CONSOLIDATED FINANCIAL REPORT [IFRS] for the Three-Month Period Ended June 30, 2020
August 3, 2020
Eisai Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange (TSE)
TSE Code: 4523
URL:https://www.eisai.com
Representative: Haruo Naito, Representative Corporate Officer & CEO
Contact: Sayoko Sasaki, Vice President, Chief IR Officer & Stakeholder Communications
Telephone: +81-3-3817-5120
Expected date of quarterly report submission: August 7, 2020
Expected date of dividend payment commencement: -
Preparation of quarterly supplementary explanatory material: Yes
Quarterly results briefing held: Yes
(Figures are rounded to the nearest million yen)
1. Consolidated Financial Results for the Three-Month Period Ended June 30, 2020
(1) Consolidated Operating Results
(Percentage figures show year on year change)
Profit for the | Comprehensive | ||||||||||||||||||
Profit before | Profit for the | period attributable | |||||||||||||||||
Revenue | Operating profit | income for the | |||||||||||||||||
income taxes | period | to owners of the | |||||||||||||||||
period | |||||||||||||||||||
parent | |||||||||||||||||||
(¥ million) | (%) | (¥ million) | (%) | (¥ million) | (%) | (¥ million) | (%) | (¥ million) | (%) | (¥ million) | (%) | ||||||||
Three-month | |||||||||||||||||||
period ended | 165,583 | 7.5 | 32,120 | 24.4 | 32,448 | 20.3 | 24,753 | 12.0 | 24,425 | 12.7 | 23,710 | 672.0 | |||||||
June 30, | |||||||||||||||||||
2020 | |||||||||||||||||||
Three-month | |||||||||||||||||||
period ended | 154,001 | 0.5 | 25,828 | 25.5 | 26,964 | 26.8 | 22,095 | 40.8 | 21,669 | 76.1 | 3,071 | -88.7 | |||||||
June 30, | |||||||||||||||||||
2019 | |||||||||||||||||||
Earnings per share attributable | Earnings per share attributable | ||||||||||||||||||
to owners of the parent (basic) | to owners of the parent (diluted) | ||||||||||||||||||
(¥) | (¥) | ||||||||||||||||||
Three-month period | 85.23 | 85.20 | |||||||||||||||||
ended June 30, 2020 | |||||||||||||||||||
Three-month period | 75.64 | 75.60 | |||||||||||||||||
ended June 30, 2019 | |||||||||||||||||||
(2) Consolidated Financial Position
Equity attributable to | Ratio of equity | Equity per share | |||
Total assets | Total equity | attributable to | attributable to | ||
owners of the parent | |||||
owners of the parent | owners of the parent | ||||
(¥ million) | (¥ million) | (¥ million) | (%) | (¥) | |
As of June 30, 2020 | 1,040,296 | 703,311 | 678,648 | 65.2 | 2,367.98 |
As of March 31, 2020 | 1,062,140 | 702,630 | 678,127 | 63.8 | 2,366.29 |
2. Dividends
Annual dividend per share | |||||||
End of Q1 | End of Q2 | End of Q3 | End of FY | Total | |||
(¥) | (¥) | (¥) | (¥) | (¥) | |||
FY 2019 | - | 80.00 | - | 80.00 | 160.00 | ||
FY 2020 | - | ||||||
FY 2020 (Forecast) | 80.00 | - | 80.00 | 160.00 | |||
(Note) Revisions to the latest dividend forecast: No
3. Consolidated Financial Forecast for Fiscal 2020 (April 1, 2020 - March 31, 2021)
(Percentage figures show year on year change)
Profit for the year | Earnings per share | ||||||||||||||
Revenue | Operating profit | Profit before | Profit for the | attributable to | attributable to | ||||||||||
income taxes | year | owners of the | owners of the | ||||||||||||
parent | parent (basic) | ||||||||||||||
(¥ million) | (%) | (¥ million) | (%) | (¥ million) | (%) | (¥ million) | (%) | (¥ million) | (%) | (¥) | |||||
Fiscal | 719,000 | 3.4 | 88,000 | -29.9 | 90,000 | -29.7 | 67,500 | -44.9 | 67,000 | -45.0 | 233.00 | ||||
Year | |||||||||||||||
(Note) Revisions to the latest financial forecast: No |
* Explanatory Notes
- Changes in number of significant subsidiaries during the period (changes in specified subsidiaries resulting in a change in scope of consolidation): No
- Changes in accounting policies and accounting estimates:
- Changes in accounting policies required by IFRS: Yes
- Changes in accounting policies other than 1): Yes
- Changes in accounting estimates: No
- Number of shares issued (common shares):
1) | Number of shares issued | As of June 30, 2020 | 296,566,949 | As of March 31, 2020 | 296,566,949 |
(including treasury shares) | |||||
2) | Number of treasury shares | As of June 30, 2020 | 9,899,980 | As of March 31, 2020 | 9,903,184 |
3) Weighted average number | |||||
For the three-month | For the three-month | ||||
of shares outstanding | period ended June 30, | 286,583,220 | period ended June 30, | 286,473,031 | |
2020 | 2019 |
The Company's shares held through a trust (73,483 shares) are not included in the number of treasury shares as of the end of the period, but are included in the average number of shares outstanding as treasury shares that are deducted from the calculation of earnings per share.
- This financial report is not subject to the quarterly review procedures by independent auditors.
- Explanation concerning the appropriate use of results forecast and other special instructions:
(Caution concerning forward-looking statements)
Materials and information provided in this financial disclosure may contain "forward-looking statements" based on expectations, business goals, estimates, forecasts and assumptions that are subject to risks and uncertainties as of the publication date of these materials. Accordingly, actual outcomes and results may differ materially from these statements depending on a number of important factors. Please refer to pages 8-9 for details with regard to the assumptions and other related matters concerning the consolidated financial forecast.
