Message from the CEO

Ono now stands at a major turning point as we prepare for our next stage of growth. The environment surrounding the pharmaceutical industry is more challenging than ever. Areas awaiting new treatments are increasingly difficult to address. In Japan, meanwhile, rising social security costs are placing pressure on public finances, making it difficult for the value of medicines to be fully reflected in NHI prices. Japan’s share of the global pharmaceutical market has declined from approximately 20% three decades ago to around 4% today, while the United States now accounts for roughly half of the market. In this environment, a business centered primarily on Japan can no longer deliver sustainable growth.

A further major challenge for Ono is the expiration of OPDIVO patents, which will begin to occur across global markets from 2028. OPDIVO has been a major driver of our growth, and no single product can easily offset the impact of its patent expirations. The most important management challenge determining Ono’s future is to build the capability to create multiple new medicines on an ongoing basis and deliver them to patients around the world.

Against this backdrop, we brought Deciphera Pharmaceuticals, Inc. (“Deciphera”) into the Ono Group in 2024 and chose to establish our own presence in the U.S. and European markets. Previously, we had largely relied on overseas partners to develop and commercialize medicines discovered by Ono. This acquisition was not simply about acquiring products. It marked a shift to a business model in which we assume responsibility for the entire process—from research and development to regulatory approval, supply, and commercialization—and maximize the value of our medicines globally. I regard this as a new starting point in Ono’s evolution into a Global Specialty Pharma.

The integration of Deciphera has progressed smoothly. Drawing on the expertise that Deciphera has built in the U.S. and Europe has enabled us to make significant progress toward establishing our own commercial operations in these markets. The two companies also share a strong commitment to addressing unmet medical needs and bringing better treatment options to patients. This shared sense of purpose has been a powerful force in moving the integration forward. Researchers from the two companies have begun interacting, and we look forward to seeing new achievements emerge from Deciphera’s research sites. Another important outcome has been the retention of key human resources critical to the business and the relationships we have built while respecting each other’s strengths. We have now reached the stage of translating this positive relationship into tangible processes and measurable results.

I do not, however, consider the integration complete. Deciphera has traditionally focused its management resources on a limited number of products and carefully nurtured each one. Going forward, we will add multiple development programs from Ono and advance a large number of projects in parallel across the U.S. and Europe. This involves far more than handling more products. It requires us to move to a cross-functional and cross-regional model to manage a more complex business with speed.

The ability of the two companies to share information and work together is only the first step. The goal of integration, as I see it, is to combine our respective experience and strengths and raise both the quality of development and the speed of decision-making to a level at which we can compete with and outperform global mega-pharmaceutical companies. Several of our development programs are expected to reach critical stages around 2030. To capitalize fully on these opportunities, we will spend the next five years building a global foundation that can translate our combined strengths into greater results.

Maximizing the value of existing products is also an important priority. The subcutaneous formulation of OPDIVO will help reduce the burden on patients and health-care professionals and make treatment more convenient, while maintaining and enhancing the product’s value through lifecycle management. By combining the creation of new medicines, the acquisition of promising external assets, and the maximization of the value of existing products, we will place sustainable growth on a firmer footing.

Continuing to invest in research and development to create innovative medicines is a responsibility to fulfill. At the same time, as a listed company, we also have a responsibility to make effective use of the capital entrusted to us by our shareholders and deliver appropriate returns. Achieving the right balance between these two responsibilities is one of management’s highest priorities.

From 2026 through approximately 2031, we expect to be in a phase in which growth investment takes priority as we advance our pipeline toward commercialization and strengthen the foundation of our global business. Precisely because this will be a period of intensive investment, we must rigorously evaluate every investment opportunity and allocate our limited management resources to the areas that will create the greatest value, while remaining mindful of our cost of capital and capital efficiency. Regarding the ROE currently at around 8%, we aim for a sustainable increase by strengthening our earning power and improving capital efficiency. Achieving this goal will require us to steadily bring promising pipeline assets to market and translate them into sustained earnings growth.

Drug discovery requires many years of investment and is inherently accompanied by uncertainty. If we reduce investment in research and development in pursuit of short-term earnings, we risk sacrificing future growth opportunities. At the same time, we cannot ask shareholders and investors simply to wait for future growth while placing shareholder returns on hold. We must carefully assess both the necessity of each investment and the value it is expected to create, while steadily delivering value to patients, generating earnings growth, and enhancing shareholder returns.

Our shareholders and investors evaluate our management from a variety of perspectives and according to their own investment philosophies. We have a responsibility to respond to those expectations by clearly explaining why growth investment is necessary, the time horizon for value generation, the value it will deliver to patients and society, and the path toward enhancing long-term corporate value, while providing objective updates on our progress.

