Medium-Term Management Plan

• Management Policy
• Management Vision
• Business Environment
• Risks and Opportunities
• Financial and Capital Strategy
• Governance
• Non-Financial Strategies

ASKA Pharmaceutical Holdings' Medium-Term Management Plan 2025

We have formulated the ASKA Pharmaceutical Holdings Medium-Term Management Plan 2025, which sets FY2025 as the final year. Our numerical targets are net sales of 70 billion yen, an operating profit margin of 8%, and ROE of 8%. The foundation for promoting this plan is built on three pillars: expertise, innovative capabilities, and social contribution.
Our core business, the ethical pharmaceuticals segment centered on hormone preparations, represents our strength, and we will further enhance our capabilities in new drug creation and business development in our three priority areas. Based on this foundation, we have established “Four Visions” and “Seven Strategies.”
Furthermore, by reinforcing ESG management, our Group aims to become a Total Healthcare Company with a Strong Foundation as a Specialty Pharma Company

Presentation 1.25MB

Management Policy

In order to remain a company that is trusted by society, we will continue to contribute to healthcare by transforming into a leading company in the specialty areas within our domestic pharmaceutical business, and by creating pharmaceutical products that meet social needs through innovations. Furthermore, building upon our current business, we are aiming to become a “Total Healthcare Company” by conducting business operations domestically as well as internationally across the entire healthcare market of Prevention, Testing and Diagnostics, Treatment, and post-treatment.

Management Vision

Become a Total Healthcare Company with a Strong Foundation as a Specialty Pharma Company

Four Visions

• 1. Expand business scope centered on pharmaceutical products
• 2. Improve business operations through promoting open innovations
• 3. Become the top domestic company regarding our specialty areas for pharmaceutical products
• 4. Continue to be a company that holds Society’s trust

Target Figures

Sales (consolidated)	Operating profit rate (Consolidated)	ROE (Return on Equity)
70 billion yen	8%	8%

Progress Chart

For FY2024, net sales are expected to reach 64.1 billion yen, with an operating profit margin of 8.3% and ROE of 8.0%, achieving the mid-term management plan targets of an operating profit margin of 8% and ROE of 8%.

	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025(Forecast)
Sales (Millions of yen)	55,181	56,607	60,461	62,843	64,139	71,000
Operating Profit Margin (%)	6.5	8.5	8.4	10.3	8.3	8.5
ROE (%)	6.3	8.8	8.2	13.0	8.0	-

Overview of Operating Results for the Fiscal Year Ended March 31, 2025

During the consolidated fiscal year under review, while the Japanese economy showed a moderate recovery supported by solid corporate earnings, the global economic environment remained uncertain due to the impact of worldwide monetary tightening, rising geopolitical risks, and developments in U.S. tariff policies. In the pharmaceutical business, which is the core of our Group, business conditions continued to be challenging, as the industry remained affected by annual drug price revisions and ongoing measures to curb medical expenses. Despite these circumstances, our Group achieved higher net sales than in the previous fiscal year, driven by the growth of priority products.

Net sales for the fiscal year increased by ¥1,296 million year on year to ¥64,139 million. This was mainly attributable to steady performance in the pharmaceutical business, particularly in products in the obstetrics and gynecology field, as well as increased revenue in the animal health business, led by growth in feed additive products. The cost of sales ratio declined by 0.1 percentage points compared to the previous fiscal year, with cost of sales amounting to ¥32,803 million. As a result, gross profit increased by ¥670 million year on year to ¥31,335 million.

On the other hand, selling, general and administrative expenses rose by ¥1,839 million to ¥26,003 million, mainly due to increased R&D expenditures, resulting in operating income of ¥5,331 million, a decrease of ¥1,168 million from the previous fiscal year. Ordinary income was ¥5,107 million, reflecting non-operating income of ¥398 million and non-operating expenses of ¥622 million.

Extraordinary income included a gain on sales of investment securities of ¥127 million, as well as ¥1,257 million related to the consolidation of Ha Tay Pharmaceutical Joint Stock Company, a Vietnamese pharmaceutical company accounted for using the equity method. Meanwhile, extraordinary losses of ¥300 million were recorded due to impairment of intangible assets. Consequently, profit attributable to owners of parent was ¥5,101 million, representing a decrease of ¥2,444 million compared to the previous fiscal year, mainly due to the absence of extraordinary gains from the sale of investment securities recorded in the prior year.

