TOKYO, Oct 24, 2019 -- Chugai Pharmaceutical Co., Ltd. (TOKYO: 4519) announced its financial results for the third quarter of the fiscal year ended December 31, 2019.

Chugai reported record high revenues, operating profit and net income for the third consecutive quarter (Core-basis). Revenues increased by 19.3% due to a double-digit sales growth driven by the contribution of new products including the hemophilia A treatment Hemlibra^® and the immune checkpoint inhibitor Tecentriq^®, mainstay products and strong exports as well as large increases in royalties and other operating income related to Hemlibra. Operating profit increased by 65.6% due to a better cost to sales ratio as the proportion of in-house products increased in the total product mix.

Chugai raised forecasts for FY2019 following the strong nine-month results. The revenues forecast was raised by ¥87.5 billion to ¥680.0 billion from the original forecast reflecting a strong progress in both domestic sales and export to Roche. The increase in domestic sales was mainly driven by mainstay products and new products in the oncology area as well as Hemlibra. Royalties related to Hemlibra and one-time income also progressed well-beyond the original expectations, resulting in the raised forecast for revenues. Forecast for Core operating profit was also raised by ¥75.0 billion to ¥218.0 billion from the original forecast due to reasons including a better cost to sales ratio expected due to changes in the product mix from the original forecast.

In addition, the dividend forecast was revised to undecided. Reflecting the significant changes in the profit structures, year-end dividends will be decided based on the Company’s dividend policy* after the fiscal year ends.

R&D activities also progressed well. Satralizumab, the anti-interleukin-6 (IL-6) receptor recycling antibody created by Chugai, was filed for regulatory approval in EU and the U.S.. Satralizumab is a growth driver candidate following Actemra^® and Hemlibra, and a regulatory filing in Japan is also planned this year. Clinical development for another in-house project NXT007 commenced for the treatment of hemophilia A. In addition, Tecentriq achieved line extensions as the first immune checkpoint inhibitor in Japan approved for the treatment of extensive-stage small cell lung cancer and PD-L1-positive triple negative breast cancer.

“We had a very good third quarter as sales of new products and mainstay products, including Hemlibra, Tecentriq and Perjeta, grew beyond our expectations. At the same time, the start of global regulatory filings for satralizumab, a future growth driver, is proceeding as planned. Although we revised the full-year forecast upward based on the strong nine-month performance, the negative growth of the prescription drug market in Japan will likely continue, increasing the severity of the environment in the future. We remain focused in our efforts to archive the targets of the mid-term business plan IBI 21,” said Tatsuro Kosaka, Chugai’s President and CEO.

*Regarding income distribution, taking into account the strategic funding needs and earning prospects, Chugai aims for a consolidated dividend payout ratio of 50% on Average in comparison with Core EPS to provide a stable allocation of profit to all shareholders.

[2019 3^rd quarter results]

[Forecasts for 2019 Jan-Dec]