TOKYO -- Daiichi Sankyo Co. Tuesday reported a hefty loss for the financial year ended March due to the write-down of its investment in India's Ranbaxy Laboratories Ltd., and projected only a modest recovery this year under the weight of costs in bringing new products to the market.
Its net loss came to 335.80 billion yen, deeper than a 316 billion yen ($3.24 billion) loss the company forecast in late January and a consensus loss of 324 billion yen compiled by Thomson Reuters based on 14 analysts' forecasts.
The loss, however, was in line with market expectations following a local media report about the company's financial outlook earlier this month.
The first ever loss at Japan's third largest pharmaceutical maker by revenue and market capitalization, created from a merger of Sankyo and Daiichi Pharmaceutical in 2005, comes from heavy falls in the share price of Ranbaxy which it acquired last year.
Daiichi Sankyo agreed to buy a majority stake in Ranbaxy before the Food and Drug Administration of the U.S. in September banned the Indian generic drug maker from importing more than 30 generic drugs into the U.S. because of manufacturing violations at two plants in India.
Daiichi Sankyo, known for its blood pressure-lowering drug Benicar/Olmetec and antibacterial agent Cravit/Levaquin, said its sales in the just ended financial year slipped 4.3% to 842.15 billion yen mainly due to the strong yen.
While Daiichi Sankyo is considered by analysts to have the most promising list of new drugs in the development pipeline among Japanese pharmaceutical makers, such products won't come to market and boost the company's profits so soon.
Daiichi Sankyo forecasts a 14% rise in sales to 960 billion yen this financial year to March 2010, with 40 billion yen in net profit - or 59 billion yen before consolidation of Ranbaxy. However, this is far short of 97.66 billion yen net profit booked in the year ended March 2008, just before the Indian company acquisition.
Despite solid sales of its main drugs, the Japanese company expects the stronger yen and costs for clinical studies and sales promotion for new treatments - including heart drug Effient/Efient and blood clot preventing edoxaban - to hinder its profit recovery this year.
The modest profit guidance triggered heavy selling in Daiichi Sankyo's shares on the Tokyo Stock Exchange, losing 9.3% to 1,653 yen in heavy trading.
On Monday, Takeda Pharmaceutical Co., Japan's largest drug maker by revenue, also reported a net loss for the year ended March and provided unimpressive guidance for this financial year due to acquisition costs, the strong yen and limited contributions from new drugs.
Its net loss came to 335.80 billion yen, deeper than a 316 billion yen ($3.24 billion) loss the company forecast in late January and a consensus loss of 324 billion yen compiled by Thomson Reuters based on 14 analysts' forecasts.
The loss, however, was in line with market expectations following a local media report about the company's financial outlook earlier this month.
The first ever loss at Japan's third largest pharmaceutical maker by revenue and market capitalization, created from a merger of Sankyo and Daiichi Pharmaceutical in 2005, comes from heavy falls in the share price of Ranbaxy which it acquired last year.
Daiichi Sankyo agreed to buy a majority stake in Ranbaxy before the Food and Drug Administration of the U.S. in September banned the Indian generic drug maker from importing more than 30 generic drugs into the U.S. because of manufacturing violations at two plants in India.
Daiichi Sankyo, known for its blood pressure-lowering drug Benicar/Olmetec and antibacterial agent Cravit/Levaquin, said its sales in the just ended financial year slipped 4.3% to 842.15 billion yen mainly due to the strong yen.
While Daiichi Sankyo is considered by analysts to have the most promising list of new drugs in the development pipeline among Japanese pharmaceutical makers, such products won't come to market and boost the company's profits so soon.
Daiichi Sankyo forecasts a 14% rise in sales to 960 billion yen this financial year to March 2010, with 40 billion yen in net profit - or 59 billion yen before consolidation of Ranbaxy. However, this is far short of 97.66 billion yen net profit booked in the year ended March 2008, just before the Indian company acquisition.
Despite solid sales of its main drugs, the Japanese company expects the stronger yen and costs for clinical studies and sales promotion for new treatments - including heart drug Effient/Efient and blood clot preventing edoxaban - to hinder its profit recovery this year.
The modest profit guidance triggered heavy selling in Daiichi Sankyo's shares on the Tokyo Stock Exchange, losing 9.3% to 1,653 yen in heavy trading.
On Monday, Takeda Pharmaceutical Co., Japan's largest drug maker by revenue, also reported a net loss for the year ended March and provided unimpressive guidance for this financial year due to acquisition costs, the strong yen and limited contributions from new drugs.
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