Japan Results Roundup: Strong Mainstays, Currency Windfall Help Top Line

The latest fiscal second quarter financial announcements from major Japanese pharma firms Daiichi Sankyo Co., Ltd. and Astellas Pharma, Inc. were characterized by high growth, largely because of mainstay products’ solid performance overseas and helped on a reported basis by the continued weakness of the yen.

Chugai Pharmaceutical Co., Ltd., Shionogi & Co. Ltd. and Eisai Co., Ltd. all faced an overall decline in revenues, however, due to decreased income in the Japanese market. But their top products also performed well outside the country, notably Eisai’s Alzheimer’s disease drug Leqembi (lecanemab), which saw its global sales surge 8,685% year-on-year to JPY6.3bn ($44m).

But with contributions from overseas sales and the weak yen playing such a large part in the figures, Japanese pharma majors are also now bracing for the US Federal Reserve Board’s interest rate decision in autumn, which could have a potentially large impact on JPY/USD forex rate. The yen has also been strengthening against the US dollar in recent weeks after measures by the Bank of Japan.

The central bank’s recent decision to raise its interest rate by 2.5% had already served to bolster the Japanese currency from JPY153.74 at the end of July to JPY142.95 (-7.1%) in early August.

Companies reported figures for the first three months of their fiscal year ended 30 June - Chugai follows a calendar financial year and so released its first half results.

Mainstays, Currency Drive Takeda

Takeda’s Q1 was marked by 2.1% revenue growth at constant exchange rates (CER), led by mainstay Entyvio (vedolizumab) for ulcerative colitis and Crohn’s disease, which grew by 7.6% CER globally to JPY234.4bn, helped by a new subcutaneous injection pen in the US. The company is aiming for 16% year-on-year growth for the drug in the full year, helped by increased pen uptake across both indications.

Takhzyro (lanadelumab) for hereditary angioedema meanwhile grew by 19.8% CER to JPY56.0bn in the quarter, helped by US pediatric uptake, while dengue vaccine Qdenga brought in JPY9.5bn. “We are very pleased with the take-off [of Qdenga],” president and CEO Christophe Weber told the results briefing, “the product is off to a fantastic start.”

It generated revenues of JPY9.5bn in the quarter and manufacturing capacity is being ramped up, Weber noted.

Currency effects added a massive JPY127.2bn to Takeda’s top line in the three months, when the top Japanese firm also booked restructuring costs of JPY40.9bn. Looking ahead, US generic erosion of attention deficit hyperactivity disorder (ADHD) drug Vyvanse (lisdexamfetamine) is expected to accelerate in the coming quarters after its loss of exclusivity around a year ago, as generic supplies improve. US revenues for the drug plunged 32.0% CER in Q1.

Takeda has so far not revised its financial outlook for the full fiscal year.

Xtandi Leads Astellas' Growth

Astellas closed a solid first quarter, driven in large part by growth for prostate cancer drug Xtandi (enzalutamide), particularly in the US (JPY119.8bn, +38.0%), helped by positive results from the Phase III EMBARK study in for non-metastatic, castration-sensitive prostate cancer.

Antibody-drug conjugate (ADC) Padcev (enfortumab vedotin) also expanded its sales to JPY38.4bn (+152%), with the US marking high growth to JPY27.2bn (+158.9%), helped by penetration for first-line use for metastatic urothelial cancer.

Despite last year’s struggles in the US, Veozah (fezolinetant) for menopausal symptoms logged JPY6.6bn (+972%) globally, as its sales in the country grew to JPY6.1bn (+895.9%) and its market expanded to Europe, Canada, China and Hong Kong.

The first-in-class anti-CLDN 18.2 antibody Vyloy (zolbetuximab) recorded its first revenues in Japan (JPY0.3bn) after its global first approval there in March for gastric cancer. Although it received a US Complete Response Letter due to manufacturing issues, the drug received a positive opinion in the EU in July.

Astellas noted it has been in discussions with the Food and Drug Administration (FDA) for an approval and a new PDUFA action date of 9 November has now been set. (Also see "Astellas’ Zolbetuximab Approval Timeline Unclear After Manufacturing Issues Prompt CRL" - Pink Sheet, 10 January, 2024.)

Daiichi Sankyo Marches On Despite HER3-DXd Delay

Daiichi Sankyo’s global success with Enhertu (trastuzumab deruxtecan) continued, with the HER2-directed ADC expanding its global market further to JPY129.6bn (+58.6%).

Other positive elements included European sales of the anticoagulant Lixiana (edoxaban; JPY45.4; +40.6%) along with cholesterol-lowering products Nilemdo (bempedoic acid) and Nustendi (bempedoic acid and ezetimibe) (JPY7.8bn, +158.6%). Daiichi announced the expansion of its production line in Europe in February. (Also see "Daiichi Sankyo Commits To Major Expansion In Germany As Part Of Global ADC Push" - Scrip, 26 February, 2024.)

The firm also recorded an upfront payment JPY7.2bn from its massive collaboration deal with Merck & Co., Inc. for five ADC candidates.

However, the lead asset among the five DXd ADCs covered by the deal and filed for US approval, patritumab deruxtecan (HER3-DXd), received a US Complete Response Letter in June due to manufacturing-related issues.

