Headcount: 15,348
Revenues: $9,104 (+6)
Net Income: $1,196 (+38%)
R&D: $1,831 (-3%)

TOP SELLING DRUGS

Headcount: 14,887
Revenues: $8,659 (flat)
Net Income: $688 (-14%)
R&D: $2,129 (+10%)

Top Selling Drugs  

It was busy and transformative year for Daiichi-Sankyo, as it returns to the top 25, and 2019 is shaping up to be another year of change for the company. Daiichi recently made organizational changes to oversee strategic priorities that aim to deliver seven new molecular entities in oncology by 2025. Sunao Manabe took the helm as CEO on June 17th succeeding George Nakayama, who will continue to serve as chairman.

As part of its efforts to establish a more efficient production system and become a global pharma innovator with a competitive advantage in oncology, Daiichi transferred and sold domestic manufacturing and assets for 41 long-listed products, from antacids to antibiotics, to Alfresa Pharma Corp. for $78 million. Daiichi has been focusing on oncology, targeting 500 billion yen ($4.5 billion) in annual sales from the business in fiscal 2025 from 20 billion yen in 2017.

In June, Ministry of Health, Labor and Welfare (MHLW) of Japan approved VANFLYTA (quizartinib) for the treatment of relapsed/refractory FLT3-ITD acute myeloid leukemia (AML), as detected by an MHLW-approved test. Quizartinib is aimed at treating AML patients with a specific genetic mutation called FLT3.

However, in May, independent experts on an advisory panel to the U.S. FDA voted 8-3 against the treatment after assessing data presented by the company. The FDA is not bound by these recommendations and the NDA for quizartinib is currently under FDA Priority Review. A decision is expected by August 25, 2019. On June 24, Daiichi received a Complete Response Letter from the FDA and will determine the next steps in the U.S.

Separately, an advisory committee voted 12-3 in favor of the approval of pexidartinib, another treatment from Daiichi, that aims to treat a type of rare, non-cancerous tumor usually affecting joints and limbs. If approved by the FDA, pexidartinib would be the first and only therapy for tenosynovial giant cell tumor, which is associated with severe morbidity or functional limitations, and not amenable to improvement with surgery. Pexidartinib is among the seven new molecular entities that Daiichi is committed to delivering from its oncology pipeline by 2025.

A clinical trial collaboration with Merck KGaA and Pfizer is evaluating the combination of trastuzumab deruxtecan (DS-8201), an HER2 targeting antibody drug conjugate (ADC), in combination with the checkpoint inhibitor avelumab and/or an investigational Merck KGaA, DNA damage response (DDR) inhibitor, in patients with HER2 expressing or mutated solid tumors. A separate research collaboration is evaluating trastuzumab deruxtecan in combination with avelumab, the DDR inhibitor and other investigational compounds in Merck KGaA’s and Pfizer’s pipelines.

Additionally, a global development and commercialization agreement with AstraZeneca is exploring trastuzumab deruxtecan for multiple HER2 expressing cancers including breast and gastric cancer, as well as non-small cell lung and colorectal cancer. The companies will jointly develop and commercialize trastuzumab deruxtecan as a monotherapy or a combination therapy. Daiichi Sankyo will be responsible for manufacturing and the supply of trastuzumab deruxtecan.

Headcount: 18,434
Revenues: $8,770 (+7%)
Net Income: $715 (-75%)
R&D: $1,855 (+9%)

TOP SELLING DRUGS

Daiichi Sankyo unveiled plans during the year to overhaul its U.S. operations, saying the company was transitioning from a maturing primary care product portfolio to a differentiated specialty portfolio including areas such as cardiovascular, pain management and oncology.

To reduce expenses, the company eliminated 1,000 to 1,200 positions across the U.S. commercial function located in Parsippany, NJ, as well as field-based sales and other positions throughout the country. The reorganization does not include U.S.-based R&D functions, which have staff concentrated in Edison, NJ, or its packaging plant in Bethlehem, PA.