(Methods for obtaining supplementary materials and content of financial results disclosure meeting)
Supplementary materials are attached to this financial report. The Company plans to hold a financial results disclosure meeting for institutional investors and securities analysts on Monday, August 3, 2020. The handouts from the disclosure meeting will be made available on the Company's website after the event.
Supplemental Materials: Table of Contents | |||
1. Qualitative Information regarding Financial Results for the Period | (Page) | ||
(1) | Operating Results | ・・・・・・・・・・・ | 2 |
(2) | Financial Position | ・・・・・・・・・・・ | 4 |
(3) | Research & Development Pipeline, Alliances, and Other Events | ・・・・・・・・・・・ | 5 |
(4) | Information on Outlook for the Future including Financial Forecast | ・・・・・・・・・・・ | 8 |
2. Condensed Interim Consolidated Financial Statements and Major Notes | |||
(1) | Condensed Interim Consolidated Statement of Income | ・・・・・・・・・・・ | 10 |
(2) | Condensed Interim Consolidated Statement of Comprehensive Income | ・・・・・・・・・・・ | 11 |
(3) | Condensed Interim Consolidated Statement of Financial Position | ・・・・・・・・・・・ | 12 |
(4) | Condensed Interim Consolidated Statement of Changes in Equity | ・・・・・・・・・・・ | 14 |
(5) | Condensed Interim Consolidated Statement of Cash Flows | ・・・・・・・・・・・ | 16 |
(6) | Notes to Condensed Interim Consolidated Financial Statements | ||
(Going Concern) | ・・・・・・・・・・・ | 17 | |
(Changes in Accounting Policies) | ・・・・・・・・・・・ | 17 | |
(Segment Information) | ・・・・・・・・・・・ | 18 | |
(Consolidated Statement of Income) | ・・・・・・・・・・・ | 19 | |
(Consolidated Statement of Cash Flows) | ・・・・・・・・・・・ | 20 | |
(Significant Subsequent Events) | ・・・・・・・・・・・ | 20 |
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1.Qualitative Information regarding Financial Results for the Period
- Operating Results [Revenue and Profit]
- Eisai Co., Ltd. ("the Company") and its affiliates (collectively referred to as "the Group") recorded the following consolidated financial results for the three-month period ended June 30, 2020.
(¥billion) | |||
Three-month period | Three-month period | Year on year | |
ended June 30, 2019 | ended June 30, 2020 | change (%) | |
Revenue | 154.0 | 165.6 | 107.5 |
Cost of sales | 42.9 | 38.3 | 89.3 |
Gross profit | 111.1 | 127.3 | 114.6 |
Selling, general and | 60.0 | 64.9 | 108.3 |
administrative expenses | |||
Research and development | 29.4 | 30.5 | 103.7 |
expenses | |||
Operating profit | 25.8 | 32.1 | 124.4 |
Profit before income taxes | 27.0 | 32.4 | 120.3 |
Profit for the period | 22.1 | 24.8 | 112.0 |
Profit for the period | |||
attributable to | 21.7 | 24.4 | 112.7 |
owners of the parent | |||
- The Group's revenue increased primarily due to the continuous significant growth of the anticancer agent Lenvima in all regions, and milestone revenue relating to the transfer of rights to receive royalties on sales outside of Japan for anticancer agent tazemetostat, absorbing the factors contributing to decrease in revenue, such as the impact of drug price revision in Japan and COVID-19.
- Regarding revenue from main global brands, revenue for Lenvima, anticancer agent Halaven and antiepileptic agent Fycompa, was ¥34.7 billion (140.2% year on year), ¥9.4 billion (85.8% year on year) and ¥6.4 billion (107.6% year on year), respectively.
- Selling, general and administrative expenses increased mainly due to the increase in shared profit paid to Merck & Co., Inc., Kenilworth, N.J., U.S.A. following Lenvima's revenue growth and proactive investment for launch preparation of anti-amyloid beta antibody aducanumab jointly developed with Biogen Inc. (U.S.), even though promotion expenses decreased due to the impact of COVID-19.
- Research and development expenses increased mainly due to aggressive resource investment in the Phase III study (Clarity AD) of anti-amyloid beta protofibril antibody BAN2401, jointly developed with Biogen Inc., even though there were delays in the progress of some clinical trials following temporary closure of clinical trial sites and other factors due to the impact of COVID-19.
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- As a result of the above, operating profit significantly increased 124.4% year on year. As mentioned above, there was a negative impact of COVID-19 on revenue, but it was within the estimated range in the financial forecast. Also, progress of selling, general and administrative expenses and research and development expenses was delayed. As a result, the impact of COVID-19 on operating profit was minor.
[Performance by Segment]
(Revenue for each segment indicates revenue from external customers)
The Group's business is comprised of pharmaceutical business and other business. The pharmaceutical business is organized into the following six reporting segments in this report: Japan, Americas (North America), China, EMEA (Europe, the Middle East, Africa, Russia and Oceania), Asia and Latin America (primarily South Korea, Taiwan, Hong Kong, India, ASEAN, Central and South America) and OTC and others (Japan).
- Total revenue came to ¥59.7 billion (91.4 % year on year), with a segment profit of ¥25.3 billion (91.3% year on year).
- Regarding revenue by products, from neurology products, revenue for insomnia treatment Lunesta totaled ¥3.6 billion (110.0% year on year) and revenue for Fycompa totaled ¥1.2 billion (128.3% year on year), each achieving growth. Co-promotion revenue for Lyrica, a pain treatment being co-promoted with Pfizer Japan Inc., totaled ¥6.1 billion (85.5% year on year) and revenue for Aricept, a treatment for Alzheimer's disease, totaled ¥2.9 billion (69.2% year on year). Among oncology products, Lenvima achieved continuous growth with revenue of ¥3.7 billion (107.4% year on year), and Halaven earned revenue of ¥2.2 billion (86.5% year on year). Fully human anti-TNF-α monoclonal antibody Humira earned revenue of ¥12.5 billion (96.2% year on year).
