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News Release

FOR IMMEDIATE RELEASE
No.06-07
February 24, 2006
For Print (PDF 266KB)

Notice Concerning the Split-off of Management Function of the R&D Division and Other Relevant Function of Eisai Co., Ltd.


Listed Stock Name:   Eisai Co., Ltd.
Location of Headquarters: 4-6-10 Koishikawa Bunkyo-ku, Tokyo
Director and President: Mr. Haruo Naito
Securities Code: 4523
Listed Locations: First Sections of the Tokyo Stock Exchange
& the Osaka Securities Exchange
Inquiries: Mr. Hiroyuki Mitsui
Executive Officer
Corporate Communications
Phone +81-3-3817-5085

Notice Concerning the Split-off of Management Function of
the R&D Division and Other Relevant Function of Eisai Co., Ltd.


Eisai Co., Ltd. (Headquarters: Tokyo, President & CEO: Haruo Naito) reached a resolution to split-off the management functions of the R&D Division and other relevant function into Eisai R&D Management Co., Ltd., a newly established wholly-owned subsidiary of Eisai Co., Ltd., as of April 1, 2006 (hereinafter referred to as the “Separation”) at the Executive Committee held on February 24, 2006. Details are noted below.

1. Purpose of the Separation
Eisai believes that the ideal condition to create innovation from research on new drugs will be realized by supporting small teams led by excellent leaders. As a result, the most important issue for the management of the R&D Division lies in empowering each project team to execute their project with prioritized resources provided by consistent management across R&D. The purpose of the split-off of the management of the R&D Division and other relevant function at this time is to support the activities of the team structure and create and develop new drugs efficiently. Eisai will establish a system in which the R&D management as a team will manage project through support of the International Project Team (IPT) for each theme to optimize the allocation of financial resources and manpower. Important decisions at the new company will be made by executives in charge of all R&D functions as well as marketing and safety in order to further improve the productivity and efficiency of the R&D activities.

Main operations at the new company include:
  • Realization of new products' submission/approval schedules defined in the business plan
  • Management of IPT for smooth progression of drug development
  • Development of a strategy toward swift acquisition and utilization of advanced technologies
  • Development of a plan to allocate resources among global R&D activities
  • Management of intellectual properties, which are the deliverables of R&D activities and other relevant activities

2. Overview of the Separation
(1)Schedule of the Separation
Date of the Executive Committee for approval of the Separation plan: February 24, 2006
Date of the Separation: April 1, 2006 (planned)
Date of registration of the Separation to the Legal Affairs Bureau: April 3, 2006 (planned)
Note: In accordance with the provisions of the Commercial Code Article 374-6 (simple incorporation-type separation), the company making the Separation is not required to obtain consent at the general shareholders' meeting.

(2)Method of the Separation
1.Method of the Separation
Eisai Co., Ltd. is defined as the company making the Separation; “Eisai R&D Management Co., Ltd.” is a newly incorporated subsidiary by the Separation. (“Kan-i Bunkatsu”)

2.Reason for Adoption of the Above Method
Eisai aims to further improve the productivity and efficiency of the global R&D activities by conducting the separation of R&D management function and other relevant function. For this purpose, Eisai decided to adopt the “Bunsha Gata Shinsetsu Bunkatsu” under which a newly incorporated subsidiary will succeed such business, while all shares issued by such subsidiary will be allotted to Eisai on the split-off of the management of the R&D Division.

(3)Allotment of Shares
All of 200 common stocks issued by the new company will be allotted to Eisai.

(4)Provision of Subsidy
No subsidy will be paid.

(5)Rights and Obligations Succeeded by the New Company
The new company will succeed assets (cash equivalents and intangible assets) in connection with the management functions of the R&D Division and management functions of intellectual properties excluding some products, and the associated rights and liabilities of Eisai. It should be noted that the employees of Eisai who are mainly engaged in the functions as of the date of the Separation will be temporarily transferred to the new company.

(6)Prospect on Fulfillment of Liabilities
As for obligations and liabilities, Eisai believes that no issue will be expected regarding the fulfillment of liabilities which Eisai and the new company should be charged with after the Separation. As for obligations and liabilities which will be transferred to the new company for assumption after the Separation, Eisai will jointly assume obligations and liabilities in accordance with the Separation plan.

