however, the Group completed the
¥2,460 million and ¥481 million, respectively, while other
purchase price allocation during the year ended 31
intangible assets decreased by ¥2,941 million. Goodwill
March 2017. Along with this, the Group retrospectively
mainly comprises the value of expected synergies
revised the corresponding balances in the consolidated
arising from the acquisition and future economic
statement of financial position as of 31 March 2016. As
benefits, which is not separately recognised.
(3) Cash flow information
Fair value of purchase consideration transferred
Cash and cash equivalents held by the acquiree
Acquisition of subsidiaries, net of cash acquired
(4) Acquisition-related costs
Acquisition-related costs: ¥939 million
(Millions of yen)
¥43,737
(1,084)
¥42,653
Acquisition-related costs were recognised in selling, general and administrative expenses in the consolidated
statement of income.
(5) Effect on the consolidated statement of income
(i) Profit (loss) before tax of the acquiree since the acquisition date included in the consolidated statement of
income for the year ended 31 March 2016:
¥(638) million
(ii) Profit (loss) before tax of the combined entity for the year ended 31 March 2016 assuming the acquisition date
had been at the beginning of the fiscal year (unaudited):
¥(5,357) million
(Note) This effect is calculated based on the business results of Ocata from 1 April 2015 to the acquisition date.
148
For the year ended 31 March 2017
(1) Outline of business combination
(i) Name and business description of the acquiree
Name of the acquiree: Ganymed Pharmaceuticals AG (“Ganymed”)
Business description: Development of antibodies against cancer
(ii) Acquisition date
20 December 2016
(iii) Percentage of voting equity interests acquired
100%
(iv) Acquisition method
Acquisition of all shares of common stock in cash with contingent consideration to be paid when certain milestones are
achieved in the future.
(v) Primary reasons for the business combination
Ganymed is a formerly privately-held biopharmaceutical
stages including IMAB362. Through the acquisition,
company founded in 2001 and focuses on the
Astellas will expand its oncology pipeline with antibody
development of a new class of cancer drugs. Ganymed
program in the late-stage to build upon its leading
has several pipeline assets in pre-clinical and clinical
oncology franchise as a platform for sustainable growth.
(2) The fair values of assets acquired, liabilities assumed and purchase consideration transferred as at the
acquisition date are as follows:
(Millions of yen)
Provisional fair
Provisional fair
Fair value
value
value
adjustments
(as adjusted)
¥ 272
¥ －
¥ 272
62,275
629
1,103
(18,679)
(5,066)
40,534
28,799
69,333
23,758
－
－
(7,127)
－
16,631
(5,486)
11,145
86,033
629
1,103
(25,806)
(5,066)
57,164
23,313
80,478
51,544
17,789
¥ 69,333
－
11,145
¥11,145
51,544
28,934
¥ 80,478
Property, plant and equipment
Other intangible assets
Cash and cash equivalents
Other assets
Deferred tax liabilities
Other liabilities
Fair value of assets acquired and liabilities assumed (net)
Goodwill
Total
Cash
Contingent consideration
Total fair value of purchase consideration transferred
149
During the year ended 31 March 2017, further facts
incomplete as of 31 March 2017 as the Group is still in
came to light and additional analysis was performed on
the process of finalizing the fair value measurement.
the fair value measurement of the assets acquired and
Goodwill mainly comprises the value of expected
liabilities assumed at the acquisition date. As a result,
synergies arising from the acquisition and future
the provisional fair values were adjusted as above. The
economic benefits, which is not separately recognised.
initial accounting for the business combination is
(3) Contingent consideration
The contingent consideration relates to certain
The contingent consideration is classified as Level 3
milestones based on progress in the development of
within the fair value hierarchy. For details on the fair
IMAB362, Ganymed’s clinical program. Maximum
value hierarchy, please refer to Note “33. Financial
potential future cash outflows associated with the
Instruments”. The fair value of the contingent
contingent consideration total 860 million euros
consideration increases if the estimate of the success
(¥103,019 million). The fair value of the contingent
probability of the clinical program, which is the
consideration is calculated based on the estimated
significant unobservable input, is raised.
success probability of the clinical program adjusted for
the time value of money.
