Definition of Foundation Areas and Growth Areas

• In clarifying our growth strategy, PHC Group has classified our businesses into Foundation Areas and Growth Areas. The definitions of each are as follows.
  • Foundation Areas: Businesses with core technologies and assets that generate revenue while the markets grow at a solid pace
  • Growth Areas: Businesses that expand products, services, and customer bases around Foundation Areas and capture high market growth while expanding technologies and assets
• To expand Growth Areas, it is essential to fully utilize the strengths of each business in PHC Group. We currently have three business domains, and each has a related Growth Area. However, the boundaries between each Growth Area are not as clear as the boundaries between the Foundation Areas, and we will expand the Growth Areas while pursuing synergies among our businesses. The Foundation and Growth Areas of the current domains are as shown in the table below.

Business Domains	Foundation Areas	Growth Areas
Diabetes Management	Blood glucose monitoring (BGM) systems	Continuous glucose monitoring (CGM) systems
Healthcare Solutions	Clinical testing Healthcare business support solutions (medical-receipt computers, electronic medical record and electronic medication history systems, etc.)	Digital health solutions, such as health management, big data analysis, etc. Drug development support solutions for clinical trials, etc.
Diagnostics & Life Sciences	Anatomical pathology equipment, reagents, glass slides, etc. Life sciences equipment such as ultra-low temperature freezers and pharmaceutical refrigerators	Digital pathology/immunohistochemistry (IHC) staining, etc. Products related to cell/gene therapy Point Of Care Testing (POCT) devices

Strategies for Foundation Areas and Growth Areas

• In our Foundation Areas, we develop strategies to align closely with the market trends in each product and country/region. For Growth Areas, we leverage synergies between our businesses to provide unconventional solutions through new technologies and services. Details are described on the pages for each business.
• Since the Mid-term Plan was announced, the following initiatives have progressed, especially in our Growth Areas.
  • Drug Development Support Business (Clinical Trials and Other Drug Development Support Solutions): On November 1, 2023, we established Mediford Corporation to drive the integration of expertise and technologies from the non-clinical and clinical trial businesses. Technologies such as imaging mass spectrometry and anti-cancer drug testing using the Patient-Derived Xenograft (PDX) model will evolve, resulting in the enhancement of analytical and evaluation technologies required for new drugs and therapies.
  • Challenge in New Fields (Cell and Gene Therapy): PHC Group also focuses its efforts on the field of cell and gene therapy, seeking significant market growth. In cell culture, it has so far not been conventionally feasible to continuously monitor the metabolic condition of cells by manually measuring metabolites intermittently. The Live Cell Metabolic Analyzer (LiCellMo), developed by PHC Corporation, applies blood glucose measurement technology to continuously monitor cell metabolites and provide data about the condition of cells in real time. This technology will seek to enable researchers to uncover new insights and contribute to the stable production of cells for therapeutic use.

Business Restructuring within the Group and Business Domain Realignment

In the last year, PHC Group restructured our businesses and realigned business domains to enhance the Growth Areas defined in the Mid-term Plan.
In November 2023, we restructured the businesses of LSI Medience and PHC IVD to create further synergies and allocate resources more intensively and efficiently to priority areas.
In addition, we made LSIM Safety Science Institute a wholly-owned subsidiary of PHC Holdings Corporation, enabling us to make strategic decisions more quickly and to create a business structure that will seek to further accelerate our growth.
In April 2024, the IVD Business Unit joined the Diagnostics & Life Sciences business domain. By optimizing our business domains to reflect this business restructuring, we will seek to accelerate synergies among our business units and increase efficiency of business operations.