A Message from President and CEO Nobuo Hanai

We will fully leverage our unique biotechnology strengths to become a global specialty pharmaceutical company.

Strength in biotechnology defines the Kyowa Hakko Kirin Group. Our most important mission is to contribute to the health and well-being of people around the world by addressing an array of unmet medical needs using biotechnology. As we fulfill this mission, we intend to further enhance technology and human resources to generate sustained growth for the Group in global markets.

Biotechnology is our greatest strength.

Biopharmaceuticals can provide opportunities to treat diseases for which conventional small molecule pharmaceuticals have been ineffective, and the market for these biopharmaceuticals has been expanding worldwide over the past several years. Moreover, entry barriers are extremely high in this market because of the need for unconventional, advanced technology and experience. Using biotechnology to deliver biopharmaceuticals to patients requires a platform that integrates research aspects from initial discovery research to development research, and process research that creates production lines while assuring quality. We are an R&D-driven pharmaceutical company that is able to provide patients with new drugs by bringing together our technology and this unique platform. Our greatest strength is biotechnology; it is the source of drug discovery that drives sustained growth.

Newly developed KW-0761 (product name in Japan: POTELIGEO^® ) is a strategic product for our growth as a global specialty pharmaceutical company. It validates the increasing sophistication of the comprehensive capabilities supporting our biotechnology.

KW-0761 is a therapeutic antibody drug we created using POTELLIGENT^® , an antibody-enhancing biotechnology unique to Kyowa Hakko Kirin. We are developing this drug globally for hematological cancers, and launched it in Japan in May 2012 for relapsed or refractory CCR4-positive adult T-cell leukemialymphoma (ATL). In March 2014, we received approval in Japan for the additional indications of relapsed or refractory CCR4-positive peripheral T-cell lymphoma and CCR4-positive cutaneous T-cell lymphoma, and also received approval in Japan in December 2014 for the additional indication of chemotherapy-naive CCR4-positive adult T-cell leukemia-lymphoma. Leading-edge research is particularly important for sustaining our strength in biotechnology. Apart from KW-0761, we have several antibody drugs in development that are the result of our leading-edge research and are now positioned to generate growth. The scientific acumen and vision of our scientists, married to a corporate culture that values them, are central to our success in the future.

Building on newly reported data indicating that KW-0761 is efficacious against solid tumors, we concluded development alliance agreements with AstraZeneca of the United Kingdom in July 2014, with Pfizer Inc. of the United States in September 2014, and with ONO PHARMACEUTICAL CO., LTD. of Japan and Bristol-Myers Squibb Company of the United States in December 2014. These agreements involve collaborative studies of the possible efficacy of KW-0761 as an immunotherapy, which is a new class of cancer treatment designed to harness the body’s own immune system in fighting cancer cells.

KW-0761 suppresses the regulatory T-cells that shield tumors from the immune system. The four companies we concluded development alliances with are taking a range of approaches in developing drugs that enhance the immune system’s ability to attack cancer cells. We believe that combining KW-0761 with drugs these companies are developing will generate oncology treatment synergies that create new treatment options for patients and have the potential to address unmet medical needs.

With the collective strength of our people underpinned by our mission of “Commitment to Life,” we are striving to become a global specialty pharmaceutical company.

Kyowa Hakko Kirin was created from Kyowa Hakko Kogyo and Kirin Pharma, both of which had a background in biotechnology. The former was the first in the world to mass produce amino acids using the fermentation method in 1956, while the latter started by launching the erythropoiesis stimulating agent ESPO^® in 1990. Both companies have subsequently overcome numerous challenges to develop an array of leading technologies. Today, we are committed to a management philosophy that values the capabilities of our people and our technologies, which are our core strengths.

Kyowa Hakko Kirin has various businesses and operations, but our “Commitment to Life” always serves as the common point of reference as we consider the approaches we should take while aiming to realize our management philosophy. Our employees are involved in the various stages of our value chain, from R&D to production, sales and marketing and quality assurance, and with “Commitment to Life” at the core they work to achieve our common goals. This shared understanding will enable us to make progress as we turn our attention to the world. I am very confident that the people at our Group operations around the world can be proud of their work on behalf of life as they engage in their respective day-to-day responsibilities.

While focusing our energies on our shared ideas, we are also concentrating on promoting diversity. Our objective is to link diversity to innovation and harness it as a strength that enables even more meaningful global business development synergies. Moreover, we want to enhance our ability to respond to the changing business environment, and continue to meet the expectations and demands of society.

In terms of the expectations and demands of society, in May 2014 inappropriate participation by Kyowa Hakko Kirin employees in clinical research led by doctors came to light. As president and CEO, I would like to deeply apologize for this compliance breach.

I immediately established an external committee of experts and commissioned an investigation of the facts and wrong-doing. I have received proposals for preventing recurrence and regaining trust from the committee (http://www.kyowa-kirin.co.jp/ report/20140711.pdf); (Japanese only). Based on issues the report uncovered regarding established internal rules, we are now steadily moving toward a resolution that involves both organizational and personnel reforms and improved employee awareness.

Today, modern society is scrutinizing more closely the relationship between pharmaceutical companies and health care providers and it is imperative that we come to grips with the compliance breach and prevent recurrence. The entire company is working in concert to further improve employee capabilities backed by a strong sense of ethics as we become a new Kyowa Hakko Kirin.

We contribute to addressing unmet medical needs through biotechnology.

In 2014, we successfully launched in Japan two new products to address unmet medical needs. One was sustained-duration G-CSF product G-Lasta^® for decreasing the incidence of chemotherapy-induced febrile neutropenia, while the other was Dovobet^®, a treatment for psoriasis vulgaris.

Moreover, we advanced KW-0761 to a new global stage, moved numerous new drugs into clinical trials, and submitted applications for additional indications of existing products. Sales of NESP^® , a core biopharmaceutical for treatment of renal anemia, remained strong, and in December 2014 we received approval in Japan for the additional indication of anemia with myelodysplastic syndrome.

In 2015, our category-based strategy will remain central to discovering new drugs and expanding the application of existing products. At the same time, we will emphasize greater market penetration for G-Lasta^® and Dovobet^®. The overseas sales ratio in the Pharmaceuticals business is currently 23 percent, but we expect to live up to our ambition as a global specialty pharmaceutical company in terms of quantitative results by raising this ratio even further during the period of the next medium-term business plan starting in 2016.

We want to be a Japan-based global specialty pharmaceutical company that contributes to the health and well-being of people around the world. We will fully leverage our biotechnology specialization and its growth potential to create drugs that address unmet medical needs, whether by treating diseases so people can live their lives normally or extending healthy lifespans.

I will continue to identify essential themes driving scientific progress to help nurture ideas for new drugs. My rationale is that the managers of an R&D-driven company must have a deep understanding of and passion for science. “Commitment to Life” guides my determination to provide the leadership as president and CEO of the Kyowa Hakko Kirin Group that allows all employees to demonstrate capabilities befitting a global specialty pharmaceutical company with an open corporate culture, and to pursue individual and organizational growth.