The Vision of the Otsuka Group
At Otsuka, we aspire to be an indispensable contributor to people’s health worldwide. With a continued focus on people, we are committed to supporting each individual’s total healthcare. As people’s health needs expand from physical to mental health, to include social fulfillment and evolve into Well-being, we recognize the growing importance of addressing social challenges in healthcare from a more holistic perspective.
In our 4th Medium-Term Management Plan (MTMP), announced in June 2024, we identified three major social issues as our focus: the global environment, women’s health, and aging societies with declining birthrates. We also articulated our long-term vision for 2035: “From Better Health to Beyond Health, and toward Well-being.” While cherishing the principle of better health embedded in our corporate philosophy, we are also redefining the meaning of health in step with the times and evolving accordingly.
In addressing diverse healthcare challenges, one of Otsuka’s greatest strengths is that we operate not only in the pharmaceutical field but also in the nutraceutical and consumer products fields, and that we have group companies around the world with expertise and networks across a wide range of domains.
As our global business and organizational sophistication continue to grow, my responsibility is to ensure the steady execution of our 4th MTMP and the strategic development and growth of our next-generation products in the short to medium term, while preserving our corporate culture and being ahead of and proactively responding to changes over the long term. By discerning what must evolve and what must remain unchanged, we will continue to pursue new value creation that contributes to people’s Well-being.
Our Concept of Total Healthcare
Total in Otsuka’s approach refers to both the horizontal continuum—from maintaining health to diagnosis, treatment, and recovery—and the vertical depth of understanding the human being. This means we view healthcare broadly not only in terms of physical and mental health, but also in the context of individuals’ lifestyles and their connections to society.
What sets Otsuka apart is our dual presence in both the pharmaceutical and nutraceutical fields, which allows us to take a fundamentally different approach from others. While pharmaceuticals address treatment, nutraceutical products are integrated into daily life and connect Otsuka with healthy individuals. Nonetheless, people may be healthy at times and live with illness at others. That is why we believe true healthcare must focus not just on diseases, but on the individual holistically.
As healthcare needs increasingly transcend traditional boundaries of medicine and wellness, the importance of our total healthcare approach continues to grow. A prime example is our multi-faceted approach to dementia. In May 2023, our antipsychotic drug REXULTI became the first drug approved in the U.S. for the treatment of agitation associated with dementia due to Alzheimer’s disease, followed by approval in Japan in September 2024 for a similar indication.1 Agitation affects approximately half of Alzheimer’s patients and significantly impacts the lives of both patients and caregivers who often are their family members.
Beyond the pharmaceutical approach, we are also advancing solutions such as MIREVO, a cognitive function testing application for dementia care support and FACEDUO, an experiential virtual reality (VR) training program.2 Further, by leveraging connections with local governments and consumers that we have cultivated through our Nutraceutical Business, we work collaboratively with a wide range of stakeholders, including healthcare providers, caregivers, municipalities, and families, to address this complex societal issue.
1. In Japan, the approved indication is: “excessive motor activity or physically/verbally aggressive behavior due to rapid changes in mood, irritability, and/or outbursts associated with dementia due to Alzheimer’s disease.”
2. One of the FACEDUO’s interactive VR training programs is Dementia Care Support VR, supervised by a medical specialist to help caregivers, including family members of people with dementia, learn about the background of the feelings and behaviors of people with dementia.
Growth Strategy and Progress of the 4th Medium-Term Management Plan
The Otsuka group operates a diverse set of businesses centered on the Pharmaceutical and Nutraceutical Businesses. Our strength lies in our unique approach to healthcare—one that holistically focuses on the individual rather than the disease—with our broad engagement with stakeholders across sectors.
With approximately 200 group companies worldwide, we have consistently addressed social issues and Well-being needs, many of which are specific to certain times and regions. By cultivating a diverse set of specialized and distinctive operating companies, we deepen our expertise across fields and respond to increasingly complex and diverse demands. While we remain flexible in reorganizing our structure when necessary, we place importance on maximizing the unique value generated from our diversified businesses.
Our management approach is rooted in horizontal collaboration, not centralized control. We focus on providing maximum support to our group companies, affiliates, and partners who best understand local needs and challenges. By organically connecting our businesses and organizations, we aim to foster collaborations to generate synergies that lead to new value creation.
The 4th MTMP (FY2024–2028) is positioned as a five-year period to overcome the loss of exclusivity (LOE) of major products and to accelerate new business expansion and investment for sustainable growth. In its first year, we achieved record highs in revenue, business profit, and net profit—significantly exceeding targets. This strong performance was driven by growth in core pharmaceutical products and nutraceutical products in the categories of For Women’s Health, For Climate & Environmental Risk, and For Healthier Life. Additionally, our next-generation products—expected to be growth drivers in the 5th MTMP—are making solid progress.
Our global expansion continues to progress steadily, and we make active investment in R&D with a long-term perspective accompanied by continuous efforts to improve profitability. To achieve sustainable growth, we are executing the 4th MTMP with both precision and speed, laying the foundation for our next phase of growth amid a rapidly changing market environment.
Innovation in R&D Driven by Diversity
The Otsuka group’s business portfolio, comprising the Pharmaceutical Business, which requires long-term large-scale R&D investment, and the Nutraceutical Business, which engages with rapidly changing markets, reflects distinct risk profiles and business cycles, and enables long-term R&D investment and supporting sustainable growth. This balance allows us to remain flexible in the face of change while continuously creating value.
