People and ideas for innovation in healthcare

The Company, founded in Parma in 1935, is today an international reality in the pharmaceutical market. With global operations consisting of 22 direct affiliates, last but not least Chiesi China, 3 manufacturing sites, and 3 research centres, the Group has over 3,000 employees. The three research and development sites (Italy, France and United States) employ more than 300 people, while the three manufacturing facilities employ about 600 people.

Chiesi’s technologies and products are available in over 50 countries through a strategic alliances network of international pharmaceutical groups developed both on a global and local scale. Group turnover reached 565 million Euros in 2005. Historically, the continuous development of the Company has been based on strategic planning for innovation, internationalisation, socially compatible economical values, and use of effective organizational structures.

Message from the Chairmen

In 2007, the pharmaceutical scenario once again evolved in line with previous years: difficulties in the development of innovative drugs, especially for chronic illnesses; a dramatic increase in the sales of generics,as a result of patent expiries for a number of important products; a decrease in the number of new chemical and biological formulations reaching the market; pressure from health authorities to reduce the cost of pharmaceutical treatments.

Despite this situation, our Group has continued to succeed, achieving higher growth rate than that of the markets in which it operates, thanks to the success of its own products for respiratory and cardiovascular diseases and the treatment of rare diseases.

The number of our direct affiliates has also grown, and we have now almost achieved complete coverage throughout the European Union. Sales of our new drugs for the treatment of asthma, the beclometasone-formoterol combination in an ecofriendly, metered-dose aerosol formulation (Foster, Innovair) have begun in several European markets, including Germany and Italy, and have been met with considerable interest among medical practitioners.

For those territories in which we are present, the products developed as a result of our internal R&D activities are becoming increasingly prominent in our affiliates’ portfolios, and this has further established respect for the image and reputation of our Group.

Modulite technology, which is the basis of all our product formulations in metered-dose aerosols, is also proving to be a key device for innovation, and has recently received significant recognition for its originality in Europe.

Our Research and Development activities have also continued to evolve, in the quest for consistently better organisational efficiency and technological efficacy: a radical, broad-scale project has been undertaken to change the development processes in various research projects, in order to ensure their completion by pre-set deadlines.

Technological investments in production activities are also progressing alongside the development of more complex and up-to-date pharmaceutical formulations. Work to build a new Research and Development Centre in Parma will begin by the end of the year, which will enable us to combine both internal activities and collaborative projects with external scientific organisations in newly equipped premises on a single site.

Objectives for 2008

In 2008, we have planned for significant growth, which will be driven by increased sales of Foster in a number of European countries; increased sales are also expected for our other Corporate products: Clenil, Curosurf, Bramitob and Clipper.

Our German affiliate Asche Chiesi has acquired direct sales of Curosurf in its territory since January this year; plans have also been made for a similar operation in China which should take place this summer, when a new Group affiliate will be opened in this enormous market.

We are currently studying further opportunities for geographical expansion in a small number of expanding markets, in order to ensure optimum development of our new Corporate products.

Our commitment to research will be intensified, with the aim of providing a sufficient number of new products in our pipeline, both in the respiratory and special care and orphan drug areas. We will be working even harder on collaborations with other pharmaceutical companies and research centres to increase the number of R&D projects.

The objectives which we have set ourselves can only be reached with the help, determination and skill of our employees, and the professionalism and dedication of our collaborators. Our heartfelt thanks to all of you.