Ranbaxy buyout boosts Daiichi profit 10-fold
Tokyo: Daiichi Sankyo, Japan`s No 3 drugmaker, said on Friday it may raise its full-year profit outlook after first-quarter income jumped nearly tenfold, boosted by cost cuts and strong results at its Indian arm Ranbaxy Laboratories.
Daiichi Sankyo posted an April-June recurring profit of 70.1 billion yen (USD 808 million), up from 7.2 billion yen a year earlier.
It kept its forecast for recurring profit to drop 18 percent to 85 billion yen in the year to March, but said it may lift its outlook that after seeing how Ranbaxy fares in the second quarter.
"Our first-quarter results exceeded expectations, and we will revise our annual forecasts if necessary after Ranbaxy reports second-quarter results," Daiichi Sankyo executive officer Manabu Sakai told a news conference.
The company`s full-year forecast is short of a consensus of a 99 billion yen profit from a poll of 15 analysts by Thomson Reuters I/B/E/S.
Daiichi Sankyo shares were up 2.6 percent at 1,615 yen, outperforming a 1.8 percent decline for the Nikkei stock average
Daiichi Sankyo bought a majority stake in Indian generic drug maker Ranbaxy Laboratories in 2008 and together with Eli Lilly launched a new flagship drug, blood-thinner Effient, this year.
Drugmakers, including domestic rivals Takeda Pharmaceutical and Astellas Pharma, are struggling to develop strong successors to their mainstay drugs which face imminent patent expirations.
Although Effient has generated disappointing initial sales, it and Ranbaxy have put Daiichi Sankyo at a relative advantage, as rivals have failed to launch new drugs.
Ranbaxy reported a net profit of 9.6 billion rupees for January-March, the first quarter of its financial year, compared with a net loss of 7.7 billion rupees in the year-ago quarter.
Daiichi`s results reflect Ranbaxy`s with a timelag of a quarter.
Daiichi Sankyo also said it would start making vaccines next April by setting up a joint venture with an affiliate organization of Japan`s Kitasato University.
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