Kyowa Hakko operates in a diverse range of more than 30 business fields which are principally divided into Pharmaceuticals and Bio-Chemicals divisions. Within its Pharmaceuticals segment, Kyowa is focused on the development of production of products to treat cancer, allergies and hypertension. Within Bio-Chemicals, Kyowa is a global leader in the supply of fermented bulk products, such as amino acids and nucleic acids. Kyowa operates in more than 80 countries worldwide, employs 5,800 people and holds approximately 2,362 patents.

In Japan, recent shifts in the economic environment have increased competition for domestic pharmaceuticals as the larger pharma companies from Europe and the US are afforded more and more of the Japanese market share. This background of increased competition led to three notable mergers in fiscal 2005 (Daiichi Sankyo, Astellas Pharma and Dainippon Sumitomo Pharma). Rising crude oil prices, increases in long-term interest rates, and the slow domestic demand for amino acids for beverages have all impacted Kyowa's performance. In fiscal 2006, Kyowa reported a downturn in pharmaceutical sales and this decline has continued in fiscal 2007. In recent years, Kyowa's capital expenditure has increased significantly as the company looks to develop its infrastructure in the Chinese market, whilst R&D expenditure has also risen, as Kyowa continues to invest strongly in the late-stage development of istradeylline (KW-6002). These factors resulted in a considerable decline in Kyowa's net income in 2007, and may affect future company policy.

Indeed, the constricting domestic environment has forced Kyowa to increase overseas expansion efforts. Kyowa is specifically targeting the developing market of China, where several of the company's major products are launched or in development, and the world's largest pharmaceutical market, the US, where Kyowa has several licence agreements and where the development of istradeylline has been particularly focused. Recent infrastructure initiatives have provided the company with a three-pronged production line based in Japan, the US and China.

Longer-term growth looks set to be built around Kyowa's expertise in the field of biotechnology. Kyowa's US subsidiary, BioWa, was founded in February 2003, and has established a range of partnerships with European and US pharmaceutical and biotechnology companies using its patented Potelligent antibody technology. These alliances should help generate a broader pipeline and aid further the profile of Kyowa overseas.