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    4578   JP3188220002

OTSUKA HOLDINGS CO., LTD.

(4578)
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Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2021 [IFRS]

11/11/2021 | 11:47pm EST

Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2021 [IFRS]

November 12, 2021

Company name

: Otsuka Holdings Co., Ltd.

Stock exchange listing

: Tokyo Stock Exchange

Code number

: 4578

URL

: https://www.otsuka.com/en/

Representative

: Tatsuo Higuchi

President and Representative Director, CEO

Contact

: Yuji Kogure

Director, Investor Relations Department

Telephone: +81-3-6361-7411

Scheduled date of quarterly securities report submission

: November 12, 2021

Scheduled date of dividend payment commencement

: -

Supplementary materials for quarterly financial results

: Yes

Earnings announcement for quarterly financial results

: Yes (for institutional investors, analysts and the press)

(Figures are rounded down to the nearest million unless otherwise stated)

1. Consolidated Financial Results for the Third Quarter of the Year Ending December 31, 2021 (January 1, 2021 to September 30,

2021)

  1. Consolidated Operating Results (cumulative)

(% indicates percentage of change from the same period of the previous fiscal year)

Profit

Profit attributable

Total comprehensive

Revenue

Business profit

Operating profit

to owners of the

income for the

for the period

Company

period

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

FY2021 Q3

1,107,417

3.8

155,863

(17.4)

158,130

(7.9)

130,033

(0.4)

126,648

(0.9)

189,671

65.9

FY2020 Q3

1,066,959

3.7

188,663

20.7

171,695

10.2

130,598

13.7

127,766

14.6

114,354

42.1

  • Business profit is an indicator of ordinary earnings power calculated as follows:
    Revenue - Cost of sales - Selling, general and administrative expenses - Research and development expenses + Share of profit of associates

Basic earnings

Diluted earnings

per share

per share

Yen

Yen

FY2021 Q3

233.50

233.34

FY2020 Q3

235.59

234.79

  1. Consolidated Financial Position

Equity attributable

Ratio of equity

Equity attributable

attributable to owners

Total assets

Total equity

to owners of the

to owners of the

of the Company to

Company

Company per share

total assets

As of

Millions of

yen

Millions of yen

Millions of yen

%

Yen

2,815,766

2,017,608

1,984,248

70.5

3,658.27

September 30, 2021

As of

2,627,807

1,883,432

1,852,375

70.5

3,415.54

December 31, 2020

2.

Dividends

Annual dividend per share

First

Second

Third

Year-end

Total

Quarter

end

Quarter end

Quarter end

Yen

Yen

Yen

Yen

Yen

FY2020

-

50.00

-

50.00

100.00

FY2021

-

50.00

-

FY2021 (forecast)

-

50.00

100.00

* Revisions to dividends forecast most recently announced: None

3. Forecast of Consolidated Operating Results for the Year Ending December 31, 2021 (January 1, 2021 to December 31, 2021)

(% indicates percentage of

change from the previous fiscal year)

Profit for the

Profit attributable

Basic earnings

Revenue

Business profit

Operating profit

to owners of the

year

per share

Company

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

FY2021

1,480,000

4.0

200,000

7.8)

203,000

2.2

165,000

8.7

161,000

8.7

296.84

announced:

Yes

* Revisions to

financial forecast most

recently

(

4. Others

  1. Changes in significant subsidiaries during the nine-month period ended September 30, 2021 (changes in specified subsidiaries resulting in a change in scope of consolidation): None
  2. Changes in accounting policies and changes in accounting estimates
    1. Changes in accounting policies required by IFRS: None
    2. Changes in accounting policies due to other reasons: None
    3. Changes in accounting estimates: None
  3. Number of shares issued and outstanding (common stock)
    1. Number of shares issued and outstanding as of the end of the reporting period (including treasury shares):

September 30, 2021

557,835,617 shares

December 31, 2020

557,835,617 shares

  1. Number of shares of treasury shares as of the end of the reporting period:

September 30, 2021

15,434,834 shares

December 31, 2020

15,499,157 shares

  1. Average number of shares outstanding during the reporting period:

Nine-month period ended September 30, 2021

542,372,023 shares

Nine-month period ended September 30, 2020

542,308,947 shares

  • This report is out of scope of reviews by the external auditor.
  • Note to ensure appropriate use of forecasts, and other comments in particular

Forecasts and other forward-looking statements included in this report are based on information currently available and certain assumptions that Otsuka Holdings Co., Ltd. (hereinafter referred to as the "Company") deems reasonable. Actual performance and other results may differ significantly due to various factors. Please refer to "1. Qualitative Information (3) Forecast for Consolidated Operating Results" on page 8 for details with regard to the assumptions and other matters concerning the financial forecast.

