Filing under Rule 425 under
the U.S. Securities Act of 1933
Filing by: Sankyo Co., Ltd.
Subject Company: Sankyo Co., Ltd. and
Daiichi Pharmaceutical Co., Ltd.
SEC File No. 132-
Business Integration of Daiichi Pharmaceutical Co., Ltd and Sankyo Co., Ltd
25 February, 2005
Background to Integration
Kiyoshi Morita President & CEO
Daiichi Pharmaceutical Co., Ltd
2
Today’s Announcement
Basic Agreement concluded today to integrate businesses of Daiichi and Sankyo
Holding company to be established on Oct 1*
Complete integration of prescription pharmaceutical operations by April 2007*
*Dates are proposed dates only
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Outline of Holding Company
Name DAIICHI SANKYO COMPANY, LIMITED
Timing of Integration 01 October, 2005*
Integration Process Companies to become
subsidiaries of joint holding
company through joint share
transfer
Head Office Present Head Office of Sankyo
Delisting and Listing
28 September, 2005* — Daiichi, Sankyo delisted
01 October, 2005* — Holding company to be listed Stock Transfer Ratios
1.159 shares in holding company for each Daiichi share
1 share in holding company for each Sankyo share
*Dates are proposed dates only
4
Milestones
March 2005 Establishment of Integration
Committee
May 2005 Signing of Definitive Agreement
June 2005 Shareholders’ Meeting
End Sept 2005 Delisting of existing companies
1 October 2005 Holding company established
April 2007 Complete integration of
prescription pharmaceutical
operations
*Dates are proposed dates only
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DAIICHI SANKYO
Achievement of true competitiveness as a Japan based global pharma-innovator
DAIICHI SANKYO
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Background
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Sluggish Domestic Market Growth
Market size in US $ billion
1993 2003
U.S. 74.7 219.5 (+294%)
Europe 65.9 135.1 (+205%)
Japan 45.9 58.9 (+123%)
Office of Pharmaceutical Industry Research
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Foreign Players Increase Japan Share
Domestic Market Share of Prescription Drugs
1990 2000 2003
Top 10
Japanese 35% 33% 32%
Firms
Top 10
15% 18% 27%
Foreign Firms
Total 50% 51% 59%
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Increasing Costs / Decreasing Approvals
R&D expenditure (Billions of Yen)
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
32 35 33 40 45 25 24 15 21 39 23 24 15 15
500 600 700 800 900 1000
0 5 10 15 20 25 30 35 40 45 50
New drugs
Source: JPMA
10
Global / Local Differential
Comparison of Global Top 10 and Japanese Top 10
Pharmaceutical Sales
(FY2003, 100 Billion of Yen)
2.5 2.0 1.5 1.0 0.5 0.0
2.3
0.3
Global Japan
R&D Expenditure
(FY 2003, 100 Billions of yen
5.0 4.0 3.0 2.0 1.0 0.0
4.1 0.6
Global Japan
Source JPMA (Currency Calculation by PRAP Japan)
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Benefits
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Benefits of Integration
Greater R&D depth in franchise categories
Global reach and overwhelming domestic sales strength
Expansion of corporate strategy options arising from increased scale
Increased operational efficiency
Enhancement of personnel resources
13
Benefits for Daiichi
Enhancement of global clinical discovery trial capabilities and greater depth in research capabilities
Further enhancement of domestic sales strength through doubling of MR numbers and increased share with specified distributors
Increased business opportunities such as European expansion
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World Class R&D Budget
R&D Expenditures — March 04 (100 mil yen)
0 200 400 600 800 1000 1200 1400 1600
DAIICHI SANKYO
Astellas Takeda Sankyo Fujisawa Yamanouchi Eisai Daiichi Mitsubishi Welpharma Chugai Ono Shionogi Tanabe Taisho
242 246 298 309 435 505 607 690 690 701 736 867 1297 1437 1474
Source: JMPA
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Leading Ranking in Domestic Sales
Sales Ranking March 2004 (100 million yen)
0 1000 2000 3000 4000 5000 6000 7000 8000
Takeda DAIICHI SANKYO Astellas Sankyo Yamanouchi Pfizer Eisai Daiichi Fujisawa Chugai Novartis Mitsubishi Welpharma
2004 2101 2183 2406 2499 2607 2968 3434 3767 5840 6266 7519
Source: JMPA
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A Japan based global pharma-innovator DAIICHI SANKYO
Synergies
Takashi Shoda President & CEO Sankyo Co., Ltd.