- Insomnia treatment Dayvigo was launched in July 2020.
- For Fycompa, a new fine granule formulation was launched in July 2020.
- Total revenue came to ¥34.2 billion (115.4% year on year), with a segment profit of ¥17.2 billion (111.3% year on year).
- Regarding revenue by products, from neurology products, revenue for Fycompa came to ¥3.0 billion (102.2% year on year), achieving growth. Revenue for antiepileptic agent Banzel was ¥5.1 billion (75.6% year on year). Among oncology products, Lenvima earned ¥21.5 billion (155.7% year on year) demonstrating continued significant growth. Revenue for Halaven came to ¥3.2 billion (86.9% year on year).
- Dayvigo was launched in the United States in June 2020.
- Revenue totaled ¥23.8 billion (107.9% year on year), with a segment profit of ¥13.8 billion (132.9% year on year).
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- Regarding revenue by products, revenue for Lenvima totaled ¥4.2 billion (118.8% year on year) expanding steadily. Revenue for peripheral neuropathy treatment Methycobal was ¥6.9 billion (107.7% year on year) demonstrating continued growth. Liver disease and anti- allergy agents Stronger Neo-Minophagen C and Glycyron Tablets together recorded ¥2.4 billion (99.6% year on year). Aricept earned ¥2.2 billion (79.2% year on year).
- Revenue totaled ¥13.4 billion (98.0% year on year), with a segment profit of ¥6.6 billion (98.3% year on year).
- Regarding revenue by products from neurology products, revenue for Fycompa, antiepileptic agent Zebinix and antiepileptic agent Zonegran, came to ¥1.7 billion (99.4% year on year), ¥1.6 billion (103.2% year on year) and ¥0.8 billion (78.5% year on year), respectively. Among oncology products, Lenvima/Kisplyx achieved significant growth, recording revenue of ¥3.9 billion (131.2% year on year). Revenue for Halaven was ¥3.2 billion (80.6% year on year).
- Revenue totaled ¥11.1 billion (88.1% year on year), with a segment profit of ¥4.3 billion (91.9% year on year).
- Regarding revenue by products, Lenvima achieved significant growth, recording revenue of ¥1.4 billion (138.6% year on year), while revenue from Aricept and Humira came to ¥2.6 billion (90.5% year on year) and ¥2.0 billion (65.6% year on year), respectively.
- OTC and others business>
- Revenue totaled ¥6.1 billion (94.7% year on year), with a segment profit of ¥1.4 billion (74.8% year on year).
- Revenue for Chocola BB Group came to ¥3.1 billion (72.1% year on year).
- New Selbelle Premium was launched in May 2020.
- Financial Position
[Assets, Liabilities, and Equity]
- Total assets as of the end of the period amounted to ¥1,040.3 billion (down ¥21.8 billion from the end of the previous fiscal year). Although trade and other receivables increased following the increase in revenue, cash and cash equivalents decreased mainly due to decrease in trade and other payables.
- Total liabilities as of the end of the period amounted to ¥337.0 billion (down ¥22.5 billion from the end of the previous fiscal year). Trade and other payables decreased.
- Total equity as of the end of the period amounted to ¥703.3 billion (up ¥0.7 billion from the end of the previous fiscal year), the same level as the end of the previous fiscal year.
- As a result of the above, the ratio of equity attributable to owners of the parent was 65.2% (up 1.4 percentage points from the end of the previous fiscal year).
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[Cash Flows]
- Net cash from operating activities amounted to an inflow of ¥10.0 billion (outflow of ¥4.1 billion in the same period of the previous fiscal year), mainly due to increase in profit before income taxes.
- Net cash used in investing activities amounted to an outflow of ¥12.5 billion (down ¥7.6 billion from the same period of the previous fiscal year), mainly due to capital expenditures (¥12.6 billion, down ¥7.8 billion from the same period of the previous fiscal year).
- Net cash used in financing activities amounted to an outflow of ¥25.4 billion (down ¥8.8 billion from the same period of previous fiscal year), mainly due to dividends paid.
- As a result, cash and cash equivalents as of the end of the period stood at ¥226.3 billion (down ¥27.9 billion from the end of the previous fiscal year). Free cash flow (cash flow from operating activities less capital expenditures) for the period was negative ¥2.6 billion.
- Research & Development Pipeline, Alliances, and Other Events [Status of Ongoing Research & Development Pipelines]
- Anticancer agent Lenvima (product name for renal cell carcinoma indication in Europe: Kisplyx, lenvatinib, jointly developed with Merck & Co., Inc., Kenilworth, N.J., U.S.A.)
- Approved for use in the treatment of thyroid cancer in over 65 countries including Japan, the United States, in Europe and in Asia. An application for the additional indication was submitted in China.
- Approved in combination with everolimus for use in the treatment of renal cell carcinoma (second-line) in over 55 countries, including the United States and in Europe.
- Approved for use in the treatment of hepatocellular carcinoma (first-line) in over 65 countries including Japan, the United States, in Europe, China and in Asia.
- Approved in combination with the anti-PD-1 antibody pembrolizumab from Merck & Co., Inc., Kenilworth, N.J., U.S.A. for the treatment of patients with advanced endometrial carcinoma that is not microsatellite instability-high(MSI-H) or mismatch repair deficient (dMMR), who have disease progression following prior systemic therapy and are not candidates for curative surgery or radiation in more than 5 countries including the United States.
