Japanese companies look abroad for growth
Overseas sales were a major factor in the performance of the leading Japanese pharmaceutical companies. First half fiscal results to the end of September 2001 saw six of the top 10 manufacturers reporting either a growth in interim profits or a return to profitability. The domestic earnings climate is becoming increasingly hard as the government cuts drug prices and cuts back on overprescription by medical institutions, making expansion overseas crucial to growth.
Industry leader Takeda Chemical Industries saw its interim group net profit rise by 45% to ¥131bn (US$1bn), with a jump in overseas sales of 32% to ¥181bn (US$1.38bn). Takeda has developed a series of treatments for prostate cancer, ulcers, diabetes and high blood pressure, and is now reaping the benefits of vigorous new drug development in the US.
In sharp contrast Sankyo Co, the second-largest drugmaker, recorded a fall of 19% in its interim group net profit to ¥20bn (US$152.1m). Sankyo's overseas sales rose by just 11% to ¥53bn (US$404.97m) in the first half, while interim group sales fell 1.5% year on year to ¥268bn (US$2.05bn). Fierce competition caused sales of its antihyperlipidemic, Mevalotin, to decline 3% to ¥87bn (US$664.8m), only partially offset by good sales of analgesic Loxonin and other drugs.
Despite US subsidiary Sankyo Pharma's sharply higher sales of cholesterol-lowering treatment WelChol, higher costs resulted in a net loss of ¥3.8bn (US$39.04m) compared with a loss of ¥3.6bn (US$27.51m) the previous year. Its German subsidiary also posted an interim net loss of ¥2.2bn (US$16.81m).