UPDATE 3-Daiichi Sankyo, Astellas forecast sharp profit fall

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By Edwina Gibbs

TOKYO, May 13 (Reuters) - Japanese drug makers Daiichi Sankyo Co Ltd (4568.T: Quote, Profile, Research, Stock Buzz) and Astellas Pharma Inc (4503.T: Quote, Profile, Research, Stock Buzz) booked rises in annual operating profit on Tuesday but forecast a surprise sharp drop in earnings for the current year on higher R&D costs.

In particular, Daiichi Sankyo's results fell short of consensus estimates and its projections were far lower than expectations on weakness in its domestic drug business, which pushed its shares down 4.2 percent.

"The company had said this business year would be tough but their projection that profits are going to slide to this extent really leaves a negative impression," said Kumi Miyauchi, an analyst at Daiwa Institute of Research.

Daiichi Sankyo forecast operating profit will slide 16 percent to 130 billion yen ($1.25 billion) for the year that started on April 1, which compares with a Reuters consensus estimate of 171 billion yen from 14 analysts.

It comes after a 29 percent rise in core operating profits to 155 billion yen that strips out effects of the merger of Daiichi and Sankyo and changes in accounting periods.

Net profit is also expected to fall 16 percent to 80 billion yen.

The success of its high blood pressure medicine Benicar and the possible approval of prasugrel, a closely watched blood thinner it is developing with Eli Lilly (LLY.N: Quote, Profile, Research, Stock Buzz), has spurred the company to plan a major increase in its U.S. sales force.