ORIX to Invest in Kobayashi Kako, a Producer and Seller of Generic Drugs

Tokyo, Japan – January 14 2020 – ORIX Corporation (“ORIX”) announced today that it will invest in Kobayashi Kako Co., Ltd. (“Kobayashi Kako”), a company that engages in the reserch and development, production and sales of generic drugs. ORIX plans to acquire a majority of issued shares in Kobayashi Kako in January 2020.

Kobayashi Kako is a pharmaceutical manufacturer that engages in the in-house research and development of generic drugs, such as oral agents and injections; it also procures raw ingredients for, produces, and sells generic drugs. The company has several production plants and research laboratories in Fukui Prefecture, and works with generic drugs that have high added value. Examples include improving dosage forms to make medicines easier to take, and developing highly visible printing methods to prevent mistaken ingestion. The company is also engaged in the development of highly pharmacologically active^*1 formulations, such as anti-cancer agents, the markets for which are expected to grow in the future.

An aging population and advancements in medical technologies have resulted in rising national health costs. However, the widespread use of generic drugs, which provide the same efficacy as brand-named drugs at cheaper prices, can both decrease the burden on patients and improve health insurance financing. The Ministry of Health, Labour and Welfare has led initiatives to popularize the use of generic drugs and, as a consequence, usage rates have risen from 39.9 percent in 2011 to 76.7 percent in 2019; in 2020, the usage rate^*2 is expected to reach the target figure of 80 percent^*3. Going forward, generic drug manufacturers will be required to combine an even more stable supply of generic drugs with high-level quality management.

ORIX not only provides leases, financing, and medical equipment rental services for medical corporations; it also invests in bulk drug trading companies, medical equipment sales companies, and animal drug manufacturers. In this way, ORIX is developing wide-ranging businesses centered on the healthcare industry. Via its investment in Kobayashi Kako, ORIX intends to link the strengths of Kobayashi Kako with its own domestic and overseas sales networks and business foundations. By further growing Kobayashi Kako, ORIX also seeks to contribute to sustainable social security.

Going forward, ORIX will use the expertise of the ORIX Group to establish stable business foundations and develop high-quality technologies and services. In so doing, it will provide support for companies and industries with high potential for further growth.

*1 Pharmaceuticals that give a strong medicinal effect to the human body in a small amount.
*2 The usage rate of generic drugs includes both “brand-named drugs with generic equivalents” and “generic drugs.
*3” Source: “Trends and goals in usage rates of generic drugs,” Ministry of Health, Labour and Welfare
　https://www.mhlw.go.jp/content/000446850.pdf [160KB]

■ Overview of Kobayashi Kako

Company name	Kobayashi Kako Co., Ltd.
Address	5-15 Yachi, Awara City, Fukui Prefecture
Representative	Hiroyuki Kobayashi
Date of establishment	April 1961
Business locations	Eight offices in Japan – four branches and four sales offices; eight facilities in Japan – five production plants, two research laboratories, and one logistics center
Number of employees	728 (as of Dec 31, 2019)
Description of business	Poduction and sales of generic drugs
Affiliated companies	Kobayashi Kako Sales Company
Revenues	Kobayashi Kako – 35 billion yen; Kobayashi Kako Sales – 6.2 billion yen (for the year ended March 31, 2019)
Website	https://www.kobayashikako.co.jp/

Contact Information:
ORIX Corporation
Corporate Planning Department
Tel: +81-3-3435-3121

About ORIX:
ORIX Corporation (TSE: 8591; NYSE: IX) is a financial services group which provides innovative products and services to its customers by constantly pursuing new businesses.
Established in 1964, from its start in the leasing business, ORIX has advanced into neighboring fields and at present has expanded into lending, investment, life insurance, banking, asset management, automobile related, real estate and environment and energy related businesses. Since entering Hong Kong in 1971, ORIX has spread its businesses globally by establishing locations in 37 countries and regions across the world.
Going forward, ORIX intends to utilize its strengths and expertise, which generate new value, to establish an independent ORIX business model that continues to evolve perpetually. In this way, ORIX will engage in business activities that instill vitality in its companies and workforce, and thereby contribute to society. For more details, please visit our website: https://www.orix.co.jp/grp/en/
(As of March 31, 2019)

Caution Concerning Forward Looking Statements:
These documents May contain forward-looking statements about expected future events and financial results that involve risks and uncertainties. Such statements are based on our current expectations and are subject to uncertainties and risks that could cause actual results that differ materially from those described in the forward-looking statements. Factors that could cause such a difference include, but are not limited to, those described under “Risk Factors” in the Company’s annual report on Form 20-F filed with the United States Securities and Exchange Commission and under “(4) Risk Factors” of the “1. Summary of Consolidated Financial Results” of the “Consolidated Financial Results April 1, 2018 – March 31, 2019.”