1. Success Stories and Lessons from US Strategies in Japanese Pharmaceutical Companies November 17 th, 2006 Ken Araki Senior Director, Alliance Research, Global Licensing & Business Development Takeda Pharmaceutical Company Limited

2. 2 Takeda ’ s Corporate Overview

3. 3 Fact Sheet  Founded in 1781 and Incorporated in 1925  225 Years Old - one of the longest history in Japanese pharmaceutical industry  Chairman: Kunio Takeda President: Yasuchika Hasegawa  Consolidated Revenue : ￥ 1,212 billion Net Income: ￥ 313 Billion (FY2005)  15,069 Employees (as of March 2006)  12,092 Employees for ethical pharmaceutical business  #15 in Global Rx Sales, but #12 in Market Capitalization

4. 4  #1 Pharmaceutical Company in Japan (7.8% Market Share in 2005 based on IMS Health)  #1 Sales in Global Oral Anti-Diabetics (Actos as a global flagship product) and Strong Franchise in Cardio-metabolic Diseases  #12 Size of Sales Force in United States that is almost equivalent to Wyeth, and larger than BMS and Boehringer (based on combination of TPNA and TAP by Verispan 1Q2006)  #1 Profitability in Global Top 15 Pharmaceutical Companies Competitive Edge

5. 5 Global Presence Takeda Pharmaceutical Company, Ltd. Takeda Pharmaceutical Company, Ltd. Takeda Global R&D Center Inc (as of May, 2006) TAP Pharmaceutical Products Inc. (TAP) Takeda Pharmaceuticals North America, Inc. (TPNA) Marketing R&D Production Takeda Ireland Ltd. Takeda Pharma Ireland Ltd. Takeda Ireland Ltd. Takeda Pharma Ireland Ltd. Takeda Global R&D Centre (Europe), Ltd. Takeda UK Ltd. (UK) Laboratoires Takeda (France) Takeda Italia Farmaceutici (Italy) Takeda Pharma GmbH (Germany) Takeda Pharma GmbH (Austria) Takeda Pharma AG (Switzerland) Takeda UK Ltd. (UK) Laboratoires Takeda (France) Takeda Italia Farmaceutici (Italy) Takeda Pharma GmbH (Germany) Takeda Pharma GmbH (Austria) Takeda Pharma AG (Switzerland) Takeda Chem. Ltd. (Taiwan) P.T. Takeda Indonesia (Indonesia) Tianjin Takeda (China) Boie-Takeda (Philippines) Takeda Thailand (Thailand) Takeda Chem. Ltd. (Taiwan) P.T. Takeda Indonesia (Indonesia) Tianjin Takeda (China) Boie-Takeda (Philippines) Takeda Thailand (Thailand) Takeda Research Investment (TRI) Takeda San Diego, Inc.

6. 6 Sales by Region ￥ 1,127Billion (FY2005) +10.7% Worldwide (Sales of in-house ethical products) *Including TAP sales 33% 52% 14% Japan +10.3 ％ 1% US +11.0 ％ Europe +9.6% Others +2.4 ％ * % in black represents Y on Y growth

7. 7 Y on Y Growth Top 10 Products -Four Global Strategic Products Yen (Billion) FY2005 +2.5% +26.4% +25.4% +1.3% +14.6% +2.5% +3.4% +24.1% -5.6% +6.3% Note:Top four products based on global including partner’s sales; Others based on sales in Japan only

8. 8 * ( ) as % of net sales FY2005 FY2004 Y on Y Growth 1H 06 1H 05 Y on Y Growth Net sales 1,2121,123+7.9%642600+7.1% (100.0%) R&D170142+19.9%9682+16.9% (14.0%)(12.6%) Operating income 403385+4.6%236215+9.7% (33.2%)(34.3%) Ordinary income 485442+9.8%299259+15.3% (40.0%)(39.4%) Net income 313277+12.9%159181-12.2% (25.8%)(24.7%) Financial Overview - History of Solid Performance Enables Higher R&D Expenditure Yen(Billion)

9. 9 Product Pipeline in P- Ⅱ or later - NCE-

10. 10 Projected Launch Of New Products (Targeted Launch Schedule in US) 2006 2005 2007 2008 2010 | Contingency plans are prepared Rozerem (US. Launched)Amitiza (US. Launched) SYR-322 TAK-475 TAK-242 EMD-72000 Hematide TAK-390MR* * developed by TAP

11. 11 Strategic Rationale for Advancement to US

12. 12 Scale ａｎｄ Growth Trend of US Rx Market - Still Attractive for Japanese Pharma Companies

13. 13  Marketing - Source of Innovative Methods due to Private-centric Market  Science of Physician Targeting  DTC(=Direct-to-Consumers)  Disease Management  Authority - Tightening Regulation, but still Relatively Fast to be Launched  Development - Higher Cost, but still Base of Global Clinical Development  Easy to Recruit Patients  Source of Unique Clinical Design related to Marketing Strategies  Research - More Investment on Science than in Europe since mid-1990  Strong Accumulation of Biotech Companies US Market as a Show Case of Global Rx Business

