Eisai Co.,Ltd. Q3 FY2026 earnings call

Key Points

• Pharmaceutical business growth was strong, led by 3L products. Lenvima's revenue was JPY 258.1 billion (+4% y-o-y), DAYVIGO at JPY 47.7 billion (+18% y-o-y), and LEQEMBI at JPY 61.8 billion (+109% y-o-y).
• Pipeline updates: Two in-licensing deals in oncology were announced. Taletrectinib acquisition for Europe, Middle East, etc., and Serplulimab acquisition for Japan.
• LEQEMBI initiatives: Focus on value maximization through pathway optimization, subcutaneous formulation expansion, and advancements in blood-based biomarkers. Global expansion of subcutaneous formulation and progress in various regions.
• Oncology pipeline: Strengthening through strategic in-licensing and in-house R&D efforts. E2086, an orexin 2 receptor agonist, is in Phase II trial for narcolepsy.

The Pharmaceutical business achieved revenue of JPY 619.9 billion in Q3 fiscal 2025, a 3.1% year-on-year increase. This growth was driven by the organic pharmaceutical business, particularly the '3L' products: Lenvima, DAYVIGO, and LEQEMBI. Lenvima had Q3 revenue of JPY 258.1 billion (+4% y-o-y), DAYVIGO was JPY 47.7 billion (+18% y-o-y), and LEQEMBI was JPY 61.8 billion (+109% y-o-y). Other businesses saw revenue decrease due to the absence of upfront payments from divestitures. The Pharmaceutical business contributed significantly, with the 3L products accounting for a major portion of the growth.

Guidance

• Consolidated full year forecast for fiscal 2025 remains JPY 790 billion in revenue and JPY 54.5 billion in operating profit.
• In-licensed oncology assets are expected to contribute revenue starting from fiscal 2028.
• LEQEMBI's global revenue forecast is JPY 76.5 billion. The company plans to allocate resources to next-generation pipeline programs in Q4.

Risks

• Uncertainties in onetime revenues from partnerships and out-licensing.
• Impact of structural reforms in EMEA and increased R&D expenses on profits.
• Competition in the Alzheimer's and narcolepsy markets, including potential challenges from competitors.

Q: Regarding the performance up to Q3 and future guidance, how does the organic business factor in with potential one-time profits and structural costs?

A: Oyama responded that organic business is growing steadily, but one-time profits are uncertain. Structural reforms in EMEA will incur costs in Q4, but organic business is expected to absorb negative impacts.

Q: What is the impact of competitors on LEQEMBI's growth?

A: Haruna and Naito responded that LEQEMBI's differentiating factors include early initiation and long-term administration, subcutaneous formulation options, and clinical data over 4 years. It is expected to grow steadily despite competition.

Q: How will LEQEMBI's initial treatment approval affect market penetration?

A: Haruna stated that initial treatment approval with IQLIK is expected to accelerate growth, with smoother reimbursement anticipated after formulary listing in January 2027.

Q: About in-licensed oncology assets, how will they be developed and marketed?

A: Iike responded that in-licensed oncology assets will be developed and marketed through targeted approaches in respective regions, leveraging existing sales and marketing networks.