The reorganization was driven by the loss of exclusivity on Daiichi Sankyo’s best-selling medication, Olmesartan/Benicar, which loses its patent protection in 2016. Benicar is used in the treatment of hypertension and was responsible for about 27 percent of annual revenue for the company. Last year the medication brought in $2.6 billion. Benicar is prescribed to keep blood vessels from narrowing, which lowers blood pressure and improves blood flow.

Leading up to 2015, Daiichi Sankyo bolstered its pipeline when it gained Phase III acute myeloid leukemia (AML) candidate quizartinib after acquiring Ambit Biosciences in a deal worth $410 million. Ambit is a biopharma company focused on the discovery and development of medicines to treat unmet medical needs in oncology, autoimmune and inflammatory diseases by inhibiting enzymes behind those diseases. Ambit’s lead drug candidate, quizartinib, is targeted at patients with AML.

In another move, Japan-based Daiichi Sankyo’s U.S. subsidiary merged with its U.S.-based sister company, Asubio Pharmaceuticals, which will be integrated into the Daiichi Sankyo global development organization.

Headcount: 32,000
Pharma Reveneus: $10,881 (12%)
Total Revenues: $10,881 (12%)
Net Income: $639 (-5%)
R&D Budget:$1,84 (52%)

Top Selling Drugs  

While depreciation of the yen against the U.S. dollar and the euro played a role in generating growth for Daiichi in 2013, major products, including flagship antihypertensive agent olmesartan, antiplatelet agent prasugrel, ulcer treatment NEXIUM, and the Alzheimer’s disease treatment Memary, also contributed. Although Ranbaxy Group revenue grew, largely due to the offsetting effects of the 15-month accounting period, together with higher sales in emerging markets, Daiichi recorded an operating loss of ¥1.0 billion in FY13.

This past January, three days after the latest subpoena for Ranbaxy’s Toansa plant, Daiichi unloaded the troubled subsidiary via a share swap with Sun Pharmaceutical Industries of Mumbai, India, in a transaction valued at $4 billion and providing Daiichi with equity stake of approximately 9%. The combined company will be India’s largest pharmaceutical company and the world’s fifth-largest generic company with estimated annual revenue of $4.2 billion.

The FDA had prohibited Ranbaxy from selling drugs in the U.S. due to poor manufacturing practices, and from distributing any raw materials in the U.S. from its Toansa facility. Ranbaxy has five manufacturing facilities in India that are registered with the FDA: Paonta Sahib, Mohali, Toansa, Gurgaon and Dewas, all of which are now covered under the consent decree with the U.S. Department of Justice. After selling its controlling stake in Ranbaxy following struggles to turn the business around and posting a record full-year loss, Daiichi’s former chairman Takashi Shoda, who headed the acquisition of Ranbaxy as CEO in 2008, has stepped down.

R&D pipeline progression manifested itself in additional local indications for prasugrel in ischemic heart disease in patients undergoing percutaneous coronary intervention, and RANMARK (denosumab) for the treatment of giant cell tumor of the bone, making it the first fully human monoclonal antibody to target RANK Ligand, an essential mediator of osteoclast formation.

Additionally, a Phase III trial is currently proceeding in Japan to evaluate prasugrel in patients with ischemic stroke, and success here will further drive drug sales, which climbed 37% in FY13. Denosumab is proving to be a wise investment, with several potential cancer indications moving through development. Daiichi has been working on the drug since 2007, when it acquired the rights in Japan from Amgen, and subsequently launched in April 2012 for bone complications stemming from multiple myeloma and bone metastases.

New revenue contributors include Pralia, an osteoporosis treatment, which is also being investigated in Phase III studies in breast cancer and rheumatoid arthritis, and subsidiary Luitpold Pharmaceuticals gained FDA approval for Injectafer to treat iron deficiency anemia, a condition that afflicts 7.5 million people in the U.S.

Unfortunately, Daiichi decided to discontinue a Phase III study of Nimotuzumab in non-small cell lung cancer based on the recent recommendation of the Independent Data Monitoring Committee, which observed safety issues in certain patients. The company is also evaluating the drug in gastric cancer; only time will tell if success is possible with potential safety implications on the table.

