Kyowa Kirin (4151) Q3 2024 earnings summary

Executive summary

• Revenue rose 19% year-over-year to ¥362.8B for the first nine months, with overseas sales ratio increasing to 72%, driven by global product growth, technology out-licensing, and FX tailwinds.

• Core operating profit grew 22% to ¥74.4B, and net profit increased 4% to ¥55.9B compared to the same period last year.

• Overseas revenue, especially in North America and EMEA, offset declines in Japan due to NHI price cuts and biosimilar competition.

• Acquisition of Orchard Therapeutics contributed to increased non-current assets and revenue from gene therapy products.

• Key products Crysvita and Poteligeo saw significant global sales growth, while Japan faced headwinds from NHI price cuts and biosimilar competition.

Financial highlights

• Revenue up ¥56.7B (+19%) year-over-year, with forex contributing ¥23.3B.

• Gross profit increased ¥39.7B (+17%), but gross margin declined slightly from 75% to 74%.

• R&D expenses rose 45% to ¥74.3B, mainly due to clinical studies and Orchard consolidation.

• Core operating profit margin improved to 21% from 20% year-over-year.

• Cash and cash equivalents at period end: ¥296.3B, down ¥106.8B from December 2023.

Outlook and guidance

• FY2024 revenue guidance maintained at ¥492.0B, with 74% progress to goal by Q3.

• Core operating profit forecast at ¥92.0B (81% progress), and net profit at ¥68.0B (82% progress).

• No revisions to previously announced earnings forecasts.

• Dividend forecast for FY2024: ¥58.00 per share.

• Medium-term business plan KPIs (ROE 10%+, revenue CAGR 10%+) now expected to be achieved in 2026 or later.