Otsuka (4578) Q4 2025 earnings summary

Executive summary

• FY2025 revenue rose 6.0% year-over-year to ¥2,468.9 billion, with business profit up 3.6% to ¥446.1 billion, both reaching record highs, driven by global products, royalty income, and the nutraceutical business.

• Pharmaceutical revenue increased 7.1% to ¥1,744.2 billion, led by strong sales of REXULTI, ABILIFY MAINTENA, and higher royalty income, despite generic JYNARQUE impact.

• Nutraceutical revenue grew 3.7% to ¥577.7 billion, with all categories contributing, especially "For Women's Health," "For Healthier Life," and POCARI SWEAT.

• Operating profit surged 48.2% to ¥479.4 billion, aided by a gain from the sale of MicroPort shares and reduced impairment losses.

• Major acquisitions included Araris Biotech AG and Otsuka ICU Medical LLC, expanding R&D and IV solution capabilities.

Financial highlights

• Operating profit surged 48.2% year-over-year to ¥479.4 billion, while net profit rose 5.8% to ¥363.2 billion; EPS was ¥685.06.

• Business profit margin was 18.1% of revenue; ratio of operating profit to revenue was 19.4%.

• R&D expenses increased 12.3% to ¥352.8 billion, reflecting investment in new drug pipelines.

• Cash and cash equivalents at year-end were ¥534.6 billion, up ¥108.5 billion.

• Total assets increased to ¥4,197.6 billion; equity attributable to owners rose to ¥3,033.4 billion.

Outlook and guidance

• FY2026 revenue is forecast at ¥2,520.0 billion (+2.1% YoY), but business profit is expected to decline 20.4% to ¥355.0 billion due to higher SG&A, R&D costs, and loss of exclusivity (LOE) for major products.

• Net profit is projected to fall 27.0% to ¥265.0 billion, with ROE above 8.5%.

• R&D expenses expected to rise 7.1% to ¥378.0 billion, focusing on next-generation products.

• Dividend per share forecast for FY2026: ¥140.00.

• Growth in "Global 10 plus 2" products and NC business expected to partially offset LOE impacts.