1897
Dainippon
Pharmaceutical
1944
Sumitomo
Pharmaceuticals
Innovation today,
healthier tomorrows
Integrated Report 2023
Securities Code 4506
Sumitomo Pharma Co., Ltd.
Sumitomo Pharma Co., Ltd. Integrated Report 2023 | Message | Capitals | Strategy | Governance | Business | Sustainability | Data | 1 |
Purpose
What is Sumitomo Pharma's reason
For the betterment of healthcare and
fuller lives of people worldwide
Sumitomo Pharma Group is devoted to the research and development of innovative and useful pharmaceuticals and healthcare solutions for the betterment of healthcare and fuller lives of people worldwide.
Sumitomo Pharma Group's Philosophy
Mission
(The significance of the Group's existence, commitment and duty to society)
To broadly contribute to society through value creation based on innovative research and development activities for the betterment of healthcare and fuller lives of people worldwide
for existence?
Values
(Values that all executives and
employees should share)
Patient First
Always with Integrity
One Diverse Team
Declaration of Conduct
(The code of conduct to be observed in daily
work by all executives and employees)
Follow through on our Slogan "Innovation today, healthier tomorrows"
Pursue trustworthy corporate activities
Transparently disclose information and properly manage information
Improve individual capabilities and collaborate with peers
Respect human rights
Positively address global environmental issues
Build harmonious relationships with society
Sumitomo Pharma Co., Ltd. Integrated Report 2023 | Message | Capitals | Strategy | Governance | Business | Sustainability | Data | 2 |
R&D
With a focus on two priority disease areas with
high unmet medical needs and other areas
The Sumitomo Pharma Group is committed to contributing to the betterment of healthcare and fuller lives of people through a diverse range of approaches, including pharmaceuticals, regenerative medicine/cell therapy, and non-medical solutions, with a focus on the psychiatry & neurology area, and oncology area as its priority disease areas. We will also leverage our assets in other areas to deliver value to patients.
On what area is Sumitomo Pharma focused on?
Psychiatry & Neurology area
Number of new compounds under
development: 15*1
Oncology area
Number of new compounds under
development: 5*1
Other areas*2
Small molecules | Regenerative | |
Molecular design and synthesis | medicine/cell therapy | |
capabilities based on accumulated | Know-how acquired by pioneering | |
experience and know-how | initiatives | |
Non-pharmaceutical | Other modalities | |
(Frontier) | ||
To be developed in the mental | Pursuit of optimal modalities | |
resilience area | ||
*1 As of July 31, 2023
*2 Women's health issues, urological diseases, diabetes, rare diseases, and infectious diseases
Sumitomo Pharma Co., Ltd. Integrated Report 2023 | Message | Capitals | Strategy | Governance | Business | Sustainability | Data | 3 |
Global
platform
In what region are we delivering value?
Become a company with a strong presence in
Japan, North America, and China & Asia
Since the merger, Sumitomo Pharma Group has strived to globalize its business. Currently, we have local headquarters, sales, and development functions in Japan, North America, and China & Asia, and are engaged in sales and marketing activities suited to each region, as well as expanding our business foundation with a focus on Asia.
China | Japan | North America |
We are focused on infectious | In addition to psychiatry & | Sumitomo Pharma America, Inc., which was integrated |
disease area, and psychiatry & | neurology area, we are focused on | in July 2023 through a combination of Group companies, |
neurology area. | diabetes area and rare diseases | is engaged in research and development, manufacturing, |
area. | and sales of ethical pharmaceuticals. | |
Europe and | Asia | ||
We strengthened the functions of our | |||
other areas | |||
subsidiary in Singapore and established our | |||
Coordination with partner | subsidiaries in Thailand, Taiwan, and Malaysia. | ||
companies | |||
FY2006 | 8.4% | FY2022 | 69.4% |
revenue | revenue | ||
Ratio of overseas | Ratio of overseas | ||
Japan | |||
555.5 | America | ||
North | |||
Other | billion yen | ||
overseas | |||
China |
Sumitomo Pharma Co., Ltd. Integrated Report 2023 | Message | Capitals | Strategy | Governance | Business | Sustainability | Data | 4 |
Human
resources
Foster human resources with CHANTO spirits, the capability to deliver the highest performance
Based on the corporate culture of diligence, integrity, and resilient and detailed execution, Sumitomo Pharma fosters professional human resources with CHANTO spirits, the capability to deliver the highest performance to achieve continuously creating and delivering innovation to people while transforming themselves in flexible ways to adapt to changes in the world, as the greatest driving force for delivering value.