Seven Strategies

1. Enhancing Corporate Value by Strengthening Initiatives in the Specialty Areas

• Contribute to improving women's QOL as a leading company in the field of obstetrics and gynecology
• Promote awareness activities within the thyroid field and contribute to the treatment of potential patients

2. Continuous Creation of New Drugs through Advanced Drug Discovery

• Leverage open innovations to continuously create new drugs
• Promote and enhance global alliance activities as well as In-and-Out-licensing activities

3. Overseas Operations

• Develop and provide high-quality pharmaceuticals within Asia, and strengthen our presence

4. Providing New Value to Realize “Total Healthcare”

• Strengthen animal reproduction, immunity, and nutrition to support the health of companion animals
• Take on new business challenges within the Testing and Diagnostic business, etc.

5. Improving Operational Efficiency, managing Costs, and Reinforcing Our Financial Base

• Promote cost efficiency
• Promote operational efficiency by engaging in DX

6. Foster an Organizational Culture that Emphasizes thorough Compliance and Accountability

• Ensure company compliance and enhance trustworthiness from society
• Achieve a high quality and stable supply chain at any given time
• Strengthen corporate governance under the HD system

7. Develop Human Resources to Realize Growth Strategies

• Develop and attract human resources that are capable of responding to new business opportunities as well as the changing environment
• Create an environment in which a diverse range of talent can thrive, including women, professionals at every stage of their work journey and active seniors. “ASKA Pharmaceutical Holdings aims to achieve its financial targets and to contribute to the realization of SDGs by addressing social issues through its business activities.”

（7 Strategies）Medium-Term Management Plan 2025: Results of the 3rd year, and Future Efforts

Strategies	Results of the 3rd year	Future efforts
①	Achieved No. 1 sales in the Ob/Gyn area RIFXIMA received approval for the pediatric indication Signed an agreement with SUSMED for joint development and marketing of digital therapeutics	Strengthen our presence as a leading company in the field of Ob/Gyn Establish the market value of LF111 as Japan’s first progesterone-only pill (POP) Contribute to women’s health through around-the-pill solutions including digital therapeutics Continue raising awareness of hepatic encephalopathy and thyroid disease
②	Initiated Ph I/II for AKP-022 (relugolix combination tablets) Preparation for filing LF111 to authorities Signed a joint research agreement with Red Arrow Therapeutics to develop a new treatment for preeclampsia	Speed up development of AKP-022 (for uterine fibroids and endometriosis) Flesh out pipeline by stepping up inlicensing and outlicensing Continue search for in-house-discovered seeds by inviting drug discovery research proposals
③	Executed capital increase in Vietnamese pharmaceutical company Ha Tay Pharmaceutical Joint Stock Company (Hataphar) Filed for WHO-GMP approval of Hataphar's new plant	Strengthen partnership Support new Hataphar plant’s preparation for acquiring PIC/S GMP certification Expand into other Southeast Asian markets
④	Established corporate venture capital (CVC) fund and started investment Commenced sale of training videos on women's health Launched new feed additives Launched two new hormone measurement kits	Explore new businesses in areas peripheral to pharmaceuticals, including via CVC fund Pursue fast-track establishment of Femtech business Develop products addressing untapped demand in companion animal field Establish non-invasive measurement business
⑤	Continued efforts to reduce cost of sales ratio (Cost of sales ratio:FY2020 54.0％→ FY2023 51.2％)	Build sustainable supply chain Promote DX across the entire Group Maintain stable and efficient financial structure Undertake re-review of unprofitable products in portfolio Continue responding to cost increases stemming from external factors
⑥	Continued review of quality management system Continued implementation of compliance training	Build global risk management and compliance structure Continue to foster quality culture
⑦	Took various measures to make work styles more flexible Named to the White 500 (top 500 enterprises) in Certified Health & Productivity Management Outstanding Organizations Recognition Program (ASKA Pharmaceutical Holdings for third straight year, ASKA Pharmaceutical for sixth year) Expanded education and training programs Established work support grant and introduced cancer insurance coverage for employees	Strengthen HR development through Next-Generation Leader Development Program Continue making investments that draw out the value of human resources

Medium-Term Management Plan Presentation Materials

FY2020 Financial Results & New Medium-Term Management Plan Briefing Video (held on May 19, 2021) *New Plan Only, Japanese version only

　
• May 19, 2021
  FY2020 Financial Results & New Medium-Term Management Plan Presentation Materials (held on May 19, 2021) [PDF]

Business Environment

In addition to market changes such as annual drug price revisions under medical cost containment policies, issues related to pharmaceutical quality and supply, and the increasing difficulty of drug discovery, the environment continues to be highly challenging. This is further compounded by changes in the international situation, including the Russia–Ukraine conflict, global supply chain disruptions, and rising costs of energy, raw materials, and labor.

