sales and marketing · japanese market 40.5 36.6 17.0 13.3 8.8 2.5 4.0 2.2 6.1 3.5 revenue of major...

Japanese Market

40.5

36.6

17.0

13.3

8.8

2.5

4.0

2.2

6.1

3.5

Revenue of Major Products (Before reduction of rebates; Billions of yen)

Strengths

• Provision of neutral and detailed information based on extensive product lineup and top-class sales in Diabetes area.

• In-house product development capabilities and case-based treatment proposals taking advantage of dedicated CNS MRs in Psychiatry & Neurology area

• Implementation of digital innovation and effective e-promotion

Opportunities

• High unmet medical needs in Psychiatry & Neurology area

• Opportunities for in-licensing of other companies’ product leveraging solid marketing base

• Increase in opportunities for healthcare professionals to obtain information digitally

Weaknesses

• Decline in profitability associated with changes in product mix

Threats

• Decline in revenue and profit associated with annual NHI price revisions

• Decline in revenue of long-listed products due to earlypenetration of generic drugs

Equa® / EquMet®

Trulicity®*2

TRERIEF®

REPLAGAL®

METGLUCO®

LONASEN® Tape

AmBisome®

LATUDA®

AMLODIN®

SUREPOST®

—

29.6

3.4

6.3

(4.3)

—

3.6

—

(16.2)

13.2

Value Chain

Sales and Marketing

Japan’s ethical pharmaceuticals market is worth USD85.1 billion*1 (approximately 9 trillion yen), making it the world’s third largest market behind the U.S. and China (as proportion of world market: 7.1%*1). Japan has universal health insurance, with pharmaceutical prices set by the Ministry of Health, Labour and Welfare. Pharmaceutical expenses are being curbed, and the use of generic drugs is recommended.

Market Environment SWOT

*1 Source: Prepared (All Rights Reserved) based on IQVIA World Review 2018, Copyright© 2020 IQVIA. Source: DATABOOK 2020, Japan Pharmaceutical Manufacturers Association (JPMA) (Conversion of values into yen calculated by Sumitomo Dainippon Pharma)

*2 Revenue of Trulicity® is shown by NHI price basis.

Rate ofchange

(%)

FY2020

forecastBrand Name Therapeutic

Indication

—

23.1

15.7

12.5

10.1

—

4.0

—

9.1

6.1

FY2018

17.1

30.0

16.2

13.3

9.6

0.5

4.2

—

7.6

6.9

FY2019

Therapeutic agent for type 2 diabetesTherapeutic agent for type 2 diabetesTherapeutic agent for Parkinson’s diseaseTherapeutic agent for Fabry diseaseTherapeutic agent for type 2 diabetes

Atypical antipsychotic

Therapeutic agent for systemic fungal infectionAtypical antipsychoticTherapeutic agent for hypertension and angina pectorisTherapeutic agent for type 2 diabetes

53 Sumitomo Dainippon Pharma Co., Ltd. Integrated Report 2020

Response to COVID-19

*3 Number of MRs represents the number as of March 31 of the fiscal year*4 Revenue per MR in fiscal 2016 is calculated using net sales based on Japanese accounting standards.

129.3

25.1

Revenue / Core Segment profit

(Billions of yen)

160

120

80

40

0

(Billions of yen)

60

45

30

15

0

139.7143.3

22.9

40.3

(FY)2017 2019(forecast)

153.1

22.7

20202018

Number of MRs (Medical Representatives)*3

/ Revenue per MR*4

(Persons) (Millions of yen)

1,130

127

1,120

115

1,600

1,200

800

400

0

200

150

100

50

0

1,130

124

(FY)2016 20182017

1,220Number of MRs Revenue per MR

¥115 million

Virtual MR (vMRTM) characters

Revenue increased by 8.1% year-on-year to reach 139.7 billion yen. Sales of products such as Trulicity® and SUREPOST® experienced a high rate of growth, and Equa® and EquMet® which the company started selling in November also contributed to the increase in sales. On the other hand, in addition to the impact due to NHI price revisions, sales of long-listed products declined.

