Company Reports

Narrow-moat Daiichi Sankyo is a Japanese drugmaker with a global footprint and a cutting-edge development platform for antibody drug conjugates. As an established pharmaceutical company with a long history, it also has numerous lucrative business lines, including generics, anticoagulants, painkillers, and heart medications. In 2019, it formed a partnership with AstraZeneca and will co-develop and co-commercialize Enhertu and Datroway, its two leading assets from its ADC platform. In 2023, it formed another partnership with Merck & Co. to co-develop and co-commercialize three other ADCs: I-DXd, HER3-DXd, and R-DXd. We expect its ADC platform and other pipeline assets to drive growth over the next 10 years.

Daiichi Sankyo reported 21% year-on-year revenue growth and 6% core operating profit growth. It also corrected its fiscal 2025 financials, which had overstated sales, general, and administration expenses by JPY 29 billion and understated its full-year profit.

Narrow-moat Daiichi Sankyo is a Japanese drugmaker with a global footprint and a cutting-edge development platform for antibody drug conjugates. As an established pharmaceutical company with a long history, it also has numerous lucrative business lines, including generics, anticoagulants, painkillers, and heart medications. In 2019, it formed a partnership with AstraZeneca and will co-develop and co-commercialize Enhertu and Datroway, its two leading assets from its ADC platform. In 2023, it formed another partnership with Merck & Co. to co-develop and co-commercialize three other ADCs: I-DXd, HER3-DXd, and R-DXd. We expect its ADC platform and other pipeline assets to drive growth over the next 10 years.

Daiichi Sankyo booked JPY 133.2 billion of net temporary expenses to core profit this quarter, or 22.6% of revenue. Full-year operating profit declined 68% on a reported basis, and management guided to 38% growth for next fiscal year. The company's 5-year revenue target is JPY 3 trillion by 2030.

Narrow-moat Daiichi Sankyo is a Japanese drugmaker with a global footprint and cutting-edge development platform for antibody drug conjugates. As an established pharmaceutical company with a long history, it also has numerous lucrative business lines including generics, anticoagulants, painkillers, and heart medications. In 2019 it formed a partnership with AstraZeneca and will co-develop and co-commercialize Enhertu and Datroway, its two leading assets from its ADC platform. In 2023, it formed another partnership with Merck & Co. to co-develop and co-commercialize three other ADCs: I-DXd, HER3-DXd, and R-DXd. We expect its ADC platform and other pipeline assets to drive growth over the next 10 years.

On April 15, Daiichi Sankyo announced that it had entered into an agreement to sell its consumer health unit to Suntory Holdings, a leading Japanese beverage company, for a total consideration of JPY 246.5 billion. Shares rallied 4% from the previous day's close.

For its third fiscal quarter, Daiichi Sankyo reported core operating profit of JPY 90.6 billion, which is a 45% year-on-year growth and 16.2% core operating profit margin. Management kept guidance unchanged from last October.

Narrow-moat Daiichi Sankyo is a Japanese drugmaker with a global footprint and cutting-edge development platform for antibody drug conjugates. As an established pharmaceutical company with a long history, it also has numerous lucrative business lines including generics, anticoagulants, painkillers, and heart medications. In 2019 it formed a partnership with AstraZeneca and will co-develop and co-commercialize Enhertu and Datroway, its two leading assets from its ADC platform. In 2023, it formed another partnership with Merck & Co. to co-develop and co-commercialize three other ADCs: HER3-DXd, I-DXd, and R-DXd. We expect its ADC platform and other pipeline assets to drive growth over the next 10 years.

For its second fiscal quarter, Daiichi Sankyo reported core operating profit of JPY 62.3 billion, a 34% year-on-year decline, and a core operating profit margin of only 12%. Revised guidance raised full-year revenue by 5% but left core operating profit unchanged at JPY 350 billion.

Daiichi Sankyo reported a strong start to its fiscal year with revenue of JPY 475 billion, or 9% year-on-year growth. Core operating profit was JPY 96 billion, which is 27% progress on its full-year target of JPY 350 billion and corresponds to 20% core operating profit margin.

Narrow-moat Daiichi Sankyo is a Japanese drugmaker with a global footprint and cutting-edge development platform for antibody drug conjugates. As an established pharmaceutical company with a long history, it also has numerous lucrative business lines including generics, anticoagulants, painkillers, and heart medications. In 2019 it formed a partnership with AstraZeneca and will co-develop and co-commercialize Enhertu and Datroway, its two leading assets from its ADC platform. In 2023, it formed another partnership with Merck & Co. to co-develop and co-commercialize three other ADCs: HER3-DXd, I-DXd, and R-DXd. We expect its ADC platform and other pipeline assets to drive growth over the next 10 years.

