Daiichi Sankyo Turns to Profit, Appoints New CEO

Daiichi Sankyo Co., Japan’s third-largest drugmaker, posted a full-year profit after a one-time charge in the previous period related to its Indian unit Ranbaxy Laboratories Ltd.

Net income was 41.85 billion yen ($452 million), or 59.42 yen a share, compared with a loss of 215.5 billion yen a year earlier, Tokyo-based Daiichi Sankyo said in a statement today. Sales gained 13 percent to 952.1 billion yen.

Shares of Tokyo-based Daiichi Sankyo surged as much as 3.7 percent. The company, whose 64 percent-owned Ranbaxy unit posted record quarterly profit yesterday, said it will promote Joji Nakayama to chief executive officer, replacing Takashi Shoda, who will become chairman.

Major contributors to growth this fiscal year will include the Benicar hypertension treatment and anti-clotting drug Effient, Daiichi Sankyo said. Still, the company “expects harsh conditions to prevail in markets due to increased efforts worldwide to restrain the growth in health-care costs,” it said.

Daiichi Sankyo gained 2 percent to 1,650 yen as of 1:44 p.m. on the Tokyo Stock Exchange, while the benchmark Nikkei 225 Stock Average slipped 0.2 percent.

Nakayama’s appointment takes effect June 28, subject to shareholder approval, Daiichi Sankyo said in a separate statement. Nakayama, who turned 60 yesterday, has an MBA from Chicago-based Northwestern University is an executive vice president at the company.

Daiichi Sankyo forecast net income will rise 7.5 percent to 45 billion yen in the year ending March 31. Sales will probably gain 2.9 percent to 980 billion yen, and operating profit, or sales minus the cost of goods sold and administrative expenses, may drop 5.8 percent to 90 billion yen, the drugmaker said.

Osaka-based Takeda Pharmaceutical Co., Asia’s largest drugmaker, and Astellas Pharma Inc., Japan’s second-largest pharmaceutical company, are both scheduled to report results later today.

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