- The combination therapy with pembrolizumab was granted Breakthrough Therapy Designations for advanced and/or metastatic renal cell carcinoma, and for the potential first-line treatment of patients with advanced unresectable hepatocellular carcinoma not amenable to locoregional treatment in the United States.
- In July 2020, regarding applications seeking accelerated approval of the combination therapy with pembrolizumab for the first-line treatment of patients with unresectable hepatocellular carcinoma in the United States, a Complete Response Letter (CRL) was received from the U.S. Food and Drug Administration (FDA). The applications were based on data from the Phase Ib Study 116 trial. Eisai and Merck & Co., Inc., Kenilworth, N.J., U.S.A. plan to work with the FDA to take appropriate next steps, which include conducting a well-controlled clinical trial that demonstrates substantial evidence of effectiveness and the clinical benefit of the combination. The Phase III trial (LEAP-002) evaluating the combination therapy as a treatment for advanced hepatocellular carcinoma (first-line) is currently underway and fully enrolled.
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- In July 2020, an application for the agent's additional indication (monotherapy) of the treatment for unresectable thymic carcinoma was submitted in Japan. In June 2020, the agent received an orphan drug designation for this indication in Japan.
- A Phase III study of the agent in separate combinations with everolimus and pembrolizumab in renal cell carcinoma (first-line) is underway in Japan, the United States and Europe.
- Respective Phase III studies of the agent in combination with pembrolizumab for endometrial carcinoma (second-line), endometrial carcinoma (first-line), hepatocellular carcinoma (first-line), melanoma (first-line), nonsquamous non-small cell lung cancer (first-line),PD-L1 positive non-small cell lung cancer (first-line),non-small cell lung cancer (second-line), head and neck cancer (first-line), bladder cancer (first-line) and hepatocellular carcinoma (first-line, in combination with transarterial chemoembolization) are underway in the United States, Europe and other countries.
- A Phase II study of the agent in combination with pembrolizumab for melanoma (second- line), as well as a Phase II basket trial in multiple cancer types are underway in the United States, Europe and other countries.
- A Phase II study for head and neck cancer (second-line) has been initiated in the United States and Europe.
- Anticancer agent Halaven (eribulin)
- Approved for use in the treatment of breast cancer in over 75 countries including Japan, the United States, in Europe, China and in Asia.
- Approved for use in the treatment of liposarcoma (soft tissue sarcoma in Japan) in over 65 countries, including Japan, the United States, in Europe and in Asia.
- A Phase I/II study of the agent in combination with pembrolizumab in triple-negative breast cancer is underway in the United States.
- A Phase I/II study for the combination therapy of the liposomal formulation of Halaven and anti-PD-1 antibody nivolumab of Ono Pharmaceutical Co., Ltd. (Osaka, Japan) is underway in Japan.
- The development of the agent in combination with PEGPH20 (a PEGylated recombinant human hyaluronidase being developed by Halozyme Therapeutics, Inc., U.S.) in HER2- negative breast cancer which was in Phase I/II stage in the United States has been finished.
- Antiepileptic agent Fycompa (perampanel)
- Approved in over 65 countries including Japan, the United States, in Europe, China and in Asia, as an adjunctive therapy for use in the treatment of partial-onset seizures in patients with epilepsy 12 years of age and older. The agent was approved for monotherapy and adjunctive use in the treatment of partial-onset seizures in patients from 4 years of age with epilepsy in Japan and the United States.
- Approved in over 65 countries including Japan, the United States, in Europe and in Asia, as an adjunctive therapy for use in the treatment of primary generalized tonic-clonic seizures in patients with epilepsy 12 years of age and older.
- A supplemental new drug application seeking approval for use in pediatric patients with
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epilepsy is under review in Europe.
- A Phase III study for Lennox-Gastaut syndrome is underway in Japan, the United States and Europe.
- Orexin receptor antagonist Dayvigo (lemborexant)
- The agent was approved for the treatment of insomnia characterized by difficulties with sleep onset and/or sleep maintenance in adults in the United States.
- The agent was approved for the treatment of insomnia in Japan.
- New drug applications seeking approval for the treatment of insomnia were submitted in Canada, Australia and Hong Kong.
- A Phase II study for irregular sleep-wake rhythm disorder associated with Alzheimer's disease dementia is underway in Japan and the United States.
- Anti-amyloidbeta antibody aducanumab (jointly developed with Biogen Inc.)
- In July 2020, Biogen Inc. has completed the submission of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for the approval of aducanumab. In Europe, preparation for submission is underway based on the official meeting with regulatory authorities. In Japan, Biogen Inc. is engaging in dialogue with regulatory authorities and working diligently toward the goal of submitting applications.
- Anti-amyloidbeta protofibril antibody BAN2401 (jointly developed with Biogen Inc.)
- A Phase III study (Clarity AD) in patients with mild cognitive impairment due to
Alzheimer's disease or mild Alzheimer's disease (collectively known as early Alzheimer's disease) is underway in Japan, the United States, Europe and China. - A Phase III study for preclinical Alzheimer's disease (AHEAD 3-45) has been commenced. In this study, the agent has been selected by the Alzheimer's Clinical Trials Consortium (ACTC) as treatment to be evaluated.
- In May 2020, partial changes for additional dosage and administration of Humira for a treatment of hidradenitis suppurativa were approved in Japan.
-
In June 2020, Equfina was approved for the treatment of Parkinson's disease in South
Korea. - In June 2020, a new drug application seeking approval of anticancer agent tazemetostat (development code: E7438) for treatment of EZH2 gene mutation-positive follicular lymphoma was submitted in Japan.
[Major Alliances, Agreements and Other Events]
- In April 2020, Eisai and Seikagaku Corporation (Tokyo) entered into an agreement for the co-development and marketing alliance in China for SI-613, a therapeutic agent for osteoarthritis discovered by Seikagaku Corporation.
