Contents:

Chapter 1 Executive summary Key findings 3 Strategic outlook 4 Strategic recommendations 5 Current positioning: competitive outlook 2004 6 Daiichi Sankyo’s forecast revenue stream, 2005–10 7 Key issues facing Daiichi Sankyo: 2005–10 8 Chapter 2 Global company strategy Introduction to Daiichi Sankyo 16 Assessment of strategic position 16 Strengths 16 Weaknesses 18 Opportunities 18 Threats 19 Strategic recommendations 21 Therapeutic foci 22 Evolution of R&D focus 23 Growth strategy assessment 24 Organic growth 24 Partnerships/licensing 25 Mergers and acquisitions 26 Chapter 3 Global portfolio and pipeline analysis Evolution of therapy area focus, 2004-10 38 Key growth drivers and resistors of future performance, 2005–10 41 Daiichi Sankyo’s cardiovascular franchise 42 Marketed products 42 R&D compounds 59 Cardiovascular portfolio sales forecasts and forecast revenue growth 64 Daiichi Sankyo’s infectious diseases franchise 65 Marketed products 65 R&D compounds 74 Infectious diseases portfolio sales forecasts and forecast revenue growth 79 Daiichi Sankyo’s AIID franchise 80 Marketed products 80 R&D compounds 85 AIID portfolio sales forecasts and forecast revenue growth 87 Daiichi Sankyo’s other products 88 Marketed products 89 Chapter 4 Us strategy, portfolio and pipeline Introduction to Daiichi Sankyo’s presence in the US 110 US marketing strategy 110 US product sourcing strategy 110 US Portfolio and pipeline analysis 111 US evolution of therapy area focus, 2004-10 111 Daiichi Sankyo’s Cardiovascular portfolio US sales forecasts and forecast revenue growth 113 Daiichi Sankyo’s Infectious Disease portfolio US sales forecasts and forecast revenue growth 115 Chapter 5 Corporate development Daiichi 117 Financial position, 2003–04 117 Revenue growth 117 Historical assessment of Daiichi’s profitability, 2000–04 119 Cost structure 120 2004 operating cost ratio benchmarking 121 Business model clustering according to 2004 cost ratios 121 Liquidity, 2000–04 123 2004 growth and investment momentum 124 Sankyo 126 Financial position, 2003–04 126 Revenue growth 126 Historical assessment of Sankyo’s profitability, 2000–04 128 Cost structure 129 2004 operating cost ratio benchmarking 130 Business model clustering according to 2004 cost ratios 130 Liquidity, 2000–04 131 2004 growth and investment momentum 133 Chapter 6 Appendix: supporting data Exchange rates List of Tables Table 1: The changing Japanese ethical pharmaceutical landscape, 2004 27 Table 2: Breakdown of Daiichi Sankyo’s ethical sales by therapy area, 2003–04 37 Table 3: Breakdown of Daiichi Sankyo’s ethical sales by therapy area, 2004–10 39 Table 4: Daiichi Sankyo’s marketed cardiovascular portfolio 42 Table 5: Daiichi Sankyo’s current other R&D products 59 Table 6: Forecast sales for Daiichi Sankyo’s cardiovascular portfolio, 2005–10 64 Table 7: Daiichi Sankyo’s marketed infectious diseases portfolio 65 Table 8: Daiichi Sankyo’s current infectious diseases R&D pipeline 74 Table 9: Forecast sales for Daiichi Sankyo’s infectious diseases portfolio, 2005–10 79 Table 10: Daiichi Sankyo’s marketed AIID portfolio 80 Table 11: Daiichi Sankyo’s current AIID R&D pipeline 85 Table 12: Forecast sales for Daiichi Sankyo’s AIID portfolio, 2005–10 87 Table 13: Daiichi Sankyo’s other marketed products 89 Table 14: The Japanese antihistamines market, 2004 93 Table 15: Daiichi Sankyo’s current other R&D products 101 Table 16: Forecast sales of Daiichi Sankyo’s other products portfolio, 2005–10 108 Table 17: Breakdown of Daiichi Sankyo’s US ethical sales by therapy area, 2004–10 111 Table 18: Forecast US sales for Daiichi Sankyo’s Cardiovascular portfolio, 2003-10 113 Table 19: Forecast US sales for Daiichi Sankyo’s Infectious disease portfolio, 2003-10 115 Table 20: Daiichi revenues by division, 2003–04 117 Table 21: Daiichi’s operating costs, 2003-04 120 Table 22: Sankyo revenues by division, 2003–04 126 Table 23: Sankyo’s operating costs, 2003-04 129 Table 24: Exchange rates*, 2004 List of Figures Figure 1: Assessment of Daiichi Sankyo’s strategic position, 2005 4 Figure 2: Competitive positioning of Daiichi Sankyo within the pharmaceutical market, 2004 6 Figure 3: Forecast sales for Daiichi Sankyo’s major therapy areas, 2005–10 7 Figure 4: Daiichi Sankyo’s level of generic threat by therapy area to 2010 8 Figure 5: Development of Daiichi Sankyo’s therapeutic strategy, 2004-10 22 Figure 6: Daiichi Sankyo’s business development by therapy area 23 Figure 7: Daiichi Sankyo’s breakdown of corporate deals against the industry trend between January 2004 and June 2005 25 Figure 8: Geographical sales breakdown, Daiichi vs. Sankyo 28 Figure 9: Geographical sales breakdown forecast, Daiichi Sankyo, 2005–10 29 Figure 10: Geographical sales breakdown forecast, Daiichi Sankyo, 2005–10 30 Figure 11: Therapeutic spread, Daiichi Sankyo, 2004 31 Figure 12: Japanese sales forces, 2004 32 Figure 13: Japanese merger comparison, 2002–10 33 Figure 14: Japanese peer set comparison, 2004–10 34 Figure 15: Daiichi Sankyo’s ethical sales breakdown, 2004-10 40 Figure 16: Daiichi Sankyo’s growth drivers and resistors, 2004–10 41 Figure 17: Daiichi Sankyo’s US ethical sales breakdown, 2004-10 112 Figure 18: Daiichi’s profitability stream, 2000–2004 119 Figure 19: R&D and S,G&A spend and COGS as a proportion of sales, 2004 122 Figure 20: Daiichi’s liquid assets versus total liabilities,2000–04 123 Figure 21: Benchmarking of financial strength, 2004 124 Figure 22: Sankyo’s profitability stream, 2000–2004 128 Figure 23: R&D and S,G&A spend and COGS as a proportion of sales, 2004 130 Figure 24: Sankyo’s liquid assets versus total liabilities,2000–04 131 Figure 25: Sankyo’s liquid assets versus total liabilities,2000–04 133