Daiichi Sankyo (4568): FY2025 Results Summary — Core Operating Profit Up 15.1% as New 5-Year Plan Targets Global Top 5 Oncology Status

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Daiichi Sankyo Co., Ltd. reported FY2025 (fiscal year ended March 2026) consolidated revenue of 2,123.0 Bn JPY, up 12.6% year on year, driven by strong sales growth of ENHERTU® and DATROWAY®. Core operating profit rose 15.1% YoY to 360.0 Bn JPY. Operating profit declined to 229.1 Bn JPY from 331.9 Bn JPY, after the Company recorded approximately 133.2 Bn JPY of temporary expenses in Q4 alone, including a 75.7 Bn JPY CMO compensation fee. Profit attributable to owners of the Company was 259.9 Bn JPY, down 12.1% YoY. Alongside the results, Daiichi Sankyo presented its new 5-Year Business Plan (FY2026-FY2030), which targets becoming a Global Top 5 Oncology Company by 2035.

Consolidated Results (Full-Year Actual)

All figures below are in billions of Japanese yen (Bn JPY) as presented in the source material. Cost of sales, SG&A expenses and R&D expenses shown are on a ‘core’ basis, i.e. excluding temporary income and expenses. Full-year temporary expenses totaled 153.0 Bn JPY (versus 3.1 Bn JPY in FY2024), which included a CMO compensation fee of 88.3 Bn JPY, losses of 19.3 Bn JPY related to the cancellation of the Odawara site investment, and 16.0 Bn JPY of environmental measures costs in Yasu.

Item	FY2024 Results	FY2025 Results	YoY Change
Revenue	1,886.3	2,123.0	+236.8 (+12.6%)
Cost of sales	415.7	441.3	+25.6
SG&A expenses	724.8	859.6	+134.8
(of which) DXd ADC profit share	226.2	305.6	+79.4
R&D expenses	432.9	462.1	+29.3
Core operating profit	312.8	360.0	+47.1 (+15.1%)
Temporary expenses	3.1	153.0	+149.9
Operating profit	331.9	229.1	-102.8 (-31.0%)
Profit before tax	355.6	263.4	-92.2
Profit attributable to owners of the Company	295.8	259.9	-35.9 (-12.1%)

Revenue increased by 236.8 Bn JPY versus FY2024 (up 215.0 Bn JPY excluding forex impact). Within the Oncology Business Unit (Daiichi Sankyo, Inc. and Daiichi Sankyo Europe oncology products), ENHERTU® contributed +116.1 Bn JPY and DATROWAY® +33.7 Bn JPY to revenue growth. In the Japan Business, positive contributors included Nilemdo®/Nustendi® (+21.8 Bn JPY), DATROWAY® (+12.8 Bn JPY), Tarlige® (+9.7 Bn JPY) and Lixiana® (+8.7 Bn JPY). Upfront payments and regulatory/sales milestones related to the AstraZeneca and US Merck alliances contributed +24.6 Bn JPY and +7.9 Bn JPY, respectively. These gains were partly offset by lower Inavir® sales (-18.3 Bn JPY) and a 9.4 Bn JPY decrease related to the non-recurrence of a prior-year gain on unrealized inventory at Daiichi Sankyo Espha. The 47.1 Bn JPY increase in core operating profit (32.4 Bn JPY excluding forex impact) reflected the revenue increase, partly offset by higher cost of sales related to sales expansion (+19.9 Bn JPY), higher SG&A expenses mainly due to an increase in the DXd ADC profit share paid to AstraZeneca on ENHERTU and DATROWAY sales (+133.3 Bn JPY), and higher R&D expenses reflecting increased investment in the 5DXd ADCs portfolio (+29.4 Bn JPY).

Segment Results

Daiichi Sankyo discloses revenue for its ‘5DXd ADCs’ — ENHERTU®, DATROWAY®, HER3-DXd, I-DXd and R-DXd — including product sales and upfront/milestone payments, with figures inclusive of forex impact. 5DXd ADCs total revenue was 925.3 Bn JPY in FY2025 (+224.2 Bn JPY YoY) and is forecast at 1,157.9 Bn JPY in FY2026 (+232.6 Bn JPY YoY).

