2022 Report Integrated .Ltd ,.Co & Shionogi
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SHIONOGI
INTEGRATED REPORT 2022
Year ended March 31, 2022
Capability and Vision, unified.
Our Group Philosophy
SHIONOGI Group Heritage
SHIONOGI strives constantly
to supply the best possible medicine (healthcare solutions)
to protect the health and wellbeing of the patients we serve.
SHIONOGI Group Vision
Building Innovation Platforms to Shape the Future of Healthcare
SHIONOGI is transforming itself from a drug discovery-based pharmaceutical company to a HaaS* company in order to pursue the health that people truly desire and to deliver unprecedented new value to society.
*Healthcare as a Service: Provide a range of healthcare services in line with customer needs, rather than only providing pharmaceuticals.
The unwavering purpose of the SHIONOGI Group's corporate activities is expressed in the opening of the SHIONOGI Group Heritage as the image of what SHIONOGI should be and the Company's social existence values.
As people's lifestyles and values are changing irreversibly, their healthcare needs are becoming increasingly sophisticated and diverse. Unprecedented opportunities are emerging before us to deal with various needs that could not be solved in the past.
SHIONOGI will continue to transform itself into a company that goes beyond the boundaries of a pharmaceutical company to provide the best healthcare solutions by being closely attuned to desires of people everywhere with regards to health.
We are committed to making people's dreams for the future of healthcare into reality.
*SHIONOGI is an abbreviation for the SHIONOGI Group
SHIONOGI is uniting globally to take a new step forward in transforming itself into a HaaS company
Capability and Vision, unified.
"Capability" that | "Vision" for |
has been built up | evolution |
Our Philosophy
The Company Policy of Shionogi
Shionogi's Purpose
Shionogi strives constantly to supply the best possible medicine to protect the health and wellbeing of the patients we serve.
For this purpose, Shionogi will need to
Pursue the search for even better medicines. Produce even better medicines.
Promote awareness of these better medicines to more people so that more people will be able to use these medicines.
Research, produce, and promote in an even more economical manner.
For this purpose, Shionogi will need to
Strive ceaselessly day after day to improve their skills.
Strive ceaselessly day after day to improve as human beings.
As a result, Shionogi people will
Find even greater satisfaction in their daily work and in their daily lives. Find even greater improvement in the quality of their lives.
Find even greater prosperity in their lives.
Established in 1957
SHIONOGI | ||
Group | ||
Heritage | ||
The foundation that | ||
supports SHIONOGI | ||
Building Innovation Platforms | ||
to Shape the Future of | SHIONOGI Group | |
Healthcare | Vision | |
What we want to achieve by 2030 | ||
• Be trustworthy | ||
• Be bold | SHIONOGI Group Values | |
• Be dauntless in spirit | ||
• Build greatness out of diversity | Our psyche that is indispensable for | |
• Contribute to society | achieving vision |
Reliable Weight | Dynamic One Ring | Group Brand Logotype |
"Trust" and "Accuracy" | Dynamic expansion and unity | Design that gives a sense of security |
and trust |
Our minds on the new group brand
The "FUNDOH" weight mark which stands "accuracy", "honesty", and "trust" has been a longtime Group Brand Symbol of Shionogi & Co., Ltd and its group companies.
Reflecting SHIONOGI's intention to transform to a global HaaS company, we have refined the Group Brand Symbol and logotype design and evolved it into an identity that embodies the new SHIONOGI.
