Growth Strategies（Second period 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 conduct nearly 100 clinical trials mainly in the oncology field, aiming to maximize product value through expanding product indications, treatment lines, and combination therapies.

▽ Reinforcement of pipelines and acceleration of global development
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, and neurological diseases. We will strengthen research and drug discovery partnerships with world-leading universities, research institutions, and biotech venture companies, and aim to enhance a highly original pipeline that can aim for first-in-class. In addition, we will move forward with creating highly original in-house drugs by utilizing a variety of drug discovery modalities, and strive to improve the certainty of R&D by actively using nonclinical data and data from clinical trials to verify drug targets and strengthen translational research. Currently, 11 global development projects are in the clinical stage, and we are accelerating the development of numerous projects including ONO-4059.

▽ Initiatives for direct sales in the U.S. and Europe
We are focusing on U.S. and European direct sales as a growth strategy. We have already established local subsidiaries in Korea and Taiwan to begin marketing our own products, and in the U.S. and Europe, we are working to develop a sales structure for our own sales with an eye on launching several projects, such as ONO-4059.
We acquired Deciphera in June 2024, thereby gaining two approved/registered products and three compounds in development in oncology and expanding our pipeline. We will leverage Deciphera’s excellent R&D capabilities and strength in sales in the U.S. and Europe, and work to further accelerate the global expansion of our Group.

▽ Expansion of business domains
We are developing and commercializing products and services that take full advantage of the assets we have accumulated through research and development of prescription drugs, and are working to expand our business domains in order to both meet the needs of the expanding healthcare sector, and to continue to provide new value.
We have launched REMWELL, which is a sleep supplement that has been approved in Japan as foods with function claims, and provided “michiteku β-version,” a tool to support improved psychological care of cancer (colorectal and gastric cancer) patients immediately after diagnosis, and better healthcare literacy by helping them understand physicians. Further, we aim to create and expand new businesses through investment in startups in the healthcare field by establishing ONO DIGITAL HEALTH INVESTMENT, GK.

▽ Corporate Transformation through Digital & IT
We aim to grow into a company capable of accelerating our growth strategy, innovating business processes, and creating new value (digital transformation) by leveraging digital and IT cross functionally. This requires a flexible IT infrastructure supported by the latest technologies, a data utilization platform including internal and external data, and the capability of data analysis from company-specific perspectives. This use 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. For human capital, we will work to develop talent throughout the Group and those who will drive the growth strategy, while focusing on increasing diversity. Regarding improving corporate recognition in Western markets, we will work on improving our corporate value by promoting the penetration of our brand.

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.