Sumitomo Pharma (4506) Q1 2027 earnings summary

Executive summary

• Q1 FY2026 revenue reached JPY 129.5 billion, up 19.9% year-over-year, driven by strong U.S. sales of ORGOVYX and GEMTESA, offsetting declines from divestitures and Asian business transfer.

• Net profit attributable to owners increased 51.7% year-over-year to JPY 17.0 billion, mainly due to higher profit before taxes and foreign exchange gains.

• Core operating profit declined 11.0% year-over-year to JPY 18.1 billion, impacted by higher SG&A and R&D expenses and lower gross margin.

• Major U.S. products ORGOVYX and GEMTESA saw significant revenue growth, while APTIOM declined due to loss of exclusivity.

• R&D momentum increased, especially in oncology and CNS, with several clinical milestones achieved.

Financial highlights

• Revenue: JPY 129.5 billion (+19.9% YoY); Core operating profit: JPY 18.1 billion (-11.0% YoY); Net profit: JPY 17.0 billion (+51.7% YoY).

• Gross profit rose by JPY 4.2 billion YoY, but gross profit margin declined due to product mix and Asian business transfer.

• SG&A expenses increased to JPY 39.2 billion (+10.0% YoY); R&D expenses rose 39.8% YoY to JPY 11.4 billion.

• Finance income/costs improved by JPY 8.6 billion year-over-year.

• Basic earnings per share increased to 39.02 JPY from 28.21 JPY a year earlier.

Outlook and guidance

• Full-year revenue forecast for FY2026 is JPY 540.0 billion, up 19.1% year-over-year; net profit projected at JPY 77.0 billion.

• Management maintains a conservative full-year outlook, with no change to guidance; exchange rate assumption is JPY 155/USD.

• Q1 results represent 24% of annual revenue and 65.4% of first-half net profit forecasts.

• Dividend resumption will be considered at interim results if performance continues to exceed plan.

• H1 plan based on JPY 155/USD; actual Q1 rate was JPY 160, which may cause Q2 accounting discrepancies.