Ono Pharmaceutical Co., Ltd.

On a core basis, Q1 revenue increased 8.4% year over year to JPY127.5 billion, with product revenue up 10.6% to JPY87.8 billion and royalties/others up 3.7% to JPY39.8 billion. Core operating profit declined 10.1% to JPY31.6 billion, and core profit for the period fell 13.7% to JPY24.8 billion. On a full IFRS basis, operating profit was JPY22 billion and profit for the period was JPY17.7 billion. Management said domestic sales were down slightly, OPDIVO weakened on competition, and Deciphera added JPY10.1 billion of sales but also a JPY4.8 billion operating loss. Full-year earnings forecasts were not revised, and management said Q2/full-year guidance remains unchanged from the start of the fiscal year.

The company’s strategic message was that Deciphera is now a meaningful growth contributor and that ONO is using a core-basis view to show the underlying business after the acquisition. Management emphasized that overseas sales are ahead of plan, while domestic business is mixed: FORXIGA remains strong, OPDIVO is under pressure, and the pipeline plus new approvals should support future growth. Tone-wise, leadership sounded constructive but cautious, repeatedly noting that some areas are still difficult and require continued execution.

Itoh highlighted that Q1 core revenue reached JPY127.5 billion, with JPY10.1 billion coming from Deciphera and with royalties helped by OPDIVO and KEYTRUDA. He said core operating profit declined to JPY31.6 billion because R&D rose JPY7.4 billion and SG&A rose JPY6.1 billion, including a JPY4.8 billion Deciphera operating loss. He also said full-year guidance is unchanged, operating profit is tracking roughly to plan, and SG&A is almost in line with plan; gross margin was described as not expected to fluctuate materially from here. Cash flow comments were limited, except that a large intangible asset acquisition line was mainly due to sapablursen.

Analysts pressed on whether Deciphera’s Q1 launch pace was ahead of expectations; management said both QINLOCK and ROMVIMZA are performing faster than expected, with ROMVIMZA benefiting from lack of a warning label and some switching from prior therapies. Questions also focused on OPDIVO’s weak lung cancer trends and the drop in gastric share to 57%; management blamed the main shortfall on competition from VYLOY and said the recovery to 65% came from better resonance with doctors on claudin-positive/CPS10+ patients. On povetacicept and sapablursen, management was reluctant to discuss filing timing or economics, saying it is too early to specify Japan submission timing or interim-analysis strategy. Management also said it is not planning to narrow the pipeline at this stage, preferring to keep building late-stage assets while using Go/No-Go discipline in early development.