- In July 2020, in collaboration with the Global Coalition for Adaptive Research (U.S.), a nonprofit organization, and University of Pittsburgh Medical Center (U.S.), Eisai joined the REMAP-COVID clinical trial that tests multiple interventions for the treatment of patients hospitalized with COVID-19. Eritoran, an investigational TLR (Toll-Like Receptor) 4 antagonist discovered and developed by Eisai, has been selected to be evaluated in the
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trial.
- In July 2020, Eisai entered into an industry-academia-government joint research agreement with four universities in Japan aiming to create a therapeutic drug for systemic lupus erythematosus by using its in-house discovered new oral TLR 7/8 inhibitor E6742. This joint research project has been selected by the Japan Agency for Medical Research and Development (AMED) for its Cyclic Innovation for Clinical Empowerment (CiCLE) grant program.
- In July 2020, an industry-academia-government joint research agreement among Eisai, Allm Inc. (Tokyo) and Tokyo Medical and Dental University (Tokyo) has been concluded for study of the smartphone application SpO2 monitoring system linking with "LINE" for COVID-19 patients on the home/hotel recuperation. The joint project has been selected by AMED for its "Technology Development Project for Measures against Viruses and Other Infectious Diseases".
- In July 2020, Eisai and DeNA Co., Ltd.'s subsidiary DeSC Healthcare Co., Ltd. (Tokyo) began provision of the brain performance application "Easiit App", co-developed by the two companies, for preparation against dementia based on a business alliance agreement. With the beginning of provision of the Easiit App, the Eisai Dementia Platform has commenced.
- Information on Outlook for the Future including Financial Forecast (April 1, 2020 - March 31, 2021)
[Consolidated Financial Forecast]
There are no changes to the consolidated financial forecast announced on May 13, 2020.
FY2019 | FY2020 | Year on year | |
Forecast | change | ||
Revenue | ¥695.6 billion | ¥719.0 billion | 103.4% |
Operating profit | ¥125.5 billion | ¥88.0 billion | 70.1% |
Profit before income taxes | ¥128.1 billion | ¥90.0 billion | 70.3% |
Profit for the year | ¥122.5 billion | ¥67.5 billion | 55.1% |
Profit for the year attributable to owners of | ¥121.8 billion | ¥67.0 billion | 55.0% |
the parent | |||
Earnings per share attributable to owners of | ¥425.01 | ¥233.00 | 54.8% |
the parent (basic) | |||
* Assumptions: 1 USD = ¥105, 1 EUR = ¥117, 1 GBP = ¥130, 1 RMB = ¥14.6 |
[Forecasts and Risk Factors]
- The materials and information provided in this announcement include current forecasts, targets, evaluations, estimates, assumptions that are accompanied by risks, and other matters that are based on uncertain factors. Accordingly, it is possible that actual results will deviate significantly from forecasts, etc., due to changes to a variety of factors. These risks and uncertainties include general industry and market conditions, fluctuation of
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interest rates and currency exchange rates, and other aspects of economic conditions in Japan and internationally.
- Risks and uncertainties that could cause significant fluctuations in the results of the Group or have a material effect on investment decisions are as follows. However, these do not cover all of the risks and uncertainties faced by the Group, and it is possible that they will be affected in the future by other factors that cannot be foreseen, or are not deemed to be important, at this point in time.
- These are judgments as of the time of the announcement, and statements in the text regarding the future are not guarantees that they will occur or be achieved.
- Risks factors include risks related to management based on the Corporate Philosophy, risks related to establishment of AD franchise, risks related to maximization of the value of Lenvima, risks related to partnership model, risks related to digital transformation, risks related to uncertainties in new drug development, risks related to occurrences of side effects, risks related to product quality and stable supply, risks related to intellectual property, risks related to litigations, risks related to data reliability, risks related to medical cost containment measures, risks related to succession, risks related to information security, risks related to COVID-19, risks related to climate change, risks related to impairment of goodwill and intangible assets.
- For further details on the above-mentioned risks, please refer to the "Risk Factors" section of the Annual Securities Report.
