Chugai Pharmaceutical : Main Report

Annual Report 2020

Fiscal year ended December 31, 2020

Contents

Annual Report

(This document)

Medium- to Long-Term Value Creation

	01	Editorial Policy
About Chugai /	02	Mission Statement
Messages	04	Chugai's Business Processes
	08	Themes over the Past Year
	10	Message from the Chairman
	12	Interview with the CEO

Activity Report

(Separate document)

Detailed Short-Term Information

Chugai in	Outline of Functions / Response to
Action	the COVID-19 Pandemic / Research /
	Development / Pharmaceutical
	Technology and Production /
	Marketing / Medical Affairs /
	Drug Safety / Quality and Regulatory
	Compliance / Intellectual Property /
	Human Resources / Human Rights /
	Environment, Health, and Safety
	(EHS) / Social Contribution /
	Global Health

Value Creation by Chugai

18 Value Creation by Chugai

1. Our History and Shared Value

1. Value Creation Model

1. Vision of Chugai as a Top Innovator in 2030

1. Capital Investment with a Focus on 2030

1. Collaboration with Roche

Basic	Basic Information on
Information	the Pharmaceutical Industry /
	Oncology / Bone and Joint Diseases/
	Autoimmune Diseases /
	Renal Diseases / Neurology /
	Other Diseases
Financial	Consolidated Financial Indicators /
Information	Management's Discussion and

Indicators and	34	Relationships of Indicators
Performance	36	Financial and Pre-Financial Highlights (IFRS)
	40	Review by Disease Area
	42	Development Pipeline

Analysis / Business Risks /

Consolidated Financial Statements

Forward-Looking Statements

Sustainability and Growth Strategies

1. Sustainability and Growth Strategies

1. Message from the Deputy Chairman

1. Executive Officers

1. Targets and Progress in Material Issues

1. Main Risks and Countermeasures

1. Background to Growth Strategy Development

1. New Growth Strategy TOP I 2030

70 Focus:

CHUGAI DIGITAL VISION 2030 / Mid-Term Environmental Goals 2030

72 Message from the CFO

This report may include forward-looking statements pertaining to the business and prospects of Chugai Pharmaceutical Co., Ltd. (the "Company"). These statements reflect the Company's current analysis of existing information and trends. Actual results may differ from expectations based on risks and uncertainties that may affect the Company's businesses.

Disclaimer

In this report, information on pharmaceutical products or drug candidates under development may be included, but such information is not intended for promotional or advertising purposes, or as medical advice, etc. The trademarks appearing in the report are protected by trademark rights, copyright, and other intellectual property (IP) rights.

Corporate	76	Enhancement of Corporate Governance
Governance	76	Message from an Outside Director
	90	Directors /
		Audit & Supervisory Board Members
Corporate Data	92	Shareholder Information
	93	Corporate Profile

About the Cover
The cover design represents		Annual Report 2020
innovation by Chugai-driven
by various drug discovery
technologies, science, and
digital technologies-that
brings new hope for better
global healthcare and individual
patient wellbeing.

Editorial Policy

This report is positioned to encourage dialogue.

This integrated report is structured to encourage dialogue with shareholders, investors, and other stakeholders. The 2020 report is being released in two parts: this annual report that provides a comprehensive outline of value creation over the medium-to-long term plus a separate activity report that provides more detailed information. The report structure is aimed at clarifying how information is organized and arranged into chapters, and at providing more detailed information for the reader that is easily accessible. We hope it will be useful in sharing value with you.

Scope of This Report

This report presents information on Chugai Pharmaceutical Co., Ltd. and its consolidated subsidiaries. In some places, however, it gives data specifically pertaining to Chugai Pharmaceutical Co., Ltd.

Timeframe

The basic timeframe for this report is the financial reporting period of January to December 2020. However, in view of the importance of providing the latest information available, some information relating to activities that occurred in 2021 is included, mainly in research and clinical development data.

