Formed through the merger of SEKISUI CHEMICAL’s Medical Business Division and Daiichi Pure Chemicals Co., Ltd., in 2008, SEKISUI MEDICAL CO., LTD. has taken the lead in supporting the Group’s Medical Business.
The globally active Medical Business is composed of two parts, namely the Diagnostics Business, which is centered on diagnostic drugs and devices, and the Pharmaceuticals Sciences Business. The Pharmaceuticals Sciences Business is further broken down into the Pharmaceuticals and fine chemicals business, which handles contracted manufacturing of active pharmaceutical ingredients (APIs), and the Drug development solutions business, which provides support for research and development among pharmaceutical companies. The ratio of net sales accounted for by overseas business has exhibited steady growth, reaching 50% in fiscal 2015, up from the 21% recorded in fiscal 2008. The Medical Business is promoting further globalization through the continued acceleration of business deployments in North America, Europe, and Asia.
In recent years, social and consumer needs for medical care have been diversifying in line with the dramatic transformations of the global medical environment. Accordingly, we will continue to embrace change and challenge new frontiers so that we can create unique, high-quality products and services that will leave our customers truly satisfied.
In addition to the start of a new scope of consolidation that includes Singapore-based Veredus Laboratories, which was acquired at the end of fiscal 2017, in fiscal 2018 the Medical Business saw growth in sales with performance primarily driven by an expansion of overseas sales in Europe, the US, and China for its mainstay diagnostics business. Likewise, the Medical Business set a new record for operating income for the second consecutive fiscal year. During fiscal 2019, the Medical Business will be removed from the High Performance Plastics (HPP) Company and placed under the jurisdiction of the Headquarters. During the first fiscal year after separation, sales are forecast to increase ¥1.8 billion to ¥72.5 billion and operating income is forecast to increase ¥400 million to ¥10 billion. In the Diagnostics Business, expansion of new products and a reinforced framework in Europe, the US, China, and Asia are expected to increase sales ¥3 billion to ¥58.1 billion. The Pharmaceuticals Sciences Business is forecast to see a decline in sales because of an expected drop in demand for some of its mainstay products. Despite this, the Medical Business will work towards new orders for APIs and on expanding its drug development solutions business in Europe and the US.
Under the current medium-term plan, the Medical Business has steadily grown its core domains (diagnostic reagents (domestic) and pharmaceuticals and fine chemicals) and growth enhancing domains (diagnostics reagents (overseas), drug development solutions (overseas), and new APIs) as one of the four strategic fields within the HPP Company. From fiscal 2019, the Medical Business will fall under the jurisdiction of the Headquarters, but will continue to advance growth strategies in the two domains of diagnostics and pharmaceutical sciences.
In striving to achieve the Medium-term Plan, the Medical Business is working to demonstrate technological synergy with each area that has been acquired thus far through mergers and acquisitions. In addition, it aims to continue expanding its business domains in both the Diagnostics Business and Pharmaceuticals Sciences Business from the two aspects of business area and technical expansion.
The Medical Business will work to further accelerate growth as a means of contributing to the realization of a new phase of growth as the Company’s long-term vision (2020s: ¥2 trillion in net sales, ¥200 billion in operating income).
*Regarding the current earnings plan for FY2019, please see IR Briefig Materials.