Japan’s leading drugmaker, Takeda, pleased investors with a set of better-than-expected record results for the first half of fiscal year, with profit rising 11% to 181.2 billion yen ($1.55 billion), or 204.78 yen a share, as high demand for its diabetes and hypertension offerings countered mounting R&D expenses.

Revenues grew 5.8% to 599.8 billion yen, driven by sales of its antihypertensive Blopress (candesartan) in Japan, pushing a 24% rise to 18 billion yen, and a stunning performance by it and partner Eli Lilly’s diabetes agent Actos (pioglitazone HCl) in the USA, which jumped nearly 20% to 18.5 billion yen, the group said.

But profit was held back by soaring R&D costs, which rocketed 53% to 141 billion yen, as well as higher marketing costs for Rozerem (ramelteon), a sleep aid launched in the USA earlier this year and competes with French drugmaker Sanofi-Aventis’ Ambien (zolpidem tartrate).

Commenting on the results, Takeda president Yasuchika Hasegawa said during a news conference: “Drug sales were stronger than expected, especially abroad. Our profit margin improved thanks to robust sales of in-house products and divestiture of a non-drug operation helped offset higher research and development spending.”

Consequently, Takeda has upped its full-year outlook on the back of its strong performane in the first half of the year, now forecasting record net profit of 310 billion yen compared to its earlier prediction of 295 billion yen.