Shionogi & Co., Ltd. Integrated Report 2022 | 1 |
Contents
- 1 Our Group Philosophy
Section 1
SHIONOGI Value Creation
Approaches to Achieve the Goals
4 | Special | COVID-19 Initiative Results and |
Feature | Learning | |
- Message from the CEO
- Our History
- Value Creation Process
- Value Creation Story
- Risks and Opportunities
- SHIONOGI's Material Issues
- Market and Performance
- Financial Highlights / Non-Financial Highlights
- At a Glance
Section 3
SHIONOGI Innovation and Evolution
- 54 Protect People Worldwide from the Threat of Infectious Diseases
- 58 Improve Social Productivity and Extend Healthy Lifespans
- 60 Contribute to Sustainable Social Security
- 62 Improve Access to Healthcare
- 66 Supply Socially Responsible Products and Services
- 68 Reinforce Supply Chain Management
- 69 Respect Human Rights
- 70 Protect the Environment
Section 4
Governance to Create Value and Implement Strategy
- 72 SpecialFeature Outside Directors Roundtable
- 75 Corporate Governance
- 85 Engagement with Stakeholders
- 86 Ensure Compliance
- 87 Risk Management
- External evaluation
ESG index | External recognition related to IR and sustainability | |
Other
Selected by domestic equity managers at the Government Pension Investment Fund as having an "Excellent Integrated Report" (second consecutive year)
Section 2 | Data Section | |||
SHIONOGI Strategy | ||||
90 11-Year Financial Summary | ||||
34 | Medium-Term Business Plan | |||
92 Consolidated Financial Statements | ||||
36 | Management Strategy/Financial Strategy | |||
97 Non-Financial Data | ||||
40 | R&D Strategy | |||
98 | Environmental Data | |||
44 | Top-Line Strategy | |||
99 Third-Party Assurance of Environmental Data | ||||
48 | Management Foundation Strategy | |||
100 | Glossary | |||
50 | Secure Human Resources to Support Growth | |||
101 | Attestation of Validity | |||
102 | Corporate Information/Stock Information |
Forward-looking statements
This report contains forward-looking statements. These statements are based on expectations in light of the information currently available, assumptions that are subject to risks, and uncertainties which could cause actual results to differ materially from these statements. Risks and uncertainties include general domestic and international economic conditions, such as general industry and market conditions, and changes of interest rates and currency exchange rates. These risks and uncertainties particularly apply to forward-looking statements concerning existing products and those under development. Product risks and uncertainties include, but are not limited to: completion and discontinuation of clinical trials; obtaining regulatory approvals; claims and concerns about product safety and efficacy; technological advances; adverse outcome of important litigation; domestic and foreign healthcare reforms; and changes of laws and regulations.
- For existing products, there are also manufacturing and marketing risks, which include, but are not limited to, inability to build manufacturing capacity to meet demand, unavailability of raw materials, and competition with other companies' products. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. This report contains information on pharmaceuticals (including com- pounds under development), but this information is not intended to make any representations or advertisements regarding the efficacy of these pharmaceuticals nor provide medical advice of any kind.
- Commitment to society
SHIONOGI has endorsed and supported the United Nations Global Compact. See our website for more information. https://www.shionogi.com/global/en/sustainability/ungc.html
- Editorial Policy
In order for stakeholders*1 better understand SHIONOGI's corporate value, we conduct integrated reporting based on integrated thinking.
- Period covered
Results for fiscal 2021 (April 1, 2021 to March 31, 2022). Some of the activities after the same period are included.
- Target organizations
This report covers 53 Group companies (the Company, 48 consolidated subsidiar- ies, 3 affiliated companies, and 1 jointly controlled entity). The scope of our environmental activities covers all of Shionogi & Co., Ltd business sites and major domestic group companies. For some indicators, major overseas group companies are also included in the scope of coverage.
- Reference Guidelines
IIRC*2 "International Integrated Reporting Framework," "GRI (Global Reporting Initiative) Sustainability Reporting Standards," "ISO 26000," Ministry of the Environment "Environmental Reporting Guidelines 2018," and Ministry of Economy, Trade and Industry "Guidance for Collaborative Value Creation"
*2 IIRC was reorganized as the Value Reporting Foundation (VRF) in June 2021. VRF was integrated into the ISSB of the IFRS Foundation in August 2022.
