Nippon Shinyaku (4516): FY2025 Results Summary — Fourth Straight Year of Revenue Growth; Net Profit Dips on Higher Tax Burden

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Nippon Shinyaku Co., Ltd. (TSE: 4516) announced its FY2025 financial results (fiscal year ended March 31, 2026) on May 15, 2026. Revenue rose 6.6% year on year to 170,771 million yen, marking the fourth consecutive period of revenue growth, with increases in both the pharmaceuticals and functional food businesses. Operating profit edged up 0.1% to 35,496 million yen, the third consecutive period of growth, as higher cost of sales and SG&A expenses weighed on margins. Profit attributable to owners of parent decreased 8.7% to 29,721 million yen due to changes in the tax rate. For FY2026, the company forecasts revenue of 200 billion yen (up 17.1% YoY) and operating profit of 38 billion yen (up 7.1% YoY), driven in part by the planned U.S. launch of CAP-1002 (deramiocel).

Consolidated Results (Full-Year Actual)

Revenue grew on new product lines including Uptravi and Fintepla, the inclusion of Erleada in revenue through a reverse co-promotion arrangement, and royalty revenue growth from overseas sales of Uptravi. The cost of sales ratio worsened by 1.7 points YoY to 33.6%, reflecting changes in the pharmaceutical product sales mix and NHI drug price revisions. SG&A expenses rose 14.6% on higher U.S. sales expenses at NS Pharma and increased commissions for promotional activities of Uptravi. Other income increased 246.0% to 3,025 million yen, mainly from foreign exchange gains of 2,265 million yen.

Item (million yen)	FY2024	FY2025	Change	%
Revenue	160,232	170,771	+10,539	+6.6%
(Pharmaceuticals)	138,654	148,484	+9,829	+7.1%
(Functional Food)	21,577	22,287	+710	+3.3%
Cost of sales	51,116	57,460	+6,343	+12.4%
SG&A expenses	38,011	43,565	+5,554	+14.6%
R&D expenses	34,341	36,713	+2,372	+6.9%
Operating profit	35,450	35,496	+46	+0.1%
Profit before tax	36,135	36,462	+327	+0.9%
Profit attributable to owners of parent	32,558	29,721	-2,837	-8.7%

Segment Results

In the Pharmaceuticals segment (revenue 148,484 million yen, up 7.1% YoY), ethical drugs grew 7.3% to 90,062 million yen on growth of Uptravi and Fintepla and the recognition of Erleada revenue through a reverse co-promotion arrangement. Revenues from the licensing of industrial property rights rose 8.5% to 49,457 million yen on royalty revenue growth from increased overseas sales of Uptravi. Profit in co-promotion declined 2.2% to 8,964 million yen; Yuvanci’s sales increased, but revenue recognition for Erleada has changed. For Viltepso (viltolarsen), sales in Japan rose 2.4% to 4,775 million yen, while U.S. sales fell 4.1% to 16,413 million yen (108.86 million U.S. dollars) as the average dose per patient decreased due to a younger patient population; the company expects revenue growth from an increase in the number of new patients and longer-term administration.

The Functional Food segment (revenue 22,287 million yen, up 3.3% YoY) increased revenue on new product launches and strengthened sales activities. Protein preparations rose 1.4% to 13,680 million yen on growth in the egg protein share and strong sales of protein powder, and supplements grew 16.8% to 2,821 million yen with sales increases in both the athlete and anti-aging care categories. Preservatives declined 0.3% to 3,269 million yen in a competitive market.

Segment / Line item	FY2025 (million yen)	YoY change	YoY %
Pharmaceuticals: Ethical drugs	90,062	+6,163	+7.3%
Pharmaceuticals: Licensing of industrial property rights	49,457	+3,871	+8.5%
Pharmaceuticals: Profit in co-promotion	8,964	-205	-2.2%
Functional Food: Protein preparations	13,680	+194	+1.4%
Functional Food: Preservatives	3,269	-8	-0.3%
Functional Food: Supplements	2,821	+406	+16.8%
Functional Food: Health food ingredients	1,214	+92	+8.2%

FY2026 Forecast

For FY2026, Nippon Shinyaku forecasts revenue of 200,000 million yen (up 17.1% YoY), operating profit of 38,000 million yen (up 7.1%), and profit attributable to owners of parent of 30,300 million yen (up 1.9%). Revenue growth is expected from the U.S. launch of CAP-1002 (deramiocel), growth in domestic products, and royalty revenue growth from increased overseas sales of Uptravi. In the Pharmaceuticals segment, ethical drugs are forecast at 114,900 million yen (up 27.6%), with CAP-1002 forecast to contribute 11,400 million yen in U.S. sales. The foreign exchange assumption is 150.0 yen per U.S. dollar; for every 1 yen depreciation against the USD, revenue is expected to increase by approximately 550 million yen and operating profit by approximately 410 million yen.

Item (million yen)	FY2025 (Actual)	FY2026 (Forecast)	Change	%
Revenue	170,771	200,000	+29,228	+17.1%
(Pharmaceuticals)	148,484	176,500	+28,015	+18.9%
(Functional Food)	22,287	23,500	+1,212	+5.4%
Operating profit	35,496	38,000	+2,503	+7.1%
Profit before tax	36,462	38,600	+2,137	+5.9%
Profit attributable to owners of parent	29,721	30,300	+578	+1.9%

Shareholder Returns

The annual dividend for FY2025 was 124 yen per share (interim 62 yen), and the company forecasts the same annual dividend of 124 yen per share (interim 62 yen) for FY2026. The consolidated payout ratio was 28.1% for FY2025 and is projected at 27.6% for FY2026, based on basic earnings per share of 441.00 yen for FY2025 and 449.55 yen forecast for FY2026. The dividend on equity ratio for FY2025 was 3.1%.

Item	FY2025	FY2026e
Interim dividend per share	¥62	¥62
Annual dividend per share	¥124	¥124
Basic earnings per share	¥441.00	¥449.55
Payout ratio (consolidated)	28.1%	27.6%
Dividend on equity ratio	3.1%	–

Pipeline and Topics

For CAP-1002 (deramiocel), a treatment for Duchenne muscular dystrophy cardiomyopathy filed in the U.S. in partnership with Capricor Therapeutics, the FDA has set a new PDUFA target action date of August 22, 2026. On May 7, 2026, a lawsuit was filed against Nippon Shinyaku in the Superior Court of New Jersey; the company states that it recognizes Capricor’s claims lack merit but remains open to constructive discussions in the best interests of DMD patients and their families in the U.S. For RGX-121 (clemidsogene lanparvovec), a gene therapy for mucopolysaccharidosis type II partnered with REGENXBIO, the clinical hold placed by the FDA in January 2026 has been lifted; the FDA issued a Complete Response Letter in February 2026, and REGENXBIO has filed an appeal and is continuing to engage the agency regarding a path forward.

Other pipeline updates include the March 2026 launch of Elzonris (tagraxofusp) for blastic plasmacytoid dendritic cell neoplasm in Japan, the filing of Gazyva (obinutuzumab) for idiopathic nephrotic syndrome in May 2026, the start of Phase 3 for NS-304 (selexipag) in arteriosclerosis obliterans in April 2026, and a collaboration agreement with xFOREST Therapeutics on drug discovery research targeting RNA structures in March 2026.

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.