Among early R&D efforts, Daiichi established several collaborations, forming a compound library partnership with Astellas, inclusive of 400,000 selected compounds, to utilize each other’s assets aimed at fostering open innovation. For a period of three years, both companies will be able to implement broad High Throughput Screening using the shared compounds without restrictions on targeted disease areas.

Also, early this year, Daiichi and UMN Pharma entered a research agreement for a norovirus vaccine. The virus, one of the leading causes of infectious gastroenteritis, has been infamously associated with cruise ships, as reported by the media, and is now popping up in schools and even hotels. UMN will provide a recombinant norovirus Virus-Like Particle (VLP) antigen and Daiichi will conduct research aimed at developing a vaccine. The companies will negotiate further upon meeting certain research criteria.

Daiichi also expanded its Take a New challenge for Drug diScovery (TaNeDS) Global Program, a drug discovery program with universities and research institutions based in Japan, to Germany, Switzerland and Austria, looking to work with innovative partners for research that could result in novel drug discovery candidates and new drugs, namely cancer, diabetes, and genetic disorders.

Additional early stage discovery efforts include an alliance with Sanfron-Burnham to develop therapeutics for cardio-vascular diseases, and with the University of California, San Francisco (UCSF) focused on molecular diagnostics for multiple neurodegenerative diseases.

With olmesartan losing patent protection beginning in 2016, and Nimotuzumab failing in Phase III lung cancer trials, Daiichi needs to move its assets closer to market. Pending studies for Prasugrel and Denosumab may prove vital in buying time for
future pipeline progress.

Headcount: 32,229
Pharma Revenues: $11,50 (41%)
Total Revenues: $12,07 (41%)
Net Income: $8065 (11%)
R&D Budget: $2,215 )-6%)

Top Selling Drugs

Account for 43% of total pharma sales, down from 46% in 2011

Daiichi’s five-year business plan aims to transform the company into a ‘Hybrid Business Powerhouse’ by strengthening business in key markets (Japan, India, and U.S.) and emerging markets. The goals, mapped out below, entail achieving sales of Yen 1,300 billion in 2017. We’re still waiting on a few late-stage development prospects from last year’s report, but Daiichi’s pipeline appears to be on track. Ranbaxy woes however, may linger.

The Olmesartan franchise remains essential to the company’s portfolio, while it suffered from generic competition in the U.S., overall sales were up. With the looming patent expiry in the EU and Japan, anticipated product launches in 2014-15 in atrial fibrillation and venus thromboembolism by expanding in emerging countries through Ranbaxy, along with plans acquire external assets and deploy its next-generation product, edoxaban, will be vital. Daiichi also plans to expand its presence in biologics and the biosimilar business and has received a grant toward expanding bio-production facilities.

Additional per year targets include: achieving more than two new major indication launches for new medical entities (NME) including new biologics, bringing four major indications to late development stage for biosimilars, and initiating nine Phase I projects. Upcoming projects scheduled to be approved/launched in 2015-16 include Edoxaban in VTE, Prasugrel in CVA, Etanercept biosimilar for RA. Additionally, the company is seeking further indications for antiplatelet agent Prasugrel, marketed as Effient in the U.S. in cooperation with Eli Lilly and Co.

The company is hoping to recoup its leadership in the U.S. injectable iron market through the launch of Injectafer for iron deficiency anemia. Luitpold Pharmaceuticals, a Daiichi Sankyo Group Co. headquartered in Shirley, NY, is positioning this next-generation product to succeed the struggling anemia treatment Venofer in the niche injectables market. Luitpold is also plans to release competitive generic injectables onto the market. LPI experienced a 5.4 billion yen decline in sales as mainstay product Venofer was negatively affected by competing products, and LPI itself was affected by a warning issued by the FDA in the early part of the FY11 concerning its plant in Shirley.

In other product news, Daiichi and partner Mitsubishi Tanabe Pharma launched the selective DPP-4 inhibitor Tenelia
tablets, which offer a new treatment option for type 2 diabetes, and Daiichi launched its osteoporosis treatment PRALIA (denosumab) Subcutaneous Injection in Japan. Daiichi has been working on denosumab since 2007, when it licensed the rights from Amgen to develop and market the antibody in Japan. It’s also approved to treat bone complications from multiple myeloma and bone metastases, and is currently in Phase III trials for early-stage breast cancer.

