Growth Strategy (Second Medium-Term Management Plan)

Strengthen the Management Foundation and Implement the Four Growth Strategies

▽ Maximization of product value - From a patient-centered perspective -
We will work together with healthcare professionals to realize the wellbeing of patients and their families (a state of fulfillment in terms of physical, mental, social, and life satisfaction), and as a result, we will strive to achieve the rapid penetration of new drugs into medical treatment facilities.
In marketing, we are working to develop human talents who, in collaboration with healthcare professionals, address medical issues from the patient’s perspective and who use digital technologies to effectively and efficiently provide and collect information, thereby maximizing product value.
In development, we have conducted nearly 100 clinical trials, mainly in our key strategic fields of oncology, and we continue to aim to maximize product value.

▽ Reinforcement of pipelines
We aim to become a “Global Specialty Pharma” by accumulating disease know-how and working on creating innovative new drugs in areas of high medical need such as oncology, immunological diseases, neurological diseases, and the area of specialty. We will strengthen research and drug discovery partnerships with world-leading universities, research institutions, and biotech venture companies, and strive to expand highly original pipelines that can aim for first-in-class. In addition, we select optimal drug discovery modalities according to the drug discovery seeds, advance highly unique in-house drug discovery, and enhance reliability of research and development by using data from nonclinical and clinical studies to verify drug targets and strengthen translational research. Further, we are working to strengthen our pipelines by aggressively introducing innovative compounds and acquiring new technologies in the areas with high medical needs.

▽ Acceleration of global business advancement
We are working to expand our global business to deliver new drugs around the world. To expand and accelerate our overseas business, we acquired Deciphera to obtain sales structure in the US and Europe as well as to strengthen our pipelines and R&D capabilities. In addition, we are working to reorganize and integrate our conventional US and UK functions with Deciphera as the base for our US and European operations. Our group will work together to further accelerate our global business. In the short-term, we will maximize the product value of QINLOCK and ROMVIMZA through additional indications and expansion of sales territories and promote activities for the launch of ONO-4059 (Velexbru Tablets) in the US. We will also work to strengthen our global development organization and promote development in the US and Europe, not only in oncology area but also in other disease areas. We will continue our efforts to deliver innovative medicines to more patients around the world as quickly as possible.

▽ Expansion of business domains
We are committed to expanding our business domains to capture the needs of the expanding healthcare sector and continue to deliver new value. We are continuously expanding our customers for our sleep supplement, REMWELL, as foods with functional claims. In addition to ‘michiteku β-version’, a tool to support psychological care for cancer (colorectal, gastric, lung, and breast cancer) patients immediately after being informed and improvement of their health care literacy to understand what doctors tells, we started, in January 2025, to provide ‘michiteku YOHA’, an application for managing hospital visit days to support balancing between daily life and treatment. In parallel with these activities, we aim to create and expand new businesses through investment activities in healthcare startups by ONO DIGITAL HEALTH INVESTMENT, GK.

▽ Corporate Transformation through Digital & IT
We promote the use of digital and IT technology cross-functionally, aiming to transform into a company capable of accerelating growth strategies, innovating business process, and realizing new value creation (DX) . This requires a flexible IT infrastructure supported by data utilization platform including internal and external data, the capability of data analysis from our unique perspectives, and the latest technologies.The utilization of internal and external data enables us to detect and assess business issues and new opportunities accurately and in a timely manner and turn them into business transformation initiatives.

▽ Management Infrastructures to Support Growth Strategies – Expansion of Intangible Assets –
Expanding our intangible assets: human capital, corporate brand, digital and IT infrastructure, etc. will support our four growth strategies, and help us achieve dramatic growth. In the expansion of human capital, we are working on securing and developing human resources to promote business growth, while also building an organizational culture to achieve high employee engagement. Regarding our corporate brand, we will work to enhance corporate value by working with Deciphera to promote the penetration of our brand at global levels.

Material Issues（Priority Management Issues）

Address the priority management issues which integrate financial and non-financial issues

To promote management that integrates financial and non-financial aspects based on our growth strategy and Sustainable Management Policy, we have identified material issues. By promoting initiatives for each material issue, we aim to improve the sustainability of both ONO and society.
In June 2024, Deciphera Pharmaceuticals Inc. of the United States joined the Ono Pharmaceutical Group, enabling direct sales in Europe and the United States. This prompted us to review and consider our materiality issues. In March 2025, we reclassified the 18 materiality items into 9 and incorporated the voices of external stakeholders.

ONO’s Value Creation Process

We will realize a sustainable society by delivering original and innovative medicines to the world.

Policy on Medium- to Long-term Investment

The medium- to long-term financial policy is to balance strategic investments, including R&D, and shareholder return in order to achieve sustainable growth.While securing stable investment resources by continually expanding operating cash flows through greater revenue, we work to increase asset efficiency by reducing cross-shareholdings, and the cash flows we generate are used for growth investments, including R&D while considering return on investments.
For the five years from FY2022 to FY2026, we will strive to expand revenue at an revenue CAGR in the high single digits compared to FY2021. We will then aim to maintain an operating income to revenue ratio of at least 25% while investing about 20-25% of revenue in R&D. With revenue growth and expanding profits through aggressive R&D investment as targets, we believe we can achieve ROE that exceeds the cost of shareholders’ equity without falling into a short-term orientation.
To achieve growth and ensure the soundness of our financial foundation while also providing stable shareholder returns, we aim to implement a progressive dividend policy and target a dividend payout ratio of 40% starting in FY2024.

Cash Allocation

Cash allocation has progressed largely in line with the scenario in the second medium-term management plan launched in FY2022. We have allocated 600 billion yen from accumulated profits and newly generated cash to R&D investment and have been operating with the intention of utilizing the remaining significant investment capacity as a strategic investment framework. As such, we have allocated 250 billion yen towards enhancing the drug discovery business, expanding business domains, and reinforcing the management foundation.
In the short to medium term, the Financial Division is working to visualize surplus funds while balancing activities to maximize product value, R&D, and shareholder returns. This approach allows for quick responses to investment opportunities to strengthen our pipeline. Additionally, we will generate cash reserves by promoting the liquidity of cross-shareholdings in the medium to long term.
We expect to achieve the growth strategies outlined in the medium-term management plan by steadily executing investment plans through such cash allocation. In particular, we have made “realization of direct sales in the U.S. and Europe” a reality through ONO-4059 in-house drug discovery and M&A, and are also steadily securing assets for the direct marketing of multiple products in the U.S. and Europe.
In FY2023, R&D expense reached 112.2 billion yen, exceeding 100 billion yen for the first time. This is nearly double the 57.5 billion yen at the start of the medium-term management plan in FY2017, and activities to expand the new drug pipeline leveraging our strong R&D capabilities are progressing well. Growth investments are not only focused on strengthening the drug discovery business but also include investments in business domain expansion and strengthening the management foundation. In June 2024, we acquired the US venture Deciphera Pharmaceuticals for approximately USD 2.4 billion (about 380 billion yen), further expanding our pipeline and steadily strengthening our direct sales system in the U.S. and Europe.