Five Conduct Guidelines essential for practicing CHANTO
What drives us to deliver value?
Goal-oriented, take as one's own issues, and follow through
Show courage to meet challenges
Self-disciplined, independent and exert individual abilities
Respect each other and collaborate with peers
Continue to cherish diligence and integrity
Sumitomo Pharma Co., Ltd. Integrated Report 2023 | Message | Capitals | Strategy | Governance | Business | Sustainability | Data | 5 |
Vision
What sort of state are
we aiming for?
For longer and healthier lives. We unlock the future with cutting-edge technology and ideas
Sumitomo Pharma Group has established its vision - For longer and healthier lives. We unlock the future with cutting-edge technology and ideas. We deliver innovative and differentiated pharmaceutical product and we also aim to establish ourselves as a "Global Specialized Player*" by 2033 by providing healthcare solutions that encompass the entire patient journey, including disease prevention, diagnosis, long-term care, and rehabilitation.
*Global Specialized Player: The Sumitomo Pharma Group is committed to contributing to the betterment of healthcare and fuller lives of people and to establishing its unique position worldwide through a diverse range of approaches, including pharmaceuticals, regenerative medicine/cell therapy, and non-pharmaceutical solutions, with a focus on the psychiatry & neurology area, and oncology area as its priority disease areas.
Rehabilitation
Prevention
Diagnosis
Long-term care
Treatment
Sumitomo Pharma Co., Ltd. Integrated Report 2023 | Message | Capitals | Strategy | Governance | Business | Sustainability | Data | 6 |
Commitment
With CHANTO spirits, Sumitomo Pharma Group is committed to taking on the challenge of becoming the Global Specialized Player.
Sumitomo Pharma Co., Ltd. Integrated Report 2023 | Message | Capitals | Strategy | Governance | Business | Sustainability | Data | 7 |
Contents
Top Message
Message from the President | 8 |
Financial Strategy | 13 |
Capitals
Six capitals | 17 |
Strategy
Review of the Mid-term Business Plans | 20 | ||
Trends in Focused Markets | 21 | ||
Sumitomo Pharma Group's Material Issues | 22 | ||
Sumitomo Pharma's Value Creation Process | 23 | ||
Vision and Position We Aspire to Establish by 2033 | 24 | ||
Mid-term Business Plan 2027 | 25 | ||
Establish a revenue base facilitating sustained growth | 26 | ||
Priority measures | |||
Bring own innovations to fruition | 29 | ||
Priority measures | |||
Change to a flexible and efficient business foundation | 33 | ||
Priority measures | |||
Governance
Corporate Governance | 38 |
Outside Director Roundtable Discussion | 47 |
Outside Audit & Supervisory Board Member Roundtable Discussion | 51 |
Risk Management | 53 |
Compliance | 55 |
Directors, Audit & Supervisory Board Members, and Executive Officers | 56 |
Business Overview
Psychiatry & Neurology Area | 61 |
Oncology Area | 63 |
Other Areas | 64 |
FOCUS Message from the marketing manager of the three key products 65
Regenerative Medicine/CellTherapy Business | 67 |
Frontier Business | 68 |
Sustainability
Environment | 70 |
Strengthening Human Capital toward the Sustained Enhancement of Corporate Value 76
Social Contributions | 83 |
Data Section
Financial Highlights | 87 |
Non-Financial Highlights | 89 |
Table of Material Issues and KPIs | 91 |
Ten-Year Summary of Selected Financial Data | 95 |
Results of Operations and Financial Condition | 97 |
Consolidated Financial Statements | 100 |
Main Products | 104 |
Value Chain Initiatives | 105 |
Basic Knowledge of Pharmaceuticals | 106 |
Corporate Profile | 108 |
Shareholder Data | 109 |
External Evaluations of Sumitomo Pharma Group on Sustainability | 110 |
Publication of the 2023 Integrated Report | 111 |
Editorial Policy | 112 |
Sumitomo Pharma Co., Ltd. Integrated Report 2023 | Message | Capitals | Strategy | Governance | Business | Sustainability | Data | 8 |
Message from the President
Making a "qualitative transformation" of the business structure and business practices
Hiroshi Nomura
Representative Director,
President and Chief Executive Officer
Sumitomo Pharma Co., Ltd. Integrated Report 2023 | Message | Capitals | Strategy | Governance | Business | Sustainability | Data | 9 |
Message from the President
Vision
After significant changes over the past 17 years, we aim to be a Global Specialized Player
In fiscal 2023 we launched a new Mid-term Business Plan running through to fiscal 2027. Here, I would like to briefly look back on the trajectory of the Company in light of the considerable transformation of our operations since its establishment 17 years ago. When Sumitomo Pharma was established through the merger of Dainippon Pharmaceutical and Sumitomo Pharmaceuticals in 2005, we were a Japan-based entity with a domestic sales weighting of more than 90%. However, in our first Mid-term Business Plan that kicked off in 2007, we identified globalization as a key theme and pursued the in-house development of the atypical antipsychotic drug LATUDA® for the sizeable U.S. market where we could independently determine drug prices. Then in 2009, through the acquisition of the former Sepracor we established our own sales structure in the U.S. and successfully turned LATUDA® into a blockbuster product that has brought in sales revenue of roughly ¥200 billion. As a result, we have transformed our operations and grown into a global company with overseas sales accounting for more than 60% of total revenue.
