The present invention provides a compound having aggrecanase inhibitory activity and MMP-13 inhibitory activity, and useful as a therapeutic agent for osteoarthritis, rheumatoid arthritis and the like, more specifically, a cyclopropane compound of formula (1): wherein R1 is —(CH2)m—X—(CH2)n-A1 etc., wherein m and n are the same or different and each is 0 to 6, X is a single bond, etc. and A1 is a substituted C3-14 hydrocarbon ring group, etc.; R2 and R3 are the same or different and each is a hydrogen atom, —(CH2)p—X1—(CH2)q-A2, etc., wherein p and q are the same or different and each is 0 to 6, X1 is a single bond, etc. and A2 is an optionally substituted C3-14 hydrocarbon ring group, etc.; R4 is —CO2R9, etc., wherein R9 is a hydrogen atom, etc.; and R20 and R21 are the same or different and each is a hydrogen atom, —(CH2)m12—X12—(CH2)m12—R30, etc., wherein m12 and m12 are the same or different and each is 0 to 6, X12 is a single bond, etc. and R30 is a hydrogen atom, etc.; or a prodrug thereof or a pharmaceutically acceptable salt thereof.