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a leading global position in those categories. The GCL business model is the most important tool in our drive to create sustainable growth for Astellas. 

We are implementing the “value innovation cycle” as a business cycle that will strengthen our competitive edge in the pharmaceutical market. We believe that this approach will enable us to deliver a constant stream of high added value for people seeking better health. 

## Risks and Opportunities on the Road to Further Growth 

The risks to our future growth that we must consider are trends that will remain essentially the same: government efforts to restrict healthcare spending, increasing difficulties in new drug development and higher costs once a product has been launched. We also recognize that we cannot avoid the risks posed by patent expiry on mainstay prod- ucts. The substance patents on two such products, the overactive bladder (OAB) treatment Vesicare and the anti- cancer product Tarceva, are due to expire in 2018–2020 in major countries. We will build a resilient organization and related systems, along with continuously creating new drugs so we can overcome the impact of patent expiry and generate sustained growth. This is a priority task for us in targeting the next stage of growth. 

Meanwhile, the business opportunities for the pharma- ceutical industry are broad. There are still many diseases where unmet medical need exists. Such areas provide opportunities for Astellas. Moreover, recent scientific and technical advances are opening vast new possibilities to create highly innovative drugs at a time when regulatory authorities worldwide are starting to introduce systems to recognize innovation. 

To ensure that we seize these opportunities, we never miss a chance for in-licensing new products and tech- nologies or M&A deals. Our main aim, however, is not to expand our operational scale, but rather to acquire products 

## Focus Therapeutic Areas in Research and the Gcl Model 

Concentrate management resources on the innovative drug business 

<img src='content_image/248002.jpg'>

and innovative technologies that are consistent with our strategic approach. We will actively look at acquiring opportunities including alliances in new therapeutic areas and varied fields with new drug business as our core,  considering our business areas, existing product portfolio and drug discovery technology. Furthermore, we will con- tinue the never-ending challenge of drug discovery in order to deliver new value to patients. 

Compliance is vital to sustaining and growing our  business and we in management are acutely aware of that. On the Board of Directors, which is responsible for making management decisions and overseeing business execution, outside Directors with a high degree of independence constitute a majority of four of the seven members. Under this governance structure, we aim to achieve a level of transparency and reliability in management that satisfies the increasing demands of society. 

## Progress on the 2014 Mid-Term Management Plan* 

When we embarked on the 2014 Mid-Term Management Plan in fiscal 2010, we faced a significant challenge from the emergence of generic competition for two of our main- stay products—Prograf, an immunosuppressant, and Harnal (also known as Flomax in the U.S.), a treatment for functional symptoms of benign prostatic hyperplasia— following the expiry of related U.S. patents. Under the plan, we pursued three growth strategies and an efficiency strat- egy to overcome this situation and engineer a new growth stage for Astellas. We have made steady progress in  executing each of these strategies. 

* 2014 Mid-Term Management Plan: Covers the five-year period from fiscal 2010 to fiscal 2014 

## Therapeutic Area Strategy 

Under the therapeutic area strategy, we are working to maintain and reinforce our GCL status in the therapeutic 

