Eisai Q1 FY2027: Revenue Jumps 15.6%, Net Profit Up 26%

Eisai reported consolidated revenue of ¥234.3 billion (+15.6% YoY), operating profit of ¥24.7 billion (+19.2% YoY), and net profit attributable to owners of the parent of ¥18.2 billion (+26.0% YoY) for the first quarter of FY2027, achieving strong top-and bottom-line growth.

The revenue increase was led by the global expansion of three major products: anticancer agent Lenvima at ¥97.3 billion (+15.9% YoY), Alzheimer's treatment Leqembi at ¥29.3 billion (+26.7% YoY), and insomnia treatment Dayvigo at ¥18.9 billion (+37.9% YoY). A weaker yen, particularly against the dollar, further boosted overseas sales.

Selling, general and administrative expenses rose 14.6% YoY, reflecting profit-sharing with Merck & Co. for Lenvima sales and increased investment in Leqembi. R&D expenses grew 12.7% YoY on continued spending on key projects. Nevertheless, improved gross margins secured a sharp increase in operating profit. Core operating profit, excluding one-off items, came to ¥24.7 billion (+13.9% YoY), demonstrating solid underlying earnings power.

The pharmaceutical business (revenue ¥230.9 billion, +16.4% YoY) achieved growth across all five regions, with segment profits posting double-digit gains in each.

Americas: Revenue ¥86.6 billion (+22.3% YoY), segment profit ¥51.9 billion (+25.0% YoY). Lenvima generated ¥66.5 billion (+14.5% YoY), Leqembi ¥15.5 billion (+70.5% YoY), and Dayvigo ¥3.3 billion (+74.5% YoY). Leqembi's US sales surged over 70%, driving regional performance.

China: Revenue ¥42.5 billion (+16.6% YoY), segment profit ¥21.2 billion (+18.2% YoY). Leqembi dropped to ¥4.8 billion (-37.3% YoY) due to the absence of the prior year's inventory buildup, but the weak yen and growth from Merislon at ¥5.1 billion (+67.1% YoY) and Methycobal at ¥3.7 billion (+27.7% YoY) lifted overall revenue.

Japan: Revenue ¥57.9 billion (+3.4% YoY), segment profit ¥21.0 billion (+8.1% YoY). Dayvigo grew to ¥12.4 billion (+13.4% YoY), Leqembi to ¥6.1 billion (+10.9% YoY), and Jyseleca to ¥5.4 billion (+25.2% YoY). Consumer healthcare brand Chocola BB was steady at ¥3.9 billion (+1.1% YoY).

EMEA: Revenue ¥23.6 billion (+24.4% YoY), segment profit ¥12.5 billion (+51.8% YoY). Lenvima/Kisplyx jumped to ¥15.1 billion (+36.6% YoY), and Leqembi to ¥0.5 billion (+341.2% YoY). Leqembi launches in Belgium and Australia accelerated European expansion.

East Asia & Global South: Revenue ¥20.2 billion (+25.3% YoY), segment profit ¥9.5 billion (+15.0% YoY). Lenvima contributed ¥5.2 billion (+20.3% YoY) and Leqembi ¥2.4 billion (+214.0% YoY), boosted by new launches in Brazil and India.

Total assets at the quarter-end stood at ¥1,558.1 billion (up ¥109.0 billion from the prior fiscal year-end), with higher trade receivables and Leqembi inventory buildup inflating current assets. Liabilities increased to ¥624.9 billion (up ¥100.9 billion), reflecting the issuance of ¥50.0 billion in unsecured bonds and higher short-term borrowings. The equity ratio attributable to owners of the parent was 58.2% (down 3.9 percentage points), still high but with slightly elevated financial leverage due to the bond issue.

Operating cash flow swung to an outflow of ¥2.6 billion (from an inflow of ¥1.1 billion a year earlier), weighed by increased working capital from receivables and inventories. Investing activities generated ¥6.5 billion from the sale of financial assets. Financing activities brought in ¥57.9 billion via bond issuance and borrowings, lifting the cash and equivalents balance to ¥311.7 billion (up ¥66.3 billion).

The planned annual dividend is ¥160 per share (interim and year-end each ¥80), unchanged from the prior year, balancing growth investments and shareholder returns.

The full-year FY2027 consolidated forecast remains unchanged from initial guidance: revenue of ¥883.5 billion (+7.0% YoY), operating profit of ¥70.0 billion (+58.6% YoY), and net profit attributable to owners of the parent of ¥52.3 billion (+35.6% YoY). The large profit increase largely reflects the absence of prior-year structural reform charges and improved core earnings and cost control. Core operating profit is seen at ¥70.0 billion (+39.8% YoY), indicating a substantial improvement in underlying profitability.

R&D expenses in the quarter totaled ¥43.7 billion (+12.7% YoY), reflecting sustained investment. In Alzheimer's disease, the subcutaneous formulation of Leqembi gained approval for initiation of therapy in the US and is under review in Japan and China. Key pipeline assets, including the anti-MTBR tau antibody E2814 and a novel orexin-2 receptor agonist E2086, are advancing.

In oncology, a Phase III trial of Lenvima in combination with pembrolizumab and belzutifan failed to meet its primary endpoint. On the other hand, taletrectinib (ROS1-positive non-small cell lung cancer) had its marketing authorization application accepted in the UK.

A strategic investment in the Hatfield biologics facility in the UK was announced to bolster cold-chain supply capabilities, including for lecanemab. To support growth investments, the company issued ¥50.0 billion in bonds.

Key risks disclosed by Eisai include:

• Currency fluctuations: against assumed rates (¥153/USD, ¥180/EUR), a strengthening yen could erode overseas revenue and profit.
• Product concentration: Lenvima accounts for over 40% of revenue, exposing results to competition and patent expiry; recent combination trial failure highlights pipeline risk.
• R&D uncertainty: heavy investment in Alzheimer's disease could yield high returns, but clinical failures or regulatory delays would materially impact the business.
• Drug pricing and health policy: pricing reforms or cost-containment measures in key markets may pressure margins of major products.
• Supply chain: expanding cold-chain manufacturing capacity entails investment burdens and quality-control complexity.