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Daiichi Sankyo aims for 50% overseas sales by 2020

  • May 25, 2017
  • , Nikkei Asian Review , 5:45 a.m.
  • English Press

TOKYO — Having stumbled in one international acquisition, Daiichi Sankyo is again sharpening its focus outside Japan, with the goal of earning more than half of its revenues abroad as soon as the first half of 2020.

 

In fiscal 2016, Daiichi Sankyo generated just 39% of its sales abroad — the lowest ratio among five major drugmakers in Japan. With sluggish growth in the domestic market, however, the company will step up its efforts to cultivate overseas customers, with a focus on the growth field of cancer drugs.

 
 

“It would be good to reach 50-50 by fiscal 2020,” President Sunao Manabe said of the sales goal. The ratios “will change further with the introduction of cancer drugs,” he added.

 

The company plans to release a breast cancer treatment in Europe in fiscal 2017, and file by 2020 for approval of multiple blockbuster candidates, including a leukemia treatment.

 

Daiichi Sankyo also plans a 22 billion yen ($196 million) investment in the U.S. for its unit Luitpold Pharmaceuticals to boost the production capacity of two facilities that make injections and anemia treatments, by 2020. For the time being, the target is to increase Luitpold’s sales by about 70% from fiscal 2015 to 150 billion yen in fiscal 2020.

 

The Japanese company, meanwhile, will expand sales of its mainstay anticoagulant drug Edoxaban to Russia and nearby countries via a tie-up with French company Servier. For Europe, it will join with Merck group of the U.S. to increase sales. Daiichi Sankyo envisions the drug to be a blockbuster to generate more than 100 billion yen worldwide in fiscal 2020.

 

Daiichi Sankyo will also cut costs overseas to boost profitability. It seeks to save more than 50 billion yen cumulatively by fiscal 2020 by consolidating procurement, previously managed separately by region. 

 

The company aims for an 86% jump in operating profit from fiscal 2016 levels to 165 billion yen in fiscal 2020. Sales for that year are targeted at 1.1 trillion yen, up 15%.

 

The company needs to rebuild its overseas strategy after its 2008 purchase of Ranbaxy Laboratories ended in failure. The Indian company, for which Daiichi Sankyo paid 500 billion yen, had quality problems. So Daiichi Sankyo was unable to reap the expected synergies and had to unload its stake by 2015.

 

In fiscal 2016, Daiichi Sankyo was the leader in prescription drug sales in Japan. But in overseas exposure, rivals Takeda Pharmaceutical and Astellas Pharma are far ahead, with more than 60% of sales generated abroad.

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