Helping to address the thorn in Daiichi’s side, subsidiary Ranbaxy Laboratories has taken actions to correct the conduct that led to the investigations by the U.S. Department of Justice (DOJ) and the U.S. FDA. These efforts include undisclosed changes to management, culture, operations and compliance. According to a company statement, Daiichi Sankyo believes that certain former shareholders of Ranbaxy concealed and misrepresented critical information concerning the U.S. DOJ and FDA investigations.

Ranbaxy sales declined 29% in the fourth quarter, primarily impacted by the recall of atorvastatin in the U.S. market due to possible glass contamination. The company says it has taken several Corrective and Preventive Actions (CAPA) and began shipment of atorvastatin to its formulation facility in the U.S. Also, during the quarter, 15 regulatory agency inspections from the U.S. FDA, EU Countries/ EMEA, Germany, South Africa and India were conducted at Ranbaxy’s global manufacturing sites. Now that progress has been made in the negotiations with the FDA’s DOJ, which has been a major issue the past few years, Daiichi plans to step up the evolution of its Hybrid Business Model. This includes recently integrating Daiichi and Ranbaxy’s business operations in Thailand to offer generics, and utilizing Ranbaxy to support Daiichi’s Brazilian subsidiary to enter the branded generics market there.

The innovative pharmaceuticals business in Japan will need to be the driving force to help counterbalance continued erosion of Olmesartan. That is, unless Ranbaxy manages to get its act together.

Headcount: 30,488
Pharma Revenues: $11,338 (5%)
Total Revenues: $11,921 (5%)
Net Income: $132 (-84%)
R&D Budget: $132 (3%)

Headcount: 30,488
Pharma Revenues: $10,794 (10%/-6%*)
Total Revenues: $11,318 (10%/2%*)
Net Income: $820 (82%/68%*)
R&D Budget: $2,274 (7%/-1%*)

* Converted at avg. exch. rate / based on reported currency (JPY)

Top-Selling Drugs in 2010

Account for 44% of total pharma sales, down from 47% in 2009.

PROFILE

At the core of Daiichi’s business model is an emphasis on vaccines, established pharmaceuticals and OTC products aimed at market and consumer diversity, as well as geographic synergy leveraging subsidiary Ranbaxy Laboratories, and the growth potential of emerging markets. Although a 17% sales boost from Ranbaxy helped propel Daiichi’s modest FY10 results, don’t be overly impressed by the 68% increase in income, as it was partly due to prior-year tax adjustments.

Major drug launches this past year, expected to sufficiently pad the company’s bottom line, included the combination antihypertensive agents, Tribenzor/Sevikar in the U.S. and Europe, and in Japan the antihypertensive Rezaltas, anti-inflammatory analgesic Loxonin Gel, and the flu treatment Inavir. Also, Nexium just received its first regulatory approval for the treatment of acid-related disease in Japan, where Daiichi and AstraZeneca will co-promote the drug.

In addition to maximizing sales of the Olmesartan franchise (Rezaltas, Olmetec, and Calblock), the company plans to bring new products to market — such as flu drug Laninamivir and Memary/memantine for Alzheimer’s dementia — in an effort to sustain growth, as well as develop new blockbuster drugs. Its next anticipated global blockbuster is Edobaxan, for which the company is pursuing in VTE and other metabolic disorders. Edoxaban, part of the new class of oral factor Xa inhibitors www.inpharm.com/news/new-anti-clotting-drugs-stopping-silent-killers, is looking to replace the 65-year-old warfarin treatment. The drug is perched to pocket a significant portion of the anticoagulant market by 2015. Perhaps the blockbuster strategy will prove beneficial if the company can make some major therapeutic breakthroughs in critical areas such as hypertension and Alzheimer’s disease.

Fostering recent R&D initiatives, Daiichi gained late-stage oncology product PLX4032 with the acquisition of Plexxikon. The drug met primary endpoints of overall survival and progression-free survival in metastatic melanoma in a Phase III trial.

