Shionogi & Co., Ltd.

Q1 FY2025 revenue was JPY99.8 billion, up JPY2.2 billion year over year. Operating profit was JPY35.1 billion, up JPY7.0 billion; profit before tax was JPY46.3 billion, up JPY9.8 billion; profit attributable to owners of parent was JPY39.4 billion, up JPY8.7 billion; and EBITDA was JPY40.6 billion, up JPY7.0 billion. Cost of sales was JPY12.3 billion, down JPY2.1 billion; SG&A was JPY26.3 billion, up JPY1.2 billion; and R&D was JPY24.9 billion, down JPY4.5 billion. By segment, domestic prescription drug sales were JPY14.1 billion, overseas subsidiaries/exports were JPY14.2 billion, contract manufacturing was JPY4.5 billion, and royalty income was JPY63.9 billion. Management said it expects HIV franchise growth, cefiderocol/Fetroja/Fetcroja growth, and higher Xocova revenue in the second quarter, while strengthening cost control and continuing aggressive R&D investment; it also said it aims to achieve the first-half forecast.

John Keller emphasized that HIV remains the core growth engine, with long-acting Cabenuva, Apretude, and Dovato driving expansion and with more long-acting formulations under development. He framed the JT Group M&A and Torii integration as a way to strengthen proprietary drug discovery, domestic sales, and supply capabilities, saying the combined group will pursue more in-house discovery and synergies in Japan. His tone was confident and strategic, with repeated emphasis on long-term growth beyond 2030 rather than near-term noise.

Takuji Fujiwara said Q1 performance benefited from a favorable mix, especially stronger royalty income, lower cost of sales, and lower R&D versus the prior year’s heavy trial burden. He attributed cost of sales improvement to mix effects, including higher royalty income and lower sales of higher-cost products, and said SG&A rose because of higher U.S. sales-related expenses. He also said R&D was not being actively restrained; the year-over-year decline reflected the absence of last year’s large Phase 3 and Phase 2 programs, while the company still plans to invest for growth drivers. On capital allocation, management said it spent about JPY70 billion on shares acquired through the TOB and that Torii’s full subsidiary conversion remains scheduled for September 1.

Analysts pressed on the impact of Gilead’s six-month PrEP, U.S. Medicaid and drug-price reforms, and whether long-acting HIV products can keep growing. Keller said the market is still mostly treatment, not prevention, that treatment is relatively protected under Medicaid, and that the bigger uncertainty is prevention coverage expansion; he also said Cabenuva continues to grow and that long-acting therapy could reach about one-third of HIV treatment by 2031 or sooner. Questions also focused on Xocova’s FDA filing timing, RSV Phase 2b dosing/endpoints, Quviviq’s slower-than-planned rollout, and Torii/JT acquisition cash outlay. Management said the FDA has received the Xocova package and a follow-up letter is expected after 60 days, RSV Phase 3 design will depend on Phase 2b results, Quviviq is constrained by the 2-week prescription hurdle in internal medicine, and the Torii share purchase was about JPY70 billion.