Shionogi (4507): FY2025 Results Summary — Record Profit Amid ViiV Equity-Method Shift and RADICAVA U.S. Launch

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Shionogi & Co., Ltd. reported FY2025 consolidated results in which revenue and all profit categories reached record highs, with revenue and operating profit setting records for the fourth consecutive fiscal year. During the year the company completed its equity acquisition in ViiV Healthcare Ltd., which was reclassified as an equity-method affiliate as of March 31, 2026, and completed the transfer of the edaravone business, establishing a new U.S. company for RADICAVA effective April 1, 2026. For FY2026, Shionogi forecasts revenue of 700.0 B yen, a 40.1% change year on year, with operating profit and profit attributable to owners of parent both expected to reach new records.

Consolidated Results (Full-Year Actual)

Full-year FY2025 revenue was 499.7 B yen (99.9% of the 500.0 B yen forecast, 14.0% change year on year), and operating profit was 166.7 B yen (90.1% of the 185.0 B yen forecast, 6.5% change year on year). Profit before tax was 238.9 B yen (103.0% of forecast, 19.0% change year on year) and profit attributable to owners of parent was 205.2 B yen (109.1% of forecast, 20.4% change year on year), both exceeding forecast. The company attributed the operating profit shortfall versus forecast to expenses related to business investments and U.S. operations and to an impairment loss on development assets reflecting clinical trial results, while the outperformance in profit before tax and profit attributable to owners of parent reflected an increase in dividends driven by ViiV’s solid business growth. M&A contributed 40.5 B yen in revenue from Torii and 8.3 B yen in royalties related to the former JT pharmaceutical business.

Item	FY2025 Forecast	FY2025 Result	Achievement (%)	FY2024 Result	YoY Change (%)	YoY Change (Amount)
Revenue	500.0	499.7	99.9	438.3	14.0	61.4
Cost of Sales	82.0	82.5	100.5	63.8	29.2	18.6
Gross profit	418.0	417.2	99.8	374.4	11.4	42.8
SG&A + R&D expenses total	240.0	255.8	106.6	214.7	19.2	41.2
SG&A	120.0	133.0	110.8	106.1	25.4	27.0
R&D expenses	120.0	122.8	102.4	108.6	13.1	14.2
Other income & expenses	7.0	5.3	76.4	(3.2)	–	8.5
Operating profit	185.0	166.7	90.1	156.6	6.5	10.1
Finance income & costs	47.0	72.2	153.6	44.1	63.5	28.0
Profit before tax	232.0	238.9	103.0	200.8	19.0	38.2
Profit attributable to owners of parent	188.0	205.2	109.1	170.4	20.4	34.7
EBITDA	206.0	187.7	91.1	179.3	4.7	8.4

(Unit: B yen)

Segment Results

Prescription drug revenue was 123.5 B yen (25.0% change year on year, 86.0% of forecast), including a 40.5 B yen contribution from Torii, driven by sales growth of Quviviq following the lifting of prescribing restrictions, partly offset by a decrease in sales of acute respiratory virus infection treatments. Overseas subsidiaries/export revenue was 65.0 B yen (9.9% change year on year), driven by increased sales of Fetroja and Fetcroja, partly offset by a decrease in the China business. Royalty income was 278.6 B yen (13.9% change year on year), driven by solid growth in the HIV franchise (ViiV), which contributed 261.3 B yen (8.7% change year on year).

Segment	FY2025 Forecast	FY2025 Result	Achievement (%)	FY2024 Result	YoY Change (%)	YoY Change (Amount)
Prescription drugs	143.5	123.5	86.0	98.8	25.0	24.7
Overseas subsidiaries/export	61.0	65.0	106.5	59.1	9.9	5.9
Shionogi Inc. (US)	27.2	28.7	105.8	23.4	22.9	5.4
Shionogi B.V. (EU)	19.3	20.8	107.8	16.8	23.4	3.9
Shionogi China	5.9	6.2	104.6	8.7	(28.3)	(2.5)
Contract manufacturing	14.0	15.1	107.6	17.3	(12.7)	(2.2)
OTC and quasi-drug	17.5	15.0	86.0	16.8	(10.5)	(1.8)
Royalty income	261.5	278.6	106.5	244.7	13.9	33.9
HIV franchise	245.0	261.3	106.7	240.4	8.7	20.9
Royalty income – Others	16.5	17.3	104.7	4.3	304.9	13.0
Others	2.5	2.5	101.6	1.7	51.1	0.9
Total	500.0	499.7	99.9	438.3	14.0	61.4

(Unit: B yen)

FY2026 Forecast

For FY2026, Shionogi forecasts revenue of 700.0 B yen (40.1% change year on year) and operating profit of 220.0 B yen (32.0% change year on year), both expected to reach record highs for a fifth consecutive year, with profit attributable to owners of parent forecast at 210.0 B yen (2.4% change year on year), a record for a third consecutive year. Profit before tax is forecast at 220.0 B yen, a (7.9)% change year on year. Growth drivers cited include the start of RADICAVA sales in the U.S. (forecast at 101.7 B yen, within Shionogi Inc. (US) revenue of 138.7 B yen), further growth of cefiderocol in the U.S. and Europe, continued growth from the HIV franchise, and annual royalty income from the former JT pharmaceutical business. Forecast exchange rate assumptions are USD/JPY 153.0 (FY2025 result: 150.67), GBP/JPY 205.0 (201.86), and EUR/JPY 184.0 (174.65).