-
Disclosure and engagement
Financial information
IR Library https://www.shionogi.com/global/en/investors/ir-library.html
Securities report (JP) https://www.shionogi.com/jp/ja/investors/ir-library/securities-report.html
Non-financial information
Sustainability https://www.shionogi.com/global/en/sustainability.html
Policies https://www.shionogi.com/global/en/company/policies.html
Basic Views and Guidelines on Corporate Governance https://www.shionogi.com/global/en/company/cg/basic.html
Environmental Initiatives https://www.shionogi.com/global/en/sustainability/environment. html
*1 | |
Shareholders and investors | Employees |
SHIONOGI's stakeholders | |
Customers | Society |
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Section 1 SHIONOGI Value Creation Approaches to Achieve the Goals
Special
Feature
COVID-19 Initiative Results and
Learning
Results
Commitment to fighting COVID-19
Pre-symptomatic | Prophylactic | ||
phase/detection | vaccines | ||
• Provide wastewater epidemiological surveillance service by | • Research and development of a recombinant protein vaccine | ||
establishing AdvanSentinel Inc. |
Initiatives for total care
As a leading company in infectious diseases, it is SHIONOGI's mission to combat the threat of COVID-19, which is having a significant impact on the lives, livelihoods, and economies of people worldwide. SHIONOGI has been working with public institutions, academia, and our partner companies to help bring COVID-19 to an early end through research, develop- ment, and provision of a wide range of medical solutions from a total care perspective, including detection (epidemic fore- casting), prevention, diagnosis, treatment, and exacerbation suppression. In particular, the development of oral therapeutics that are effective, safe, and convenient is highly anticipated worldwide as we learn to live with COVID-19. Based on the results of the Phase 3 clinical trial of S-217622 (ensitrelvir), we will accelerate our efforts to commercialize the drug in
SHIONOGICreation Value1 Section
Japan and globally. In addition, we have made progress in several late-stage clinical trials for prophylactic vaccines, including comparative studies with existing vaccines, aiming for both initial immunity and booster immunity. We plan to file for approval as soon as the necessary data and production framework are prepared. Furthermore, in efforts related to epidemic forecasting, we have taken a major step toward social implementation of wastewater monitoring by establishing Advan- Sentinel Inc. with Shimadzu Corporation. In addition to this, we were able to start providing diagnostic drugs and kits that predict not only the presence of infection, but also individuals at risk of severe exacerbation. A Phase 2 clinical trial is in progress at our partner company for the development of a drug candidate for exacerbation suppression.
• Research and development of a nasal vaccine | |
• Launch of mutational analysis service | • Research and development of a universal antigen vaccine |
Things we were able to do because we are SHIONOGI
Diagnostic drugs | Therapeutic agents | ||
• Sales of antigen test kit products | • Research and development of antiviral drugs |
- Sales of SARS-CoV-2 antigen test kit products for assisting in predicting exacerbation
- Sales of Th2 chemokine TARC kit for assisting in predicting exacerbation
- Online sales of PCR testing services for COVID-19(SARS-CoV-2)
Exacerbation | Support to local | ||
suppression | governments | ||
• Research and development of pharmaceuticals to prevent | • Support to health centers in Tokyo and Osaka prefectures | ||
severe disease |
As a drug discovery-based pharmaceutical company boasting an internally-discovered pipeline ratio of 73% (as of March 2022), SHIONOGI places the highest priority on solving the problems of patients and society in its daily drug discovery activities. Small-molecule drug discovery in particular is one of our long-cultivated strengths. For example, information on the anti-HIV drug Tivicay was utilized in the chemical structure conversion of the influenza antiviral drug Xofluza, and great use was made of the knowledge gained from the discovery of Xofluza in the new COVID-19 therapeutic drug S-217622. Furthermore, the basic skeleton of S-217622 also utilizes the structure of S-600918, which is being developed for the treatment of chronic cough. SHIONOGI's accumulated experience
in antiviral research and small-molecule drug discovery has made it possible to create promising compounds with such amazing speed. In the evaluation of the drug efficacy of com- pounds, we have a library of bacteria and viruses that we have accumulated over the years, and we have a system in place that allows us to efficiently utilize this library in combination with our library of compounds. In addition, SHIONOGI's strength lies in its broad base of researchers who handle viruses in our Biosafety Level 3 (BSL-3, a Japanese standard) laboratories which only trained personnel are allowed to work with. We believe that these are the factors that enabled us to push through the challenge of COVID-19 with such promptitude.
