The creation of a new marketing system for over-the-counter pharmaceuticals resulting from deregulation means that we must build on the new system and increase our activities in the OTC market and invest in new, high-quality products. For Sato Pharmaceutical, there are four major keywords that drive and dewe promote Healthcare Innovation.

First, to help us provide the technology and products demanded by the self-medication society, last year in November, we released a new Switch OTC herpes labialis treatment, Arasena S, and other products as the st area of pharmaceutical product development. The development of new advanced materials targeting metabolic syndrome and other lifestyle diseases is another way in which we are expanding our product lineup with products that improve people's lives.

The second is to strengthen our IT and marketing strategy, emphasizing the use of major entertainment names such as Seattle Mariners star Ichiro Suzuki and others. We will continue to develop our advertising efforts backed by a reinforced marketing effort that responds to revisions in law which will provide special support to our three main brands―Yunker, Acess and Stona/Stona Rhini. We also want to put IT and our media mix to practical use in our advertising strategy by taking on new themes in advertising.

Our third major area is in the strengthening of our international business activities. This will focus on the further promotion of the Yunker series and medicated plasters, particularly in the North American, European and Asian markets. Our goal is to take a proactive policy in our sales activities for OTC products, the Sato products that are closest to where our customers actually are. In Asia, our goal is to establish the Hakubi brand through our existing bases in Taiwan, Singapore and Hong Kong. We also plan to expand our business activities in China.

Finally, the fourth theme is in continuing to develop our production system. Production is now proceeding very smoothly at the Kazusa Factory for external-use medicines. This, we believe, will ensure a continuous, reliable supply of products with even higher quality. In our environmental efforts, solar panels have been installed at the Kazusa Factory which will allow for at least a portion of the electricity consumed at the plant to be produced internally.

In 2009, the first major revision to the Japanese Pharmaceutical Affairs Law in a half century was completed. This will have a very large impact on our business activities, with the increased OTC business having an effect on both our foundation activities as well as our business.

These effects will continue to motivate us, as we continue to support and help create the new and increasingly important self-medication society. We look forward to continuing to serve you in the best way possible.

Seiichi Sato
President and CEO
Sato Pharmaceutical Co., Ltd.