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2. Condensed Interim Consolidated Financial Statements and Major Notes
(1) Condensed Interim Consolidated Statement of Income
(Millions of yen) | ||
Three-month period | Three-month period | |
ended June 30, 2020 | ended June 30, 2019 | |
Revenue | 165,583 | 154,001 |
Cost of sales | (38,282) | (42,890) |
Gross profit | 127,301 | 111,111 |
Selling, general and administrative expenses | (64,924) | (59,962) |
Research and development expenses | (30,530) | (29,429) |
Other income | 710 | 4,777 |
Other expenses | (437) | (671) |
Operating profit | 32,120 | 25,828 |
Financial income | 651 | 1,440 |
Financial costs | (323) | (304) |
Profit before income taxes | 32,448 | 26,964 |
Income taxes | (7,695) | (4,869) |
Profit for the period | 24,753 | 22,095 |
Profit for the period attributable to | ||
Owners of the parent | 24,425 | 21,669 |
Non-controlling interests | 328 | 425 |
Earnings per share | ||
Basic (yen) | 85.23 | 75.64 |
Diluted (yen) | 85.20 | 75.60 |
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(2) Condensed Interim Consolidated Statement of Comprehensive Income
(Millions of yen) | ||
Three-month period | Three-month period | |
ended June 30, 2020 | ended June 30, 2019 | |
Profit for the period | 24,753 | 22,095 |
Other comprehensive income (loss) | ||
Items that will not be reclassified to profit or loss | ||
Financial assets measured at fair value | 1,100 | (2,498) |
through other comprehensive income (loss) | ||
Subtotal | 1,100 | (2,498) |
Items that may be reclassified subsequently to profit or loss | ||
Exchange differences on translation of foreign operations (loss) | (2,174) | (16,537) |
Cash flow hedges | 31 | 11 |
Subtotal | (2,143) | (16,526) |
Total other comprehensive income (loss), net of tax | (1,043) | (19,024) |
Comprehensive income (loss) for the period | 23,710 | 3,071 |
Comprehensive income (loss) for the period attributable to | ||
Owners of the parent | 23,378 | 2,646 |
Non-controlling interests | 332 | 425 |
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(3) Condensed Interim Consolidated Statement of Financial Position
(Millions of yen) | ||
As of | As of | |
June 30, 2020 | March 31, 2020 | |
Assets | ||
Non-current assets | ||
Property, plant and equipment | 144,310 | 144,638 |
Goodwill | 167,003 | 168,682 |
Intangible assets | 103,455 | 106,094 |
Other financial assets | 42,305 | 39,779 |
Other assets | 14,350 | 15,104 |
Deferred tax assets | 67,626 | 66,438 |
Total non-current assets | 539,049 | 540,735 |
Current assets | ||
Inventories | 70,921 | 65,735 |
Trade and other receivables | 183,991 | 180,022 |
Other financial assets | 666 | 1,555 |
Other assets | 19,361 | 19,849 |
Cash and cash equivalents | 226,308 | 254,244 |
Total current assets | 501,247 | 521,405 |
Total assets | 1,040,296 | 1,062,140 |
12
(Millions of yen) | |||
As of | As of | ||
June 30, 2020 | March 31, 2020 | ||
Equity | |||
Equity attributable to owners of the parent | |||
Share capital | 44,986 | 44,986 | |
Capital surplus | 77,601 | 77,609 | |
Treasury shares | (34,260) | (34,338) | |
Retained earnings | 507,957 | 505,359 | |
Other components of equity | 82,365 | 84,511 | |
Total equity attributable to owners of the parent | |||
678,648 | 678,127 | ||
Non-controlling interests | 24,663 | 24,503 | |
Total equity | 703,311 | 702,630 | |
Liabilities | |||
Non-current liabilities | |||
Borrowings | 54,951 | 54,945 | |
Other financial liabilities | 35,608 | 36,572 | |
Provisions | 1,365 | 1,346 | |
Other liabilities | 13,242 | 14,112 | |
Deferred tax liabilities | 298 | 569 | |
Total non-current liabilities | 105,465 | 107,545 | |
Current liabilities | |||
Borrowings | 34,998 | 34,994 | |
Trade and other payables | 61,868 | 76,879 | |
Other financial liabilities | 21,295 | 25,507 | |
Income taxes payable | 6,309 | 5,355 | |
Provisions | 17,807 | 18,739 | |
Other liabilities | 89,244 | 90,492 | |
Total current liabilities | 231,520 | 251,965 | |
Total liabilities | 336,985 | 359,510 | |
Total equity and liabilities | 1,040,296 | 1,062,140 | |
13
(4) Condensed Interim Consolidated Statement of Changes in Equity
For the three-month period ended June 30, 2020
(Millions of yen) | |||||
Equity attributable to owners of the parent | |||||
Other components | |||||
of equity | |||||
Share | Capital | Treasury | Retained | Financial assets measured | |
capital | surplus | shares | earnings | at fair value through | |
other comprehensive | |||||
income (loss) | |||||
As of April 1, 2020 | 44,986 | 77,609 | (34,338) | 505,359 | - |
Profit for the period | - | - | - | 24,425 | - |
Other comprehensive income (loss) | - | - | - | - | 1,100 |
Comprehensive income (loss) | - | - | - | 24,425 | 1,100 |
for the period | |||||
Dividends | - | - | - | (22,933) | - |
Share-based payments | - | (8) | - | - | - |
Acquisition of treasury shares | - | - | (7) | - | - |
Disposal of treasury shares | - | (0) | 85 | - | - |
Reclassification | - | - | - | 1,100 | (1,100) |
Other changes | - | - | - | 6 | - |
Total transactions with owners (loss) | - | (8) | 79 | (21,827) | (1,100) |
As of June 30, 2020 | 44,986 | 77,601 | (34,260) | 507,957 | - |
Equity attributable to owners of the parent | ||||||
Other components of equity | ||||||
Exchange | Equity | Non- | Total | |||
differences on | Total other | attributable | controlling | |||
Cash flow | equity | |||||
translation of | components | to owners of | interests | |||
hedges | ||||||
foreign | of equity | the parent | ||||
operations | ||||||
As of April 1, 2020 | 84,704 | (192) | 84,511 | 678,127 | 24,503 | 702,630 |
Profit for the period | - | - | - | 24,425 | 328 | 24,753 |
Other comprehensive income | (2,177) | 31 | (1,047) | (1,047) | 4 | (1,043) |
(loss) | ||||||
Comprehensive income (loss) | (2,177) | 31 | (1,047) | 23,378 | 332 | 23,710 |
for the period | ||||||
Dividends | - | - | - | (22,933) | (172) | (23,105) |
Share-based payments | - | - | - | (8) | - | (8) |
Acquisition of treasury shares | - | - | - | (7) | - | (7) |
Disposal of treasury shares | - | - | - | 85 | - | 85 |
Reclassification | - | - | (1,100) | - | - | - |
Other changes | - | - | - | 6 | - | 6 |
Total transactions with owners (loss) | - | - | (1,100) | (22,856) | (172) | (23,029) |