Changes in the Obstetrics and Gynecology Market

The obstetrics and gynecology market, which is the core of our group's ethical pharmaceuticals business, is expected to grow continuously.

Changes in the Environment Surrounding Women

Promotion of National Policies on Women’s Empowerment

• Inclusion in the Basic Policy 2024 and Women’s Version of the Basic Policy 2024
• Support for balancing women’s health issues—such as menstruation, pregnancy/childbirth, and menopause—with work
• Introduction of the Gynecology-Specific Disease Treatment Management Fee (2020)
• Insurance coverage for infertility treatment (2022)

Women’s Advancement in Society and Lifestyle Changes

• Increase in the number of female employees and women in management positions
• Greater understanding of women’s health issues, improved health literacy, and increased exposure through media and social networks

Advances in Medical Technology and Access Related to Women’s Diseases

• Expansion of high-quality pharmaceuticals, particularly in Asia, to enhance presence
• Diversification of treatments for dysmenorrhea and infertility
• Expansion of internet access and online medical consultations

The Group's Share of the Obstetrics and Gynecology Market

Share of the Group's growth drivers, the uterine fibroid and endometriosis treatment RELUMINA and the dysmenorrhea treatment product line.

Risks and Opportunities

At ASKA Pharmaceutical Holdings, we identify the most critical issues to address by properly analyzing the current situation and the associated “opportunities” and “risks” from the perspective of their relevance to our businesses and social contribution, with the aim of achieving sustainable growth across the Group.
In particular, by focusing on materialities where our strengths can be maximized—namely “Contributing to Women’s Health” and “Contributing to Animal Health”—the entire Group works on each initiative, thereby contributing to the achievement of the SDGs.

Financial and Capital Strategy

Practicing management conscious of cost of capital and shareholder value, while also boldly pursuing growth investments

Evaluation of FY2024 Performance and Progress of Medium-Term Management Plan 2025

During the consolidated fiscal year under review, the Japanese economy is on a moderate recovery trend due to solid corporate performance etc. However, the economic environment remains highly uncertain owing to the impact of global monetary tightening, heightened geopolitical risks, and trends in U.S. tariff policy. The pharmaceutical business, which is the core of our Group, continued to face a challenging business environment due to the impact of ongoing policies to control medical costs, including annual NHI drug price revisions. Even under these circumstances, the Group's businesses achieved net sales that exceeded the previous fiscal year due to growth in key products and other factors. Due in large part to growth in sales of new products in the Ob/Gyn field, net sales increased ¥1,296 million year on year to ¥64,139 million, for the sixth consecutive fiscal year of growth dating back to before the transition to a holding company structure. With operating profit and ordinary profit similarly increasing year on year for the fourth consecutive fiscal year, business performance has been brisk for several years now. Against this backdrop, the Group targets net sales of ¥70 billion, an operating profit margin of 8%, and ROE (return on equity) of 8% in Medium-Term Management Plan 2025. To achieve those goals, in our domestic operations we must continue to roll out new drugs in the core pharmaceutical business, which accounts for some 90% of net sales, in order to offset negatives such as annual NHI drug price revsions. We must also ensure that Group companies step up efforts to expand adjacent businesses including Femtech, animal health, and testing and diagnostics. In our overseas operations, I think it is essential that we accelerate our efforts in the fast-growing Southeast Asian market.

