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Daiichi Sankyo Company (JP:4568)
:4568
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Daiichi Sankyo Company (4568) AI Stock Analysis

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JP:4568

Daiichi Sankyo Company

(OTC:4568)

Rating:68Neutral
Price Target:
¥3,918.00
▲(6.87%Upside)
Daiichi Sankyo's strong financial performance, characterized by robust revenue growth and financial stability, is the primary driver of its stock score. However, the technical indicators suggest caution due to a potential nearing of overbought conditions. The valuation is reasonable, but the negative Free Cash Flow is a concern for future financial flexibility.
Positive Factors
Corporate Confidence
A recent JPY200Bn-buyback was conducted in defiance of the weak stock price, indicating confidence in the company's corporate value.
Drug Development
Advancing to Enhertu’s filing for 1L HER2+ BC with strong DB09 interim data shows promising progress in drug development.
FDA Approval
FDA has approved anticancer candidate Dato-DXd for breast cancer, which is considered a positive surprise by the market.
Negative Factors
Disappointing Study Data
Daiichi's shares have declined by about 1/3 since the company reported disappointing Ph2 data from the TROPION-Lung01 study.
Stock Decline
Daiichi's shares have declined by about 1/3 since the company reported disappointing data from a lung cancer study.

Daiichi Sankyo Company (4568) vs. iShares MSCI Japan ETF (EWJ)

Daiichi Sankyo Company Business Overview & Revenue Model

Company DescriptionDaiichi Sankyo Company, Limited researches and develops, manufactures, imports, markets, and sells pharmaceutical products worldwide. The company offers trastuzumab deruxtecan, an anti-cancer agent and anti-HER2 antibody drug conjugate; mirogabalin for pain treatment; teneligliptin/canagliflozin for type 2 diabetes mellitus treatment; lacosamide anti-epileptic agent; prasugrel, an antiplatelet agent; denosumab for osteoporosis and bone disorders; teneligliptin for type 2 diabetes mellitus treatment; edoxaban, an anticoagulant; esomeprazole for ulcer treatment; memantine for treating Alzheimer's disease; and laninamivir for anti-influenza treatment. It also provides olmesartan, an antihypertensive agent; levofloxacin, an antibacterial agent; pravastatin for hypercholesterolemia treatment; and loxoprofen, an anti-inflammatory analgesic. In addition, the company offers colesevelam for treating hypercholesterolemia and type 2 diabetes mellitus treatment; and ferric carboxymaltose and iron sucrose injections for treating anemia. Further, it provides Lulu, a combination cold remedy; Loxonin S, an antipyretic analgesic /anti-inflammatory analgesic; Transino for melasma improvement and treating against spots and freckles; Minon, a skincare product; and Breath Labo and Clean Dental oral care products, as well as Silodosin for dysuria; Gefitinib for malignant tumours; Bicalutamide for prostate cancer; and Tamoxifen, an anti-breast cancer agent. Additionally, the company offers adsorbed cell culture-derived influenza, influenza HA, measles rubella combined, and mumps vaccines. It also provides pharmaceuticals and drugs for animals, cosmetics, medical equipment, food products, drinking water, active pharmaceutical ingredients, and intermediates. It has collaboration with Guardant Health to develop Guardant360 CDx as a companion diagnostic for Enhertu in advanced metastatic non-small cell lung cancer. The company was founded in 1899 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyDaiichi Sankyo generates revenue through the research, development, manufacturing, and sale of pharmaceutical products. The company's revenue model is centered around its portfolio of patented drugs, which are sold globally. Key revenue streams include sales of prescription medications, especially in the oncology and cardiovascular segments, which are among the fastest-growing areas in the pharmaceutical industry. Additionally, Daiichi Sankyo engages in strategic partnerships and collaborations with other pharmaceutical companies to enhance its research capabilities and expand its market presence. These partnerships often involve co-development and co-marketing agreements, which contribute to the company's earnings by leveraging shared resources and expertise. Moreover, the company invests in research and development to continuously innovate and bring new drugs to market, which is crucial for maintaining its competitive edge and sustaining long-term revenue growth.