Our R&D investments are focused on areas where we can generate synergies with our existing assets, and this policy will remain unchanged. In drug discovery, in addition to our long-standing small molecule research capabilities at the Tokushima Research Center for Drug Discovery, the Tsukuba Research Institute, and Astex Pharmaceuticals, we have acquired Visterra, which possesses proprietary antibody platform technology; Jnana Therapeutics, known for its groundbreaking small molecule drug discovery platform; and Araris Biotech, which brings next-generation antibody-drug conjugate (ADC) capabilities. We will continue to further strengthen the Otsuka group’s drug discovery foundation, innovation ecosystem, via M&A and alliances.
When pursuing M&A, we place great importance on shared vision and cultural compatibility, while respecting the uniqueness of each company. For example, we retain the original company name and position their research centers as global satellite institutes within the group, rather than integrating them into existing structures. We believe that respecting each other’s expertise and culture fosters diversity, which in turn sparks new ideas and research breakthroughs through synergies among research centers.
Our core therapeutic areas are in psychiatry and neurology, oncology, and cardiovascular and renal systems, and we pursue strategies that emphasize synergies among these domains.
One example is our expansion into the autoimmune space. In 2018, we acquired Visterra to strengthen our pipeline in the renal field. Leveraging its proprietary antibody drug discovery technology, Visterra has generated a promising pipeline for autoimmune diseases in the renal area, including sibeprenlimab. In 2024, we acquired Jnana Therapeutics, gaining both a pipeline in autoimmune diseases and new small molecule discovery capabilities. By leveraging the strengths of our existing therapeutic areas and drug discovery technologies, we strive to develop the autoimmune space into a next-generation core domain. We will continue to invest actively to create innovative value and address a broader range of social issues.
People and Culture as the Driving Force of Innovation
Sustainable growth and social contribution are made possible above all by diverse talents within the Otsuka group and the corporate culture that underpins it—embodied in principles of Ryukan-godo (by sweat we recognize the way), Jissho (actualization), and Sozosei (creativity).
To foster innovation, we believe in cultivating a culture that encourages open dialogue, bold ideas, and a willingness to take on challenges—supported by an environment where failure is accepted and recognized. Our corporate philosophy and culture, together with our unwavering focus on human beings, are enduring values that must be preserved. At the same time, it is essential to reinterpret these values in ways that resonate with the current era, enabling employees to internalize, describe in their own words and act on them.
To this end, I have begun initiatives to articulate the spirit behind our philosophy in language attuned to today’s context and share it with employees across the organization. A philosophy becomes truly meaningful when it is not only understood intellectually but also connected to tangible business outcomes. Even small successes, when aligned with our corporate philosophy, foster a sense of ownership and willingness to act on it, deepening our cultural roots.
Diversity and mobility within the organization are key to personal growth. When people from different backgrounds come together, it creates opportunities to reflect on and refine ways of working. Personally, I began my career in the Pharmaceutical Business and have since been involved in a wide range of healthcare-related fields, including international operations, diagnostics, business development, and the Nutraceutical Business. With each new role, I have embraced the challenge of learning unfamiliar areas from the ground up, engaging in dialogue with others, identifying issues within each business, and working toward solutions. While starting from scratch and building new relationships can be stressful, I believe it is precisely these experiences that foster personal growth.
In our talent development efforts, we intentionally create opportunities for cross-functional and cross-cultural experiences—such as working across the Pharmaceutical and Nutraceutical Businesses, as well as in varied cultural and geographic settings, and collaboration with partner organizations that bring diverse strengths. Through these initiatives, we cultivate our people’s ability to understand multiple perspectives and grasp the essence of business.
In 2024, three representatives from our U.S. group companies were appointed to the board of directors at Otsuka Pharmaceutical. Their inclusion has enriched board discussions with diverse viewpoints and enabled deeper and more substantive dialogue. We will continue to embrace this approach, building the future of Otsuka from the wellspring of our people.
Message to Our Stakeholders
In light of the universal value of health, the Otsuka group aspires to not only address each individual’s affected organs and body systems but also engage with the individual holistically, support them throughout their life journey, and respond to people’s aspirations for Well-being.
If we focus solely on short-term profits, we risk losing sight of the very individuals we aim to serve and may be drawn into acquisition or development competitions driven by immediate returns.
In our Pharmaceutical Business, tenacious development efforts spanning over a decade are essential. Meanwhile, our Nutraceutical and Consumer Products Businesses require agile responses to bring small shifts in people’s daily health and lifestyle as the market changes over short periods of time. We are committed to navigating these domains—long-term and short-term, treatment and prevention—which are often seen as difficult to pursue simultaneously and believe that this integrated approach is what enables us to deliver unique value that only Otsuka can realize. Notably, our Nutraceutical Business prioritizes long-term brand cultivation over short-term bestsellers. Product brands like POCARI SWEAT, ORONAMIN C DRINK, and Calorie Mate have been in market for over 40 years. Despite operating in fastchanging markets, we nurture brand equity from a long-term perspective—another hallmark of Otsuka.
While we remain mindful of our responsibility to maximize shareholder value as a listed company, we also invest strategically in R&D and talent development to foster the seeds of future growth. We recognize the importance of communicating our philosophy and initiatives to society in a clear and compelling manner, building lasting trust with stakeholders. Moving forward, we will continue sincere dialogue with our stakeholders and remain committed to addressing social issues as a total healthcare company—in both a broad and deep sense. We aim to become an indispensable company in the healthcare field, and together, we will shape the future of healthcare.