14. 14 Positioning of Japanese Pharmaceutical Companies in US

15. 15 US Major Brands Originated in Japan Alzheimer’s disease (52%) GERD -PPIs (23%) BPH (62%) Hypertension -ARBs (21%) Type-2 diabetes - PPAR agonists (50%) Immuno-suppressants (21%) Antibiotics - quinolones (40%) Prostate cancer (62%) Prograf Benicar TRx Share Data based on IMS Health on September 2006

16. 16 Leading Japanese Corporation and Products in US Corporation Rank 2005 Sales in US (mil $) 1PFIZER 26,665 15TAKEDA 4,451 19EISAI 2,648 28OTSUKA 1,526 35DAIICHI SANKYO 1,088 39ASTELLAS PHARMA 1,036 70ALTANA 324 … … … … … Product Rank 2005 Sales in US (mil $) 1LIPITOR (PFIZER) 8,063 4PREVACID(TAP/TAKEDA) 3,633 21ACTOS(TAKEDA) 2,124 28PRAVACHOL (BMS) 1,655 30ABILIFY(OTSUKA ) 1,478 34LEVAQUIN (MCNEIL/DAIICHI ) 1,377 40ACIPHEX(EISAI ) 1,197 43ARICEPT(EISAI ) 1,133 68CRESTOR (ASTRAZENECA) 796 70FLOMAX (BOEHRINGER/ASTELLAS) 766 … … … … … … … … Japanese Corporations: 5 out of 70 (share 4.5%) Japanese Products: 9 out of 70 (share 11.6%) … … Source: IMS Health, * Takeda’s sales includes 50% of TAP’s

17. 17 Number of Sales Forces in US

18. 18 Case Studies of Advancement to US in Major Japanese Pharmas

19. 19  Established: 1985 Equity Ownership: 50% Takeda, 50% Abbott Location: Lake Forest, Illinois Employees: 3,050 Major Products:  Prevacid (PPIs, GERD)  Lupron (GnRH agonist, prostate cancer and endometoriosis) TAP Pharmaceutical Products ， Inc. - Description Trend of Sales and Profits in Past Three Years

20. 20  Utilization of Partner’s Clinical Development Capability and Business Infrastructure  1977: Establishment of Takeda Abbott Products as a Clinical Development JV  1985: Establishment of Current Entity with Marketing Capability  1986: Launch of Lupron(daily, self injection)  1987: Launch of Lupron Depot(monthly administration at physician office)  1995: Launch of Prevacid  Good Initial Start  Successful Change of Initial Launch Plan from Cephalosporin to Lupron  Immediate Launch of More Convenient Depot Formulation of Lupron  Taking Much Longer Time from Launch of 1 st Product to 2 nd Product  No Clear Path of Clause to Exit the JV Lessons form TAP

21. 21  Established: 1998 Location: Lincolnshire, Illinois Employees: 3,000 Major Products:  Actos (PPAR agonist, type-2 diabete)  Rozerem (MT1/2 agonist, insomnia)  Amitiza* (chloride channel openner, chronic constipation) Takeda Pharmaceuticals North America ， Inc. - Description Trend of Sales and Profits in Past Three Years * licensed from Scampo

22. 22  Fully Owned Marketing Subsidiary as an Independence of TAP for Takeda  1998: Establishment of TPNA  1999: Launch of Actos with Lilly (7 years contract)  2004: Co-promotion of Niaspan/Advicor with Kos Pharmaceuticals (3 years contract)  2005: Launch of Rozerem Launch of Fixed Dose Combination of Actos and metformin  2006: Launch of Amitiza Co-promotion of Provigil with Cephalon (3 years contract) Launch of Fixed Dose Combination of Actos and sulfornylurea  Use of Effective Co-promotion Strategy  Maximization of Sales Force Effectiveness  Highly Synergetic Effects for Existing and Future Products  3 Years Behind of Fixed Dose LCM Strategy Compared with a Competitor Lessons form TPNA

23. 23  Established: 1998 (Fujisawa) 2000 (Yamanouchi) Location: Deerfield, Illinois Employees: 650 Major Products:  Prograf (immuno- suppressant, renal transplantation)  Adenoscan (contrast agent)  VESIcare (muscarine M3 antagonist, OAB) Trend of Sales and Profits in Past Three Years Astellas Pharma US, Inc. - Description

