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Message from the President

Tatsuo Higuchi President and Representative Director, CEO Otsuka Holdings Co., Ltd.

Supporting Sustainability by Addressing Social Issues through Health and Creativity

The Global Movement toward Sustainability

A current world population at over 7 billion, estimated to rise to nearly 10 billion in 2050, will continue to have significant global impacts, such as the environmental effects of increased carbon dioxide and waste levels, as well as growing wealth inequality. Analogously, addressing environmental, social and economic sustainability issues are critical responsibilities now and in the future for global companies.
Otsuka Holdings signed the United Nations Global Compact in 2016. By declaring our support for the Global Compact and commitment to contribute toward achieving the Sustainable Development Goals (SDGs)*, we underscored the Otsuka group's commitment to achieve sustainable development in collaboration with all sectors of society. Under the corporate philosophy of “Otsuka-people creating new products for better health worldwide,” innovation is at the core of our business. We leverage this know-how through our work on a variety of sustainability issues for the betterment of all in society.
* Sustainable Development Goals: Shared objectives for the international community that include both developed and developing countries, and that address sustainable development in social, economic, and environmental dimensions.

Sustainability of Our Business

In recent years, amid rising concerns about soaring healthcare costs, interest in disease prevention is growing rapidly. Otsuka foresaw growing social recognition of the importance of disease prevention and established its current business model, which focuses mainly on pharmaceuticals and nutraceuticals in functional foods and beverages.
In pharmaceuticals, treatments for disorders of the central nervous system (CNS) are one of our priorities. The underlying causes of many CNS-related disorders have yet to be precisely elucidated, making the research and development of treatments challenging. Our flagship, in-house-originated products include REXULTI, a new antipsychotic with a unique mechanism of action, and the antipsychotic, ABILIFY, with the world's first dopamine partial antagonist. In other fields, we have undertaken research and development aimed at creating first-in-class products to treat unmet medical needs. Examples of these products include Samsca, an aquaretic with the first-ever mechanism that promotes the excretion of water without electrolyte loss, for treating heart failure and cirrhosis of the liver with edema, and DELTYBA, one of the world's first new drugs in approximately 50 years for tuberculosis.
In nutraceuticals, we leveraged the knowledge gained in our IV solutions business to create the ion supply drink market by introducing POCARI SWEAT, which was conceptualized as a drinkable IV solution. By similarly leveraging our knowledge of liquid food concentrates used in medical settings, we created a new category of nutritionally balanced food products with Calorie Mate. This product has been incorporated into disaster relief supplies. In our focus to strengthen our business foundation, we are strategically concentrating on accelerating the global development of product lines to promote healthy life expectancy.
We believe that we can develop further confidence and exceed the expectations of our stakeholders by helping to address social issues through responsible business activities. Our CSR activities are also driven by our sense of fulfillment in recognizing the needs of others and delivering social benefit returns to the communities where we operate. This includes our community support related to culture and health. Our relationship with stakeholders is a vital force that drives our business development. Going forward, we aim to promote sustainability in our business, while at the same time identifying the unmet needs of patients and providing them with unique, innovative products.

Perpetuating Otsuka “DNA”

The Otsuka group has inherited its corporate “DNA” from generations of company leaders. It comprises three guiding principles: (1) Ryukan-godo (by sweat we recognize the way), which means discovering the core substance of matters not only through knowledge, but also through hard work and repeated practical application; (2) Jissho (actualization), which is defined as self-actualization through execution, completion and the discovery of truth; and (3) Sozosei (creativity), which means resisting the urge to copy and pursuing that which only Otsuka is capable of delivering. These principles are the driving force behind Otsuka’s growth. They serve both as our corporate foundation and as the basis for the future growth of the Otsuka group and its employees. It is this core Otsuka “DNA” that provides resilience in overcoming challenges. The foundation of the company’s success relies on the development of employees cognizant of the company’s heritage. In order to nurture talented people who can succeed on a global level, we have launched a new group-wide human resource development program that will continue over the medium and long term, steadily evolving to include more content.

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Becoming an Indispensable Contributor to People’s Health Worldwide

Stakeholders, including investors, are closely watching corporate governance reforms triggered by a series of scandals at large companies in recent years. Consequently, at Otsuka Holdings, we are reinforcing already sound management practices by further strengthening our governing structure, promoting growth from a long-term perspective, and strengthening our international competitiveness.
We recognize that respect for universal social principles such as human rights, freedom, and equality are essential for conducting business globally.
We strive to cultivate a corporate culture where employees can express their individuality and values by promoting diversity in nationality, race, age, and gender.
Furthermore, productive workdays require that employees be mentally and physically healthy; therefore we continuously work on measures to promote employee health. In April 2017, Otsuka Holdings established the Otsuka Group Health Declaration to further promote health management. As a healthcare company, we widely advocate health as an important piece of social sustainability inside and outside the company.
I and my 45,000 colleagues deeply appreciate your ongoing support for the Otsuka group as we aim to become an indispensable contributor to people’s health worldwide.

Tatsuo Higuchi President and CEO Otsuka Holdings Co., Ltd.