The movement of the contingent consideration for the year ended 31 March 2017 is as follows:
Balance at 1 April 2016
Business combination
Settlements
Movement of fair value
Exchange differences
Balance at 31 March 2017
(Millions of yen)
¥ －
28,934
－
35
(519)
¥28,450
The balance of scheduled payments of the contingent consideration by maturity date as of 31 March 2017 is as follows:
Not later than one year
Later than one year and not later than five years
Later than five years
Total
(Millions of yen)
¥ 1,198
14,543
13,241
¥28,982
150
(4) Cash flow information
Total fair value of purchase consideration transferred
Fair value of contingent consideration included in purchase consideration transferred
Cash and cash equivalents held by the acquiree
Acquisition of subsidiaries, net of cash acquired
(Millions of yen)
¥ 80,478
(28,934)
(629)
¥ 50,915
(5) Acquisition-related costs
Acquisition-related costs: ¥101 million
Acquisition-related costs were recognised in selling, general and administrative expenses in the consolidated
statement of income.
(6) Effect on the consolidated statement of income
(i) Profit (loss) before tax of the acquiree since the acquisition date included in the consolidated statement of
income for the year ended 31 March 2017:
¥(1,151) million
(ii) Profit (loss) before tax of the combined entity for the year ended 31 March 2017 assuming the acquisition date
had been at the beginning of the fiscal year (unaudited):
¥(3,825) million
(Note) This effect is calculated based on the business results of Ganymed from 1 April 2016 to the acquisition date.
151
■ 38. Contingent Liabilities
Legal Proceedings
various state laws, APUS misused the Citizen Petition
The Group is involved in various claims and legal
process for the sole purpose of delaying the approval of
proceedings of a nature considered common to the
generic tacrolimus by the U.S. Food and Drug
pharmaceutical industry.
Administration, thereby injuring the plaintiffs. In June
These proceedings are generally related to product
2011, the U.S. Judicial Panel on Multi- District Litigation
liability claims, competition and antitrust law, intellectual
ordered that the cases be consolidated before the U.S.
property matters, employment claims, and government
District Court for the District of Massachusetts.
investigations.
In January 2015, APUS settled all claims brought
In general, since litigation and other legal
against it by the direct purchaser plaintiffs. In May 2015,
proceedings contain many uncertainties and complex
the Court approved the settlement and dismissed the
factors, it is often not possible to make reliable judgment
case.
regarding the possibility of losses nor to estimate
In February 2016, APUS settled all claims brought
expected financial effect if these matters are decided in
against it by the indirect purchaser plaintiffs. In
a manner that is adverse to the Group.
November 2016, the Court approved the settlement and
In these cases, disclosures would be made as
dismissed the case.
appropriate, but no provision would be made by the
Group.
Prograf Litigation
Astellas Pharma US, Inc. (APUS), one of the
Company’s indirect US subsidiaries, was named as a
defendant in 2011 in several separate lawsuits brought
by plaintiffs in various federal courts on behalf of
themselves and proposed classes of all direct and
indirect purchasers of Prograf. These lawsuits involve
allegations that under the federal antitrust laws and
152
■ 39. Events after the Reporting Period
Acquisition of Ogeda SA
(1) Outline of business combination
(i) Name and business description of the acquiree
Name of the acquiree: Ogeda SA
Business description: Development of small molecule drugs targeting G-protein coupled receptors (GPCR)
(ii) Acquisition date
16 May 2017
(iii) Percentage of voting equity interests acquired
100%
(iv) Acquisition method
Acquisition of all shares of common stock in cash with contingent consideration to be paid when certain milestones are
achieved in the future.
