The management policies of CMIC Co., Ltd. and the CMIC Group are as follows:

1. Fundamental Management Policies
2. Target Management Indicator
3. Medium- to Long-term Management Strategy
4. Key Management Issues
5. Other Significant Matters Affecting the Company’s Management

1.Fundamental Management Policies

The CMIC Group utilizes a unique business model as a PVC contributing to the enhancement of pharmaceutical companies’ added value. In the its five business segments—CRO, CMO, CSO, Healthcare and Other— the Group comprehensively supports pharmaceutical companies’ value chain, from development and manufacturing to sales and marketing.
The Group will continue working to further reinforce its core CRO business, while at the same time strengthening its CMO, CSO and other businesses. The Group will strive to create new businesses that broadly support wellness. The CMIC Group’s fundamental management policies aim to build a new business model through which it can expand its customer base from pharmaceuticals companies to the overall healthcare sector. We believe that this will increase our ability to contribute to society.

2.Target Management Indicator

In business fields that have high growth potential, the Group works to continually increase sales share, while in business fields that serve established markets, the Group focuses on the ongoing improvement of profit margins. The CMIC Group aims to achieve an operating income ratio (operating income/net sales) of 10% or more, on a consolidated basis.

3.Medium- to Long-term Management Strategy

The Group’s operating environment is undergoing significant changes owing to a range of factors. These include curbs on medical expenditure, the globalization of the pharmaceutical industry, amendments to the Japanese Pharmaceutical Affairs Law, and the establishment of pharmaceutical ventures based on new technologies. We believe that it is essential for the Group to leverage its experience as a PVC, providing a comprehensive suite of value-chain support services—from drug development to manufacturing, sales and marketing. Furthermore, we aim to build a portfolio of businesses to broadly support wellness by pursuing the following management strategies.

1. Improving the quality of healthcare—The Pharmaceutical Value Creator (PVC) model
   Based on its business model as a PVC that contributes to the enhancement of pharmaceuticals companies’ added value, the CMIC Group provides a full range of support services to overseas-based pharmaceuticals companies aiming to enter the Japanese market and companies looking to enter the pharmaceuticals field from other industries. These services include support for drug development, manufacture, sales and marketing. In addition, for Japanese companies wanting to develop or manufacture drugs overseas, by leveraging our value chain, we are able to provide full support to such pharmaceuticals companies.
   Business expansion based on its unique PVC model creates an environment that allows for the use of safer and more effective drugs, including for rare disorders. Further, by covering from prevention to diagnosis and treatment, it contributes to the prevention of illness (maintaining health) and improved health for people.
2. Building a competitive advantage in our core business
   The Group has successfully expanded its business domain centered on the CRO business, which is currently the Group’s core business. By continuing to pursue further strengthening of its business model as a PVC, we aim to maintain and enhance our competitive advantage.
   Through the following strategies, the Group will strive to further reinforce its competitiveness in this area.
   1. Strengthen Group capabilities to enable it to move from undertaking contracts involving one part of a client’s requirements to contracts covering a client’s entire requirements
   2. Reinforce capabilities enabling the Group to undertake Asian clinical trials and global studies
   3. Enhance specialization and quality through an upgraded training system
   4. Strengthen the foundations for each of its business segments including the CMO business
   5. Based on the unique PVC business model, pursue the establishment of an environment for clinical trials that realizes synergies among the Group’s business segments and enhances productivity
3. International business development
   The following problems exist in Japan’s new drug development and approval process.
   1. Owing to the amount of time necessary for therapeutic trials and approval inspections within Japan’s new drug approval process, Japan suffers from a “drug lag” compared to other countries in getting new drugs to market as well as higher development costs owing to the long approval process.
   2. Securing a large number of case subjects sufficient to conduct PMS and trials, which are mandatory under additional conditions attached to new drug approvals, is often problematic.
   For these reasons, in order to supplement clinical data collected in Japan, many pharmaceuticals companies are applying international standards and looking toward clinical trials being performed in South Korea and China, where case subjects may be secured rapidly. In this way, Japan’s regulatory regime may be seen as promoting joint clinical trials with other parts of Asia. Another relevant factor is that Japan’s large pharmaceuticals companies are increasingly looking to achieve new drug approvals and marketing launches simultaneously in Japan and other markets. For this reason, such companies are commencing overseas new drug development at an early stage and strengthening efforts in the area of global clinical trials.
   Based on such trends, the Group has pursued a strategy of building its international business capabilities. In the Asia region, we have established subsidiaries CMIC Korea in South Korea, CMIC (Beijing) in China and CMIC Asia-Pacific in Singapore. In the United States, CMIC-VPS CORPORATION, which CMIC acquired in 2007, has strengthened its structure for the contract manufacturing of ethical drugs, and has begun making shipments.
   By drawing on this business structure, together with our experience and track record in global clinical trials (simultaneous development in the United States, Europe and Asia), CMIC will further expand the CRO business in Asia. We will also utilize EDC (Electronic Data Capture: a system that uses the internet to collect clinical data) and other means to offer services that support Japanese companies expanding into the U.S. and European market, as well as foreign corporation entering the Japanese market. We will further aggressively market directly to foreign pharmaceutical companies expanding internationally.
4. Encouragement of the intellectual property development (IPD)
   The Group aims to accumulate intellectual property and build a new profit model through in-house and joint development of orphan drugs, diagnostics and other products. At present, we are conducting in-house development of a diagnostic application of L-FABP to predict kidney disease progression. We submitted an application for its approval as an in vitro diagnostic (IVD) in September 2006. If it is approved after inspection, this product will become our first successful IPD project, opening the way to development of a royalty-based business model. CMIC is also conducting clinical development in Japan for Normosang®, a drug not yet approved in Japan for the treatment of the rare condition acute porphyria, and will make the application for approval itself.
5. Utilization of M&A
   The Group is pursuing alliances with companies that have potential synergies with its businesses.

