Astellas's Q1 sales and profit slide as generics hit hard
This article was originally published in Scrip
Generic competition in the US for Astellas's lead products, Prograf and Flomax/Harnal, continued to cut into the company's sales and profits during the first quarter of the new fiscal year.
A stronger yen also took its toll on Astellas's sales for the quarter ended 30 June 2010, although it pushed operating income up by ¥3.7 billion from the same period last year.
To take account of exchange rate fluctuations, as well as other factors such as an upfront payment of $165 million due under its recently extended VelocImmune technology licensing agreement with Regeneron (scripintelligence.com, 29 July 2010), the Japanese company has lowered its sales and profit forecasts for the full year.
The earnings projection for fiscal year 2010 could come down even further once Astellas factors in the cost of its $4 billion acquisition of OSI Pharmaceuticals (scripintelligence.com, 9 June 2010) during the second quarter.
Net sales for the latest quarter were ¥237.4 billion, down by 6% year-on-year, which reflected a ¥9.2 billion hit from currency fluctuations. In the first three months of the year, the exchange rate for the yen rose by ¥5 and by ¥16 against the US dollar and the Euro respectively, Astellas noted.
Operating income was 18% lower at ¥56.9 billion, despite the positive exchange rate effect, and net income was down by 10.3% to ¥39.5 billion.
Single-digit sales growth in Japan and Asia during the quarter was offset by steep declines in Europe and the Americas. Sales in Japan were 2% higher at ¥136.4 billion, while sales in Asia jumped by nearly 10% year-on-year to ¥8.9 billion. First-quarter sales in Europe dropped by 17% to ¥52.3 billion and sales in the Americas were down 16% at ¥39.7 billion.
Among Astellas's leading brands, worldwide sales of the immunosuppressant Prograf (tacrolimus), including exports to third parties, were down by 17% to ¥43.4 billion, with a particularly sharp decline in the Americas reflecting the build-up of generic competition in the US market since August 2009.
Astellas has lowered its forecast for full-year sales of Prograf from ¥163.6 billion to ¥154.4 billion. At the last count, the generic share of tacrolimus prescriptions on the US market was 47.2%, Astellas reported. In Europe, generic versions of tacrolimus have been launched in Germany, the UK and the Netherlands.
Another major product that has fallen prey to generics in the US is Flomax/Harnal (tamsulosin) for the treatment of benign prostatic hyperplasia, which has dragged bulk sales and royalty income down by 73% to ¥4.3 billion in the latest quarter. Astellas's own sales of Harnal fell by 7% to ¥16.5 billion, while worldwide sales overall were down by 39% at ¥20.8 billion.
Following the start of generic competition in the US in March 2010, the generics share of tamsulosin prescriptions in the week of 2 July was 92%, the company said.
More encouraging were first-quarter sales of Vesicare (solifenacin) for overactive bladder symptoms, which were up by 7.2% worldwide to ¥22.0 billion, riding on a 15% increase to ¥6.5 billion on the Japanese market despite the impact of the NHI price revision in April 2010.
Another strong performer was the antifungal Funguard/Mycamine (micafungin), with sales doubling in the Americas and tripling in Europe to give a worldwide total of ¥6.1 billion (+38%) for the first quarter.
Astellas has revised its forecast for net sales in fiscal year 2010 downwards from the ¥940 billion projection given in late May (scripintelligence.com, 26 May 2010) to ¥914.0 billion now. The company has lowered its guidance for full-year operating income by ¥17.0 billion to ¥135.0 billion and for net income by ¥13.0 billion to ¥94.0 billion.
Product | Americas | % chg | Europe | % chg | Japan | % chg |
Prograf | 11.3 | –46 | 16.1 | –4 | 9.9 | +18 |
Vesicare | 9.2 | +3 | 5.7 | +4 | 6.5 | +151 |
Funguard/Mycamine | 2.1 | >100 | 0.5 | >100 | 3.18 | + 4 |
Note: sales of products in Japan are on a gross sales basis | ||||||