Cash
500 million euros
Milestone payments Total 300 million euros based on the progress in the development of fezolinetant
(v) Primary reasons for the business combination
Ogeda SA is a privately owned drug discovery company
development in multiple therapeutic areas including
founded in 1994 and focuses on the discovery and
inflammatory and autoimmune diseases. Through the
development of small molecule drug candidates
acquisition, the Group will expand its late stage pipeline,
targeting GPCRs. Ogeda has fezolinetant in the clinical
thereby further solidifying its medium- to long-term
development stage. In addition, Ogeda has several
growth prospects.
small molecules targeting GPCRs in pre-clinical
Detailed information on the accounting treatment is not disclosed as the initial accounting treatment for this business
combination has not been completed by the approval date of the consolidated financial statements.
153
154
Investor Information
Common Stock (as of March 31, 2017)
Authorized:
Issued:
9,000,000,000
2,153,823,175
(including 87,917,718 treasury stock)
Number of shareholders: 114,997
Transfer Agent for Common Stock in Japan
Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku, Tokyo 100-8233, Japan
Major Shareholders (as of March 31, 2017)
The Master Trust Bank of Japan, Ltd. (trust account)
Japan Trustee Services Bank, Ltd. (trust account)
State Street Bank and Trust Company
Nippon Life Insurance Company
JP Morgan Chase Bank 385632
Japan Trustee Services Bank, Ltd. (trust account 5)
State Street Bank West Client - Treaty 505234
JP Morgan Chase Bank 385147
Japan Trustee Services Bank, Ltd. (trust account 7)
Japan Trustee Services Bank, Ltd. (trust account 1)
Shares owned
(Thousand shares)
Percentage of total common
shares outstanding
152,044
113,642
80,827
64,486
53,215
39,311
37,239
34,367
30,101
29,209
7.35
5.50
3.91
3.12
2.57
1.90
1.80
1.66
1.45
1.41
Notes: Shares owned are rounded down to the nearest thousand shares, while the percentage of total common shares outstanding is rounded down to two decimal places.
Astellas holds 87,917 thousand shares of treasury stock, but it is not included in the above list of major shareholders.
Breakdown of Shareholders (as of March 31, 2017)
Other companies 3.4%
Securities companies 3.5%
Individuals and others 9.1%
Financial institutions
30.7%
Treasury stock 4.1%
Foreign companies and others
49.3%
155
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017
Corporate Data
Company Name
Astellas Pharma Inc.
Head Office
2-5-1, Nihonbashi-Honcho, Chuo-ku,
Tokyo 103-8411, Japan
TEL: +81-3-3244-3000
https://www.astellas.com/en/
Capital (as of March 31, 2017)
¥103,001 million
Representative
Yoshihiko Hatanaka
Representative Director, President and CEO
Founded
1923
Professional Institution Affiliation
International Federation of Pharmaceutical
Manufacturers & Associations (IFPMA)
Stock Exchange Listing
Tokyo (Securities Code: 4503)
Independent Auditors
Ernst & Young ShinNihon LLC
Hibiya Kokusai Building, 2-2-3 Uchisaiwai-cho, Chiyoda-ku,
Tokyo 100-0011, Japan
Principal Subsidiaries and Affiliates
(as of March 2017)
Astellas is a group of companies engaged solely in the
pharmaceutical business. The Group consists of 92
companies, which include Astellas Pharma Inc., 81
consolidated subsidiaries and 10 affiliates accounted for
by the equity method. Major Group companies are listed
as follows:
Japan
Manufacturing Base
- Astellas Pharma Tech Co., Ltd.
R&D Bases
- Astellas Research Technologies Co., Ltd.
- Astellas Analytical Science Laboratories, Inc.
Other
- Astellas Business Service Co., Ltd.
- Astellas Learning Institute Co., Ltd.
- Astellas Marketing and Sales Support Co., Ltd.
- Amgen Astellas BioPharma K.K.
156
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Americas
Holding Company in North America
• Astellas US Holding, Inc.
1 Astellas Way, Northbrook, IL 60062-6111, U.S.A.
Regional Headquarters
• Astellas US LLC
1 Astellas Way, Northbrook, IL 60062-6111, U.S.A.
TEL: +1-800-888-7704
R&D Bases
• Astellas Pharma Global Development, Inc.
• Agensys, Inc.
• Astellas Research Institute of America LLC
• Astellas Institute for Regenerative Medicine
Sales Bases
• Astellas Pharma US, Inc.