Broadening our shareholder base to include more investors who support our long-term vision is also an important objective of our investor relations activities. By steadily delivering results, engaging in open and constructive dialogue with shareholders and investors, and building trust through consistent execution, we aspire to achieve an even higher level of both growth investment and shareholder returns. As our pipeline begins to deliver tangible results, I believe we have entered a new stage—one in which our long-term aspirations turn into corporate value.

There was once a prevailing view within Ono that our foremost responsibility was to focus on our core business and that we should avoid becoming more involved than necessary in industry activities or broader social issues. I, too, once believed that a company’s contribution to society lay in returning the generated profits to society. However, as Ono marked its 300th anniversary and brought OPDIVO to patients around the world, I came to reflect more deeply on the role a company should play in society.

Our purpose is to deliver new treatment options to patients suffering from disease and to their families. By giving them hope we contribute to better health and, ultimately, to a happier future. This is the essence of how our business helps address social challenges and creates social value. As a company whose medicines support people’s lives and health, however, our responsibility extends beyond simply providing pharmaceuticals. We must also address social issues—including environmental protection and respect for human rights—with sincerity and earn society’s trust through all aspects of our business. The value we create for patients and our responsibilities to the environment and society are not separate priorities. They are now inseparable elements of Ono’s corporate purpose.

Our evolution into a Global Specialty Pharma requires excellence in drug discovery and the trust of society. Addressing challenges such as climate change and human rights is an essential part of the management foundation that supports that trust while contributing to higher long-term corporate value. By integrating the value we create for patients, our responsibilities to the environment and society, and the value we deliver to shareholders and investors, we will achieve sustainable growth.

The most important foundation for developing people and organizations capable of creating value globally is our corporate philosophy: “Dedicated to the Fight against Disease and Pain.” This philosophy is widely shared throughout Ono. Yet simply understanding it as an abstract concept is not enough. What matters is that each individual embraces it personally and reflects it in the decisions and actions they take every day. We thus encourage employees to develop their own “My Mission Statement” while each organization defines its own mission. When the aspirations of the Company align with those of each employee, I believe the drive to take on new challenges grows even stronger.

To me, a global talent is not simply someone who can work overseas or communicate fluently in English. A true global leader is someone who can clearly express their own ideas wherever they are, gain the support of those around them, and unite people with diverse backgrounds around a common purpose. We must cultivate more leaders of this kind and build an organization that consistently delivers results.

One of Ono’s greatest competitive strengths is speed. Yet there is a limit to speeding up routine work alone. The greatest opportunity lies in the speed of decision-making. Making sound decisions quickly and translating them into action across the organization is what will define Ono’s distinctive competitive advantage.

I was not fully prepared when I took on the role of President. That experience convinced me of the importance of giving future leaders opportunities to acquire the knowledge and experience they need from an early stage. We have therefore established systems to support their development. Yet systems alone cannot develop future leaders. Nothing can replace the experience of confronting difficult challenges, making decisions, and accepting responsibility for the outcomes. We will ensure that the experience gained by those leading change today becomes an enduring strength for the entire organization and is passed on to the next generation.

To achieve sustainable growth, we must continuously create innovative medicines, acquire promising pipeline assets from external sources, and strengthen our ability to deliver them to patients. As we overcome each patent expiration, we must also build a business that is less vulnerable to their impact, thereby strengthening the stability of our management. Our immediate priority is to further enhance our research and development capabilities, licensing strategy, and our ability to maximize product value on a global scale.

Ono was founded in Osaka more than 300 years ago. From a company rooted in the Kansai region, we grew into one of Kansai’s leading companies and then into one of Japan’s leading pharmaceutical companies. My dream is that we will continue that journey and become a company recognized around the world for its unique strengths and distinctive character.

I believe that dreams become reality when we face challenges with a clear understanding of reality and move forward steadily, one step at a time. Throughout our long history, Ono has overcome many challenges. Today, however, we are at a stage where we must do more than simply overcome them—we must transform the experience and strengths we have built over the years into our next phase of growth. Remaining where we are is simply not an option. We will continue striving to deliver more innovative medicines to patients while enhancing our corporate value.

Our stakeholders are indispensable partners who support our aspirations and help shape our future. To meet the expectations of patients eagerly waiting for new medicines, we will continue working together with our employees, shareholders and investors, research institutions, business partners, and all those who share our vision.

Creating value on a global scale is never easy. Yet it is precisely because the challenge is so great that it is worth pursuing. I believe that embracing such challenges is what gives Ono its distinctive character. By continuing to deliver new treatment options to patients, we aspire to remain a company valued by society and trusted by shareholders and investors as a partner for the future. Together with our stakeholders, we will continue taking steady steps toward making that ambition a reality.