Cash Allocation and Business Portfolio

The Group operates a pharmaceutical business, animal health business, and testing and diagnostics business under the ASKA Pharmaceutical Holdings umbrella. Common to all are the tasks of globalization and business diversification with a view to becoming a total healthcare company. The steps we take in that direction will form the basis of our basic growth strategy and therefore are the target of our growth investments. When it comes to cash allocation there are four main areas in which we are investing for growth. First, we are focused on expanding our new drug pipeline in order to secure stable future cash inflows for the core pharmaceutical business. In particular, we seek to grow our businesses in the Ob/Gyn and thyroid fields, where we are established already as the leading company, and in the thyroid field. Second, we plan investments in new growth businesses. We are focusing in particular on the Femtech, animal health, and testing and diagnostics businesses, where we expect to see synergies with our existing businesses. In the animal health business, we will launch new products in the companion animal² (CA) field, where we see more opportunities for our company than in the production animal³ (PA) field. When it comes to Femtech, we have started providing materials to support women’s health and work styles within our own company, and we also plan collaborations with other companies. Our third area of focus is overseas expansion. The initial challenge is to accelerate our foray into Southeast Asia. Lastly, we will also actively invest in human capital and in business and capital alliances with other companies, in order to acquire the human resources and capabilities needed to execute our growth strategies. Over the years, we have not hesitated to change our business strategies to suit the times. Some years ago, ASKA Pharmaceutical’s Iwaki Factory in Fukushima Prefecture, which is the Group’s main production base, sustained damage in the 2011 Great East Japan Earthquake, hindering the production and supply of pharmaceuticals. This led to a temporary slump in both sales and profits. At that time, our business was centered on generic drugs, against a backdrop of government policies aimed at reducing drug expenditures. Once we had recovered from the earthquake damage, we decided to alter our business strategy. We changed tack and began concentrating management resources on our traditional specialty areas of internal medicine, Ob/Gyn, and urology, also actively in-licensing products from other companies, both domestically and overseas, and spending heavily on R&D, including drug discovery. I believe that this growth strategy founded on strengthening specialty areas has paid off and is the reason for our strong business performance in recent years. This business portfolio transformation was an essential initiative for sustaining corporate growth. While the Group will continue leveraging its strengths in the aforementioned specialty areas, our aim is to build a portfolio of new businesses to serve as the next pillars of growth. Currently, the Group's products are mainly pharmaceuticals, but we are also venturing into adjacent areas such as digital therapeutics and medical devices, as well as wider-ranging support for addressing women's health concerns. The pharmaceutical industry in Japan is viewed as a defensive sector that is relatively immune to economic vagaries. Pharmaceutical company operations can be significantly affected, though, by NHI drug price revisions and weak yeninduced increases in procurement and manufacturing costs. In order to establish a stronger corporate constitution, I believe we need to build a business portfolio in which multiple businesses support each other in maintaining stability.
<sub>2. Animals such as dogs and cats that are kept as pets
3. Animals such as cows, pigs, and poultry, whose products and labor are useful to humans</sub>

Action to Implement Management That is Conscious of Cost of Capital and Share Price

As noted earlier, earnings have been robust for some years now. That said, there has been little change in market cap, considered a measure of corporate value, and improving the PBR (price-tobook ratio) has been a major challenge. We accordingly conducted an internal analysis and also sought the opinions of shareholders and investors to identify the issues facing the Group, evaluate the current situation, and come up with policies and initiatives for improvement. We released these in November 2023, under the title “About Action to Implement Management That is Conscious of Cost of Capital and Share Price,” the essence of which is outlined below. The PBR remained below 1x from FY2018 through FY2022 even though ROE reached the 8% target set in Medium-Term Management Plan 2025 ahead of schedule in FY2021 and has remained above 8%. We determined that the reasons for this were that (1) the feasibility of our growth strategy was not fully understood; (2) there was insufficient external communication, including through IR; and (3) there was no detailed disclosure concerning cash allocation, which meant that we were not providing a clear direction for our growth strategy and shareholder returns. In addition, we concluded that the market’s evaluation of the Group’s ability to generate profits in our core business had not risen sufficiently. Within “Action to Implement Management That is Conscious of Cost of Capital and Share Price,” we included a basic policy for our growth strategy, disclosing specific cash allocations. In the core pharmaceutical business, we seek to further strengthen our position as a leading company in the Ob/Gyn field, while in the animal health business we will invest in expanding our presence in the companion animal field. In order both to strengthen our drug discovery research as an R&D-oriented company and grow as a total healthcare company, we will invest the cash generated through our business activities not only in the pharmaceutical business, but also in global expansion and in new businesses such as Femtech. In addition, we will allocate cash for investment in human capital and production facilities with a view to strengthening our management base (see diagram) We initiated a new policy for shareholder returns. Previously, our basic policy for returning profits to shareholders was to maintain a stable dividend regardless of profit levels. However, as business performance improved, we began to receive feedback from investors regarding room for enhancing both the dividend amount and the dividend payout ratio. Therefore, as of FY2024 we have shifted to a performance-linked profit distribution system for dividends, setting a consolidated dividend payout ratio benchmark of 30%. By also setting a minimum per-share dividend of ¥30 per year, we aim to maintain a stable dividend while returning profit to shareholders in line with business performance. PBR can be broken down into ROE and PER (price-to-earnings ratio). ROE was rising in line with our business performance, but PER remained low. Shareholders and investors seem to believe that there is a mismatch between our growth strategy and perceptions about the Group’s future, so we decided to strengthen our IR activities in order to deepen shareholders’ understanding of our core business’ potential for generating profits. The PER multiple essentially reflects the market and shareholders’ expectations regarding a company’s growth. We are committed to creating opportunities for fully and promptly explaining our strategies to ensure that stakeholders have the best possible understanding of our growth potential. This includes fleshing out the content of IR meetings, holding results briefings for both individual and institutional investors, hosting small meetings, and organizing pipeline briefings, which are of great interest to stakeholders. Any opinions obtained from these discussions will be reported to the Board of Directors, to be reviewed and potentially parlayed into improvements ensuring timely and appropriate dissemination of information.

