July 31, 2009 / 7:59 AM / 10 years ago

UPDATE 3-Takeda swings back to profit but sales lacklustre

* Analyst: worries about Takeda existing drug sales

* Takeda keeps profit forecast unchanged

* Daiichi Sankyo lifts H1 outlook on Ranbaxy’s forex gain

* Takeda shares end up 2.1 pct, Daiichi Sankyo falls 2.1 pct (Adds more analyst comments)

By Yumiko Nishitani

TOKYO, July 31 (Reuters) - Takeda Pharmaceutical Co (4502.T), Japan’s biggest drugmaker, swung back to profit in April-June, recovering after costly acquisitions, but sales for new and mainstay drugs were lacklustre.

Rival Daiichi Sankyo (4568.T), Japan’s No.3 drugmaker, booked an 83 percent drop in quarterly recurring profit that it blamed on rising costs of clinical studies, as well as losses at its newly acquired Indian drugmaker Ranbaxy Laboratories RANB.BO.

Both drugmakers have been hurt by a strong yen, which has gained about 12 percent in the past year against the dollar, and higher safety bars for the regulatory approval of new drugs.

In contrast, bigger offshore rivals such as Switzerland’s Roche ROG.VX have generally reported impressive earnings, on the strength of their underlying business and free of adverse currency moves. [ID:nN23473395]

“Takeda has been hit by major setbacks in drug development and may also be facing challenges with its existing drugs,” said Kenji Masuzoe, an analyst at Deutsche Securities.

Takeda’s revenues fell 4.5 percent to 379 billion yen, with sales of Actos, a popular diabetes drug and Takeda’s best-selling product, dropping 6.6 percent to 96 billion yen.

The fall-off in sales comes despite the launches earlier this year of Kapidex to treat heartburn, a successor to Prevacid which will soon lose patent protection, and of Uloric for hyperuricemia, or excessive uric acid in the blood, for patients with gout.

“Actos has yet to lose patent protection but is already running out of steam, and Kapidex isn’t showing enough strength to succeed Prevacid,” Masuzoe said.

The outlook has worsened for Takeda’s near-term development costs and mid-term sales, after U.S. regulators requested a lengthy additional test on Takeda’s most important drug candidate, a successor to Actos, which the company had hoped would be approved in June. [ID:nN01446476]

The April-June financial first quarter saw Takeda earn 137.6 billion yen ($1.4 billion) in recurring profit, which is before tax and special items.

That compares with a loss of 6.4 billion yen in the same period a year ago, when it bought U.S. biotech firm Millennium Pharmaceutical and absorbed its part of former U.S. joint venture TAP Pharmaceuticals.

Takeda kept its annual profit forecast at 400 billion yen, broadly in line with a consensus forecast of a 421 billion yen profit from poll of 17 analysts by Thomson Reuters.

DAIICHI SANKYO

Daiichi Sankyo, which has a 64 percent stake in Ranbaxy, more than doubled its first-half recurring profit forecast to 37 billion yen, citing large foreign exchange gains which led to an unexpected surge in Ranbaxy’s April-June profits. [ID:nDEL290002]

But it maintained its annual forecast of 69 billion yen, lower than a consensus forecast of 87 billion yen in a poll of 16 analysts by Thomson Reuters.

“We raised the half-year profit targets because Ranbaxy’s first-half results became concrete. For the full-year outlook, we kept it because the rupee’s outlook is uncertain, senior managing director Hitoshi Matsuda told a news conference.

Deutsche’s Masuzoe said investors were focused on the sales outlook for Effient, a closely watched blood thinner, also known as prasugrel that was developed with Eli Lilly (LLY.N).

“If it turns out to be like Takeda’s Kapidex or Urolic, investors will be discouraged,” he said.

Effient has posted paltry second-quarter European sales, raising some initial concern about its long-term sales prospects overseas and in the crucial U.S. market, where it will be launched in the next few weeks. [ID:nN22333444]

Recurring profit fell to 7.2 billion yen in the April-June first quarter from 40.9 billion yen in the same period last year.

Takeda shares closed up 2.1 percent, rising only slightly from levels before the announcement, while Daiichi Sankyo finished down 2.1 percent at 1,720 yen, little changed from earlier levels. The Nikkei average .N225 ended up 1.9 percent. (Editing by Edwina Gibbs)

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