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Sumitomo Dainippon Pharma Co (JP:4506)
:4506
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Sumitomo Dainippon Pharma Co (4506) AI Stock Analysis

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JP:4506

Sumitomo Dainippon Pharma Co

(OTC:4506)

Rating:67Neutral
Price Target:
¥1,161.00
▲(1.31%Upside)
Sumitomo Dainippon Pharma Co's stock is supported by robust technical indicators, suggesting strong market momentum. However, financial performance shows mixed results with significant leverage concerns, necessitating careful monitoring. While the valuation is reasonable, the absence of a dividend yield may be a drawback for some investors.

Sumitomo Dainippon Pharma Co (4506) vs. iShares MSCI Japan ETF (EWJ)

Sumitomo Dainippon Pharma Co Business Overview & Revenue Model

Company DescriptionSumitomo Dainippon Pharma Co., Ltd. is a leading global pharmaceutical company headquartered in Osaka, Japan. The company engages in the research, development, manufacturing, and marketing of pharmaceutical products with a focus on psychiatry & neurology, oncology, and regenerative medicine. It operates in various sectors including pharmaceuticals, healthcare, and life sciences, providing innovative therapies and solutions to improve patient health and well-being.
How the Company Makes MoneySumitomo Dainippon Pharma Co. makes money primarily through the sale of its pharmaceutical products across various therapeutic areas such as psychiatry & neurology, oncology, and others. The company generates revenue by developing and marketing prescription drugs and proprietary medicines, which are distributed globally. A significant portion of its earnings comes from key products in its portfolio, including those in the central nervous system and diabetes treatment categories. The company also engages in strategic partnerships, licensing agreements, and collaborations with other pharmaceutical firms to enhance its product offerings and expand market reach, thereby contributing to its revenue streams. Additionally, investments in research and development lead to the creation of new products, further driving sales and profitability.

Sumitomo Dainippon Pharma Co Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q3-2024)
|
% Change Since: 25.38%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Negative
The earnings call highlighted promising developments in the oncology and regenerative medicine pipelines but was overshadowed by significant financial losses, decreased revenue across all segments, and underperformance of key products, leading to a revised downward financial forecast. The call focused on strategic adjustments to address market challenges and improve profitability.
Q3-2024 Updates
Positive Updates
Development Progress in iPS Cell-Derived Therapies
Significant progress in clinical development in regenerative medicine, particularly in Parkinson's disease using iPS cell-derived dopaminergic progenitor cells. The University of California San Diego began a study in November 2023, with ongoing trials in Japan.
Oncology Pipeline Advancements
Promising interim results for TP-3654 in myelofibrosis and DSP-5336 in acute leukemia, with observed reductions in spleen volume and bone marrow blasts respectively, and good tolerability in trials.
Negative Updates
Significant Revenue Decline
Revenue was JPY 235 billion, a decrease of JPY 225.2 billion compared to the same period last year, with declines across all segments, including Japan, North America, and Asia.
Core Operating and Net Profit Losses
Core operating profit decreased by JPY 139.3 billion year-on-year, resulting in a loss of JPY 96.4 billion. Net profit attributable to owners also decreased, resulting in a loss of JPY 117.7 billion.
Challenges in North America
The North America segment saw a revenue decrease of JPY 164 billion compared to the same period last year, heavily impacted by the end of the exclusive sales period of LATUDA.
Underperformance of Key Products
Significant downward revisions for ORGOVYX, MYFEMBREE, and GEMTESA forecasts due to slower than expected market penetration and increased competition.
Financial Forecast Revisions
Revenue forecast revised down by JPY 45 billion, with core operating profit expected to see a reduction of JPY 72 billion, forecasting a loss of JPY 134 billion.
Potential Impairment Concerns
Possibility of impairment for key products due to underperformance and downward revisions of their outlook.
Company Guidance
During the Q3 2024 earnings call for Sumitomo Pharma, several key financial metrics and strategic adjustments were discussed. Revenue for Q3 2023 was reported at JPY 235 billion, which marked a significant decrease of JPY 225.2 billion from the same period in the previous year. The decline was attributed to reduced revenue across all segments, including Japan, North America, and Asia. Despite a decrease in SG&A expenses and some operating income from the sale of shares in Sumitomo Pharma Animal Health, the core operating profit decreased by JPY 139.3 billion, resulting in a core operating loss of JPY 96.4 billion. The company also recorded a JPY 20.5 billion nonrecurring expense related to restructuring in North America, contributing to an operating loss of JPY 117.7 billion. Additionally, profit before taxes saw a year-on-year decrease of JPY 107.4 billion, resulting in a quarterly loss of JPY 105.2 billion. Consequently, the net profit attributable to owners of the parent decreased significantly, resulting in a loss of JPY 117.7 billion. The full-year financial forecast was revised downward, with expectations for revenue at JPY 317 billion, a reduction of JPY 45 billion from previous forecasts. The forecasted core operating profit was expected to see a reduction of JPY 72 billion, projecting a loss of JPY 134 billion. The company is also anticipating a decrease in profit attributable to owners by JPY 61 billion, forecasting a loss of JPY 141 billion. The underperformance was largely due to the North American segment, where key products like ORGOVYX, MYFEMBREE, and GEMTESA fell short of their sales plans.

