Astellas (4503): FY16 Q2 Results – Delivering the Goods
Not only did Astellas report early in this results season, but its 2Q numbers were telegraphed by the Nikkei, rather killing the story. However, as more results come out in this earnings quarter, it is evident that Astellas is delivering the goods, albeit in a typically irritating matter. This isn’t really its fault – drug companies’ results don’t really fit well into the quarterly system, and the yen plays as much havoc with SG&A as it does with the top-line – but the Japanese market isn’t really in the mood for such niceties. That is a pity.
Key Points
- NHI price cuts hit H1 sales, but this was offset by a COGS ratio decline.
- Because of the focus on Xtandi, the importance of Myrbetriq is often overlooked, but it came through loud and clear with these results. Myrbetriq is now at an inflexion point.
- Xtandi label change to include pre-chemo now brings the drug into the urology market. As well as broadening usage, this favours Astellas’s strong urology sales force.
- Astellas now has two in-house global oncology offerings.
- We raise our FY16 OP target by ¥10bil to reflect benefits of the strong yen. Since it is unclear whether these gains will continue into FY17, we leave our FY17 forecasts unchanged.
Astellas Pharma is engaged in the development, research, manufacture, and sale of pharmaceuticals. Co. operates its operation in Japan, Americas, Europe, and Asia/Oceania. Co.'s principal product for the global market include "Xtandi" a therapeutic agent for prostatic cancer, "Eligard" a luteinizing hormone-releasing hormone (LHRH) agonist for the treatment of prostate cancer,"Prograf" an immunosuppressant used to prevent rejection in organ transplants, "Vesicare" a treatment for overactive bladder, "Harnal ( "Omnic" in the U.S. and Europe)" an 1 blocking agent for prostatic and urethral smooth muscle, and "Fungurad ("Mycamine" in the U.S. and Europe)" a candin-type antifungal agent.
Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods.
PSA produces both company and sector reports. The focus of PSA’s research is to identify winners and losers as new technologies impact the top and bottom lines of corporations. Critical to our research is the clear explanation of how these new technologies work and how they impact companies and industries.
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