Information in This Report

This report presents information that Chugai believes to be important given its significance in building Chugai's corporate value over the short, medium, and long term, and its degree of impact on stakeholders.

Reference Guidelines

The content of this report is focused on value creation, using as reference The International Integrated Reporting Framework issued by the International Integrated Reporting Council (IIRC) and Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation compiled by the Ministry of Economy, Trade and Industry (METI) of Japan. Sustainability information was prepared with reference to Environmental Reporting Guidelines 2018 issued by the Ministry of the Environment of Japan, the GRI Sustainability Reporting Standards of the Global Reporting Initiative (GRI), and the Final Report on Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Production Process and In-House Use

	August-September		October-November		December-January		February-March		April-May
	Secretariat Planning		Draft Plan Review and		Content Production		Specific Page Layout		Finalization
	and Design		Verification		• Content confirmation,		• Develop messaging,		• Final sign off by main
	• Set up production		• Review and verification
			approval by main		structure composition,		executives responsible
	systems		by management team		executives responsible		data		(Ueno, Itagaki)
	• Design concept		• Interview with relevant		(Ueno, Itagaki)		• Create messaging based		• Overall checks,
	• Create outline of		parties		• Verify risks		on interviews with		fine-tuning by
	planned structure		• Verify Material Issues		• Progress update on		management team and		production department
	• Environmental, social,		• Review structure		short-,medium-, and		external directors		• Third-party review
	and governance (ESG)		content, required		long-term plans		• Page layout verification
	meeting, review		messaging				by relevant executives
	interviews		• Liaison with internal
	• Interview with investors		divisions

Management Participation in Planning

The underlined stages in the production processes listed above show the steps that involve the management team.In particular, Representative Director and Deputy Chairman Motoo Ueno (left photo) and Chief Financial Officer (CFO) Toshiaki Itagaki (right photo) engaged in discussions on its concept, structure, content, and design at a number of meetings and took responsibility up to its completion. Interviews and confirmation of the content were conducted with Representative Director and Chairman Tatsuro Kosaka, and Representative Director, President & Chief Executive Officer (CEO) Dr. Osamu Okuda.

Departments Responsible within the Company

The Secretariat mostly comprises the Corporate Communications Department with the addition of the Sustainability Department. Additional members participated from the Corporate Planning Department, General Affairs Department, and Human Resources Management Department, and representatives were appointed from each division and department to build a company-wide production organization.

Positioning of This Report within the Company

The level of awareness of this report is high within the Company, and in addition to discussions held among persons in charge in each division during its production process, it is used in a wide range of applications including introduction at strategy briefings for employees and use in new graduate recruiting.

Annual Report 2020

1

Mission Statement

2	CHUGAI PHARMACEUTICAL CO., LTD.

About Chugai / Messages

Mission

Dedicate ourselves to adding value by creating and delivering innovative products and services for the medical community and human health around the world

Core Values

1. Patient Centric

Make each patient's wellbeing our highest priority

2. Pioneering Spirit

Pursue innovation by improving ourselves and thinking differently

3. Integrity

Maintain the highest standards in all we do to create shared value with society

Envisioned Future

Become a top innovator for advanced and sustainable patient-centric healthcare, powered by our unique strengths in science and technology and the alliance with Roche

At Chugai, our Mission Statement is the basis of everything we do. It is Chugai's most enduring and important concept, and represents our adherence to the Company's founding spirit and our founder's vow to "create drugs that benefit the world" in response to a medicine shortage following a major natural disaster. Our Core Values are the values that employees share and embody. They represent our commitment to maintaining the highest standards in all we do to meet the expectations and requirements of society as we pursue innovation with a pioneering spirit for the benefit of patients. In our Envisioned Future, we have set the goal of becoming a top innovator in the healthcare industry by going beyond the conventional scope of the pharmaceutical business in anticipation of future changes in the healthcare landscape. Chugai's vision of value creation is to fulfill its Mission Statement by creating shared value.

Annual Report 2020

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