Product / Item	FY2025 Results (Bn JPY)	FY2025 YoY	FY2026 Forecast (Bn JPY)	FY2026 YoY
ENHERTU® (Total)	819.5	+168.1	993.3	+173.8
Product Sales	698.4	+145.5	861.3	+162.9
Upfront and Milestone Payments, etc.	121.1	+22.6	132.0	+10.9
DATROWAY® (Total)	56.1	+48.2	121.5	+65.5
Product Sales	47.6	+46.2	111.4	+63.8
Upfront and Milestone Payments, etc.	8.4	+2.1	10.1	+1.7
HER3-DXd (Upfront and Milestone Payments, etc.)	13.1	-6.7	12.0	-1.1
I-DXd (Total)	15.1	-0.2	18.3	+3.1
R-DXd (Upfront and Milestone Payments, etc.)	21.5	+14.8	12.8	-8.8
5DXd ADCs Total	925.3	+224.2	1,157.9	+232.6

ENHERTU® maintained the No.1 new patient share across major countries and regions and achieved $5 Bn in cumulative global alliance product sales, triggering a $537.5 Mn (86.0 Bn JPY) sales milestone; FY2025 global product sales were 698.4 Bn JPY (+26.3% YoY, 101.2% versus the January forecast). DATROWAY® has treated more than 4,900 patients globally since launch (approx. 1.6 times the prior quarter); FY2025 global product sales were 47.6 Bn JPY (up 46.2 Bn JPY YoY, 101.3% versus the January forecast). In the Japan Business, the leading products by FY2025 revenue were Lixiana (anticoagulant), Tarlige (pain treatment) and Pralia (osteoporosis treatment).

Product	Indication / Category	FY2024 (Bn JPY)	FY2025 (Bn JPY)	YoY Change
Lixiana	Anticoagulant	133.0	141.8	+8.7
Tarlige	Pain treatment	55.6	65.4	+9.7
Pralia	Osteoporosis / inhibitor of bone erosion progression in rheumatoid arthritis	42.2	45.8	+3.5
Enhertu	Anti-cancer agent (HER2-directed antibody drug conjugate)	31.0	37.7	+6.6
Efient	Antiplatelet agent	31.5	35.2	+3.7
Vimpat	Anti-epileptic agent	30.4	28.5	-1.9
Belsomra	Anti-insomnia treatment	9.9	18.6	+8.7
Ranmark	Treatment for bone complications caused by bone metastases from tumors	20.1	19.5	-0.6
Canalia	Type 2 diabetes mellitus treatment	15.6	14.5	-1.0
Minnebro	Antihypertensive agent	9.6	11.1	+1.4
Loxonin	Anti-inflammatory analgesic	12.3	11.9	-0.5
Emgality	Prophylaxis of migraine attacks	10.7	12.8	+2.1
Datroway	Anti-cancer agent (TROP2-directed antibody drug conjugate)	0.3	13.1	+12.8
Inavir	Anti-influenza treatment	19.9	1.6	-18.3

FY2026 Forecast

Effective from FY2026, Daiichi Sankyo has revised its definition of core operating profit ahead of the planned adoption of IFRS 18 in FY2027. Under the new definition, FY2025 core operating profit is restated to 282.4 Bn JPY (versus 360.0 Bn JPY under the previous definition), as the CMO compensation fee and write-down of inventories — previously treated as temporary expenses — are now included within core operating profit, along with the amortization of intangible assets related to products. FY2026 revenue is forecast at 2,280.0 Bn JPY, driven by continued market penetration of ENHERTU and DATROWAY (especially in the U.S.), partly offset by declining sales in the iron supplement business and the drug price revision for Lixiana in Japan.

Item	FY2025 Results	FY2026 Forecast	Change
Revenue	2,123.0	2,280.0	+157.0
Cost of sales	610.3	530.0	-80.3
(of which) CMO Compensation Fee	169.5	80.0	-89.5
SG&A expenses	768.7	890.0	+121.3
(of which) DXd ADC profit share	305.6	370.0	+64.4
R&D expenses	461.6	500.0	+38.4
Non-core income	22.1	–	-22.1
Non-core expenses	75.4	45.0	-30.4
Core operating profit (new definition)	282.4	360.0	+77.6
Operating profit	229.1	315.0	+85.9
Profit before tax	263.4	329.0	+65.6
Profit attributable to owners of the Company	259.9	260.0	+0.1
Exchange rate: USD/JPY	150.78	150.00	-0.78
Exchange rate: EUR/JPY	174.79	180.00	+5.21