24. 24  Fujisawa: Solid Footprint on Specialty Rx Business after a Long Struggle  1981: Establishment of 50/50 JV with Fujisawa and SmithKline Beckman  1987: Acquisition of Remaining Interest of the JV from SmithKline  1989: Acquisition of Lyphomed  1992: Withdrawal of Flsemaid Ordered by FDA due to its False Application Data  1994: Launch of Prograf  1997: Divesture of Lyphomed’s Assets  1998: Establishment of Fujisawa Healthcare, Inc.  2001: Launch of Protopic (Afterward Co-promoted with GSK and Roche)  2005: Launch of Mycamin Co-promoted with Roche  2006 ： Acquisition of World-wide Marketing Rights of Amevive from BiogenIdec Lessons form Astellas Pharma US (1)

25. 25  Yamanouchi: Exploring Expansion of PCP Business in US for a Long Period  1985: Preliminary Discussion with Lilly to Set up Commercial JV in US  1991: Minority Investment (29%) in Roberts Pharmaceuticals  2000: Divesture of the Minority Investment in Roberts Establishment of Yamanouchi America, Inc.  2004: Joining of Co-promotion Activity in Flomax  2005: Integration of Yamanouchi America and Fujisawa Healthcare Launch of VESIcare Co-promoted with GSK  2006 ： Launch of Vaprisol Difficulty of Management of Discrepancy of Both Parties’ Speculation in JV Points to Be Considered in Case of Strategic Acquisition  Through Examination of Correspondence with Own Strategic Objectives  Mutual Trust between Both Parties  Pricing Lessons form Astellas Pharma US (2)

26. 26  Established: 1995 Location: Teaneck, New Jersey Employees: 850 Major Products:  Aricept (acetylcholinase inhibitor, Alzheimer’s disease)  Aciphex (PPIs,GERD)  Zonegran* (sodium channel blocker, seizure disorders) Eisai, Inc - Description Trend of Sales and Profits in Past Three Years * licensed from Elan and Dainippon Pharmaceuticals

27. 27  Only Japanese Pharma Company with Full-line Rx Business Function in US  1987: Establishment of Eisai Research Institute of Boston  1994: Establishment of Process, Research, Bulk Pharmaceutical Company  1995: Establishment of Eisai, Inc.  1997: Launch of Aricept Co-promoted with Pfizer Completion of Pharmaceutical Production and Formulation Company  1999: Launch of Aciphex Co-promoted with Janssen Pharmaceutica  2002: Establishment of Eisai Medical Research, Inc.  2003: Assuming of US Distribution Responsibilities for Aricept  2004: Acquisition of US Marketing Rights for Zonegran from Elan  2006: Acquisition of Oncology Portfolio and Sales Force from Ligand Pharmaceuticals  Aggressive Products Acquisition Concentrated on Core Therapeutic Areas  Cerebyx, Zonegran, rufinamide, and resagiline  Acquisition of Ligand’s Oncology Portfolio as an Internal Training for Future Launch  Sticking to Management of Brand Names and Full Sales Book Lessons form Eisai

28. 28  Established: 1996 Location: Parsippany, New Jersey Employees: 880 (Sep.2005) Major Products:  Benicar (ARB antagonist, hypertension)  Welcol* (bile acid sequestrant for hypercholesterolemia) Sankyo Pharma, Inc. (Now Daiichi Sankyo, Inc) - Description Trend of Sales and Profits in Past Three Years * licensed from Genzyme

29. 29  Establishment of Operation by Execution of Buy-out Option to Marketing JV  1996: Establishment of Marketing JV with Warner-Lambert  1997: Launch of Rezulin Co-promoted with Warner-Lambert  2000: Withdrawal of Rezulin from US Market Launch of Welchol  2001: Execution of the Buy-out Option followed by Merger with Pfizer and W-L  2002: Launch of Benicar Co-promoted with Forest Laboratories (6 years contract)  2005: Integration of SPI and DPH followed by Merger with Sankyo and Daiichi  Holding of Buy-out Option to Marketing JV  Pre-determined Valuation Methodology to Purchase Remaining Interest  Best Choice for Partnering of Promotion in Benicar without Puzzling to the Scale of Business Lessons form SPI

30. 30 ConclusionConclusion

31. 31  Acquisition  Through Examination of Correspondence with Own Strategic Objectives  Mutual Trust between Both Parties  Pricing  JV  Commitment by Both Parties  Sharing Clear Goal to Achieve with Both Parties  Clear Path to Exit for Both Parties  Co-promotion by Creating Own Sales Force  Trying Best Choice for Partnering without Puzzling to the Scale of Companies  Series of Efforts to Fill Product Pipeline through Internal Projects, Products Acquisition, and Another Co-promotion Activity to Maximize Capacity of Current Sales Force and Create Room to Expand it How Should an Emerging Pharma Company Go Advance into US Market ?

32. 32 acquisition of Synthelabo cancellation of JV (Eloxatin) increase own share of co-pro profits (Avapro) reversion of whole distributorship (Ambien) 1 product launched 4 products launched Success Model: Sanofi - Synthelobo