Kyowa Hakko: Pipeline, Products, Performance, Potential

Kyowa Hakko: Pipeline, Products, Performance, Potential

Pharmaceutical company intelligence reports from Espicom provide a full review of the company's activities together with five-year sales forecasts for its key products. The company's financial performance is covered in-depth, from its latest results to a complete analysis of its latest full fiscal year and an outlook for the future. A section on company strategy covers mergers, acquisitions and divestitures, key agreements, products and R&D. An overview of key products and R&D is followed by a comprehensive review of the company's product portfolio and research and development pipeline by therapeutic area. In addition, supplementary appendices provide more in-depth information on financials, agreements and corporate events.

In Japan, recent shifts in the economic environment have increased competition for domestic pharmaceuticals as the larger pharma companies from Europe and the US are afforded more and more of the Japanese market share. This background of increased competition led to three notable mergers in fiscal 2005 (Daiichi Sankyo, Astellas Pharma and Dainippon Sumitomo Pharma), followed by another merger in fiscal 2007 to form Mitsubishi Tanabe. Rising crude oil prices, increases in long-term interest rates, and the slow domestic demand for amino acids for beverages have all impacted Kyowa's performance in recent years, meanwhile, the company faces increasing difficulty in matching the R&D and marketing resources of the aforementioned mergers. Consequently, in October 2007, Kyowa announced an agreement to enter into its own merger with Kirin Brewery.

The entire merger became effective in October 2008, with Kyowa as the surviving company, which will be named Kyowa Hakko Kirin. On 1st April 2008, the first stage of integration was completed with Kirin Pharma becoming a wholly-owned subsidiary of Kyowa through a share exchange, and Kyowa becoming a consolidated subsidiary of Kirin Holdings. The financial targets for this new entity for fiscal 2010 (consolidated) include: net sales of ¥513.0 billion, operating income (before goodwill amortisation) of ¥73.0 billion and operating income (after goodwill amortisation) of ¥63.3 billion. The segmental sales targets are Pharmaceuticals ¥225 billion, Bio-Chemicals ¥98 billion, Chemicals ¥117 billion and Food ¥45 billion.

In the shorter-term, the integration of Kirin Pharma is expected to have an immediate positive impact on KHK's pharmaceuticals performance. The new products entering the portfolio sees KHK's focus shift away from cardiovascular and allergy products and towards central nervous system and blood/fluid disorder treatments. Key additions to the product portfolio from Kirin include Espo, Nesp and Regpara, all of which treat renal blood disorders and are expected to achieve growth within our forecast period. Meanwhile, Kyowa's own R&D efforts have led to the launch of Topina, a new treatment for epilepsy, which is forecast to achieve sales in excess of ¥12 billion within our forecast period. The CNS pipeline also contains istradefylline, a potential treatment for Parkinson's disease which Kyowa believes has blockbuster potential. Kirin Pharma has also brought three early-stage cancer compounds to KHK's pipeline.

Traditionally, Kirin and Kyowa have also been prevalent in the amino acid and fermentation markets, and the companies' expertise are likely to be complimentary. Therefore, we should see improvements to all of KHK's business areas following the merger. Higher revenues for the combined company should ensure continued investment in pharmaceutical research and help KHK emerge as a strong competitor to companies such as Astellas and Daiichi Sankyo.

Contents

• Executive Summary
  • A detailed and comprehensive overview of current financial position, company strategy, product and pipeline analysis.
• Therapeutic Area Focus
  • Key product analysis and forecasting
• Anti-allergy
  • Allelock (olopatadine)
  • Patanol (olopatadine ophthalmic solutiuon)
• Cardiovascular
  • Coniel (benidipine)
• Central Nervous System
  • Depakene (sodium valproate)
  • Durotep (transdermal fentanyl)
  • Topina (topiramate)
• Anticancer
  • Adriacin/Farmorubicin (doxorubicin)
• Gastrointestinal
  • Nauzelin (domperidone)
• Blood and Fluid Disorders
  • Espo (epoetin alpha)
  • Nesp (darbepoetin alpha)
  • Regpara (cincalcet)
• Operational Data
  • A wealth of background and detail
  • A full 5-year financial performance assessment
  • Key corporate events
  • Key agreements
  • Infrastructure
  • Subsidiaries and joint ventures

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