(7)Directors and Officers of the New Company
The newly appointed members of the Directors, Statutory Auditors and Executive Officers are as follows:

<Directors and Auditor>
TitleNamePresent Title at Eisai
Director and Chairman of the CompanyHaruo NaitoPresident and CEO
DirectorNobuo DeguchiSenior Vice President
Director and PresidentKentaro YoshimatsuSenior Vice President
Statutory AuditorHideaki MatsuiRepresentative Executive Officer & Executive Vice President

<Executive Officers>
TitleNamePresent Title at Eisai
PresidentKentaro YoshimatsuSenior Vice President
VP, Project ManagementMasanori TsunoESL Director
VP, Strategy·PlanningTerushige IikeDirector, Strategic Pipeline Planning Department
VP, Global RegulatoryDavid JefferysEEL Senior Director
VP, Global ClinicalJiro HasegawaSenior Vice President
VP, Global ClinicalMindell SeidlinEMR President
VP, Global Clinical - JapanHisashi TanakaVice President
VP, Japan Research - ECLSeiichi KobayashiERI Executive Director
VP, US ResearchMichael LewisERI President
VP, Europe ResearchYukio NishizawaELL Director
VP, Global Safety OfficerStewart GearyDeputy Director, Corporate Regulatory Compliance, Quality Assurance
VP, MarketingEd BroughtonESI Senior Vice President


ESL:Eisai Ltd.
EMR:Eisai Medical Research, Inc.
ERI:Eisai Research Institute of Boston, Inc.
ELL:Eisai London Research Laboratories, Ltd.
ESI:Eisai Inc.
ECL:Eisai Co., Ltd.

<Operational scheme>
Board of Directors

3.  Profile of the Parties Involved in the Separation
(1) Trade NameEisai Co., Ltd.(The company making the Separation)Eisai R&D Management Co., Ltd.(Newly incorporated subsidiary)
(2) BusinessManufacture and sales of pharmaceuticals, quasi-drugs, pharmaceutical machinery, etc.Management of the R&D Division and intellectual properties
(3) Date of Establishment December 6, 1941April 3, 2006 (planned)
(4) Location of Headquarters4-6-10, Koishikawa Bunkyo-ku, TokyoBunkyo-ku, Tokyo (planned)
(5) RepresentativeHaruo Naito
(President and CEO)
Kentaro Yoshimatsu
(President) (planned)
(6) Capitalyen44,985 millionyen10 million (planned)
(7) Number of Shares Issued296,566,949 shares200 shares
(8) Shareholders' Equityyen448,255 millionyen76 million
(9) Gross Assetsyen546,890 millionyen76 million
(10) Settlement TermMarch 31March 31
(11) No. of Employees3,783 (individual, as of March 31, 2005)20 (planned)
(12) Main Business Partners<Suppliers>
Beta Chem Co., Ltd.
Novo Nordisk Pharma Ltd.
Chugai Pharmaceutical Co., Ltd.
<Clients>
Alfresa Corp.
Suzuken Co., Ltd.
Mediceo Paltac Holdings Co., Ltd.
<Entrusted to>
Eisai Co., Ltd.
(13) Major Shareholders and Ratio of their Share holdings (as of September 30, 2005)The Master Trust Bank of Japan, Ltd. (trust account) (6.24%), Nippon Life Insurance Co. (4.66%), Japan Trustee Services Bank, Ltd. (trust account) (4.55%), Saitama Resona Bank, Ltd. (4.18%)Eisai Co., Ltd. (100%)
(14) Main Trading BanksSaitama Resona Bank, Ltd., Mizuho Corporate Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd.TBD
(15) Relations between the CompaniesCapital: The new company shall be a wholly-owned subsidiary company of Eisai.
Personnel: Eisai will dispatch officers and employees as secondees to the new company.
Partnerships: The new company will be entrusted with the management operations related to R&D activities from Eisai.
Note) The above amounts of capital, shareholders' equity and gross assets of the new company are the ones as of September 30, 2005.

(16) Business Results over the Last 3 Settlement Terms of Eisai Co., Ltd.
 Eisai Co., Ltd. (company making the Separation)
Settlement TermMarch 2003March 2004March 2005
Net Salesyen289,603 millionyen303,626 millionyen307,936 million
Operating Incomeyen65,273 millionyen67,057 millionyen67,634 million
Ordinary Incomeyen64,805 millionyen66,559 millionyen69,115 million
Net Incomeyen34,174 millionyen41,883 millionyen43,498 million
Net Income per Shareyen117.57yen143.73yen151.56
Annual Dividends per Shareyen32.00yen36.00yen56.00
Shareholders' Equity per shareyen1,293.44yen1,407.52yen1,510.69


4.  Details of the Functions to be Separated

(1) Overview
Development and progress management of a plan on R&D activities of pharmaceutical products
Enforcement of licensing, trade, operation and maintenance of intellectual property rights

(2) The items and amounts of property for transfer and liabilities (as of September 30, 2005)
AssetsLiabilities
ItemsBook ValueItemsBook Value
Current Assetsyen30 millionCurrent Liabilities-
Fixed Assetsyen46 millionFixed Liabilities-
Totalyen76 millionTotal-

5. Condition of the Company after the Separation
There will be no change to the corporate name, nature of business, location of headquarters, capital or settlement terms of the company after the Separation. The Separation will have negligible effects on the company's consolidated performance. The company is predicted to incur no reduction in gross assets as a result of the Separation.