Contents:

Chapter 1 Executive summary 4 Key findings 4 Strategic outlook 5 Current positioning: competitive outlook 2004 6 Our strategic recommendations 7 Key issues facing Dainippon Sumitomo: 2005–10 8 Dainippon Sumitomo’s forecast revenue stream, 2005–10 9 Business development in other geographic regions 10 Chapter 2 Global company strategy 17 Introduction to Dainippon Sumitomo 18 Assessment of strategic position 18 Strengths 18 Weaknesses 20 Opportunities 21 Threats 22 Our strategic recommendations 24 Therapeutic foci 25 Evolution of R&D focus 26 Growth strategy assessment 28 Partnerships/licensing 29 Mergers and acquisitions 33 Chapter 3 Global portfolio and pipeline analysis 36 Therapy area focus in 2004 37 Evolution of therapy area focus, 2004–10 38 Key growth drivers and resistors of future performance, 2005–10 41 Dainippon Sumitomo’s cardiovascular franchise 44 Marketed products 44 R&D compounds 49 Cardiovascular portfolio sales forecasts and forecast revenue growth 52 Dainippon Sumitomo’s infectious disease franchise 53 Marketed products 53 R&D compounds 58 Infectious disease portfolio sales forecasts and forecast revenue growth 60 Dainippon Sumitomo’s CNS franchise 61 Marketed products 61 CNS R&D compounds 68 CNS portfolio sales forecasts and forecast revenue growth 72 Dainippon Sumitomo’s respiratory products 73 Marketed products 73 Respiratory R&D compounds 78 Respiratory portfolio sales forecasts and forecast revenue growth 79 Dainippon Sumitomo’s gastrointestinal franchise 80 Marketed products 80 R&D compounds 83 Gastrointestinal portfolio sales forecasts and forecast revenue growth 84 Dainippon Sumitomo’s other products 85 Marketed products 85 R&D compounds 91 Other products sales forecasts and forecast revenue growth 96 Chapter 4 Corporate development 97 Dainippon’s financial position, 2003–04 98 Revenue growth 98 Historical assessment of Dainippon’s profitability, 2000–04 98 Cost structure 99 Liquidity, 2000–04 100 Sumitomo’s financial position, 2003–04 101 Revenue growth 101 Historical assessment of Sumitomo’s profitability, 2000–04 102 Cost structure 103 Liquidity, 2000–04 104 2004 operating cost ratio benchmarking 105 Business model clustering according to 2004 cost ratios 105 Chapter 5 Appendix: supporting data 107 Financial data 107 Exchange rates 107 Methodology for therapy area forecasting List of Tables Table 1: Dainippon Sumitomo’s major deals, 2004–05 30 Table 2: DNS’s co-marketed/co-promoted drug alliances in Japan, 2004 35 Table 3: Breakdown of Dainippon Sumitomo’s ethical sales by therapy area, 2003–04 37 Table 4: Breakdown of Dainippon Sumitomo’s ethical sales by therapy area, 2004–10 38 Table 5: Dainippon Sumitomo’s marketed cardiovascular portfolio 44 Table 6: Dainippon Sumitomo’s current cardiovascular R&D pipeline 49 Table 7: Forecast sales for Dainippon Sumitomo’s cardiovascular portfolio, 2005–10 52 Table 8: Dainippon Sumitomo’s marketed infectious disease portfolio 53 Table 9: Dainippon Sumitomo’s current infectious disease R&D pipeline 58 Table 10: Forecast sales for Dainippon Sumitomo’s infectious disease portfolio, 2005–10 60 Table 11: Dainippon Sumitomo’s marketed CNS portfolio 61 Table 12: Dainippon Sumitomo’s current CNS R&D pipeline 68 Table 13: Forecast sales for Dainippon Sumitomo’s CNS portfolio, 2005–10 72 Table 14: Dainippon Sumitomo’s marketed respiratory portfolio 73 Table 15: Forecast sales for Dainippon Sumitomo’s respiratory portfolio, 2005–10 79 Table 16: Dainippon Sumitomo’s marketed gastrointestinal portfolio 80 Table 17: Gastroprokinetics market in Pacific Rim ($m), 2003–04 82 Table 18: Forecast sales for Dainippon Sumitomo’s gastrointestinal portfolio, 2005–10 84 Table 19: Dainippon Sumitomo’s ‘other’ marketed products 85 Table 20: Dainippon Sumitomo’s current other R&D products 91 Table 21: Forecast sales for DNS’s ‘other’ portfolio, 2004–10 96 Table 22: Dainippon’s operating costs, 2003–04 99 Table 23: Sumitomo’s sales by division, 2003–04 101 Table 24: Sumitomo’s operating costs, 2003–04 103 Table 25: Exchange rates*, 2004 List of Figures Figure 1: Assessment of Dainippon Sumitomo’s strategic position, 2005 5 Figure 2: Competitive positioning of Dainippon Sumitomo within the pharmaceutical market, 2004 6 Figure 3: Generic risk across Dainippon Sumitomo’s franchises, 2005–10 8 Figure 4: Forecast sales for DNS’s major therapy areas, 2005–10 9 Figure 5: Development of DNS’s therapeutic strategy, 2004–10 26 Figure 6: Dainippon Sumitomo’s business development by therapy area 27 Figure 7: DNS’s breakdown of corporate deals against the industry trend between January 2004 and May 2005 29 Figure 8: Dainippon Sumitomo’s ethical sales breakdown, 2004–10 40 Figure 9: Dainippon Sumitomo’s growth drivers and resistors, 2005–10 41 Figure 10: Dainippon’s profitability stream, 2000–04 98 Figure 11: Dainippon’s liquid assets versus total liabilities, 2000–04 100 Figure 12: Sumitomo’s profitability stream, 2000–04 102 Figure 13: Sumitomo’s liquid assets versus total liabilities,2000–04 104 Figure 14: R&D and S,G&A spend and COGS as a proportion of sales, 2004 105