Shareholder Returns

The annual dividend forecast for FY2025 remains unchanged at 78 JPY per share (up 18 JPY YoY), reflecting continued profit growth on a core operating profit basis. For FY2026, Daiichi Sankyo plans to increase the annual dividend to 100 JPY per share (up 22 JPY), marking the fifth consecutive year of dividend increases. Under the FY2026-FY2030 Business Plan, the Company intends to maintain progressive dividends with an adjusted DOE (Dividend on Equity, calculated on ‘adjusted shareholders’ equity,’ which excludes items that fluctuate primarily due to share prices and exchange rates) target of more than 10.0% annually. Regarding share buybacks, the Company had established an upper limit of up to 200.0 billion JPY for the acquisition period of May 1, 2025 to March 24, 2026, and repurchased shares for an aggregate cost of 91.8 billion JPY (46% of the maximum acquisition amount), totaling 13.85 million shares; all acquired shares are scheduled to be cancelled on June 10, 2026. Under the new 5-Year Business Plan, the Company will prioritize investment for growth and progressive dividends, with flexible share buybacks to be considered.

R&D and Pipeline Highlights

ENHERTU® received new indication approvals during FY2025/early FY2026 including HER2 positive gastric cancer 2L (China in January 2026, Japan in March 2026), HER2 positive solid tumors (Japan, March 2026, based on DESTINY-PanTumor02 and related studies) and HER2 positive neoadjuvant breast cancer (China, March 2026, based on DESTINY-Breast11). DESTINY-Breast09 showed ENHERTU® plus pertuzumab reduced the risk of disease progression or death by 44% versus THP as 1L therapy for metastatic HER2+ breast cancer, and was approved in the US in December 2025. For DATROWAY®, TROPION-Lung05 received accelerated approval in the US in June 2025 for EGFR-mutated NSCLC. For I-DXd, the FDA accepted the application and granted priority review in April 2026 for extensive-stage small cell lung cancer (PDUFA date: October 10, 2026), following Breakthrough Therapy Designation granted in August 2025; a confirmed objective response rate of 48.2% was reported among all participants receiving I-DXd 12 mg/kg in the IDeate-Lung01 Ph2 study. As a new program in the autoimmune disease field, Daiichi Sankyo plans to start a first-in-human study of DS2001, an anti-ORAI1 antibody, in FY2026 H1.

Medium-Term Plan: 5-Year Business Plan (FY2026-FY2030)

Daiichi Sankyo’s previous 5-Year Business Plan (FY2021-FY2025), themed ‘Global Pharma Innovator with Competitive Advantage in Oncology,’ achieved its 2025 goals: revenue reached 2.1 Tn JPY against a target of 1.6 Tn JPY (Oncology Business revenue of 954.0 Bn JPY versus a target of over 600.0 Bn JPY); the core operating profit ratio before R&D expense was 38.7% against a target of 40%; ROE was 15.8% against a target of over 16%; and DOE was 8.7% against a target of over 8%. These results were achieved despite the yen depreciating significantly versus the exchange rate assumptions used at the time of planning (1 USD = 105 JPY, 1 EUR = 120 JPY at planning vs. 1 USD = 150.78 JPY, 1 EUR = 174.79 JPY in FY2025).

The new 5-Year Business Plan (FY2026-FY2030) targets becoming a ‘Global Top 5 Oncology Company’ by 2035, under the long-term 2035 Vision of being a ‘Trusted healthcare innovator transforming the lives of people through our science and technology.’ FY2030 financial KPIs are: revenue of over 3.0 Tn JPY, operating profit of over 600.0 Bn JPY and EPS of over 260 JPY, with adjusted DOE of over 10.0% annually and progressive dividends; the Company is positioned to achieve operating profit on the scale of 1.0 Tn JPY in the early 2030s. Key strategies include maximizing the value of DXd ADCs, identifying new BGTs (Breakthrough Generating Technologies) beyond DXd ADCs, and achieving company-wide operational excellence targeting more than 200.0 Bn JPY in cumulative cost optimization over FY2026-FY2030. Over the plan period, the Company expects operating cash flow before R&D expenses of approximately 3.85 Tn JPY, with approximately 2.9 Tn JPY to be allocated to R&D expense and approximately 0.7 Tn JPY to dividends.

As part of its shift toward an innovative pharmaceuticals business focus, Daiichi Sankyo concluded an agreement in April 2026 to transfer its shares in DAIICHI SANKYO HEALTHCARE CO., LTD. to Suntory Holdings Limited for planned consideration of 246.5 Bn JPY, with the transfer to be executed in three tranches (30% on June 1, 2026; 40% on June 1, 2027; 40% on June 1, 2029). The Company expects to recognize the gain on the stock transfer as non-core income in FY2027.

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.