Item	FY2026 Forecast (Full Year)	FY2026 Forecast (1H)	FY2025 Result	YoY Change (%)	YoY Change (Amount)
Revenue	700.0	340.0	499.7	40.1	200.3
Cost of Sales	120.0	64.0	82.5	45.5	37.5
Gross profit	580.0	276.0	417.2	39.0	162.8
SG&A + R&D expenses total	395.0	197.0	255.8	54.4	139.2
SG&A	240.0	118.0	133.0	80.4	107.0
R&D expenses	155.0	79.0	122.8	26.2	32.2
Other income & Expenses	35.0	17.0	5.3	554.7	29.7
Operating profit	220.0	96.0	166.7	32.0	53.3
Finance income & costs	–	–	72.2	–	(72.2)
Profit before tax	220.0	96.0	238.9	(7.9)	(18.9)
Profit attributable to owners of parent	210.0	108.0	205.2	2.4	4.8
EBITDA	315.0	152.0	187.7	67.8	127.3

(Unit: B yen)

Segment	FY2026 Forecast (Full Year)	FY2026 Forecast (1H)	FY2025 Result	YoY Change (%)	YoY Change (Amount)
Prescription drugs	178.6	79.9	123.5	44.7	55.2
Overseas subsidiaries/export	175.2	85.4	65.0	169.7	110.3
Shionogi Inc. (US)	138.7	68.0	28.7	382.7	110.0
RADICAVA	101.7	51.8	–	–	101.7
Shionogi B.V. (EU)	22.6	11.1	20.8	8.7	1.8
Shionogi China	5.3	2.5	6.2	(15.5)	(1.0)
Contract manufacturing	14.4	7.7	15.1	(4.2)	(0.6)
OTC and quasi-drug	18.8	8.3	15.0	25.0	3.8
Royalty income	310.6	157.7	278.6	11.5	32.0
HIV franchise	276.0	139.1	261.3	5.6	14.7
Royalty income – Others	34.6	18.6	17.3	100.3	17.3
Others	2.3	0.9	2.5	(9.3)	(0.2)
Total	700.0	340.0	499.7	40.1	200.3

(Unit: B yen)

Shareholder Returns

The year-end dividend is scheduled to be increased by 5 yen per share from the previous forecast to 38 yen per share, bringing the annual dividend to 71 yen per share, marking the 14th consecutive year of dividend increases. Shionogi is planning a 15th consecutive annual dividend increase for FY2026. FY2025 ROE was 13.5% and DOE was 4.0%. The company’s basic policy is to allocate expanding cash flow to growth investments and shareholder returns, aiming to steadily increase dividend amounts in line with business growth while implementing flexible share buybacks in response to investment conditions and the market environment, with profit returns adjusted flexibly considering DOE and ROE.

Progress in Pipeline (Toward the 2030 Vision)

Following completion of the ViiV Healthcare equity acquisition, Shionogi’s ownership stake rose from 10% to 21.7%, and ViiV was reclassified as an equity-method affiliate as of March 31, 2026; HIV royalty income continues to be recognized as P/L revenue as before, equity-method income is newly recognized within other income and expenses, and dividend income from the increased stake is recognized on the balance sheet under non-current assets rather than in the P/L, though it is expected to significantly increase cash flow. In infectious diseases, FY2025 pipeline progress included Phase 2 top-line results for Secutrelvir [S-892216] (COVID-19, oral treatment), a Phase 2b FPI for S-337395 (RSV infections), a Phase 3 LPO for olorofim (invasive aspergillosis), and approval of cefiderocol in China. In QOL diseases, the Phase 2/3 trials of zatolmilast for Fragile X syndrome did not meet their primary endpoints, though statistically significant improvements were observed on several endpoints, including the NRS Language/Communication and Daily Function endpoint in the adult trial (CNS-301); the company plans to determine its development strategy for zatolmilast in the second half of 2026 based on the pivotal trial results. Other progress included a Phase 2 FPI for S-606001 (Pompe disease), submission in Japan of an additional Delgocitinib lotion formulation, and approval of naldemedine in China.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.