* Cuts recurring profit f’cast to Y200.5 bln, below consensus
* Hit by yen, competition from generic version of Prograf
* Q2 recurring profit at Y58.69 bln, down 21 percent
* Competition from generic rival tougher than expected
* Sees generic rival taking 40 pct of Prograf’s sales in 2H
TOKYO, Nov 5 (Reuters) - Astellas Pharma 4503.T, Japan's No.2 drugmaker, cut its outlook further below market expectations as tough competition from generic drugmakers, the yen's strength and R&D costs took their toll.
Astellas, which like other global drugmakers is scrambling to develop next-generation drugs as patents on mainstay drugs expire, also reported on Thursday a 21 percent fall in quarterly recurring profit.
It was Astellas' first earnings report since Novartis AG's NOVN.VX unit Sandoz launched a generic rival to Astellas' best-selling drug, Prograf, which helps prevent the rejection of a kidney or liver transplant. [ID:nLB598268]
The Sandoz drug, still the sole generic version of Prograf, debuted in the United States in August, well after Prograf’s patent expiration in April 2008.
“The market penetration by the generic drug for Prograf has been faster than anticipated. We now expect generic drugs to account in the second half for around 40 percent of the market Prograf used to own,” Yoshihiko Hatanaka, Astellas’ chief financial officer, told a news conference.
“Accordingly, we have lowered our U.S. sales outlook for the second half year,” he said, adding that the company will also need to adjust inventories because of the slide in Prograf’s sales volume.
Hatanaka also said generic drugs have been gaining market share amid the weak economic conditions in the United States.
The outlook cut also reflects the fees Astellas recently agreed to pay for the rights to Medivation Inc's MDVN.O cancer drug. [ID:nN27232593]
Astellas lowered its recurring profit forecast for the year to March 2010 by 8.4 percent to 200.5 billion yen from 219 billion yen.
The new estimate falls short of a consensus forecast of 228 billion yen in a poll of 13 analysts by Thomson Reuters I/B/E/S.
For the July-September second quarter, Astellas posted a recurring profit of 58.69 billion yen, down from 74.46 billion yen in the same period a year ago.
Last week, Japan's drug industry leader Takeda Pharmaceutical 4502.T and other Japanese drugmakers reported mixed results, reflecting the varied performances of their mainstay drugs, while they similarly faced pressure from the yen's strength.
Overseas rivals reported relatively upbeat results for the latest quarter. [ID:nN22535787] U.S. giant Pfizer PFE.N posted profit growth as cost cuts offset a negative foreign exchange impact and falling drug sales. [ID:nN208741]
Astellas also said it would spend up to 30 billion yen ($331 million) to buy back as much as 1.7 percent of its outstanding shares by Dec. 11, as it seeks to improve returns on its capital.
Prior to the announcement, Astellas shares closed down 3 percent at 3,290 yen, underperforming a 1.3 percent fall in the benchmark Nikkei 225 stock average .N225. ($1=90.60 Yen) (Reporting by Yumiko Nishitani)