Daiichi Sankyo's first-half profit jumps 35.3%

Daiichi Sankyo reported solid earnings for the six months to September 30, 2006. The firm, which is Japan's second-largest drugmaker, saw net sales reach 485.84 billion yen ($4.08 billion), up 7.5% on the like, year-ago period. However, its operating income fell 2.5% to 78.35 billion yen, despite a 6.7% rise in ordinary income to 88.2 billion yen. While the company took an extraordinary loss of 7.8 billion yen during the period related to business integration, it also recognized extraordinary gains, including 20.5 billion yen from the sale of group subsidiaries, and so its net income surged 35.3% to 66.8 billion yen.

In terms of profitability, the growth due to higher sales was supplemented by a more profitable sales mix, which contributed to a 2.9-point year-to-year improvement in the cost-of-sales ratio to 28.4%, as gross profit rose 12% to 347.8 billion yen.

Net sales from Daiichi Sankyo pharmaceuticals totaled 441.3 billion yen, a 14.5% rise, as operating income for this unit fell 2.3% to 75.8 billion yen. Although rival generic products had a negative impact on sales of the hypercholesterolemia treatment pravastatin (Pravachol in the USA, Mevalotin in Japan), several of the group's leading products maintained high levels of sales, including the broad-spectrum oral antibacterial agent, Cravit (levofloxacin), and the antihypertensive olmesartan (trade name Benicar in the USA and Olmetec in Japan), while sales revenue was also boosted by the receipt of milestone payments related to the Japanese National Health Insurance listing of the antiplatelet agent Plavix (clopidogrel).