Core segment profit decreased by 8.8% year-on-year to 22.9 billion yen despite the growth in revenue, as a result of changes in the product mix, including the growth of tie-up products and decline of long-listed products.

While there were regional variations, during the period

when we voluntarily restricted our visit activities, we

provided and collected information in accordance with

customer circumstances by conducting interviews online

utilizing IT tools in addition to providing information by

e-mail. We also held briefings and lecture meetings

online and began streaming video content based on the

activities of dedicated remote MRs (iMR®) and virtual

MRs (vMRTM) utilizing original new characters.

We plan to continue utilizing IT tools to facilitate

timely and appropriate provision and collection of

information in addition to our conventional visit activities

while assessing regional and customer circumstances.

¥139.7 billion

Revenue Core Segment profit

¥22.9 billion

1,220

115115115

2019

Financial SectionProfile Value Creation Strategies CSR-Based Management

Fiscal 2019 Main Initiatives and Business Results

In the Psychiatry & Neurology area, we will aim to be the leading pharmaceutical company through the provision of high quality information by dedicated CNS MRs regarding LATUDA® launched in June 2020 and LONASEN® tape on which the prescription limitation will be lifted in October.

In the Diabetes area, we will fulfill our responsibility as the leading pharmaceutical company in Japan by providing the high-quality neutral information that is possible because we handle multiple therapeutic agents for diabetes with different mechanisms of action, such as Trulicity®, Equa®, and EquMet®.

Fiscal 2020 Business Plan and Outlook

54Sumitomo Dainippon Pharma Co., Ltd. Integrated Report 2020

North American Market

Revenue of major products (Billions of yen)

The U.S. market for ethical pharmaceuticals is worth USD484.5 billion*1 (approximately 50 trillion yen), making it the world’s largest market (as a proportion of world market: 40.4%*1), and it is one of the world’s most competitive markets.

As there is no universal public health insurance, the U.S. market is characterized by the extremely large presence of private health insurance. Moreover, based on the market principles in operation between pharmaceutical companies, insurance companies, and medical institutions, pharmaceutical companies can independently set drug prices.

Strengths

• Development and sales capabilities in the Psychiatry & Neurology area

• Late-stage best in class development assets focused on value and talent to lead development of these assets

Opportunities

• Enhancement of innovation base and digital transformation through technology platforms, DrugOme and Digital Innovation

Weaknesses

• Development of large-scale products to follow LATUDA® is an issue for future growth

Threats

• Decline in profitability due to expiry of exclusive marketing period for LATUDA®

Value Chain

Sales and Marketing



Rate ofchange

(%)

FY2020


IndicationFY

2018FY

2019

Atypical antipsychoticTherapeutic agent for COPDAntiepilepticTherapeutic agent for COPDTherapeutic agent for asthmaTherapeutic agent for Parkinson’s Disease OFF episodes

184.5

33.7

20.5

1.4

4.6

—

189.5

34.5

23.4

2.9

4.1

—

187.9

29.7

23.3

3.0

4.6

1.1

LATUDA®

BROVANA®

APTIOM®

LONHALA® MAGNAIR®

XOPENEX®

KYNMOBI™

2.7

2.3

14.1

105.0

(10.3)

—




240.8109.5


(Billions of yen)

300

225

150

75

0

1,000

750

500

250

0

(Billions of yen)

160

120

80

40

0

600

450

300

150

0

262.3117.5

(FY)2019

252.5114.5

2018(forecast)

258.5

87.8

20202017


/ Revenue per MR*3


830

290

720

351

870

227

(FY)2016 20182017

650Number of MRs Revenue per MR

¥404 million

As visits to medical institutions were restricted and direct

interviews were often not possible, we implemented

detailing activities utilizing an online interview system,

an online Peer to Peer program (lectures), and online

briefings.

Although many medical institutions are maintaining

the prohibition on visits as of July 31, 2020, we have

resumed direct visits by MRs in 35 states which passed

pre-established criteria.

¥262.3 billion


¥117.5 billion

650404404404

2019

Sales reps working from home conducts virtual meeting with HCP’s office to convey product information


Revenue increased by 3.9% year-on-year to reach 262.3 billion yen. Sales of LATUDA® and APTIOM® increased steadily, contributing to revenue growth. Core segment profit increased by 2.6% year-on-year to reach 117.5 billion yen as revenue growth offset costs at Sumitovant and an increased acquisition-related expenses.


