Daiichi Sankyo Co Ltd said its first-half net profit would beat its initial estimate by 36 percent aided by strong drug sales overseas, but it only nudged its annual outlook higher as it will likely spend more to buy rights to new drug candidates.
The Japanese drug maker, which is gearing up for a major U.S. expansion, has been benefiting from robust U.S. sales of its high blood pressure medicine Benicar and favourable currency rates.
It said it now expects net profit for April-September to come in at 60 billion yen ($525 million), better than its July forecast of 44 billion yen, although that would still be 10 percent below last year's result.
The expected first-half rise was also due to the company postponing booking some costs until the second half.
The drug maker, formed when Sankyo bought Daiichi Pharmaceutical in 2005, has surprised itself and analysts with cost-cutting results and sales strength.
For the full year, Daiichi Sankyo said it expects to book a net profit of 100 billion yen, which is in line with analysts' estimates.
The figure is 8.7 percent higher than its previous forecast and 27 percent better than its year-earlier result.
This week its shares were hit by news that it and Eli Lilly and Co would giving their most important experimental medicine, the blood-clot preventer prasugrel, to patients in two small phase II trials because the dosage may need to be changed for certain patients.
Prasugrel is a serious potential rival to Bristol-Myers Squibb's Plavix, one of the world's biggest-selling medicines.
Analysts gave various reactions to the news, but many in Tokyo said they were reserving judgment until they see data from phase III testing, the results of which are due to be released on Nov. 4.
UBS Securities analyst Hirohisa Shimamura said in a report that there had been no change to his expectations that prasugrel was likely to show superior efficacy but an inferior safety profile such as minor bleeding, compared with Plavix.
The likelihood of the Food and Drug Administration requesting follow-up data had increased, which would slow time to market, he said.
Prior to the announcement, Daiichi Sankyo's shares ended 0.3 percent lower at 3,150 yen after tumbling 10.3 percent a day earlier on the prasugrel news.