As of June 30, 2020 | 82,527 | (162) | 82,365 | 678,648 | 24,663 | 703,311 |
14
For the three-month period ended June 30, 2019
(Millions of yen) | |||||
Equity attributable to owners of the parent | |||||
Other components | |||||
of equity | |||||
Share | Capital | Treasury | Retained | Financial assets measured | |
capital | surplus | shares | earnings | at fair value through | |
other comprehensive | |||||
income (loss) | |||||
As of April 1, 2019 | 44,986 | 77,590 | (34,671) | 438,489 | - |
Profit for the period | - | - | - | 21,669 | - |
Other comprehensive income (loss) | - | - | - | - | (2,498) |
Comprehensive income (loss) | - | - | - | 21,669 | (2,498) |
for the period | |||||
Dividends | - | - | - | (22,922) | - |
Share-based payments | - | (21) | - | - | - |
Acquisition of treasury shares | - | - | (38) | - | - |
Disposal of treasury shares | - | 3 | 39 | - | - |
Reclassification | - | - | - | (2,498) | 2,498 |
Other changes | - | - | - | 16 | - |
Total transactions with owners (loss) | - | (18) | 2 | (25,403) | 2,498 |
As of June 30, 2019 | 44,986 | 77,572 | (34,669) | 434,755 | - |
Equity attributable to owners of the parent | ||||||
Other components of equity | ||||||
Exchange | Equity | Non- | Total | |||
differences on | Total other | attributable | controlling | |||
Cash flow | equity | |||||
translation of | components | to owners of | interests | |||
hedges | ||||||
foreign | of equity | the parent | ||||
operations | ||||||
As of April 1, 2019 | 102,144 | (418) | 101,726 | 628,120 | 23,862 | 651,981 |
Profit for the period | - | - | - | 21,669 | 425 | 22,095 |
Other comprehensive income | (16,537) | 11 | (19,024) | (19,024) | (0) | (19,024) |
(loss) | ||||||
Comprehensive income (loss) | (16,537) | 11 | (19,024) | 2,646 | 425 | 3,071 |
for the period | ||||||
Dividends | - | - | - | (22,922) | (7) | (22,929) |
Share-based payments | - | - | - | (21) | - | (21) |
Acquisition of treasury shares | - | - | - | (38) | - | (38) |
Disposal of treasury shares | - | - | - | 42 | - | 42 |
Reclassification | - | - | 2,498 | - | - | - |
Other changes | - | - | - | 16 | - | 16 |
Total transactions with owners (loss) | - | - | 2,498 | (22,922) | (7) | (22,929) |
As of June 30, 2019 | 85,607 | (407) | 85,200 | 607,843 | 24,280 | 632,124 |
15
(5) Condensed Interim Consolidated Statement of Cash Flows
(Millions of yen) | |||
For the three-month | For the three-month | ||
period ended June | period ended June | ||
30, 2020 | 30, 2019 | ||
Operating activities | |||
Profit before income taxes | 32,448 | 26,964 | |
Depreciation and amortization | 8,681 | 8,269 | |
(Increase) decrease in working capital | (22,885) | (28,108) | |
Interest and dividends received | 731 | 1,414 | |
Interest paid | (267) | (118) | |
Income taxes paid | (7,118) | (7,038) | |
Other | (1,542) | (5,456) | |
Net cash from (used in) operating activities | 10,049 | (4,073) | |
Investing activities | |||
Purchases of property, plant and equipment | (8,841) | (4,538) | |
Proceeds from sale of property, plant and equipment | 13 | 825 | |
Purchases of intangible assets | (3,235) | (21,961) | |
Proceeds from sale of subsidiaries | - | 5,832 | |
Purchases of financial assets | (610) | (672) | |
Proceeds from sale and redemption of financial assets | 38 | 64 | |
Payments of time deposits exceeding three months | (1) | (30) | |
Proceeds from redemption of time deposits exceeding | 74 | 501 | |
three months | |||
Other | 65 | (159) | |
Net cash from (used in) investing activities | (12,497) | (20,139) | |
Financing activities | |||
Net increase (decrease) in short-term borrowings | - | (9,000) | |
Repayments of lease liabilities | (2,369) | (2,285) | |
Dividends paid | (22,933) | (22,922) | |
Other | (89) | (7) | |
Net cash from (used in) financing activities | (25,391) | (34,214) | |
Effect of exchange rate change on cash and cash equivalents | |||
(97) | (8,005) | ||
Net increase (decrease) in cash and cash equivalents | (27,935) | (66,430) | |
Cash and cash equivalents at beginning of period | 254,244 | 291,924 | |
Cash and cash equivalents at end of period | 226,308 | 225,494 | |
16
(6) Notes to Condensed Interim Consolidated Financial Statements
(Going Concern)
Not applicable
(Changes in Accounting Policies)
With the exception of the following, all significant accounting policies that are applied to these condensed interim consolidated financial statements for this period are the same as those that were applied to the consolidated financial statements for the previous fiscal year. None of the following accounting standards and interpretations applied by the Group has any major impact on the condensed interim consolidated financial statements for this period.
Effective from this fiscal year, the Group adopts early application of IFRS 16 "Leases" in order to be able to use any practical expedient to exempt the evaluation whether it corresponds to the amendment of lease terms in case the rent concessions related to COVID-19 occurs.
Mandatory | ||||
Accounting standards | application | To be applied | Description | |
and interpretations | (Date of | by the Group | ||
commencement) | ||||
IAS 1 | Presentation of Financial | |||
Statements | Fiscal year ending | Amendment of definition of | ||
IAS 8 | Accounting Policies, | January 1, 2020 | ||
March 31, 2021 | "Material" | |||
Changes in Accounting | ||||
Estimates and Errors | ||||
IFRS 7 | Financial Instruments: | Providing temporary relief | ||
Disclosures | ||||
from applying specific hedge | ||||
IFRS 9 | Financial Instruments | Fiscal year ending | ||
January 1, 2020 | accounting requirements to | |||
IAS 39 | Financial Instruments: | March 31, 2021 | ||
hedging relationships directly | ||||
Recognition and | ||||
affected by IBOR reform. | ||||
Measurements | ||||
Fiscal year ending | Amendment of rent | |||
IFRS 16 | Leases | June 1, 2020 | March 31, 2021 | concessions related to |
Early application | COVID-19 | |||
17
(Segment Information)
Reporting segments are units for which the Group can obtain independent financial information and for which top management undertakes periodic reviews in order to determine the allocation of management resources and evaluate performance.