Additionally, Daiichi expanded its R&D alliance with ArQule, establishing a third oncology therapeutic target, with an option for a fourth. Closer to fruition, Daiichi and AstraZeneca are in a co-promotion pact in Japan for pending drug Denosumab, Amgen’s treatment of bone disorders stemming from bone metastasis.

In business related news, Daiichi acquired from Amcor its first U.S.-based manufacturing and packaging and facility. The Bethlehem, PA acquisition, worth $10.3 million, supplements its operations and is expected to package portfolio products, such as Benicar, Welchol and Azor, as soon as this summer/early fall.

Also, earlier this year, Daiichi an-nounced restructuring plans, which took effect in April, consolidating R&D, healthcare, and sales divisions. Although there was no mention of associated job cuts, the company phased out two R&D departments and two sales departments in an effort to “streamline decision-making processes” by creating single departments for each.

As a result of the Japan earthquake and ensuing disaster, Daiichi-Sankyo incurred $68 million of costs associated with damage to facilities. As of the latest update on operations, restoration of facilities is underway at the Onahama plant, which manufactures APIs, including pravastatin and olmesartan, and normal operations have been restored at the Hiratsuka plant.  —KB

Previous Profile: Astellas Pharma // Next Profile: Eisai

Headcount: 29,272
Pharma Revenues: $9,757 (+23%/+14%)
Total Revenues: $10,264 (+22%/+13%)
Net Income: $452
N/AR&D Budget: $2,122 (+15%/+7%)

Revenues converted at average exchange rate / based on reported currency (JPY)

Account for 47% of total pharma sales, down from 52% in 2008.

PROFILE

Daiichi Sankyo, one of the largest Japanese pharmaceutical companies, focuses on four primary therapeutic areas: thrombosis, diabetes, malignant neoplasm (a.k.a. tumors), and autoimmune diseases, with the self-proclaimed goal of leading these markets by 2015. Daiichi Sankyo is also set to become the first major Japanese pharmaceutical company to sell generic drugs domestically through India’s Ranbaxy Laboratories Ltd., which became a subsidiary of Daiichi in November 2008. Allied generic efforts will focus on high blood pressure and cholesterol treatments.

Also under the arrangement with Ranbaxy, Daiichi will launch its portfolio of products in Mexico through Ranbaxy Companies and will also leverage Ranbaxy’s presence in Africa for marketing and distribution of diabetes drug Olmesartan, which is set to launch in six African countries. This hybrid model allows the two companies to leverage their respective strengths in the dominant prescription segment, while continuing expansion in the generics market, which holds lots of global potential.

According to an interview recently conducted by Bloomberg, Daiichi Sankyo is also looking to grow its line of oncology candidates and expand upon its acquisition two years ago of German biotech company U3 Pharma AG, which brought treatments for breast, colon and lung cancers. “We’re still looking energetically for venture capital companies or biotechnology companies that could lead to acquisitions or partnerships,” said Reinhard Bauer, Daiichi Sankyo’s head of European operations. According to Mr. Bauer, Daiichi isn’t interested at this time in acquiring existing products or generic-drug acquisitions.

Revenues in FY2009 (ended March 31, 2010) were up 13% to $10.3 billion, with a net income of $452 million — a big improvement over the $2.2 billion loss the previous year. This growth is mainly due to a sales contribution of $1.6 billion by Ranbaxy Laboratories. Other contributors included sales of antihypertensive agents Benicar and Azor, cholesterol and type 2 diabetes treatment Welchol, and the anemia treatment Venofer. Another goal Daiichi set for itself is to increase its sales in Europe more than 50% to $1.6 billion a year by FY2013. Daiichi plans to accomplish this goal with Benicar and the recently launched antiplatelet agent Effient.

Edoxaban would be a nice addition to Daiichi’s future revenues as well. Late-stage data on the blood thinner is expected within the year, with plans to submit the drug for U.S. approval shortly thereafter. The drug would compete with Bayer AG’s Xarelto and Boehringer Ingelheim’s Pradaxa, and has the potential to top $1 billion a year in sales. That would put Daiichi head-to-head with its closest Japanese rival, Astellas. —KB

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