Under its mission of contribute to the realization of healthy and enriched lifestyles for all people, the Medical Business provides the pharmaceutical sciences sector with a diverse range of products and services. 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 the Diagnostics Business, which is engaged in the sale of diagnostic reagents and devices, and the Pharmaceutical Sciences Business, which is broken down into the pharmaceutical and fine chemicals business, which handles contracted manufacturing of active pharmaceutical ingredients (APIs), the drug development solutions business, which provides support for research and development among pharmaceutical companies, and the enzyme business, which undertakes the sale of raw materials for diagnostics and enzymes for the manufacture of biopharmaceuticals. 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. Meanwhile, the main portion of the Life Science field previously included in the High Performance Plastics segment is now presented as the Medical Business segment in an effort to accelerate the pace its growth as a new divisional company candidate from fiscal 2019.
Risks that could affect the performance of the Group as it works to expand its global operations include unexpected changes in public policy and revisions to laws and regulations by various countries. Pandemics, including COVID-19, pose another risk with the potential to limit domestic and international business activities by stagnating the testing market, especially for lifestyle diseases. In contrast, against the backdrop of an upswing in healthcare costs due to the aging of the population, demand for tests that can lead to early detection of a disease is steadily expanding. From a preventive medicine perspective, the potential exists for the number of tests to therefore increase. Even as conditions change by the moment, we will continue to provide products that contribute to people’s health.
Under the previous medium-term management plan, the Medical Business recorded an increase in sales and profit in fiscal 2019 compared with fiscal 2016. In specific terms, net sales and operating income came in at ¥72.6 billion and ¥9.2 billion, respectively. As far as our overseas activities were concerned, the Diagnostics Business contributed mainly to these results with significant growth in Europe, the U.S., and China. In the Pharmaceutical Sciences Business, growth was limited. This was largely the result of a decline in orders due to customers’ circumstances. Moving forward, we will continue to secure new orders for pharmaceutical ingredients. In making preparations for medium- to long-term growth, we participated in the establishment of PeptiStar while acquiring a sales base in Southeast Asia through the purchase of Veredus Laboratories under the previous medium-term management plan.
Under the Medium-term Management Plan, we are targeting net sales of ¥85 billion, an increase of ¥12.4 billion compared with fiscal 2019, and operating income of ¥12.5 billion, a year-on-year increase of ¥3.3 billion. In the mainstay Diagnostics Business, we will actively introduce new products in Japan. As far as our overseas activities are concerned, we will rollout area-specific measures. We will endeavor to expand sales of mainstay products by strengthening alliance with major companies in Europe and the United States. In China, we remain focused on targeting and expanding our efforts in the blood coagulation field. In the Pharmaceutical Sciences Business, we will pursue capital investments to increase our production capacity in response to diversifying pharmaceutical modalities* and ensure the steady launch of new products. Moreover, we will further strengthen our development system and target the expansion of business domains by actively introducing new products. Endeavoring to upgrade and expand our pipeline, we will build the foundation for growth under the next medium-term management plan, focusing on new products.
Under the Medium-term Plan, we will actively introduce new products in Japan while expanding alliances with major companies and strengthening POC in Europe and the United States. In China, we will continue to expand our blood coagulation activities while entering new domains. In Asia management, we will work to position Veredus Laboratories, acquired under the previous medium-term plan, as the Group’s ASEAN base.
Nanopia LRF as a biomarker to reflect the activity of inflammatory bowel disease was included in the scope of medical insurance coverage from June 1, 2020. Test results can now be obtained in a convenient and timely manner through the use of technology that employs high-precision particulates (latex).
Under the Medium-term Plan, we will undertake large capital investments to increase production capacity. In pharmaceutical and fine chemicals, we will acquire new products orders and steadily launch manufacturing processes, while strengthening partnerships between Japan and XenoTech in the United States in drug development solution activities. As far as enzymes are concerned, we will aim to expand our CDMO* business.