Daiichi Sankyo told its results call that it “will work closely with the FDA and the manufacturer to address the feedback as quickly as possible,” while proceeding with approval filings outside the US using data from the Phase III HERTHENA Lung02 study. Top-line results from this are expected in the first half of the fiscal year (ending 30 September).

Chugai Rides Hemlibra Overseas

Chugai’s first half was marked by the ending of supplies of Ronapreve (casirivimab/imdevimab) to the Japanese government for COVID-19 stockpiling, which was projected to be worth JPY81.2bn last year.

Total overseas revenues grew to JPY268.4bn (+28.2%) on the back of the hemophilia therapy Hemlibra (emicizumab) outperforming expectations with JPY160.6bn (+54.6%). Demand in established markets outside the US and Europe led to double-digit growth, noted CEO Osamu Okuda at a press conference in Tokyo on 31 July.

“Although it is a much smaller market vs the US and EU, according to Chugai, the region requires bigger inventory due to their fast growth and higher supply chain uncertainty,” noted Miki Sogi, an analyst at Bernstein, after the Q2 results. “When asked whether this is a temporary windfall, Chugai was surprisingly not concerned,” despite their innate conservatism, the analyst added.

Due to the overseas growth, the weak yen was also a major contributor. Okuda told Scrip the firm is keeping a close watch on US interest rates as an impact on the company’s overseas performance, whether positive or negative, is inevitable.

Chugai’s sales in the Japanese market struggled, however, falling to JPY217.2bn (-30.7%), due partially to regular price cuts under the national health insurance drug reimbursement scheme. Hemlibra was affected by a 9.4% cut last year after its growth exceeded original official sales forecasts. (Also see "Japan Sets Luxturna, Other New Prices While Cutting Selected Fast Growers" - Pink Sheet, 29 August, 2023.)

The Roche affiliate has also recently revised its long-term strategy, TOP I 2030, with more precise measures to enhance R&D and supply chains, and said it will also implement new HR-related steps. From 2025, it will conditionally abolish its retirement age to allow employees over 65 to continue their career upon mutual agreement from their teams and the company.

Home Market Falls For Shionogi

Shionogi closed its first quarter with lower sales, due in part to the completion of divestment of ADHD drugs Intuniv (guanfacine) and Vivanse (lisdexamfetamine) to Takeda. (Also see "Shionogi Still Hopeful For Xocova In US Despite Phase III Fail" - Scrip, 16 May, 2024.)

Overall Japanese sales of COVID-19-related and flu products including Xocova (ensitrelvir) and Xofluza (baloxavir) also declined. In contrast, overseas sales marked a significant increase. The HIV franchise via ViiV Healthcare showed robust growth to close the quarter with revenues of JPY59.8bn (+35.1%). The antibiotic cefiderocol also contributed to growth in the US (JPY4.8bn, +50.5%) and the EU (JPY3.1bn, +45.7%) and has just been filed for approval in China via subsidiary Ping An-Shionogi.

The firm is still focused on pursuing approval filings outside Japan for the COVID-19 antiviral Xocova (ensitrelvir), despite the 3C-like protease inhibitor missing its primary endpoint in the global Phase III SCORPIO-HR study. (Also see "Shionogi Still Hopeful For Xocova In US Despite Phase III Fail" - Scrip, 16 May, 2024.)

In other R&D developments, Shionogi expects Japanese approval for SDT-001, a localized version of Akili Interactive Labs’s digital therapeutic mobile app AKL-T01 for ADHD by the end of this summer. (Also see "First Digital Therapeutic App Filed For Approval In Expanding Japan ADHD Market" - Scrip, 4 March, 2024.)

The firm also noted it’s planning to file for the Japanese approval of Sage Therapeutics, Inc.’s antidepressant zuranolone by the end of the fiscal second quarter (30 September).

Leqembi Builds Momentum At Eisai

Eisai’s mainstays showed global growth, including anticancer drug Lenvima (lenvatinib; JPY85.3bn, +18%) and insomnia therapeutic Dayvigo (lemborexant; JPY12.1bn, +29%), while Alzheimer’s disease therapy Leqembi (lecanemab) global revenue jumped to JPY6.3bn (+8,685%) in the quarter. US sales of the beta-amyloid-targeting antibody were JPY4.6bn (+91.7%), while Japan brought in JPY1.5bn (+400%) and mainland China JPY0.2bn.

The main cause of the minus overall growth for the company was the transfer in Japan of elacestrant, a selective estrogen receptor degrader, to DRI Healthcare Trust; the drug had sales of JPY12.7bn last year.

In July, Leqembi received a negative opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP), due to concerns over the balance between its efficacy and the risk of amyloid-related imaging abnormalities. (Also see "Analysts Split On Eisai’s Chances Of Changing EU Regulator’s Mind On Leqembi" - Scrip, 29 July, 2024.)

Eisai told a results briefing on 2 August it “is confident in the [Phase-III] Clarity AD study results and will seek seek re-examination of this opinion and work closely with the CHMP to receive early approval.” It stressed the protocol and statistical analytical method for the study “was determined in advance in consultation with global health authorities, including the EMA.”

In the US, an application was filed in March 2024 for its expanded use as an intravenous maintenance treatment, with a PDUFA date in January 2025.

(With contributions from Ian Haydock in Tokyo.)