4.Key Management Issues

Under the Revised Pharmaceutical Affairs Law, which came into force in 2005, the new drug approval system changed from the one based on manufacturing approval to the one based on marketing approval. Under this new regulatory framework, pharmaceuticals companies are aiming to increase their management efficiency through the aggressive adoption of outsourcing strategies. For example, in the area of drug discovery, we anticipate pharmaceutical ventures will become more widely used. In the development and approval process, we think there will be greater utilization of CRO. In manufacturing, we foresee increased use of CMO, and in sales and marketing, we anticipate the aggressive use of CSO. Issues to be addressed by the Group are as follows.

1. Increasing the efficiency of clinical trials
   To achieve further efficiency and productivity in clinical trials, we will aim to increase the productivity of our monitoring services by strengthen our links to medical institutions. We will also promote the use of IT for clinical trials.
2. Reinforcing capabilities in early-stage drug development and development management, including evaluation of drug discovery seeds
   Evaluation of projects to find new drug candidate substances is an extremely difficult area or work. However, based on the Group’s extensive experience related to drug development, we will provide comprehensive support services for the evaluation of new drug candidate substances as well as development and licensing to established pharmaceuticals companies, pharmaceutical ventures and companies newly entering the pharmaceutical field.
3. Building infrastructure necessary for international expansion
   To support Japanese and overseas-based pharmaceuticals companies’ simultaneous development projects in the United States, Europe and Asia, we will use a range of strategies for market development and to support clinical trials. For example, in North America, we will utilize alliances with CRO. In Asia, we will develop operations centering on CMIC Asia-Pacific, and encompassing China, South Korea and Taiwan. Based on these strategies, in addition to supporting Japanese pharmaceuticals companies, we will expand support services for European and U.S. pharmaceuticals companies.
4. Strengthening the CMO business
   CMIC plans to acquire the Shizuoka production facility of DAIICHI SANKYO PROPHARMA CO., LTD. in April 2010, adding to its existing facilities of CMIC SS CMO Co., Ltd., CMIC CMO Korea., Ltd., and CMIC-VPS Corporation. With this acquisition the CMIC Group will be one of Japan’s largest CMOs, with the capability to handle consignment production contracts for just about any drug formulation. With drug manufacturing becoming progressively more fabless and pharmaceutical clients increase outsourcing, CMIC will continue to expand this business in order to respond flexibly and promptly to increasingly diverse needs.
5. Realizing synergies in Group operations and enhancing productivity
   CMIC is strengthening its business support functions, including clinical trial support, pre-clinical services, drug sales and marketing support, as well as contract production, and enhancing coordination among Group companies in order to be a strategic partner for pharmaceutical companies, drug discovery ventures and other firms. We will also enhance the productivity of shared operations among Group companies.

5.Other Significant Matters Affecting the Company’s Management

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