Negative Impact of Price Cuts to Continue; New Opportunities Offer Marginal Benefit

Asia Healthcare Analyst, Pathology Associates Limited

Dion Stéfan Büchner M.D., FCAP

Asia Healthcare Analyst

Pathology Associates Limited

Equity Bottom-Up

<p><strong>Key highlights</strong></p><ul>
<li>NHI pricing pressure continues to take its toll on Kaken’s flagship drug, Artz (down 16% to ¥12.4b, ~30% of FY17 sales), driving overall revenue decline of ~5% to ¥47.5b</li>
<li>While SG&amp;A expenses declined by 5% (to ¥9.5b), R&amp;D expenses increased significantly by ~57% to ¥5.7b</li>
<li>As a result, Core EBIT and EPS declined by ~19% and 17% respectively to ¥12.4b and ¥222 / share</li>
</ul>

Key highlights
NHI pricing pressure continues to take its toll on Kaken’s flagship drug, Artz (down 16% to ¥12.4b, ~30% of FY17 sales), driving overall revenue decline of ~5% to ¥47.5b
While SG&amp;A expenses declined by 5% (to ¥9.5b), R&amp;D expenses increased significantly by ~57% to ¥5.7b
As a result, Core EBIT and EPS declined by ~19% and 17% respectively to ¥12.4b and ¥222 / share


Kaken 1H FY18 (YE Mar'19) Results - First Glance

Kaken Pharmaceutical

Kaken 1H FY18 (YE Mar'19) Results - First Glance