Daiichi Sankyo Company Earnings Call Summary

Earnings Call Date:Apr 25, 2025
(Q3-2024)
|
% Change Since: 10.55%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call presented a robust financial performance with significant revenue and profit growth, driven by strong product sales and successful patent settlements. However, slight downward adjustments in sales forecasts and potential financial uncertainties were noted.
Q3-2024 Updates
Positive Updates
Revenue Surge
Revenue increased by JPY 225 billion or 23.7% year-on-year to reach JPY 1,173.3 billion.
Profit Growth
Core operating profit increased by JPY 53.9 billion or 45.5% year-on-year to reach JPY 172.2 billion.
ENHERTU Sales Growth
ENHERTU sales in the first 9 months of fiscal year '23 grew by JPY 136.3 billion year-on-year to JPY 276.0 billion.
Dividend Increase
Annual dividend forecast per share increased to JPY 50, up by JPY 20 from FY 2022.
Patent Dispute Settlement
Plexxikon received a lump sum payment of USD 182 million or JPY 26.1 billion from Novartis following a patent dispute settlement.
Negative Updates
ENHERTU Sales Forecast Revision
U.S. ENHERTU sales forecast was slightly revised downward by JPY 3.2 billion from the October forecast.
Potential Financial Impact of Esperion Payments
The accounting treatment of payments related to Esperion is undecided, which may impact future financial results.
Delayed Data Availability
Top-line results for the DESTINY-Breast06 trial delayed to the first half of fiscal 2024.
Company Guidance
During the third-quarter earnings call for Daiichi Sankyo, several financial metrics and forecasts were discussed. The company reported a significant revenue increase of JPY 225 billion, or 23.7% year-on-year, reaching JPY 1,173.3 billion. This growth was driven by increased sales across various business units, including Japan, oncology, and EU specialty businesses. The core operating profit rose by JPY 53.9 billion, a 45.5% increase from the previous year, totaling JPY 172.2 billion. Meanwhile, operating profit, factoring in temporary gains and losses, surged by JPY 67.4 billion, marking a 53% year-on-year growth to JPY 194.6 billion. Notably, profit attributable to owners of the company saw an 88.7% rise, amounting to JPY 163.6 billion. The company revised its FY 2023 revenue forecast upward by JPY 30 billion to JPY 1,580 billion, attributing growth to favorable foreign exchange effects and increased sales of specific products. Additionally, the annual dividend forecast per share was increased to JPY 50, reflecting strong business performance and strategic collaborations.

Daiichi Sankyo Company Financial Statement Overview

Summary
Daiichi Sankyo exhibits strong financial performance with robust revenue growth and efficient cost management. The balance sheet reflects financial stability and conservative leverage, reducing financial risk. However, negative Free Cash Flow raises concerns about cash management and future financial flexibility.
Income Statement
88
Very Positive
Daiichi Sankyo demonstrated robust revenue growth, with a significant increase from 1.28 trillion to 1.89 trillion JPY over the past year, showing a positive growth trajectory. The Gross Profit Margin remains strong, reflecting efficient cost management. EBIT and EBITDA margins have improved, indicating better operational efficiency. However, the Net Profit Margin slightly decreased due to higher costs, which should be monitored.
Balance Sheet
85
Very Positive
The company maintains a solid equity position with a high Equity Ratio, suggesting financial stability. The Debt-to-Equity Ratio is low, indicating conservative use of leverage, which reduces financial risk. Return on Equity is strong, reflecting effective use of shareholders' funds to generate profits. Overall, the balance sheet presents a stable financial foundation.
Cash Flow
70
Positive
Operating Cash Flow to Net Income Ratio indicates a healthy conversion of income into cash. However, Free Cash Flow has turned negative, mainly due to significant capital expenditures. This could impact future financial flexibility if not managed properly. The Free Cash Flow to Net Income Ratio has worsened, indicating potential liquidity challenges.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.89T1.60T1.28T1.04T962.52B
Gross Profit1.47T1.19T914.95B691.56B624.23B
EBITDA434.68B305.46B169.72B143.05B121.18B
Net Income295.76B200.73B109.19B66.97B75.96B
Balance Sheet
Total Assets3.46T3.46T2.51T2.22T2.09T
Cash, Cash Equivalents and Short-Term Investments639.84B876.56B825.13B843.85B824.91B
Total Debt101.33B156.00B143.09B163.46B183.83B
Total Liabilities1.83T1.77T1.06T870.53B813.13B
Stockholders Equity1.62T1.69T1.45T1.35T1.27T
Cash Flow
Free Cash Flow-62.42B476.47B47.15B62.54B128.11B
Operating Cash Flow53.84B599.26B114.51B139.23B192.21B
Investing Cash Flow334.17B-282.64B-257.78B212.34B-39.25B
Financing Cash Flow-377.77B-123.56B-89.59B-86.23B-202.43B

Daiichi Sankyo Company Technical Analysis

Technical Analysis Sentiment
Positive
Last Price3666.00
Price Trends
50DMA
3505.56
Positive
100DMA
3486.31
Positive
200DMA
3945.74
Negative
Market Momentum
MACD
43.87
Negative
RSI
64.32
Neutral
STOCH
88.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4568, the sentiment is Positive. The current price of 3666 is above the 20-day moving average (MA) of 3361.60, above the 50-day MA of 3505.56, and below the 200-day MA of 3945.74, indicating a neutral trend. The MACD of 43.87 indicates Negative momentum. The RSI at 64.32 is Neutral, neither overbought nor oversold. The STOCH value of 88.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4568.

Daiichi Sankyo Company Peers Comparison

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
68
Neutral
¥6.83T23.3717.60%1.64%17.77%49.34%
52
Neutral
$7.61B0.10-63.03%2.08%16.34%0.32%
$18.20B53.873.22%0.50%
$80.20B28.5022.80%0.05%
$24.75B9.9613.46%0.04%
$15.18B12.3312.99%0.17%
$47.19B61.821.50%0.14%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4568
Daiichi Sankyo Company
3,666.00
-1,912.16
-34.28%
ALPMF
Astellas Pharma
10.02
-0.53
-5.02%
CHGCF
Chugai Pharmaceutical Co
46.99
6.97
17.42%
OTSKF
Otsuka Holdings Co
42.67
-5.66
-11.71%
SGIOF
Shionogi & Co
16.20
1.84
12.81%
TKPHF
Takeda Pharmaceutical Co
29.50
2.97
11.19%
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