The Company plans to hold an earnings release conference call for institutional investors, analysts and the press on November 12, 2021. Presentation materials and the webcast of the call will be available on the Company's website promptly after the call.

Attachment Index

1.

Qualitative Information ...................................................................................................................................................

2

(1)

Consolidated Operating Results ................................................................................................................................

2

(2)

Consolidated Financial Position................................................................................................................................

7

(3)

Forecast for Consolidated Operating Results ............................................................................................................

8

2.

Condensed Interim Consolidated Financial Statements and Major Notes ..................................................................

9

(1)

Condensed Interim Consolidated Statements of Financial Position ..........................................................................

9

(2)

Condensed Interim Consolidated Statements of Income .........................................................................................

11

(3)

Condensed Interim Consolidated Statements of Comprehensive Income ...............................................................

12

(4)

Condensed Interim Consolidated Statements of Changes in Equity........................................................................

13

(5)

Condensed Interim Consolidated Statement of Cash Flows....................................................................................

15

(6)

Notes to Condensed Interim Consolidated Financial Statements ............................................................................

16

Note to Going Concern Assumptions......................................................................................................................

16

Operating Segments ................................................................................................................................................

16

- 1 -

1. Qualitative Information

(1) Consolidated Operating Results

The forward-looking statements in this report were prepared based on information available as of September 30, 2021.

Summary of operating results for the nine-month period ended September 30, 2021

The Company and its subsidiaries (hereinafter referred to as the "Group") adopted "Business profit" as an indicator of ordinary earnings power, which is calculated as follows:

Revenue - Cost of sales - Selling, general and administrative expenses - Research and development expenses + Share of profit of associates (Millions of yen)

Nine-month period

Nine-month period

ended September 30,

ended September 30,

Change

% Change

2020

2021

Revenue

1,066,959

1,107,417

40,458

3.8

%

Business profit before research and

346,723

318,384

(28,338)

(8.2)

%

development expenses

Business profit

188,663

155,863

(32,800)

(17.4)

%

Operating profit

171,695

158,130

(13,564)

(7.9)

%

Profit before tax

164,990

166,308

1,317

0.8

%

Profit for the period

130,598

130,033

(565)

(0.4)

%

Profit attributable to owners of the

127,766

126,648

(1,118)

(0.9)

%

Company

Research and development expenses

158,059

162,521

4,461

2.8

%

Impairment losses

25,102

5,051

(20,051)

(79.9)

%

Based on the concept of total health care, the Group has been promoting corporate activities to maintain and promote health and to diagnose and treat disease. Now is the time to demonstrate the Group's true value as a total healthcare provider, and harness the opportunities presented by a growing awareness of health in the new normal in order to continue to move toward the realization of sustainable growth.

For the nine-month period ended September 30, 2021, the Group recorded consolidated revenue of ¥1,107,417 million (up 3.8% over the same period of the previous fiscal year) as the four global products ABILIFY MAINTENA, REXULTI/RXULTI, JINARC/JYNARQUE and LONSURF, and the nutraceutical business, among others, contributed to an increase in sales that significantly exceeded a large decrease in sales caused by the expiration of co-agreements for SPRYCEL and E Keppra. In the pharmaceutical business, business performance was driven by sales growth of the four global products, diagnostics, clinical nutrition, and INQOVI launched in North America last year, despite an impact from the above expiration of co-agreements and the launch of a generic version of Samsca in the U.S. In the nutraceutical business, sales of POCARI SWEAT in Asia, which were affected by lower consumption due to fewer occasions to go out last year, has recovered, and sales of Nature Made in North America and EQUELLE in Japan continued to grow in line with a rising awareness toward self-management of health. Re-building a distribution system corresponding to the new normal contributed to an increase in the revenue of the Nutrition & Santé SAS brand.

