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CEO Message On the Forefront of Healthcare Change to Turn Innovative Science into Value for Patients Yoshihiko Hatanaka Representative Director, President and CEO

Performance and Short- and Medium-Term Outlook

Remarkable First Year of the Strategic Plan with Strong Growth from Oncology and Urology OAB Franchises

In fiscal 2015, we achieved solid results and made significant progress on implementing the three strategic priorities contained in Strategic Plan 2015-2017, “Maximizing the Product Value,” “Creating Innovation,” and “Pursuing Operational Excellence.”
The initiatives of “Maximizing the Product Value” remained ontrack. We posted further growth in sales from the franchises of oncology and overactive bladder (OAB), which are key growth drivers for Astellas. On a core basis, we reported higher consolidated sales and earnings in year-on-year terms. Sales increased 10% to ¥1,372.7 billion, and operating profit rose 24% to ¥267.5 billion. Our investments to date are reaping returns.
We expect some degree of impact on our performance in 2018-2020 due to the expiries of patents for the OAB treatment Vesicare and the anticancer product Tarceva. However, we are confident that our core products in both franchises will bolster our growth throughout this period, including the prostate cancer treatment XTANDI and the OAB treatment Betanis/Myrbetriq/BETMIGA.

Overcome the “Patent Cliff” by Advancing Late-Stage Development

For “Creating Innovation,” we are actively enhancing our capabilities to deliver innovative medicines. We achieved steady progress including marketing approvals for new products in fiscal 2015. We also have a number of projects with strong potential in late-stage clinical development, including gilteritinib and ASP8273 in the oncology field, and roxadustat for anemia associated with chronic kidney disease. We are looking forward to further progression of these development activities. The innovative drug business always has the risk of a so-called “patent cliff” in connection with the expiry of patents for core products. The best way to mitigate this risk is to steadily advance the late-stage projects in line with our development schedule.

Targeting ROE of 15% or More by Maximizing Profits and Enhancing Capital Efficiency

Astellas positions return on equity (ROE) as an important management indicator. We are working to maintain and boost ROE by maximizing profits while enhancing capital efficiency. Our ROE reached 15.0% in fiscal 2015. We will continue to return profits to shareholders by increasing dividends in a stable and sustained manner, based on the medium- to long-term profit outlook. We will also flexibly implement share buybacks as needed based on an overall consideration of 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 return to shareholders.

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