Growth Concerns Loom for Daiichi Sankyo on Drug Warning

Growth Concerns Loom for Daiichi Sankyo on Drug Warning
February 9, 2015
By Alex Keown, BioSpace.com Breaking News Staff

TOKYO – Japanese pharmaceutical Daiichi Sankyo, Inc. is facing tough financial hurdles, as its best-selling medication is set to lose patent protection in 2016 and the firm faces increasingly tough competition from generic medications.

Benicar, the medication whose patent protection is set to expire next year, and which is used in the treatment of hypertension, brings in about 27 percent of annual revenue for Daiichi Sankyo. Last year the medication brought in $2.6 billion. Benicar is prescribed to keep blood vessels from narrowing, which lowers blood pressure and improves blood flow.

In addition to the loss of patent protection, a new blood thinner that will hit the U.S. market will now include a regulatory warning, which analysts speculate may limit its market potential. Savaysa, also known as edoxaban, is an oral, once-daily selective factor Xa-inhibitor, is now commercially available in U.S. pharmacies, the company announced today. The U.S. Food and Drug Administration (FDA) approved the medication last month, however the federal government said the medication will have to include a “boxed warning” that cautions against it being used for patients with normal renal function. Edoxaban faces competition with other Xa inhibitors, including ones from Bayer AG , Johnson & Johnson and Pfizer Inc. .

With the hurdles the company is facing, analysts are speculating the company will not see much in the way of earnings growth over the next three to five years, although the company said it expects to see a 6.7 percent rise in profit to $554 million at the end of the fiscal year.

In addition to the medication issues, Daiichi Sankyo has run into other issues costly issues. Last year the FDA banned the sale of medicine from Indian drug maker Ranbaxy Laboratories, which the Japanese company bought a large stake in in 2008. Due to manufacturing violations, medical supplies from one of Ranbaxy Laboratories plants were banned from sending its products to the United States. Daiichi Sankyo ended up divesting itself from Ranbaxy last year.

Last month the U.S. subsidiary of Daiichi Sankyo Co. agreed to pay $39 million to the U.S. government and state Medicaid programs to settle claims it paid doctors kickbacks to prescribe its drugs, according to the U.S. Department of Justice. The lawsuit claimed the company provided kickbacks in the form of speaking fees at programs it hosted between 2004 and 2011. According to reports, the company allegedly offered the kickbacks to get physicians to prescribe Benicar, along with other high blood pressure medications Azor and Tribenzor. Kickbacks were also allegedly offered to increase prescriptions of cholesterol-lowering drug Welchol.


BioSpace Temperature Poll
Who Do You Think Will Be Sanofi’s New CEO? French drugmaker Sanofi said Thursday that it will name a new chief executive in mere weeks, as it attempted to put to rest rumors that the company could not find any executives willing to take the reins after it unceremoniously ousted its previous CEO last fall. Who do you think will soon be crowned king? BioSpace wants your opinion!

Back to news