Japan's Taisho sees first nine month sales, earning slip but still ahead of forecast

Japanese drugmaker Taisho reported a year-on-year decline in sales and earnings for first through third quarter (April-December 2005) of the fiscal year ending March 2006, due to continued weakness in sales of over-the-counter drugs. However, the results were slightly above the company's projection, due to a modest recovery in OTC drugs during the first quarter. Despite its better-than-forecast results, the company retains its full year projections, anticipating purchasing restraint for prescription drugs in the fourth quarter prior to the scheduled drug reimbursement price cut in April 2006.

Turnover decreased 2.6% year-on-year to 204.0 billion yen ($1.73 billion) but achieved 75.8% of the full-year budget. Operating income was down 14.4% to 36.1 billion yen, while the reported figure achieved 81.1% of the full-year target. Net income was down 16.6% to 22.4 billion yen and reached 65.7% of the full-year budget. The reason for the sharper year-on-year drop in net than operating income was a decline in net extraordinary amount of 32.0 million yen from 240.0 million yen a year ago due to losses associated with the sale of fixed asset.

Sales of self-medication products were down 5.7% to 130.8 billion yen, including a 5.7% decline in OTC drugs to 123.0 billion yen against a 4.5% increase in foods for specified health use to 5.9 billion yen. Revenues from the mainstay OTC nutrient drink Lipovitan D declined 2.4% to 54.7 billion yen. Sales of Pabron, a cold remedy, fell 7.6% to 18.3 billion yen but a substantial recovery was noted in the October-December 2005 period with the earlier than usual start of influenza proliferation.