Helping to restore the safety and well-being of society
Ensuring a stable
supply of
pharmaceuticals
- Inventory management in cooperation with raw material suppliers and procurement contractors
- Thorough-goingemployee health management and mea- sures to prevent the spread of infections
Business continuity
initiatives
- Respond in line with our business continuity plan (BCP)
- Introduced systems in response to new workstyles, such as telework and staggered work hours
Providing disease
information
• Providing information via websites
Cooperation/alli-
ances with interna-
tional societies
- Described our programs in a video submission to the UN's #Uniting Business to Respond to COVID-19 campaign
We believe that helping to restore the safety and well-being | including those who are not at risk of severe exacerbation, we |
of society through the early termination of the pandemic is | believe that this will contribute to the restoration of a society |
our true contribution to the SDGs. If we gain favorable results | where people can live with peace of mind. Shionogi is making |
from the Phase 3 clinical trial of S-217622, a therapeutic | concerted efforts to achieve this goal. |
agent that enables early treatment of COVID-19 patients, |
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Section 1 SHIONOGI Value Creation Approaches to Achieve the Goals
How
As a leading company in infectious diseases, SHIONOGI is working with public institutions, aca- demia, and our partner companies to develop therapeutic agents for COVID-19. We are building a distribution system so that we can deliver these therapeutic drugs to patients as soon as possi- ble, progressing from drug discovery to clinical research to filing for approval at an unprecedented speed, as we adapt to constantly changing circumstances.
Special COVID-19 Initiative Results and Learning
Feature
SHIONOGICreation Value1 Section
Takafumi Sato
Vice President, Laboratory for Drug Discovery and Disease Research (At the time: Research Project Man-
ager, Pharmaceutical Research Division)
Aware of the risks, taking up the challenge of "clinical trials within six months"
The research project manager guides the selection and evaluation of candidate compounds for development based on the lead compound (the predecessor compound of development candidates) found in the research theme and the drug discovery logic (evaluation methods, etc.). The COVID-19 project required a different level of speed. We were being asked to expedite the process of drug discovery, which normally takes three to five years, so that, through resource investment, we could begin clinical trials within six months. We could not possibly fulfill the deadline using our conventional step-by-step approach. We had to decide on taking the risk to manufacture the necessary drugs in order to quickly advance compounds that met certain criteria in the exploratory compound evaluation to the nonclinical pivotal studies conducted in compliance with the regulatory standards. The series of difficult stages proceeding the decision for clinical development cannot be described here in full. However, we were able to achieve early creation of S-217622 thanks to close strategic coordination between the President, division head, and project members under a general policy of "narrowing down actions to the minimum necessary and proceeding with risk-taking"; thanks to the laboratory's concerted efforts based on our strengths in small-molecule and infectious disease drug discovery; and thanks to the cooperation of our external business partners who readily agreed to my reckless request to "bring all Japanese companies together" in response to the
Yasuhiro Makino
Regulatoryl Affairs Department
The challenge of filing for approval at an unprecedented speed
Our mission is to deliver S-217622 to society, healthcare professionals, and patients as soon as possible in response to the emergency of the COVID-19 pandemic. Although we are working to deliver the product as quickly as possible, we still have to ensure its safety and efficacy as we do with all other pharmaceuticals to date. In the pre-application state, it was crucial that we were able to seek solutions to various issues related to screenings and investigations and carry them out. It was also necessary to take prompt action to resolve issues from an early stage through close communication with the authorities. SHIONOGI began submitting relevant materials to the authorities in October 2021, filed for approval in February 2022 using the conditional approval system, and switched to the emergency approval system in May 2022. Based on the progress of the Phase 3 trial, the matter was continued for further discussion, but we will continue to work with the authorities to deliver the therapeutic drug as soon as possible.
national crisis of COVID-19.
