News Release

Yamanouchi Pharmaceutical Co., Ltd.

Yamanouchi Integrates Domestic Formulation Facilities by Spinning Off Two Formulation Plants

November 11, 2003

Tokyo, Japan - November 11, 2003 - At its board meeting today, Yamanouchi Pharmaceutical Co., Ltd. (president: Toichi Takenaka) decided to integrate its domestic formulation facilities on April 1, 2005. For this purpose, it will spin off its Yaizu Plant, Yaizu, Shizuoka Prefecture, and Nishine Plant, Nishine-cho, Iwate-gun, Iwate Prefecture and merge them with its production subsidiary Tohoku Yamanouchi Pharmaceutical Co., Ltd., Nishine-cho, Iwate-gun, Iwate Prefecture, together with Yamanouchi Tokai Business Co., Ltd., Yaizu, Shizuoka Prefecture, to inaugurate a new formulation production subsidiary.

Yamanouchi continually reviews its production system in order to strengthen its global competitiveness. It closed two domestic formulation facilities in Itabashi-ku, Tokyo (Azusawa Plant) and Minami-ashigara-gun, Kanagawa Prefecture (Kaisei Plant) in March 2002 and plans to close the formulation plant of Taiwan Yamanouchi Pharmaceutical Co., Ltd., in June 2004. The amended Pharmaceutical Affairs Law which will take effect in 2005 will allow drug companies to outsource the entire production process to third parties in 2005. In response to this change, Yamanouchi plans to further concentrate and integrate its domestic formulation function and boost the efficiency of its production system and cost competitiveness.

The Yaizu Plant started operation in 1968 and has been manufacturing the company's major pharmaceutical preparations (tablets, capsules and injectables), such as the treatment for gastric ulcers and gastritis Gaster, as one of the company's major production facilities. Part of its production and maintenance activities have been contracted out to Yamanouchi Tokai Business. The Nishine Plant and Tohoku Yamanouchi have been manufacturing products such as the treatment for the functional symptoms of benign prostatic hyperplasia Harnal and the antihypertensive Hypoca since the Nishine Plant went into operation in 1987. With the announced move, Yamanouchi will complete the integration of all its formulation facilities in Japan. However, Yamanouchi will continue to directly control the functions of Institute for Technology Development as well as the R&D functions of pharmaceutical technology in order to centrally manage the company's production sites around the world and provide technical support services.

In addition to its bulk drug production facilities in Takahagi, Ibaraki Prefecture, and Ireland, Yamanouchi has formulation facilities in Japan, Europe, and the US, and has already established a global production system. In order to continuously increase its corporate value, Yamanouchi will continue to review its production system and further strengthen its global competitiveness.

The profile of the new subsidiary which will be created according to the announced decision is as shown below.

1. Profile of the new company
Name: undecided
Established: April 1, 2005
Headquarters: Yaizu, Shizuoka
Plants: Yaizu Plant (Yaizu, Shizuoka Prefecture) and Nishine Plant (Nishine-cho, Iwate-gun, Iwate Prefecture)
Representative: undecided
Capital: undecided
Total assets: undecided
Number of employees: about 560
Main businesses: contract manufacturing of ethical drugs, contract manufacturing of investigational drugs, and contract services around the Yaizu business site
Main products: Gaster, Harnal, Lipitor (treatment for hypercholesterolemia), etc.


2. Profile of the parent company
Name: Yamanouchi Pharmaceutical Co., Ltd.
Established in: April 1923
Headquarters: 3-11 Nihonbashi Honcho 2-chome, Chuo-ku, Tokyo, Japan
President and CEO: Toichi Takenaka
Annual sales (consolidated): 506.6 billion yen (fiscal year ended in March 2003)
Number of employees (consolidated): 9,278 (End of March 2003)
Main businesses: manufacturing, marketing, import and export of drugs, quasi-drugs, foods, and medical devices