The Group's business is comprised of pharmaceutical business and other business. The pharmaceutical business is organized into the following six reporting segments in this report: Japan, Americas (North America), China, EMEA (Europe, the Middle East, Africa, Russia, and Oceania), Asia and Latin America (primarily South Korea, Taiwan, Hong Kong, India, ASEAN, Central and South America), and OTC and others (Japan).
(Millions of yen) | ||||
Three-month period ended | Three-month period ended | |||
June 30, 2020 | June 30, 2019 | |||
Revenue | Segment | Revenue | Segment | |
profit (loss) | profit (loss) | |||
Pharmaceutical business | ||||
Japan | 59,725 | 25,270 | 65,366 | 27,690 |
Americas | 34,182 | 17,181 | 29,626 | 15,431 |
China | 23,841 | 13,847 | 22,099 | 10,423 |
EMEA | 13,404 | 6,590 | 13,673 | 6,701 |
Asia and Latin America | 11,088 | 4,259 | 12,588 | 4,636 |
OTC and others | 6,127 | 1,402 | 6,470 | 1,874 |
Reporting segment total | 148,366 | 68,550 | 149,823 | 66,755 |
Other business (Note 1) | 17,217 | 15,136 | 4,178 | 1,598 |
Total | 165,583 | 83,686 | 154,001 | 68,353 |
R&D expenses (Note 2) | - | (30,530) | - | (29,429) |
Group headquarters' management | - | (21,035) | - | (17,471) |
costs and other expenses (Note 3) | ||||
Gain on sale of subsidiaries | - | - | - | 4,374 |
Operating profit in the condensed | ||||
interim consolidated statement of | - | 32,120 | - | 25,828 |
income | ||||
(Note 1) "Other business" mainly includes the license revenue and pharmaceutical ingredient business of the parent company.
(Note 2) "R&D expenses" are not allocated to any particular segment as the Group manages such expenses on a global basis.
(Note 3) "Group headquarters' management costs and other expenses" are the costs and expenses covering Group-wide operations which include the amount of profits and expenses shared under strategic collaborations with partners. For the three-month period ended June 30, 2020, shared profit of ¥16,497 million (¥10,939 million for the three- month period ended June 30, 2019) for anticancer agent Lenvima paid by the Group to Merck & Co., Inc., Kenilworth, N.J., U.S.A. was included in Group headquarters' management costs and other expenses.
18
(Consolidated Statement of Income)
(1) Revenue
The Group disaggregates revenue by type of goods or services. Disaggregation of revenue by reporting segment is as follows. All revenue for the three-month periods ended June 30, 2020 and June 30, 2019 is recognized based on contracts with customers.
Three-month period ended June 30, 2020
(Millions of yen) | ||||
Revenue from | ||||
pharmaceutical goods | License revenue | Other revenue | Total | |
sales | ||||
Pharmaceutical business | ||||
Japan | 52,790 | 282 | 6,653 | 59,725 |
Americas | 34,182 | - | - | 34,182 |
China | 23,841 | - | - | 23,841 |
EMEA | 13,404 | - | - | 13,404 |
Asia and Latin America | 11,066 | 22 | - | 11,088 |
OTC and others | 6,127 | - | - | 6,127 |
Reporting segment total | 141,409 | 304 | 6,653 | 148,366 |
Other business (Note 1) | - | 14,806 | 2,411 | 17,217 |
Total | 141,409 | 15,110 | 9,064 | 165,583 |
(Note 1) "Other business" mainly includes the license revenue and pharmaceutical ingredient business of the parent company.
Three-month period ended June 30, 2019
(Millions of yen) | ||||
Revenue from | ||||
pharmaceutical goods | License revenue | Other revenue | Total | |
sales | ||||
Pharmaceutical business | ||||
Japan | 56,887 | 748 | 7,731 | 65,366 |
Americas | 29,615 | 12 | - | 29,626 |
China | 22,099 | - | - | 22,099 |
EMEA | 13,673 | - | - | 13,673 |
Asia and Latin America | 12,422 | 166 | - | 12,588 |
OTC and others | 6,470 | - | - | 6,470 |
Reporting segment total | 141,167 | 925 | 7,731 | 149,823 |
Other business (Note 1) | 723 | 1,238 | 2,216 | 4,178 |
Total | 141,890 | 2,164 | 9,947 | 154,001 |
(Note 1) "Other business" mainly includes the license revenue and pharmaceutical ingredient business of the parent company.
19
(2) Selling, general and administrative expenses
For the three-month period ended June 30, 2020, the Group recorded shared profit of ¥16,497 million (¥10,939 million for the three-month period ended June 30, 2019) for anticancer agent Lenvima paid by the Group to Merck & Co., Inc., Kenilworth, N.J., U.S.A. as selling, general and administrative expenses.
(3) Other income
For the three-month period ended June 30, 2019, the Group recorded gain on sale of subsidiaries of ¥4,374 million related to the sale of Elmed Eisai Co., Ltd (Tokyo).
(Consolidated Statement of Cash Flows)
For the three-month period ended June 30, 2019, the Group recorded proceeds from sale of subsidiaries of ¥5,832 million related to the sale of Elmed Eisai Co., Ltd.
(Significant Subsequent Events)
Not applicable
20
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Eisai Co. Ltd. published this content on 03 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2020 03:31:11 UTC