Cash Allocation Plan for FY2023-2025 (Released in November 2023)

<sup>4. Assumed operating profit + Depreciation + R&D expenses (excluding tangible assets)
5. CVC: Corporate venture capital
6. CA: Companion animal</sup>

Pursuing Higher Capital Efficiency in Management

The Group seeks to optimize its capital structure with a view to maximizing corporate value. In addition to controlling working capital and strengthening management of fixed assets, we will continue to review non-business assets with the intention either of making effective use of these assets in our businesses or divesting them. As an example, we will examine the appropriateness of continuing to hold crossshareholdings from the perspective of capital efficiency and consider selling those that don’t appear to be worth keeping, for reasons such as a lack of synergy. As a result of sustained efforts to bring the ratio of cross-shareholdings to consolidated net assets below 20% by end-March 2024, as of that point the ratio was 18.4%, down 3.9% from the end of the previous fiscal year. We are committed to practicing management that is conscious of the share price, to meet the expectations of shareholders. With a view to further sharing value with our shareholders, from FY2024 we will expand the scope of restricted share compensation from directors and above to all corporate officers. In Medium-Term Management Plan 2025, we are targeting an ROE of 8%. As a result of our sustained efforts toward improvement, we recorded an ROE of 13.0% in FY2023, remaining above the target set in our medium-term plan. It goes without saying that the Group’s three operating companies each have a strong awareness of ROE. At Group Business Strategy Meetings, ROE figures are presented in the process of reporting on each company’s business progress and performance status, and debate is held on the subject of what each unit can do to further improve ASKA Pharmaceutical Holdings’ ROE. The Group’s emphasis on ROE is also reflected in the design of executive compensation. Executive compensation is linked to various performance indicators, including sales, operating profit and ROE, in order to create a system that contributes to sustained improvement in corporate value. In addition to these performance indicators, since FY2023 we have included non-financial indicators such as the CO2 emissions reduction rate in the performance evaluation items of corporate officers.

PBR (price-to-book ratio) and ROE (return on equity)

Cost of Shareholders’ Equity

As noted earlier, the Group strives to practice management with an awareness of the cost of capital. In addition to improving ROE, we are working to find ways to reduce capital costs based on the belief that there is a positive correlation between PBR and the equity spread, which is ROE less the cost of shareholders’ equity. While acknowledging that there are various ways to look at the cost of shareholders’ equity, I like to think of the cost of equity as the cost incurred by a company when raising funds from shareholders, essentially representing investors’ required rate of return on the securities issued by a company. I believe that IR activities are important in this context. When a company is reluctant to engage in IR activities and provides insufficient disclosure regarding its finances and business, investors can struggle to identify the risks and opportunities, causing them to view investment in the stock as high-risk and to demand a higher rate of return. On the other hand, if a company provides as much disclosure as possible so as not to spring any surprises on investors, investment in the stock will be perceived as low-risk, the expected rate of return will be lower, and the cost of shareholders’ equity is likely to improve as a result. On this basis, by further strengthening our IR activities we aim to reduce the effective cost of shareholders’ equity and work with shareholders and investors toward increasing corporate value.

Continue to take initiatives to swiftly achieve a PBR of above 1x

1. Growth strategy

• Implementation of growth strategy
• Optimal cash allocation

2. Strengthen shareholder returns

• Dividend payout benchmark ratio of 30% from FY2024
• Minimum annual dividend of 30 yen per share

Dividends and Dividend Payout Ratio

3. Strengthen IR activities

• Creation of dialogue opportunities
• Expansion of information disclosures

Governance

Basic Approach

Our Company continuously pursues the highest standards of corporate governance and is committed to its ongoing enhancement based on the following fundamental principles:

1. We strive to ensure that shareholders’ rights are effectively protected and that all shareholders are treated equitably.
2. We work to engage appropriately with stakeholders and foster a corporate culture that respects ethical business conduct.
3. We appropriately disclose the Company’s financial, managerial, and other information to ensure transparency.
4. The Board of Directors establishes an environment that enables bold management decisions based on corporate strategy, while exercising highly effective oversight of directors.
5. We engage in constructive dialogue with shareholders.

