Daiichi Sankyo Company (4568) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 FY2024 rose 24.3% year-on-year to JPY 436.2 billion, driven by strong growth in oncology, especially ENHERTU, Lixiana, and favorable foreign exchange rates.

• Core operating profit increased 63.9% year-on-year to JPY 72.9 billion; operating profit more than doubled to JPY 93.0 billion, reflecting gains from the sale of Daiichi Sankyo Espha Co., Ltd.

• Profit attributable to owners rose 49.8% year-on-year to JPY 85.4 billion, aided by gains from stock transfer and improved forex gains.

• ENHERTU sales achieved double-digit growth in all regions, with significant market share gains in breast, gastric, and lung cancer indications, surging 59% year-on-year.

• R&D investment increased, focusing on 5DXd ADCs and Next Wave strategy, with significant clinical progress and regulatory approvals in oncology and vaccines.

Financial highlights

• Revenue increased by JPY 85.3 billion year-on-year, with JPY 30.4 billion attributed to forex impact; core operating profit up JPY 28.4 billion, with cost of sales ratio improvement and higher R&D investment.

• Operating profit up 111.2% year-on-year to JPY 93.0 billion, with temporary income of JPY 20.1 billion mainly from stock transfer.

• Profit before tax rose to JPY 110.2 billion, with tax rate increasing to 22.5%.

• SG&A expenses rose by JPY 32 billion and R&D expenditure by JPY 23.5 billion year-on-year.

• Cost of sales decreased by JPY 8 billion due to improved product mix and higher sales of in-house products.

Outlook and guidance

• Full-year revenue forecast: JPY 1,750.0 billion (+9.3% YoY); core operating profit: JPY 210.0 billion (+7.5% YoY); profit attributable to owners: JPY 190.0 billion (-5.3% YoY); annual dividend planned at JPY 60 per share, up JPY 10 from prior year.

• FY2024 forecast: ENHERTU sales of JPY 508.4 billion (+JPY 112.4 billion YoY), total 5DXd ADCs revenue of JPY 646.9 billion (+JPY 178.5 billion YoY).

• Q1 progress exceeded initial plans in some areas; ongoing monitoring will determine if forecast revisions are needed.

• Multiple regulatory filings and data readouts planned for ENHERTU, Dato-DXd, and pipeline assets in FY2024.

• No changes to previously announced forecasts; timing of U.S. approval for HER3-DXd remains uncertain.