Going forward, it is expected that revenue of our products, including LATUDA®, will decline due to the impact of the COVID-19 pandemic, such as an increase in the unemployment rate in North America.

Core segment profit is also expected to decrease with a significant increase in sales-related expenses for new products in addition to the recording of full-year SG&A expenses for Sumitovant.



Chinese and Asian Market

The Chinese ethical pharmaceuticals market is worth USD133.7 billion*1 (approximately 15 trillion yen), making it the world’s second largest market behind the U.S. (as proportion of world market: 11.2%*1). Although the growth rate has slowed due to policies to curb healthcare expenses, future growth is expected due to the aging population and rising income levels that come with economic development.

The ethical pharmaceuticals market for new drugs in Southeast Asia has experienced a high rate of growth to date. Continued growth is forecast going forward.

Strengths

• Solid marketing base centered on Chinese subsidiary

• High quality, competitive in-house products, including MEROPEN®

Opportunities

• Policies to accelerate new drug approval have been developed, such as acceptance of overseas clinical data

• Continued growth is forecast going forward due to economic growth, improvement in healthcare infrastructure and others

Weaknesses

• Expansion of product lineup is an issue for future growth

Threats

• Implementation of policies to curb pharmaceutical expenses in countries with drug price systems based on public insurance

Revenue of Major Products (Billions of yen)

Region Covered

China and the six ASEAN countries (Thailand, Malaysia, the Philippines,

Vietnam, Singapore, and Indonesia)

Products Sold

• China market

MEROPEN®, ALMARL®, Sediel®, GASMOTIN®, LONASEN®, LATUDA®

• East Asia and Southeast Asia market, ex China

MEROPEN®, LATUDA®

Note: For China segment only

Value Chain

Sales and Marketing



Rate ofchange

(%)

FY2020


IndicationFY

2018FY

2019

Carbapenem antibiotic 21.2 24.1 23.0MEROPEN® 13.2



24.712.3


(Billions of yen)

30.0

22.5

15.0

7.5

0

400

300

200

100

0

(Billions of yen)

16.0

12.0

8.0

4.0

0

200

150

100

50

0

28.6

23.414.4

10.7

(FY)2017 2019(forecast)

28.513.8

20202018


/ Revenue per MR*3


330

71

340

72

340

71

(FY)2016 20182017

330Number of MRs Revenue per MR

¥87 million¥28.6 billion


¥14.4 billion

330

878787

2019


In the Chinese market, we actively implemented online

academic conferences and customer interviews in

parallel with face-to-face information provision in order

to make up for restrictions on face-to-face activities due

to the impact of COVID-19.

In the East Asia and Southeast Asia market, excluding

China, we held online product briefings and study

meetings due to the impact of COVID-19. Going forward,

we will continue looking into the roll out of online

promotion and so forth utilizing digital tools.

Healthcare professionals attending an online study meeting (China)

Note: For China segment only Note: For China segment only


Revenue increased 15.6% year-on-year to reach 28.6 billion yen. This increase is attributable to an increase in sales of mainstay MEROPEN® and other products. Core segment profit increased by 17.2% year-on-year to reach 14.4 billion yen.

In the East Asia and Southeast Asia market, excluding China, led by our subsidiaries in Singapore and Thailand, we worked to maximize value of MEROPEN® and LATUDA® and strengthen the base in each country.


Sales of MEROPEN® in the China market in the first quarter of fiscal 2020 underperformed due to the impact of the COVID-19 pandemic. Segment profit is forecast to decline with revenue flat year-on-year and an increase in SG&A expenses.

In the East Asia and Southeast Asia market, excluding China, we will continue aiming to maximize the value of LATUDA® and MEROPEN® and for early submission for approval of development assets. We will also work to strengthen the business base through the transfer of sales approval and the establishment of a new subsidiary with the intention of sustained growth.



sales and marketing · japanese market 40.5 36.6 17.0 13.3 8.8 2.5 4.0 2.2 6.1 3.5 revenue of major...

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