Daiichi Sankyo ups profit forecast by 13% on expected rupee gain related to Ranbaxy; files flu drug in Japan

Japanese drug major Daiichi Sankyo has raised its full-year net income forecast for the fiscal year to March 31 by 13% to 45 billion yen ($505.8 million), attributing its decision to an expected currency-related gain instead of a loss at its majority-owned Indian subsidiary Ranbaxy Laboratories. Net sales forecasts of 960 billion yen remain unchanged.

Despite a harsh earnings environment in which drug price revisions to be implemented are leaving domestic market trends uncertain and the yen is appreciating ever more on foreign exchange markets, among other things, Daiichi Sankyo, Japan's third-largest pharmaceutical firm, says it expects overseas subsidiaries to contribute to sales and earnings, therefore, no changes have been made to previously released net sales and operating income forecasts.

For non-operating income, regarding the gain/loss on the operations Ranbaxy, the valuation loss recorded during the first quarter for Ranbaxy (January to March 2009) was previously factored into full-year forecast. However, as a result of new calculations based on the foreign exchange rate at the end of December 2009, that company's fiscal year-end, has led to expectations that the loss would turn to a gain due to a change in the exchange rate for the Indian rupee versus the US dollar. Therefore, considering other factors as well, the ordinary and net income forecasts have been revised upwards.