Governance

Roundtable Discussion with Outside Directors

Non-Financial Strategies

”We aim to achieve our financial targets and contribute to the realization of the SDGs by addressing social issues through our business activities.”

Promotion of Sustainability

The ASKA Pharmaceutical Holdings Group pursues ESG management so that it can solve social issues through its business. In this, we are guided by the corporate philosophy, “Contribute toward the improvement of people’s health and progress in society through the development of innovative products.”
The Group has identified 11 material issues (most important issues). Of these, ”contribution to women’s health“ and ”contribution to animal health“ are particularly relevant material issues for the Company and are being promoted by the entire Group. We will also work to address climate change by reducing CO₂ emissions through expanded use of solar power generation and the introduction of clean energy, and strengthen our human capital by developing and acquiring human resources capable of responding to new businesses and changes in the business and social environment, and by creating a working environment in which a diverse range of human resources, including women, career professionals, and seniors, can play an active role.
In April 2023, we established a new Sustainability Promotion Section in the Corporate Planning Department with the aim of further accelerating our efforts. We will continue to meet the expectations of our stakeholders by placing sustainability at the center of our management, striking a balance between maximizing the economic value of the Company and enhancing its social value.
Atsushi Maruo
Senior Managing Member of the Board of Directors,
Representative Director, in charge of Sustainability
ASKA Pharmaceutical Holdings

Basic Policy for Sustainability

The Company has established CSR guiding principles and works for the ongoing growth for the Group as a whole and to contribute to society. As a trusted company, we will increase profitability through sound business practices and fulfill our social responsibilities as a good corporate citizen.

1. Supplying High-Quality Pharmaceuticals
   1. All employees conduct business with integrity guided by our corporate philosophy.
   2. We provide a stable supply of high-quality pharmaceuticals with excellent efficacy and safety profiles.
2. Ensuring Compliance
   1. We are thoroughly committed to corporate ethics and to compliance with all laws and regulations.
   2. We maintain fair relationships with stakeholders and conduct transactions that are fair, transparent, and based on free competition.
   3. Regarding the protection of personal information, we manage the information in compliance with our privacy policy.
3. Respecting Human Rights
   1. We respect the human rights of all people affected by our business practices.
   2. We respect the diversity of our employees and strive to foster a safe and comfortable corporate culture.
4. Contributing to Communities and Society
   1. As a good corporate citizen, we communicate with the local community and broader society while striving to contribute to the world.
5. Preserving the Environment
   1. We participate in the realization of a sustainable society through environmental preservation and by practicing environmental management.

Materiality Map

Mapping of Material Issues

The Group aims to become a total healthcare company with a strong foundation as a specialty pharma company. To contribute to solving social issues and building a sustainable society, we identified 17 materialities unique to our Company at the launch of the ESG Committee in 2021 (reorganized to 11 in October 2023, and further reorganized to 6 in April 2025).
In particular, “Contribution to Women’s Health and Animal Health” is considered a materiality where our strengths can be maximized. Based on the Medium-Term Management Plan, the Group works on these materialities as a priority, contributing to the realization of a sustainable society and aiming to enhance corporate value from a medium- to long-term perspective through sustainable growth and the creation of social value.