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Benefits of Integration
Greater R&D depth in franchise categories
Overwhelming domestic sales strength and global reach
Expansion of corporate strategy options arising from increased scale
Increased operational efficiency
Enhancement of personnel resources
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Benefits for Sankyo
Strengthening of product mix in franchise categories, centering on cardiovascular
Access to Daiichi’s expertise and know-how in cancer category
Seamless pipeline post- CS-747, CS-505
Increase in number of quality MR’s domestically
Increase in corporate strategy options through expansion of overseas operations
Enhancement of corporate strategy in Asia (China, Korea)
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Increased Depth in R&D
Capabilities
Daiichi Sankyo
Immune disorders Anti-allergic agents Cardiovascular diseases Anti-thrombotic agents Anti-inflammatory agents
Anti-infective agents Anti-cancer agents
Bone Disorders
Glucose Metabolic Disorders
Combined R&D Budget of \150 Billion
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Seamless Development Pipeline
Cardiovascular
Antibacterial
Phase I Phase II Phase III Application
SUN N8075
CS-866AZ DX-619 CS-758 CS-8958
DU-176 b DX-9065a HGF IHD
SUN 4936h
SUN N4057
CS-505
DU-6859a
(U.S)
CS-023
HGF
PAD
Plavix
CS-747 CS-866DM CS-866CMB
DF-098
DU-6859a(Japan)
Source: Company Data
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Seamless Development Pipeline (cont)
Phase I Phase II Phase III Application
Glucose Metabolic
Allergy & Immune
SUN E7001 CS-872 CS-706 DW-908e CS-712
CS-011 CS-917 SNK-860 SUN E3001 CS-003
WelChol CS-600G IGE025 LX-A
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Seamless Development Pipeline (cont)
Phase I Phase II Phase III
Cancer
Others
CS-1008
KMD-3213(China)
CS-526
DJ-927 TZT-1027 SUN Y7017 (Severe) CS-088
Feron
(Additional indication)
Evoxac SUN Y7017
(Mild to Moderate)
CS-801
CS-1401E
DL-404 KMD-3213 (Japan) DD-723 SUN Y4001 CS-419
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World Leader in Patents
Number of disclosed patents in Japanese market (2003)
0 50 100 150 200 250 300 350
Pfizer GlaxoSmithKline Merck Takeda AstraZeneca Aventis DAIICHI SANKYO
Abbott Astellas Sumitomo Novartis Mitsubishi Pharma Chugai Bayer Boehringer I
Daiichi Sankyo Roche Kyowa
314 286
189
184 170
136 126
98
95
83
70
67
67 65 64 62 62
61
Source: JPMA
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Domestic Competitiveness
Effect Products Cardiovascular Diseases Antihyperlipedemic Mevalotin Livalo ßblocker Artist Antiarrhythmic Sunrythym Acute Cardiac Failure Hanp ACE Inhibitor Acecol?Coversyl Anti Platelet Panaldine ARB Olmetec Ca Channel Blocker Calblock Oral antibacterial Cravit?Banan?Ketek?Taravid Contrast media Omnipaque, Omniscan Anti-inflamatory Loxonin?Mobic?Miltax Anti-allergy Zyrtec?Alesion Chronic renal failure Kremezin
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Number of Domestic MRs
- 500 1,000 1,500 2,000 2,500 3,000 3,500
Pfizer
DAIICHI SANKYO
Astellas AstraZeneca
Novartis Chugai Takeda Banyu
GSK
MitsubishiPharma Shionogi
Yamanouchi Daiichi Sankyo Fujisawa
Source: MIX
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Number of Details
2004.03 Sales Calls (1,000)
DAIICHI SANKYO
Astellas Pfizer Takeda Sankyo Shionogi Fujisawa Yamanouchi Daiichi
0 20000 40000 60000 80000
Source :IMS JDI 2004
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Increased Presence with Wholesalers
Share at Top 20 Wholesalers
Top 9 companies
Second 1 company
Third 2 companies
Fourth 3 companies
Fifth 1 company
Sixth or lower 4 companies
Source: Crecon Top 20 wholesalers cover 79% of market
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Enhanced Overseas Reach
Total of 2,200 MR in 33 locations
Asia South North Europe America America Locations 10 2 7 14
# of MR 400 160 850 800
Others
Expansion of corporate strategy options arising from increased scale
Increased operational efficiency
Enhancement of personnel resources
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Outline of Holding Company
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Organizational Chart
Joint Holding Company
Shareholders Meeting
Audit Committee/ Auditors
Board of Directors
President & CEO
Management Committee Chair-President
Strategy Planning Finance
Corporate Communications Integration Committee
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Directors and Officers
Representative Director & Chairman
Kiyoshi Morita
Representative Director & President CEO
Takashi Shoda
Executive Director Hiroyuki Nagasako
Executive Director Hideho Kawamura
Executive Director Yasuhiro
Ikegami
Executive Director Tsutomu Une
Non-executive Director 4 (to be
appointed)
Corporate Auditor 2 (to be appointed)
External Corporate Auditor 2 (to be appointed)
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Integration Process
Phase I
October 2005*
Joint Holding Company
Gradual Integration
Daiichi
Sankyo
Phase II
April 2007*
Operational Holding Company
Domestic Prescription Pharmaceutical Sales Research & Development Quality Control Corporate Divisions
Overseas Subsidiaries
US Europe ROW
Subsidiaries
Supply Chain and Production Business Support IT
OTC Subsidiaries
Non-prescription Pharmaceutical Divisions
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Corporate Mission
It is our mission to reply to the medical needs of people around the globe through the ongoing creation of innovative pharmaceuticals and services
In all operational processes, functions and organizational structure we will leverage the strengths of each company, learn from each other with an open mind and objectively appraise and adopt the best of best, placing the interests of the integrated company first
This is an equal integration, with fair, and non-discriminatory policies in job assignment and opportunities, merit based appraisal and remuneration, regardless of previous affiliation, nationality, age or gender.