Daiichi Sankyo reported full-year revenue of JPY 1,886 billion and core operating profit of JPY 332 billion. It issued full-year guidance of JPY 2 trillion revenue and JPY 350 billion core operating profit, which imply 6% year-on-year revenue growth and 17.5% core operating profit margin.

Narrow-moat Daiichi Sankyo’s third-quarter earnings were in line with our expectations. Despite its change in development strategy for recently approved Datroway (formerly known as Dato-DXd), we think the company's midterm target of JPY 2.1 trillion in 2025 remains within reach. However, it depends on the continued momentum of Enhertu, which remains strong so far. We expect multiple key data readouts this calendar year and maintain our fair value estimate of JPY 5,500 per share. We think shares are undervalued at the current market price.

Narrow-moat Daiichi Sankyo’s second-quarter earnings were in line with our expectations. Management revised its full-year guidance revenue upward by 5% since its April forecast and core operating profit was up by 24%. These changes were driven by favorable foreign exchange and sales expansion of Enhertu and Lixiana. Still, they were partially tempered by decreased sales of GE injectables and the assumption that the launch of HER3-DXd will no longer occur in this fiscal year. We maintain our fair value estimate of JPY 5,500 per share and view the shares as slightly undervalued at the current market price.

Narrow-moat Daiichi Sankyo is a Japanese drugmaker with a global footprint and cutting-edge development platform for antibody drug conjugates. As an established pharmaceutical company with a long history, it also has numerous lucrative business lines including generics, anticoagulants, painkillers, and heart medications. In 2019 it formed a partnership with AstraZeneca and will co-develop and co-commercialize Enhertu and Dato-DXd, its two leading assets from its ADC platform. In 2023, it formed another partnership with Merck & Co. to co-develop and co-commercialize three other ADCs: HER3-DXd, I-DXd, and R-DXd. We expect its ADC platform and other pipeline assets to drive growth over the next 10 years.

Narrow-moat Daiichi Sankyo's first-quarter earnings exceeded our expectations due to strong performance across its businesses, including Enhertu and Lixiana sales as well as its American Regent business. Revenue for the three months was JPY 436.2 billion, or 24% year-on-year growth, which we think is a strong result even after adjusting for a foreign exchange tailwind of 8.7%, or JPY 30.4 billion. We maintain our fair value estimate of JPY 5,500 per share, which is close to the current market price.

Narrow-moat Daiichi Sankyo is a Japanese drugmaker with a global footprint and cutting-edge development platform for antibody drug conjugates. As an established pharmaceutical company with a long history, it also has numerous lucrative business lines including generics, anticoagulants, painkillers, and heart medications. In 2019 it formed a partnership with AstraZeneca and will co-develop and co-commercialize Enhertu and Dato-DXd, its two leading assets from its ADC platform. In 2023, it formed another partnership with Merck & Co. to co-develop and co-commercialize three other ADCs: HER3-DXd (HER3 ADC), I-DXd (B7-H3 ADC), and R-DXd (CDH6 ADC). We expect its ADC platform and other pipeline assets to drive growth over the next 10 years.

Narrow-moat Daiichi Sankyo’s fourth-quarter revenue grew 30% year on year, which is in line with our optimistic expectations. Guidance for fiscal 2024 is above our expectations because of the company’s forecast of 28% growth in global Enhertu sales. Additionally, the company reviewed several recently initiated or planned clinical trials for the pipeline, including I-DXd and R-DXd. We raised our fair value estimate to JPY 5,500 per share from JPY 5,100 to include revenue for Enhertu from its second-line pan-tumor approval in HER2-expressing patients. We also incorporated higher risk-adjusted revenue for Dato-DXd now that its applications in lung cancer and breast cancer have been accepted by the US Food and Drug Administration.

Narrow-moat Daiichi Sankyo is a Japanese drugmaker with a global footprint and cutting-edge development platform for antibody drug conjugates. As an established pharmaceutical company with a long history, it also has numerous lucrative business lines including generics, anticoagulants, painkillers, and heart medications. In 2019 it formed a partnership with AstraZeneca and will co-develop and co-commercialize Enhertu and Dato-DXd, its two leading assets from its ADC platform. In 2023, it formed another partnership with Merck & Co. to co-develop and co-commercialize three other ADCs: HER3-DXd (HER3 ADC), I-DXd (B7-H3 ADC), and R-DXd (CDH6 ADC). We expect its ADC platform and other pipeline assets to drive growth over the next 10 years.

Narrow-moat Daiichi Sankyo’s third-quarter results came in stronger than expected due to a jump in sales of influenza and COVID-19 products. The company also raised its full-year revenue guidance to JPY 1.58 billion from JPY 1.55 billion and full-year core operating profit guidance to JPY 180 million from JPY 155 billion. In addition to higher sales of Inavir (for influenza) and Daichirona (COVID vaccine), the revision includes foreign-exchange tailwinds. Operating profit margins for the quarter and in the full-year guidance are in line with our expectations.