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Eisai First-Half Profit Falls 17% as Aricept Sales Decline

Nov. 1 (Bloomberg) -- Eisai Co. posted a 17 percent drop in first-half profit because of a slump in sales of Aricept, once the world’s best-selling treatment for Alzheimer’s disease.

Net income fell to 33.3 billion yen ($426 million), or 117 yen a share, in the six months ended Sept. 30 from 40 billion yen, or 140 yen, a year earlier, Eisai said in a statement to the Tokyo Stock Exchange today. Earnings beat the 29 billion yen average of three analyst estimates compiled by Bloomberg.

Sales of Aricept, which accounted for 38 percent of the drugmaker’s revenue last fiscal year, plunged 53 percent to 81.4 billion yen in the first half. Aricept has faced competition from cheaper generic copies in the U.S., the world’s largest drug market, since November last year. The Tokyo-based company lowered its forecast for full-year sales and profit today.

“The past six months was the first time for us to experience the full impact of Aricept’s patent expiration in the U.S.,” Chief Executive Officer Haruo Naito told reporters in Tokyo today. “We did everything we could to overcome that.”

Net income will be 67.5 billion yen, instead of the 69.5 billion yen previously forecast, while revenue will be 654 billion yen, instead of 700 billion yen, Eisai said. Global sales of Aricept for the full year will be 156 billion yen, or 31.5 billion yen less than the company predicted earlier, due to competition from generic drugs and the stronger yen, Eisai said.

First-half sales declined 20 percent to 331 billion yen. Operating profit, or revenue minus the cost of goods sold and administrative expenses, dropped by 25 percent to 50.4 billion yen.

Eisai fell 1.3 percent to 3,080 yen at the 3 p.m. close in Tokyo trading, in line with Japan’s benchmark Topix index.

To contact the reporter on this story: Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net.

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net.

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