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A Japan based global pharma-innovator DAIICHI SANKYO
Filings with the U.S. SEC
Sankyo Co., Ltd, and Daiichi Pharmaceutical Co., Ltd may file a registration statement on Form F-4 with the U.S. SEC in connection with the proposed business combination of Daiichi Pharmaceutical Co., Ltd and Sankyo Co., Ltd, under a new holding company by way of a joint share transfer. The Form F-4 (if filed) will contain a prospectus and other documents. If a Form F-4 is filed and declared effective, Sankyo Co., Ltd. and Daiichi Pharmaceutical Co., Ltd plan to mail the prospectus contained in the Form F-4 to their U.S. shareholders prior to the shareholders meetings at which the share exchange will be voted upon. The Form F-4 (if filed) and prospectus will contain important information about Sankyo Co., Ltd and Daiichi Pharmaceutical Co., Ltd, the joint share transfer and related matters. U.S. shareholders of Sankyo Co., Ltd are urged to read the Form F-4, the prospectus and the other documents that may be filed with the U.S. SEC in connection with the joint share transfer carefully before they make any decision at the shareholders meeting with respect to the joint share transfer. The Form F-4 (if filed), the prospectus and all other documents filed with the U.S. SEC in connection with the joint share transfer will be available when filed, free of charge, on the U.S. SEC’s web site at www.sec.gov. In addition, the prospectus and all other documents filed with the U.S. SEC in connection with the business combination will be made available to shareholders, free of charge, by calling, writing or e-mailing:
Sankyo Co., Ltd: Daiichi Pharmaceutical Co., Ltd;
Mr Shigemichi Kondo Mr Toshio Takahashi
Corporate Communications Dept Corporate Communications Dept
3-5-1 Nihonbashi-honcho, Chuo-ku, Tokyo 14-10 Nihonbashi, 3-chome, Chuo-ku, Tokyo,
Tel: +813-5255-7034 Tel: +813-3273-7107
shige-k@sankyo.co.jp andokb5o@daiichipharm.co.jp
You may read and copy any reports and other information filed with, or submitted to, the U.S. SEC at the U.S. SEC’s public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the other public reference rooms in New York, New York and Chicago, Illinois. Please call the U.S. SEC at 1-800-SEC-0330 for further information on public reference rooms. Filings with the U.S. SEC also are available to the public from commercial document-retrieval services and at the web site maintained by the U.S. SEC at http//www.sec.gov.
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Forward-Looking Statements
This communication contains forward-looking information and statements about Sankyo Co.,Ltd and Daiichi Pharmaceutical Co., Ltd and their combined businesses after completion of the joint share transfer. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words “expect,” “anticipates,” “believes,” “intends,” “estimates” and similar expressions. Although the management of Sankyo Co., Ltd and Daiichi Pharmaceutical Co,. Ltd believe that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Sankyo Co., Ltd and Daiichi Pharmaceutical Co., Ltd, securities are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sankyo Co., Ltd and Daiichi Pharmaceutical Co., Ltd, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the public filings with the SEC and the local filings made by Sankyo Co., Ltd and Daiichi Pharmaceutical Co., Ltd. including those listed under “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors” in the prospectus included in the registration statement on Form F-4 that Sankyo Co., Ltd and Daiichi Pharmaceutical Co., Ltd. may file with the U.S. SEC. Other than as required by applicable law, neither Sankyo Co, Ltd nor Daiichi Pharmaceutical Co., Ltd undertakes any obligation to update or revise any forward-looking information or statements.
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