Japanese drug majors deliver mixed first-half results

Three of Japan's largest drugmakers, number one Takeda and numbers three and four, Daiichi Sankyo and Eisai, respectively, posted better-than-expected first-half 20009/10 financial results today, but with some disappointing news.

Takeda's net income leapt 164% to 189.6 billion yen ($2.1 billion) in the six months to September 30, from 71.8 billion yen a year earlier, when there was a one-time charge related to the takeover of US drugmaker Millennium Pharmaceuticals. That beat the 162.4 billion yen median of four analyst estimates compiled by Bloomberg. Sales fell 6.4% to 755.5 billion yen, primarily due to the strength of the Japanese currency.

In the six-month period ended September 30, the drugmaker said revenue from leading drugs such as diabetes agent Actos (pioglitazone) decreased 4.% to 194.8 billion yen, while gastrointestinal Takepron (lansoprazole) sales fell 11.5% to 132 billion yen ($1.5 billion), and antihypertensive Blopress (candesartan) dropped 5.8% to 112.4 billion yen. Takeda faces patent protection loss on some of its major products, with Prevacid (lansoprazole) due to expire next month and Actos in January 2011.

The company seeks further acquisitions after last year's $8.9 billion purchase of Millennium, noted president Yasuchika Hasegawa. Takeda, which generates more than half of its revenues outside Japan, said sales in the year to March 31, 2010 will fall more than earlier forecast, after the yen's 9.8% gain against the dollar in the six months to September 30 cut overseas earnings, reports Bloomberg.

'Scale is what matters the most for drugmakers and unless you're within the world's No 10, you can hardly survive,' said Mitsushige Akino of Ichiyoshi Investment Management in Tokyo. 'I doubt if Takeda can compete with bigger rivals in the global arena,' he added, reported by Bloomberg, Takeda's shares rose 3.4% to close at 3,650 yen in Tokyo trading.

The Japanese drugmaker said net income will rise 20% to 280 billion yen in the year ending March 31, unchanged from its earlier projection. Analysts anticipated 272 billion yen, based on the median of three estimates compiled by Bloomberg in the past four weeks.

Aricept demand boosts Eisai

First-half net income at Eisai increased 7.7 % to 30.9 billion yen on cost savings and demand in Japan for Aricept (donepezil), the world's best-selling drug for Alzheimer's disease. Analysts anticipated 28.2 billion yen, according to Bloomberg data. Group sales slipped 1% to 395 billion yen. Eisai shares edged up 0.9% to 3,250.

Sales in Japan of Aricept, which faces competition from generic drugs when its patent protection expires in November next year, climbed 20% to 45.8 billion yen, helping to counter a decline in other regions including Europe, noted Bloomberg.

Eisai noted that its developmental breast cancer treatment eribuli (E7389) met goals set in Phase III trials, and it plans to apply for marketing approval in the USA, Europe and Japan by March 31 next year. Tokyo-based Eisai maintained its July forecasts for net income to rise 32% to 63 billion yen in the year ending March 31 and sales to advance 4.9% to 820 billion yen.

Higher development costs hit Daiichi Sankyo

Daiichi Sankyo said first-half profit fell 45% to 18.7 billion yen because of higher development costs and tax charges. That is better than analysts' expectations of 12.4 billion yen, according to Bloomberg data. Sales rose 16 percent to 471 billion yen.

The drugmaker maintained its full-year forecasts and said it will review the outlook for its 64%-owned Indian unit Ranbaxy Laboratories, .Daiichi Sankyo expects to turn to a net income of 40 billion yen for the year ending March 31, while sales may rise 14% to 960 billion yen. The firm's stock fell 1.4% to 1,788 yen today.