Ono Pharmaceutical Co., Ltd.

On a core basis, Q1 revenue increased JPY9.9 billion, or 8.4%, YoY to JPY127.5 billion. Core operating profit decreased JPY3.5 billion, or 10.1%, YoY to JPY31.6 billion, and core profit for the period fell JPY3.9 billion, or 13.7%, to JPY24.8 billion. On a full IFRS basis, operating profit was JPY22 billion, down JPY8.7 billion, or 28.3%, YoY, and profit for the period was JPY17.7 billion. Full-year guidance was left unchanged; management also said there is no revision to the product-by-product outlook announced at the start of the period.

Itoh’s message was that the company is now reporting on a core basis to reflect Deciphera, and that the quarter showed solid top-line growth despite a profit drag from the acquisition. He emphasized that domestic products were mixed, with FORXIGA strong and OPDIVO weaker, while overseas growth was boosted by Deciphera products and royalties. His tone was cautious but steady: the business is roughly on plan, with no change to full-year guidance.

Itoh highlighted that revenue was JPY127.5 billion on a core basis and that the main reason core operating profit declined was the JPY4.8 billion operating loss recorded by Deciphera. He said R&D expenses rose JPY7.4 billion and SG&A rose JPY6.1 billion YoY, largely due to Deciphera, while excluding Deciphera, R&D declined and SG&A was roughly flat. He also pointed to IFRS-to-core reconciliation items of JPY8.9 billion, mainly intangible asset amortization and PPA inventory step-up, and said gross margin and SG&A were basically in line with plan with no major future swings expected.

Analysts focused on whether Deciphera was ahead of plan, OPDIVO’s domestic weakness, and the outlook for ROMVIMZA, povetacicept, sapablursen, and the pipeline mix. Management said QINLOCK and ROMVIMZA are moving faster than expected, with ROMVIMZA at JPY1.1 billion in Q1, but it would not break down the patient mix yet. On OPDIVO, they acknowledged a tough Q1 in lung cancer and pressure in gastric cancer from VYLOY and competition, but said they still target a recovery as new indications and long-term data support prescription share. They also declined to give timing for povetacicept filing, said sapablursen will proceed through Phase III, and stated they do not need to narrow the 23-pipeline portfolio at this stage.