KPIs and SDGs for Material Issues

ESG	Materiality	KPI	SDGs
E	Promotion of Environmental Management	①CO2 emissions reduction: Company-wide target "60% reduction compared to FY2013 (by FY2035)" / Domestic production site (Iwaki Factory) target "60% reduction compared to FY2013 (by FY2030)" ②Reduction of total waste and maintaining/improving recycling rate at 90% or higher: Plastic recycling rate of 65% or higher (by FY2030) ③Environmentally conscious business development ④Reduction of environmentally hazardous substance emissions (mitigation of nitrogen load through the spread of low-protein feed) ⑤Promotion of biodiversity ⑥Thorough supply chain management and preferential purchase of environmentally friendly products *This materiality will, for the time being, apply only to domestic business activities.
S	Development of Diverse Human Resources for Enhancing Corporate Value	①Promotion of autonomous learning (20 hours/person/year, training cost of 100,000 yen/person/year) ②Promotion of diverse work styles: remote work, location-limited, shorter working hours, maintaining high & semi-high work engagement ratio (40% or higher) ③Promotion of women’s participation (target for FY2029): Female managers (20%) / Female managerial candidates (30%) ④Support for balancing work and life (diversity): Work support allowance, men’s childcare leave (average 20 days or more) ⑤Annual paid leave utilization rate of 80.0% or higher (company-wide average) ⑥Maintaining ICT environment for smooth operations inside and outside the company, ensuring flexible working styles and productivity improvement ⑦Fostering DX talent to improve work process efficiency, thereby enhancing organizational productivity and improving employees’ work-life balance
	Contributing to Women’s Health and Animal Health	①Contribution to healthcare through dissemination of accurate knowledge and disease awareness in specialty areas (obstetrics/gynecology, thyroid) ②Initiatives for sexual education of young people, and information dissemination on pregnancy, childbirth, and parenting ③Promotion of animal welfare ④Development and provision of useful products for maintaining the health of companion animals and livestock ⑤Promotion of academic activities on veterinary pharmaceuticals and related diseases (especially reproductive/endocrine diseases) ⑥Promotion of in-house research themes and strengthening of alliance activities
	Stable Supply of High-Quality Products and Proper Information Provision	①Strengthening value chain management ②Compliance with relevant laws and regulations ③Compliance with guidelines on promotional activities and strengthening training on information tools for MRs, etc. ④Prompt provision of the latest information via the website ⑤Promotion of awareness activities for proper use among veterinary pharmaceutical users (veterinarians, veterinary nurses, livestock producers, companion animal owners)
	Respect for Human Rights	①Efforts toward implementing human rights due diligence based on the ASKA Human Rights Policy ②Employee education and awareness-raising for proper understanding of human rights
G	Strengthening Governance	①Fostering a corporate culture that respects sound business ethics, and appropriate disclosure and explanation of financial and non-financial information ②Ensuring substantive equality of shareholders ③Social contribution activities leading to solutions to social issues ④Constructive dialogue with stakeholders ⑤Promotion of compliance system centered on the Group Compliance Promotion Committee (continuous implementation of preventive measures against serious incidents, etc.)

Major Material Issue Initiatives Achievements

This section introduces the results of our efforts for material issue KPIs that are of particular interest to our stakeholders.
Our ESG Committee will oversee material issue initiatives and drive improvements.

E: Promotion of Environmental Management　　*Limited to domestic business activities
Corresponding SDGs

S: Development of Diverse Talent to Enhance Corporate Value
Corresponding SDGs

KPI	Progress Report (First Half of FY2025)
Promoting Autonomous Learning (20 hours per employee per year)	◎ Average learning hours per regular employee: 11.5 hours (as of the end of September) ◎ Initiatives to encourage self-development: (1) Conducted training for new employees on the use of Udemy and flier. (2) Promoted the use of Udemy Business and flier through internal communications (3 Udemy News issues and 3 flier News issues). (3) Offered elective training programs to provide autonomous learning opportunities (4 programs with 39 participants in total). ◎ Promoted independent learning initiatives in each department, including GCP training, English and Chinese language skill enhancement, and leadership development.
Promoting Diverse Work Styles: Remote Work, Location-Specific Roles, Shortened Working Hours Target Work Engagement Ratio: 40% or higher	◎ Respected individual work–life balance by allowing employees to freely choose between on-site and remote work. ◎ As of the end of September: 5 employees under the Regional MR Employee System and 5 under the Remote Work System; both systems were revised in April 2025. ◎ Six employees utilized the short working hour system (mainly returnees from childcare leave), enabling flexible work arrangements according to family circumstances.
Promoting Women’s Empowerment (FY2029 Targets): Ratio of Female Managers: 20% / Ratio of Female Manager Candidates: 30%	◎ Held in-house roundtable discussions to share views and experiences of employees balancing childcare and work, alongside childcare leave programs exceeding legal standards. ◎ Conducted regular D&I training programs and enhanced the work environment to support women’s continuous career development through life events, resulting in an increase in the ratio of female managers to 14.1% (FY2020: 6.5%).
Initiatives for Work–Life Balance (Diversity): Work Support Incentive / Average Paternity Leave of 30 Days or More	◎ Operated and promoted the “Work Support Incentive System,” compensating employees who supported the workload of colleagues on leave (58 employees supported 17 absentees). ◎ Established a dedicated consultation desk and internal portal to alleviate concerns regarding long-term childcare leave. Promoted paternity leave, resulting in an increase in average leave days (First Half of FY2025: 31.2 days; FY2024: 16.28 days). ◎ Paternity leave acquisition rate: 100% (10 male employees took leave for 8 childbirths). Seven employees took more than one month of leave, with guidance provided to all managers to encourage and facilitate leave acquisition (100% implementation).
Annual Paid Leave Utilization Rate: 80% or Higher (Company-Wide Average)	◎ Annual paid leave utilization rate: 44.7% (Managers: 41.6%, Staff: 46.3%, as of the end of September). Communicated company-wide the FY2025 target of achieving 80% or higher utilization as part of workstyle guidelines.
Maintaining an Effective ICT Environment to Facilitate Flexible Work and Enhance Productivity	◎ Supply Chain Management Department conducted “Planner” study sessions based on feedback from DX promotion activities. ◎ Network environment renewal, scheduled for activation in the second half, is expected to enhance access speed and security. Improved iPhone communication performance will also strengthen tethering connections.
Developing Digital Transformation (DX) Talent to Improve Operational Efficiency, Organizational Productivity, and Work–Life Balance	◎ Introduced a training program for new employees utilizing generative AI to learn about the company’s history and business development, fostering a foundation for DX capabilities. ◎ Provided internal education on AI/RPA and related technologies, disseminating information to strengthen digital literacy and promote DX talent development, thereby enhancing productivity and operational efficiency.

