Daiichi Sankyo Company (4568) Q2 2026 earnings summary

Executive summary

• Revenue for Q2 FY2025 rose 10.5% year-on-year to JPY 975.4 billion, driven by strong oncology sales, especially Enhertu and Datroway, and milestone payments from alliances, despite negative FX impact and declines in the vaccine and American Regent businesses.

• Core operating profit declined 4.8% year-on-year to JPY 158.6 billion, impacted by higher SG&A, R&D, and inventory write-downs, while operating profit fell 22.8% due to absence of prior year one-off gains and new temporary expenses.

• Net income attributable to owners dropped 10.8% year-on-year to JPY 130.8 billion, reflecting increased costs, higher tax rate, and lower one-time gains.

• Total comprehensive income rose 26.7% to JPY 139.5 billion, aided by FX translation gains.

Financial highlights

• Revenue increased by JPY 92.6 billion year-on-year, with oncology contributing JPY 69.7 billion and Datroway and Enhertu showing robust growth.

• Cost of sales rose by JPY 25.8 billion, including JPY 10 billion in inventory write-downs for Enhertu and Daiichi Sankyo.

• SG&A expenses increased by JPY 51.3 billion, mainly due to higher profit sharing with AstraZeneca, sales expansion, and investments in organizational infrastructure.

• R&D expenses grew by JPY 23.5 billion, reflecting progress in DXd-ADC development and continued investment in the ADC pipeline.

• Temporary expenses of JPY 18.5 billion included CMO compensation and inventory write-downs.

Outlook and guidance

• FY2025 revenue forecast revised upward by JPY 100 billion to JPY 2.1 trillion, driven by Datroway and Enhertu sales and favorable forex.

• Core operating profit forecast unchanged at JPY 350 billion; operating profit expected to decrease by JPY 15 billion to JPY 335 billion due to higher temporary expenses.

• Net income projected at JPY 288 billion; basic EPS forecast at JPY 155.59; annual dividend planned at JPY 78 per share.

• Assumed currency rates for H2: USD/JPY 150, EUR/JPY 170.