Japanese firm Astellas Pharma saw its profit figures for the first quarter of the year plunge by almost 30% after hefty investments in its research and development portfolio and price cuts in the domestic market weighed heavily on its figures.
Japan's drugmakers have been hit by a cost-cutting drive from the country's Ministry of Health and Welfare's National Health Insurance system, which has reduced the price of pharmaceuticals by an average 6.7% since April. Although sales at the firm rose 8% to 230 billion yen ($1.9 billion), with overseas revenue accounting for nearly one-half of this figure, the NHI price slash helped send Astellas' net profit down 28% to 28 billion yen, as did a 35 billion yen upfront payment to FibroGen for its anti-anaemia therapies and an almost doubling in its R&D investment to 66 billion yen. It could have been worse, though, were it not for an exceptional gain of 21 billion yen from the sale of its over-the-counter unit Zepharma in April.
The firm's top-selling domestic products during the quarter were the blood pressure lowerer Micardis (telmisartan), the immunosuppressant Prograf (tacrolimus), both of which performed well in Japan despite the price cuts. However, Harnal (tamsulosin) for benign prostatic hyperplasia failed to impress after struggling to overcome both a price cut and generic competition. Elsewhere, Prograf and Vesicare (solifenacin) for overactive bladder put in good showings, as did Amevive (alefacept) for psoriasis, which was acquired from Biogen Idec in April.
Astellas was created in April 2005 through the merger of Yamanouchi and Fujisawa and, since that time, has worked steadily to flesh out its bag of products, inking a number of deals in a little over a year of its existence. It currently has eight drugs sitting with Japanese regulators - some acquired through licensing, others developed in-house - as well as nine Phase III programmes in the pot and more coming through behind, while other offerings are coming up to the boil in the USA and Europe.
For the full year, Astellas is forecasting net profits of 123 billion yen, up 20 billion yen from the year-earlier period, on sales up a similar figure to 902 billion yen. It is also planning a buyback scheme to purchase up to 2.7% of its outstanding shares for up to 75 billion yen as part of a bid to improve shareholder returns.