In 2012, we brought the former Boston Biomedical into the Group, marking our entry into the area of oncology where many unmet medical needs exist. Moreover, in recognizing the potential for creating groundbreaking products for diseases for which a full recovery is unlikely with conventional drugs, we seized the initiative in 2013 to enter the field of regenerative medicine and cell therapy. And in 2018 we completed the construction of "SMaRT," a regenerative medicine and cell therapy manufacturing plant in Japan that is the world's first commercial production facility for allogeneic iPS cell-derived products. We are also on schedule to complete the building of a similar cellular medicine manufacturing plant in the U.S. by the end of fiscal 2023.
In our Mid-term Business Plan 2022 (FY2018-2022) we adopted the following vision statement: "For longer and healthier lives. We unlock the future with cutting-edge technology and ideas." We also formulated a 2033 aspiration to establish ourselves as a global specialized player. Both the vision and aspiration were based on the belief that the pharmaceutical industry is facing a "Time for Change" in which we must not only create innovative new pharmaceuticals, but respond to the proliferation of digital technology and preventive medical care and establish business models that are not simply extensions of past endeavors. The term "healthier" in our vision encompasses not only treatment but also prevention, diagnosis, long-term care, and rehabilitation. It conveys
our intention of playing an indispensable role in all aspects of the patient journey. We therefore leveraged the technology of digital transformation (DX) and launched a frontier business that transcends the boundaries of pharmaceuticals to provide new healthcare solutions. Also, in view of the end of the exclusive sales period of LATUDA® in the U.S., in February 2023, we embarked on the reconstruction of our business foundation centered around the key themes of establishing a growth engine and building a flexible and efficient organization. I should also add that in fiscal 2022 we changed our name to Sumitomo Pharma Co., Ltd. by using the globally recognized "Sumitomo" brand to begin a new chapter with a fresh perspective.
Review of the Mid-term Business Plan 2022
Acquiring promising development pipelines in view of the post-LATUDA era, even though new drug R&D issues remain
Even though we posted record-high sales revenue during the period of the Mid-term Business Plan 2022 by virtue of LATUDA® sales in the U.S., in fiscal 2022, the final year of the plan, we recorded a ¥74.5 billion net loss attributable to owners of the parent owing to the booking of two large impairment losses, including the discontinuation of sales of KYNMOBI®, a treatment for "off" episodes in patients with Parkinson's disease. Over the five years of the plan, we directed a maximum of ¥600 billion into strategic investments and undertook a multitude of initiatives with the aim of rebuilding our business foundation. Put simply, however, despite making a certain amount of progress in terms of laying the groundwork for the future, we still did not achieve our most important challenge. That pertains to the discontinued development of napabucasin,
a therapeutic drug candidate for cancer that we had allocated our resources to as a potential post-LATUDA growth driver. Also, the fact that we were unable to introduce any in-house developed products for over a decade following the launch of LATUDA® weighs heavily on us, as it prevented us from establishing a growth engine.
Meanwhile, with the exclusive sales period for LATUDA® in the U.S. coming to an end in February 2023, as soon as the napabucasin clinical study targeting pancreatic cancer, which we had high hopes for, was discontinued, we quickly made the decision to forge a strategic alliance with Roivant Sciences in 2019. This enabled us to acquire a substantial development pipeline, including potential blockbusters like relugolix and vibegron. In 2021 we launched relugolix as ORGOVYX® (treatment for advanced prostate
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Sumitomo Pharma Co. Ltd. published this content on 23 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 October 2023 06:02:34 UTC.