Sumitomo Dainippon Pharma Co Financial Statement Overview

Summary
Sumitomo Dainippon Pharma Co is in a transitional phase with improving revenue growth and positive cash flow, but faces challenges with profitability volatility and high leverage. Continued focus on operational efficiency and debt management is essential.
Income Statement
45
Neutral
Sumitomo Dainippon Pharma Co has experienced significant fluctuations in its income statement metrics. The company's gross profit margin based on the latest annual report is healthy, but net income has seen a volatile trajectory with significant losses in recent years. Revenue growth showed a positive turnaround in 2025, suggesting potential recovery. However, the EBIT and EBITDA margins have been erratic, indicating instability in operational efficiency.
Balance Sheet
50
Neutral
The balance sheet reflects a mixed financial position. While the equity ratio is reasonable, the debt-to-equity ratio indicates a high level of leverage, which could pose risks if not managed carefully. Return on equity has been negative in recent periods due to net losses, but stockholders' equity remains substantial, providing some stability.
Cash Flow
55
Neutral
Cash flow metrics show signs of improvement. The company has returned to generating positive free cash flow in the latest period after significant negative cash flows previously. The operating cash flow to net income ratio is positive, reflecting improved cash generation capability, but the overall cash flow situation remains fragile due to past inconsistencies.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue398.83B314.56B555.54B560.03B515.95B
Gross Profit245.40B187.98B376.63B402.91B378.18B
EBITDA57.58B-281.07B-3.50B124.36B103.11B
Net Income23.63B-314.97B-74.51B56.41B56.22B
Balance Sheet
Total Assets742.60B907.51B1.13T1.31T1.31T
Cash, Cash Equivalents and Short-Term Investments23.12B29.05B163.65B238.58B223.18B
Total Debt305.42B418.88B334.72B269.05B273.82B
Total Liabilities573.13B751.37B727.96B634.44B659.95B
Stockholders Equity169.48B156.06B406.75B607.89B580.57B
Cash Flow
Free Cash Flow8.00B-257.62B-805.00M17.75B124.80B
Operating Cash Flow16.50B-241.89B11.94B31.24B135.60B
Investing Cash Flow99.75B33.04B52.42B-18.28B8.88B
Financing Cash Flow-108.84B77.85B-146.82B-21.43B-57.22B

Sumitomo Dainippon Pharma Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1146.00
Price Trends
50DMA
934.32
Positive
100DMA
820.64
Positive
200DMA
722.89
Positive
Market Momentum
MACD
56.51
Negative
RSI
67.80
Neutral
STOCH
94.47
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4506, the sentiment is Positive. The current price of 1146 is above the 20-day moving average (MA) of 1008.90, above the 50-day MA of 934.32, and above the 200-day MA of 722.89, indicating a bullish trend. The MACD of 56.51 indicates Negative momentum. The RSI at 67.80 is Neutral, neither overbought nor oversold. The STOCH value of 94.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4506.

Sumitomo Dainippon Pharma Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$2.25T12.7513.71%2.24%4.04%21.20%
77
Outperform
¥215.46B6.62
3.89%8.08%25.92%
73
Outperform
$291.34B14.937.24%2.25%6.49%38.42%
67
Neutral
¥455.30B19.2613.50%26.79%
67
Neutral
¥1.18T25.525.34%3.83%6.42%10.82%
67
Neutral
¥6.82T62.981.50%4.55%7.45%-25.77%
52
Neutral
$7.59B0.18-63.14%2.16%16.34%0.64%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4506
Sumitomo Dainippon Pharma Co
1,137.00
715.00
169.43%
JP:4516
Nippon Shinyaku Co., Ltd.
3,189.00
-155.82
-4.66%
JP:4530
Hisamitsu Pharmaceutical Co
3,993.00
-39.81
-0.99%
JP:4507
Shionogi & Co
2,547.00
335.82
15.19%
JP:4523
Eisai Co
4,221.00
-1,359.88
-24.37%
JP:4502
Takeda Pharmaceutical Co
4,305.00
191.56
4.66%