Pursuing quality along with speed
Masato Gomi
Formulation R&D Laboratory
Delivering easy-to-administer formulations to patients as quickly as possible
We took on the challenge of developing drug formulations at an unprecedented speed while adapting to the fast-moving changes in the development situation within a short period of time. We are designing a multi-dose formulation that can handle a wide range of clinical doses and a manufacturing process that enables seamless vertical start-up of commercial production, as well as planning a regulatory strategy to establish a maximum duration of use in a short period of time. Through these we were able to complete the application for manufacturing and marketing approval and begin commercial production (establishing a supply system for one million people in FY2021) within just ten months from the start of formulation development. We also made bold efforts to reduce the size of tablets in order to provide a high value -added formulation with an advantage over leading competitors' products. This process was not always a walk in the park, but the whole team worked together to overcome these challenges and quickly devise ways to improve the situation. This allows us to complete our mission of delivering therapeutic drugs to patients as soon as possible. Our next mission is to provide this formulation globally and help patients in need all over the world.
Yudai Iwaki
Shionogi Pharma Co., Ltd. Technology Development Division
This COVID-19 project needed to be handled at a speed that would have been unthinkable in the past, as the commercial manufacturing system was to be established and ready for initial manufacturing in four months, before the results of the Phase 1 clinical trial would be available. While various matters such as formulation dosage, packaging capacity, and product name had not yet been decided, we shared and discussed numerous issues across the organization and proceeded with speedy decision-making and implementation in order to clear the extremely high hurdle of establishing an appropriate manufacturing system that complies with Good Manufacturing Practice (GMP). In addition, SHIONOGI Pharma was able to establish a commercial manufacturing system in the fastest possible timeframe by "Be bold" - developing efficient validation strategies to assure the quality of pharmaceutical products based on scientific evidence - while leveraging its accumulated experience and technology, and by making a concerted company-wide effort.
Yuko Tsuge
Development Project Leader Clinical Research Department
"All SHIONOGI" to take on a global mission
The Research Division staked its reputation as an infectious disease company on S-217622, a development compound to formulate entered the clinical stage in July 2021. At this point, there was no oral COVID-19 treatment in practical use, and there was a need for an innovative oral therapeutic that could be easily prescribed to a wide range of patients in order to control this unprecedented pandemic. From here, the fight began for the development project to deliver S-217622 to patients in Japan and around the world as quickly as possible. The development of S-217622 is a social responsibility, and the "All SHIONOGI" team, transcending organizational boundaries, aimed to obtain approval as quickly as possi- ble. Through daily discussions with project members and management, I felt a sense of company-wide unity and the powerful impetus that comes with it. As a result of everyone's continuous efforts to do their best, we were able to file for approval within a short period of about seven months from the start of Phase 1 clinical trial. We will continue the ongoing clinical trials to completion without any relaxation of efforts, aiming to obtain official approval.
Nobuaki Tanaka
New Product Planning Department
In order to deliver to patients promptly and reliably
As the commercial team, we united under the shared mission of the research and development project teams to deliver S-217622 to patients as soon as possible, and collaborated in building a distribution sys- tem. We were required to finish as quickly as possible while responding flexibly to the ever-changing social environment and needs, such as the transition to the Omicron variant and the emergence of oral therapeutics. By making full use of our experience and know-how in building prescription registration systems for Vyvanse and OxyContin, we were able to build such a system (which is required post-ap- proval) that meets all the necessary conditions in just three months from the start of the project. We are still working to build a system that will enable us to start providing S-217622 as quickly as possible by mobilizing the power of our team and responding to each of these ever-changing circumstances by adding the necessary support and expanded functions.
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Shionogi & Co. Ltd. published this content on 31 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 October 2022 05:18:10 UTC.