ESALF - Eisai Co Ltd (ESALF) Q3 2023 Earnings Call Transcript
2024-02-06 20:49:04 ET
Eisai Co Ltd (ESALF)
Q3 2023 Results Conference Call
February 06, 2024 01:00 AM ET
Company Participants
Mitsuru Shomon - CFO
Keisuke Naito - Global AD Officer
Lynn Kramer - Chief Clinical Officer
Takashi Owa - Chief Scientific Officer
Conference Call Participants
Seiji Wakao - JPMorgan
Kazuaki Hashiguchi - Daiwa Securities
Fumiyoshi Sakai - UBS
Hidemaru Yamaguchi - Citigroup Securities
Shinichiro Muraoka - Morgan Stanley
Presentation
Operator
Thank you very much for taking time out of your busy schedule as well as in this bad weather to gather here for our meeting. Now it is time to start. Financial Results Presentation Meeting for the Third Quarter of FY 2023 for Eisai Company Limited. We are holding this meeting online as well as in person in a hybrid manner.
We have delivered the materials for your reference, the presentation material and financial briefs as well. If you are attending in person in the venue, if you are turning online, please view the screen. And I would like to introduce who are attending from the company, CFO, Mitsuru Shomon, Global AD Officer, Keisuke Naito. Now the floor is yours, CFO, Mr. Shomon. CFO, Shomon?
Mitsuru Shomon
I will report our consolidated financial results for the third quarter of fiscal year 2023. We achieved an increase in revenue and operating profit, thanks to the growth of Lenvima and Dayvigo and appropriate cost control and made good progress against our forecast for the fiscal year. Revenue was JPY 551.3 billion at 101% of the previous year's level. The breakdown of revenue is shown below.
Revenue from pharmaceutical business, our organic business was JPY 528.1 billion. The growth of the Lenvima and Dayvigo offset the factors decreasing revenue and the revenue was almost the same as the previous year at 99% due to onetime income from the execution of strategic options, which we have already reported.
Revenue from other businesses was JPY 23.2 billion or 162% of the previous year's level. Cost of sales was JPY 119.2 billion, accounting for 21.6% of revenue, down 3.9 percentage points from 25.5% in the previous year, due to an improved product mix and increased lump-sum payment income. Gross profit was JPY 432 billion, up 6% year-on-year.
Next, expense items. R&D expenses amounted to JPY 124.5 billion, up 3% year-on-year, but the ratio to sales was 22.6%, unchanged from the previous year. Actual R&D expenses after taking into account the amount borne by partners amounted to JPY 170.3 billion, 97% of the previous year's level, including profit sharing expenses of JPY 103.4 billion for Lenvima paid to Merck and a reimbursement of profit sharing expenses of JPY 17.8 billion for LEQEMBI received from Biogen. SG&A expenses were at JPY 271 billion, 99% of the previous year's level.
As a financial discipline, we controlled the increase of total expenses to be within the range of 6% increase of gross profit and with total expenses staying flat year-on-year or increased significantly to JPY 37.5 billion or 272% of the previous year's level. Profit for the period was JPY 30.8 billion, 75% of the previous year's level due to a decrease in income taxes in the previous year, resulting from a repayment of paid-in capital from a consolidated U.S. subsidiary.
As shown in the balance sheet items of the net DER and ratio of equity attributable to owners of the parent, the equity ratio, the financial soundness of the company continues to be solid. We promote a dividend policy that relies on financial soundness based on medium- to long-term balance sheet management rather than short-term PL. Our financial soundness is solid, and we will continue to pay dividends on a continuous and stable basis....
Eisai Co Ltd (ESALF) Q3 2023 Earnings Call Transcript