Sumitomo Dainippon Pharma Co Corporate Events

Sumitomo Pharma Strengthens U.S. Market Position with Asset Assignment
Jun 26, 2025

Sumitomo Pharma Co., Ltd. has announced the assignment of key product assets in the U.S. from its subsidiaries to itself, aiming to enhance its direct involvement in the U.S. market. This strategic move, valued at approximately USD 1.8 billion, is part of a broader capital reorganization to strengthen the company’s revenue stream and operational control in the U.S., reflecting the growing importance of this market for Sumitomo Pharma’s overall business strategy.

The most recent analyst rating on (JP:4506) stock is a Hold with a Yen460.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.

Sumitomo Pharma Highlights Independence Amid Parent Company Ties
Jun 26, 2025

Sumitomo Pharma Co., Ltd. announced details about its relationship with its parent company, Sumitomo Chemical Co., Ltd., which holds a 51.78% voting interest. The announcement highlights the company’s operational independence, despite its integration into the parent company’s corporate group. The collaboration includes joint ventures in regenerative medicine and shared resources, but the company maintains managerial independence, with no limitations imposed on its business activities by the parent company.

The most recent analyst rating on (JP:4506) stock is a Hold with a Yen460.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.

Sumitomo Pharma Restructures Asian Business with Marubeni Partnership
May 28, 2025

Sumitomo Pharma Co., Ltd. has announced a strategic restructuring of its Asian business through a simplified absorption-type company split. This involves transferring 60% of shares of a newly established subsidiary to Marubeni Global Pharma Corporation, with the option to transfer the remaining 40% in the future. This move is expected to enhance Sumitomo Pharma’s operational focus and market positioning in Asia, potentially impacting stakeholders by aligning with Marubeni’s resources and market reach.

The most recent analyst rating on (JP:4506) stock is a Hold with a Yen460.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.

Sumitomo Pharma Unveils ‘Reboot 2027’ for Strategic Growth
May 13, 2025

Sumitomo Pharma has announced ‘Reboot 2027,’ a strategic plan for FY2025-FY2027, aiming to stabilize its revenue base and enhance its position as an R&D-driven pharmaceutical company. The plan includes financial targets such as expanding sales of key products and reducing debt, alongside initiatives to innovate in oncology and regenerative medicine. The company seeks to improve its value creation cycle and establish a distinctive global presence, with a focus on strategic growth and innovation.

The most recent analyst rating on (JP:4506) stock is a Hold with a Yen460.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.

Sumitomo Pharma Announces Significant Share Transfer in Asian Business
May 13, 2025

Sumitomo Pharma Co., Ltd. announced the transfer of its Asian business to a new subsidiary, with 60% of shares being acquired by Marubeni Global Pharma Corporation. This transaction is expected to generate a gain of approximately 45 billion yen, impacting the company’s financial forecast for the fiscal year ending March 2026.

The most recent analyst rating on (JP:4506) stock is a Hold with a Yen460.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.

Sumitomo Pharma Proposes Amendments to Enhance Governance
May 13, 2025

Sumitomo Pharma Co., Ltd. announced a proposal to amend its Articles of Incorporation to transition to a company with an Audit & Supervisory Committee, aiming to enhance corporate governance and decision-making processes. The amendments will include changes to the roles of directors and the establishment of new provisions to support strategic discussions and improve oversight.

The most recent analyst rating on (JP:4506) stock is a Hold with a Yen460.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.

Sumitomo Pharma Announces Key Personnel Appointments Amid Governance Transition
May 13, 2025

Sumitomo Pharma Co., Ltd. announced its plan to transition to a company with an Audit and Supervisory Committee, pending approval at the upcoming Annual Shareholders’ Meeting. The Board of Directors has appointed candidates for executive and key personnel roles, with several directors and committee members being confirmed, subject to shareholder approval. This transition is expected to enhance the company’s governance structure, potentially impacting its operational oversight and strategic direction.

The most recent analyst rating on (JP:4506) stock is a Hold with a Yen460.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 18, 2025