In contrast, gross profit increased only 1.4% over the same period of the previous fiscal year due to changes in the product mix, one-time factors* and so on, and business profit before research and development expenses was ¥318,384 million (down 8.2%) due to increased co- promotion expenses associated with sales growth of ABILIFY MAINTENA and REXULTI/RXULTI as well as due to proactive investment in marketing activities accompanying the gradual expansion of the range of activities from the current activities in the new normal environment. Moreover, while development expenses related to vadadustat and others decreased, development expenses and so forth based on a collaboration and license agreement executed with Sumitomo Dainippon Pharma Co., Ltd. (hereinafter referred to as "Sumitomo Dainippon Pharma") and Sunovion Pharmaceuticals Inc. (hereinafter referred to as "Sunovion Pharmaceuticals") for joint development and commercialization increased, bringing research and development expenses to ¥162,521 million (up 2.8%), while business profit was ¥155,863 million (down 17.4%), and operating profit was ¥158,130 million (down 7.9%), mainly as a result of recording impairment losses.

Due to exchange rate fluctuations, etc., the Group recorded profit for the period of ¥130,033 million (down 0.4%), and profit attributable to owners of the Company of ¥126,648 million (down 0.9%).

  • One-timefactors refer to the impact of exchange rate fluctuations on the elimination of unrealized gains on inventories in the pharmaceutical business and inventories valuation loss related to influenza diagnostics.

Results by segment are as follows:

(Millions of yen)

Pharmaceuticals

Nutraceuticals

Consumer

Others

Adjustments

Total

products

Revenue

720,974

280,072

24,115

110,752

(28,496)

1,107,417

Business profit

126,854

45,905

5,767

10,813

(33,478)

155,863

Reference (FY2020 Q3)

(Millions of yen)

Pharmaceuticals

Nutraceuticals

Consumer

Others

Adjustments

Total

products

Revenue

715,124

252,767

24,105

104,038

(29,076)

1,066,959

Business profit

163,562

36,952

9,252

10,758

(31,862)

188,663

- 2 -

  1. Pharmaceuticals

Revenue for the nine-month period ended September 30, 2021 totaled ¥720,974 million (up 0.8%), with business profit of ¥126,854 million (down 22.4%).

Main products

  • Four global products
    The Company positions the long acting antipsychotic agent ABILIFY MAINTENA, the antipsychotic agent REXULTI*1/RXULTI*2, the V2-

receptor antagonist Samsca/JINARC*3/JYNARQUE*4 and the anti-cancer agent LONSURF as its four global products. Sales of those products totaled ¥360,850 million (up 10.9%).

*1: Brand name for the antipsychotic agent outside Japan and Europe.

*2: Brand name for the antipsychotic agent in Europe

*3: Brand name for autosomal dominant polycystic kidney disease ("ADPKD") treatment in multiple regions outside Japan

*4: Brand name for ADPKD treatment in the U.S.

  • Long acting antipsychotic agent ABILIFY MAINTENA

As the impact of the spread of COVID-19 continues, sales in the U.S. are increasing, mainly due to the use of direct-to-consumer advertising and a recovery trend in face-to-face detailing activities. In Japan, sales were strong mainly due to the addition of an indication for the suppression of recurrence and relapse of mood episodes in bipolar I disorder in September 2020. Also in Europe, sales increased, particularly in major markets. As a result, sales of ABILIFY MAINTENA totaled ¥96,746 million (up 10.1%).

  • Antipsychotic agent REXULTI/RXULTI

In the U.S., where antipsychotic agent REXULTI is sold as adjunctive therapy in major depressive disorder and a treatment for schizophrenia, prescriptions grew and sales increased, mainly due to promotions utilizing digital technologies, and an increase in direct-to- consumer advertising and face-to-face detailing activities. In Japan, sales were solid, with the acquisition of approval for orally disintegrating tablets in August 2021, increasing convenience, and stronger information provision activities. As a result, sales of REXULTI/RXULTI totaled ¥89,021 million (up 12.1%).

