China drug sales outlook a shot in the arm for Japanese drugmaker

TOKYO — Astellas Pharma Inc, Japan’s second — biggest drugmaker, will hire at least 300 sales employees in China as part of a plan to bolster global revenue by 17 percent in five years.


Sales in China are projected to double by the year ending March 2015, Astellas said in documents on Tuesday. It predicts global revenue will reach 1.1 trillion yen ($12 billion) over the same period, from 940 billion in the current year, helped by Chinese demand for the Tokyo-based company’s best-selling drug Prograf.


Astellas expects Prograf, given to transplant patients to prevent organ rejection, will gain approval for wider use in Japan and help drive a rebound in sales of the drug. Prograf accounted for 19 percent of revenue last fiscal year and analysts said demand for it would dwindle amid competition from cheaper copycat versions in the US, its biggest market.


“I didn’t expect Prograf sales to turn around and increase,” said Yasuhiro Nakazawa, an equities analyst at Mitsubishi UFJ Morgan Stanley Securities Co, by telephone.


Astellas fell 0.7 percent to a 14-month low of 2,958 yen in Tokyo trading. The benchmark Topix index dropped 2.3 percent.


Sandoz, the generic-drug unit of Basel, Switzerland-based Novartis AG, became the first company in August to sell copies of Prograf in the US.


Astellas projects Prograf sales will reach more than 170 billion yen in the 12 months ending March 2015, from an estimated 163.6 billion yen in the current year.


“The flow of Sandoz’s generic version of Prograf has stabilized,” said Masafumi Nogimori, Astellas’s chief executive officer, in a briefing in Tokyo. He said he didn’t expect significant sales erosion even as more copied versions of the drug enter the market.


The drugmaker plans to seek approval in Japan to market Prograf as a treatment for rheumatoid arthritis, lupus nephritis, ulcerative colitis and myasthenia gravis.


The planned purchase of OSI Pharmaceuticals Inc for $4 billion will contribute to earnings in March 2015, the company said, and help profit recover from three years of declines by giving Astellas its first cancer medicine on the market and a US sales force focusing on oncology drugs.


Operating profit, which excludes contributions from OSI, is forecast to jump by 58 percent to 240 billion yen within the five-year period, beating the 142.3 billion yen average estimate of three analysts compiled by Bloomberg.


Annual revenue from Asia, including China, may exceed 60 billion yen by the year ending March 2015, rising from the 35.4 billion yen that Astellas forecasts for this fiscal year.


“Astellas has presented an ambitious mid-term plan,” Stephen Barker, an analyst at MF Global FXA Securities Ltd in Tokyo, wrote in a note . “These targets are substantially higher than consensus forecasts.”


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