• Astellas Pharma Canada, Inc. (Canada)
• Astellas Farma Brasil Importação e Distribuição de
Medicamentos Ltda. (Brazil)
• Astellas Farma Colombia S.A.S (Colombia)
Other
• Astellas US Technologies, Inc.
• Astellas Venture Management LLC
Note: All subsidiaries for which no country has been indicated are located in the U.S.
EMEA
Holding Company in EMEA
• Astellas B.V.
Sylviusweg 62, 2333, BE Leiden, The Netherlands
TEL: +31-71-5455745
Regional Headquarters (Astellas EMEA Operations)
• Astellas Pharma Europe Ltd.
2000 Hillswood Drive, Chertsey, Surrey, KT16 0RS, U.K.
TEL: +44-203-379-8000
R&D and Manufacturing Bases
• Astellas Pharma Europe B.V.
(R&D and manufacturing, Netherlands)
• Astellas Ireland Co., Limited
(Development and manufacturing, Ireland)
Sales Bases
• Astellas Pharma Ges. mbH (Austria)
• Astellas Pharma B.V. (Belgium)
• Astellas Pharma s.r.o (Czech Republic)
• Astellas Pharma A/S (Denmark)
• Astellas Pharma S.A.S (France)
• Astellas Pharma GmbH (Germany)
• Astellas Pharmaceuticals AEBE (Greece)
• Astellas Pharma Kft. (Hungary)
• Astellas Pharma Co., Limited (Ireland)
• Astellas Pharma S.p.A. (Italy)
• Astellas Pharma B.V. (Netherlands)
• Astellas Pharma International B.V. (Netherlands)
• Astellas Pharma Sp.zo.o. (Poland)
• Astellas Farma Limitada (Portugal)
• JSC Astellas Pharma (Russia)
• Astellas Pharma d.o.o (Slovenia)
• Astellas Pharma (Proprietary) Ltd (South Africa)
• Astellas Pharma S.A. (Spain)
• Astellas Pharma A.G. (Switzerland)
• Astellas Pharma ilac Ticaret ve Sanayi A.S. (Turkey)
• Astellas Pharma DMCC (United Arab Emirates)
• Astellas Pharma Ltd. (United Kingdom)
Asia & Oceania
Sales and Other Bases
• Astellas Pharma China, Inc. (Sales and manufacturing, China)
• Astellas Pharma Hong Kong Co., Ltd. (Hong Kong)
• Astellas Pharma Taiwan, Inc. (Taiwan)
• Astellas Pharma Korea, Inc. (Korea)
• Astellas Pharma Philippines, Inc. (Philippines)
• Astellas Pharma (Thailand) Co., Ltd. (Thailand)
• P.T. Astellas Pharma Indonesia (Indonesia)
• Astellas Pharma India Private Limited (India)
• Astellas Pharma Australia Pty Ltd. (Australia)
• Astellas Pharma Singapore Pte. Ltd. (Singapore)
• Astellas Pharma Malaysia Sdn.Bhd. (Malaysia)
157
Financial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 Inclusion in SRI Indexes
Astellas is included as a constituent stock in the following global
socially responsible investment (SRI) indexes.
Dow Jones Sustainability Asia Pacific Index (DJSI Asia Pacific),
the Asia Pacific version of the Dow Jones Sustainability Index (DJSI)
FTSE4Good Index, an equity index series that is designed to facilitate
investment in companies that meet globally recognized corporate
responsibility standards.
158
IntroductionCorporate Strategy and Corporate GovernanceBusiness ReviewFinancial Information and DataAstellas Pharma Inc. ANNUAL REPORT 2017 A
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For the Year Ended March 31, 2017
ANNUAL REPORT
2017
Astellas Pharma Inc.
2-5-1, Nihonbashi-Honcho,
Chuo-ku, Tokyo 103-8411, Japan
https://www.astellas.com/en/
Please direct inquiries concerning Annual Report 2017 to:
Astellas Pharma Inc. Corporate Communications
TEL: +81-3-3244-3202
FAX: +81-3-5201-7473
Issued in August 2017
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