S: Contributing to Women’s Health and Animal Health
Relevant SDGs

KPI	Progress Report for the First Half of FY2025
Contribution to Healthcare through Disease Awareness and Dissemination of Accurate Knowledge in Specialty Areas (Obstetrics & Gynecology, Thyroid Disorders)	◎Endocrinology Business Promotion Office: Published an article on thyroid disease awareness in the April–May issue of *Metropolitana*, an information magazine by Sankei Shimbun. Conducted a web seminar for municipal health promotion officers on women’s life stage-specific health issues, focusing on female and thyroid hormones, among other initiatives. ◎Shonan CMC: Progressed development of three gynecology products toward market launch, including obtaining approval for LF111 (Sulinda Tablets 28). ◎Sales Division: Provided appropriate usage information through national and regional seminars on topics such as hepatic encephalopathy and contraception (15 national lectures, 41 regional sessions, 13 or more co-sponsored seminars). ◎Held the ASKA Media Seminar to promote awareness and understanding of new contraceptive options, reaching 54 media representatives and investors, and featured in publications such as *Yakujinippo*, *Answers News*, *Iji Shinpo*, and *Mizuho Securities* reports. ◎Hosted the “Mint Meeting – Voices that Empower Women” on June 25, engaging approximately 50 women in their 20s–30s to share accurate information on women’s health and the importance of gynecological consultation.
Initiatives for Providing Information on Sex Education and Reproductive Health from Adolescence through Childrearing	◎Exhibited informational booklets on contraception and emergency contraception at “Seminars on Contraception and STI Prevention for Educators” (2 events, approx. 300 participants). ◎Added new content on contraception and preconception care to the “Mint⁺ Teens” website, and continued outreach to younger audiences via 27 Instagram posts. ◎Distributed 170,040 copies of the supplementary educational booklet “What High School Students Should Know About Sexual Health” free of charge to 411 high schools across Japan.
Promotion of Animal Welfare	◎Shonan Research Institute initiatives: (1) Published ethical considerations for research on the corporate website. (2) Conducted animal experiments in compliance with in-house regulations and Shonan iPark Animal Experiment Rules, within AAALAC-accredited facilities. (3) Participated in the Shonan iPark Animal Memorial Service held on September 11. ◎Contributed to animal welfare through the development, manufacture, and sale of veterinary pharmaceuticals, feed additives, and supplements.
Development and Provision of Products Contributing to the Health of Companion and Livestock Animals	◎Submitted an application for manufacturing and marketing approval of an endocrine drug for dogs. ◎Obtained approvals and made necessary changes to ensure a stable supply of products for companion and livestock animals.
Promotion of Academic Activities Related to Veterinary Medicines and Associated Diseases (Especially Reproductive and Endocrine Disorders)	◎Produced an educational video on Cushing’s syndrome associated with Trilostane Tablets “ASKA,” featuring academic experts.
Promotion of In-house Research Themes and Strengthening of Alliance Activities	◎Shonan Research Institute initiatives: (1) Actively leveraged open innovation to explore new research areas. (2) Introduced foundational drug discovery technologies targeting ion channels. (3) Conducted a public call for joint drug discovery research targeting academic and public-sector researchers in Japan. ◎International Business Division: Promoted the search for new potential partners in Southeast Asia.

Materiality