On April 24, 2019 Chugai Pharmaceutical Co., Ltd. (TOKYO: 4519) reported its financial results for the first quarter of the fiscal year ended December 31, 2019 (Press release, Chugai, APR 24, 2019, View Source [SID1234535351]).
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Chugai reported record high revenues and profits for the first quarter of 2019 driven by contribution from new products including the hemophilia A treatment Hemlibra and the immune checkpoint inhibitor Tecentriq, and strong growth of mainstay products in Japan and overseas. Revenues increased by a little less than 5% as the double-digit sales growth driven mainly by the contribution of new products and strong exports outweighed the remarkable decrease in royalties and other operating income in the absence of one-time income from the transfer of long-term listed products reported last year. Operating profit achieved a double-digit increase due to a better cost to sales ratio as the proportion of in-house products increased in the total product mix.
Domestic sales increased to ¥99.3 billion (+6.9%). Contribution from new products including the hemophilia A treatment Hemlibra created by Chugai and the immune checkpoint inhibitor Tecentriq, and the strong growth of mainstay products chiefly in bone and joint diseases area have exceeded the negative impact from the NHI drug price revisions last year and generic competition.
Oncology: Sales increased driven by the contribution from new products such as Tecentriq and Gazayva as well as solid growth of Perjeta and Alecensa, despite the negative impact from last year’s NHI drug price revisions and generic competition facing Rituxan.
Bone and joint diseases: Sales recorded a double-digit growth due to strong sales of mainstay products such as the anti-rheumatic agent Actemra and the osteoporosis agent Edirol.
Renal diseases: Sales were almost flat while sales of the renal anemia agent Mircera and the secondary hyperparathyroidism treatment Oxarol approximated the previous year’s level.
Others: Sales increased primarily due to favorable market penetration of new products such as the hemophilia A treatment Hemlibra, despite the negative impact from the transfer of long-term listed products last year.
Overseas sales increased to ¥38.4 billion (+20.4%) due to increase in exports of Alecensa and Actemra to Roche.
Royalties and other operating income decreased to ¥16.6 billion (-26.9%) due to a decrease in other operating income in the absence of one-time income from the transfer of long-term listed products reported last year, despite royalties and profit sharing income related to Hemlibra increased.
Billion JPY Q1 2019 Q1 2018 % change
Sales 137.7 124.7 +10.4%
Domestic sales 99.3 92.9 +6.9%
Oncology 52.0 48.6 +7.0%
Bone and joint diseases 24.2 21.6 +12.0%
Renal diseases 7.9 8.0 -1.3%
Others 15.2 14.6 +4.1%
Overseas sales 38.4 31.9 +20.4%
[Core operating profit]
Core gross profit increased to ¥90.6 billion (+8.0%) due to sales growth and the better cost to sales with a higher proportion of in-house products in the total product mix, despite the remarkable decrease in royalties and other operating income.
Core operating expenses grew by a low single-digit percentage to ¥42.7 billion (+3.9%), more modestly than the growth in Core gross profit. As a result, Core operating profit totaled ¥47.9 billion (+11.9%).