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Annual Report 2009 - Daiichi Sankyo

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STRATEGIC MOVE 3: REALIZING THE HYBRID BUSINESS MODEL<br />

Ranbaxy Joins the <strong>Daiichi</strong> <strong>Sankyo</strong> Group<br />

To realize its vision for 2015 of becoming a Global Pharma<br />

Innovator, <strong>Daiichi</strong> <strong>Sankyo</strong> has been implementing its first midterm<br />

business management plan (MTP), which covers the period<br />

from fiscal 2007 through fiscal <strong>2009</strong>. The three-year plan aims to<br />

quickly realize the management integration synergies of <strong>Daiichi</strong><br />

<strong>Sankyo</strong>’s predecessor companies (<strong>Daiichi</strong> Pharmaceutical Co.,<br />

Ltd., and <strong>Sankyo</strong> Co., Ltd.), strengthen drug development capabilities,<br />

reinforce and expand business infrastructure to promote corporate<br />

growth, and attain various other strategic objectives. We<br />

have been implementing diverse measures in accordance with the<br />

MTP. One of these measures is the addition of Ranbaxy Laboratories<br />

Limited to the <strong>Daiichi</strong> <strong>Sankyo</strong> Group. Following the agreement<br />

entered into by <strong>Daiichi</strong> <strong>Sankyo</strong> and Ranbaxy in June 2008,<br />

<strong>Daiichi</strong> <strong>Sankyo</strong> completed its transactions to acquire the majority<br />

of voting rights in Ranbaxy in November 2008.<br />

Established in 1961, Ranbaxy has more than 12,000 employees<br />

and marketing bases in 49 countries throughout the world as well<br />

as manufacturing facilities in India, the United States, and nine<br />

other countries. In 2008, Ranbaxy recorded about Rs73.0 billion<br />

(US$1.68 billion) in consolidated sales* and maintained a wellbalanced<br />

geographic sales structure with significant contributions<br />

from markets such as India, Asia, North America, Europe,<br />

and Commonwealth of Independent States (CIS) countries.<br />

While Ranbaxy is most prominent in the field of generic drugs, it<br />

also has great potential in R&D on innovative drugs. Ranbaxy has<br />

Mr. Atul Sobti<br />

CEO and Managing Director of Ranbaxy Laboratories Limited<br />

several projects in its development pipeline, represented by an<br />

anti-malaria drug that is currently undergoing Phase III trials.<br />

* Calculated based on Indian accounting standards.<br />

Changes in the Global Drug Market<br />

In 2008, the worldwide drug market amounted to approximately<br />

US$773.1 billion, the majority of which was attributable to the<br />

developed countries of North America, Europe, and Japan.<br />

However, expiring patents on blockbusters (drugs with global<br />

annual sales exceeding ¥100 billion) and growing emphasis on<br />

With its executive leadership reconstituted, Ranbaxy will make a<br />

powerful contribution to the hybrid business model.<br />

Hybrid<br />

Business<br />

Model<br />

Developed countries<br />

(Current market size: large)<br />

Innovative<br />

(Proprietary drugs)<br />

Traditional core business<br />

Long-term sellers<br />

(Non-proprietary drugs)<br />

Cost containment<br />

Low growth rate<br />

Emerging countries<br />

(Current market size: small)<br />

Plus<br />

High growth rate<br />

Population increase, economic growth<br />

14<br />

<strong>Daiichi</strong> <strong>Sankyo</strong> Co., Ltd. <strong>Annual</strong> <strong>Report</strong> <strong>2009</strong>

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