  • V2-receptor antagonist Samsca

In Japan, where the drug is sold as treatment for fluid retention in patients with heart failure and hepatic cirrhosis, ADPKD and another condition, prescriptions continued to expand through online detailing activities such as web seminars. In the U.S., where the drug is sold as a treatment for hyponatremia, generics were launched after the expiry of the exclusive sales period. As a result, sales of Samsca totaled ¥66,695 million (up 0.8%).

  • V2-receptor antagonist JINARC/JYNARQUE

In the U.S., the number of prescriptions for ADPKD increased mainly due to continued efforts to raise awareness of the disease and provide information about clinical data. As a result, sales of JINARC/JYNARQUE totaled ¥74,304 million (up 21.8%).

  • Anti-canceragent LONSURF

In the U.S., sales increased since at-home care and the use of oral anti-cancer agents*5, 6 are recommended due to the spread of COVID- 19. Prescriptions continued to be robust in Japan and Europe. As a result, sales of LONSURF totaled ¥34,082 million (up 9.8%).

*5: Pelin Cinar et al., Safety at the Time of the COVID-19 Pandemic: How to Keep our Oncology Patients and Healthcare Workers Safe. J Natl Compr Canc Netw, 2020 Apr 15;1-6.

*6: ASCO. COVID-19 Patient Care Information, Cancer Treatment and Supportive Care. https://www.asco.org/covid-resources/patient-care-info/cancer-treatment-supportive-careUpdated 17 September 2021, Accessed 19 October 2021.

  1. Nutraceuticals

Revenue for the nine-month period ended September 30, 2021 totaled ¥280,072 million (up 10.8%), with business profit of ¥45,905 million (up 24.2%).

Main products

The Company positions POCARI SWEAT, Nature Made and the Nutrition & Santé SAS brand as its three major brands. Sales of those brands totaled ¥172,663 million (up 13.2%). Total sales of its three nurture brands, the Daiya Foods Inc. brand, EQUELLE and BODY MAINTÉ, were ¥20,392 million (up 1.9%).

  • Three major brands

Sales of POCARI SWEAT, an electrolyte supplement drink, increased overall for the brand amid restrained consumer activity due to the impact of COVID-19, as a result of conducting education about hydration and replenishment of electrolytes and developing markets in line with the situation in each region, particularly overseas. In Japan, in addition to awareness-raising regarding countermeasures against heat disorder in daily life and other measures, operation support was provided for both infection prevention measures and heat disorder countermeasures at Inter High School and All Japan Junior High School Sports Festivals, and new initiatives were implemented according to the situation.

Amid a more sophisticated awareness of physical conditioning among consumers accompanying the spread of COVID-19, consumers' trust in the brand and quality of Nature Made supplements by Pharmavite LLC is further rising, and sales increased due to an increase in demand, primarily for vitamins D and C in Nature Made's main market of North America. Furthermore, in July 2021, Nature Made was selected as the No. 1*7 supplement recommended by U.S. pharmacists for the 24th consecutive year.

The Nutrition & Santé SAS brand, which sells health food products mainly in Europe, saw sales increase, mainly due to the effects of continuous product composition optimization amid increasing consumer health awareness, along with expansion of e-commerce adapted to new lifestyles.

- 3 -

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Otsuka Holdings Co. Ltd. published this content on 12 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2021 04:46:06 UTC.


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Sales 2021 1 477 B 12 911 M 12 911 M
Net income 2021 157 B 1 375 M 1 375 M
Net cash 2021 280 B 2 451 M 2 451 M
P/E ratio 2021 14,3x
Yield 2021 2,44%
Capitalization 2 242 B 19 609 M 19 607 M
EV / Sales 2021 1,33x
EV / Sales 2022 1,25x
Nbr of Employees 33 151
Free-Float 75,4%
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Technical analysis trends OTSUKA HOLDINGS CO., LTD.
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TrendsNeutralBearishBearish
Income Statement Evolution
Consensus
Sell
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Mean consensus HOLD
Number of Analysts 12
Last Close Price 4 134,00 JPY
Average target price 4 633,33 JPY
Spread / Average Target 12,1%
EPS Revisions
Managers and Directors
Tatsuo Higuchi President, CEO & Representative Director
Yuko Makino Executive Officer, Manager-Finance & Accounting
Ichiro Otsuka Vice Chairman
Yukitakeshi Matsutani Independent Outside Director
Yasushi Sekiguchi Independent Outside Director