OSAKA--Based on a review of the first two years of the second medium-term business plan (covering the period from fiscal 2005 to fiscal 2009), Shionogi & Co., Ltd. announces the following revisions to the goals and targets for the coming three years.

Under the first medium-term business plan, Shionogi established an operating structure with a focus on prescription drugs as its base. The second medium-term business plan was positioned as a period for aggressively preparing for long-term growth as a pharmaceutical company under the banner of "preparing for a significant leap forward."

In particular, Shionogi has worked to concentrate research, development, sales and marketing resources in key areas, with the aim of establishing a second and third target area in addition to Shionogi's core antibiotics business. At the same time, Shionogi has aimed to steadily build a base for full-scale overseas development.

In research and development, Shionogi is concentrating resources in the three target areas of infections, pain and metabolic syndrome, with the aim of advancing at least five new chemical compounds to Phase II or more advanced stages by the end of fiscal 2009.

At present, three compounds have advanced to the development stage: S-2367, S-364735 and S-777469. Development of these three compounds is currently under way, with an eye on future overseas business development. Shionogi has steadily launched or applied for manufacturing approval for drugs that are in the final stage of the development pipeline. In addition, aggressive efforts to establish a continuous pipeline stream resulted in the in-licensing of Adapalene (acne) and Peramivir (influenza).

Initiatives aimed at achieving the Company's research and development goals are thus largely proceeding as planned. In sales and marketing, Shionogi is working to further expand its presence in the area of antibiotics, and launched Finibax and Avelox in fiscal 2005. In the area of cancer-related pain, Shionogi is conducting promotional activities focused on improving quality of life through alleviation of cancer pain and promoting educational activities regarding the medical use of narcotics.

In the area of metabolic syndrome, Shionogi shifted to regular sales of Crestor in September 2006 after completing post-marketing surveillance with a scale of 10,000 subjects with AstraZeneca six months ahead of schedule. This has allowed the Company to get an early start on full-scale programs to provide information on Crestor, which will be a crucial core product.

Through these efforts, Shionogi has strengthened training of medical representatives (MRs) and improved their capabilities so they are constantly aware of medical needs.

However, Shionogi must still improve its sales and marketing organization, such as by enhancing coordination between marketing functions and sales divisions. In addition, conditions in the prescription drug market are becoming more challenging than expected. Consequently, domestic sales of prescription drugs have not reached target.

Moreover, higher research and development expenses have offset an increase in royalty revenues, which has kept Shionogi from achieving its income targets.