Eisai Co Ltd - ADR

Q3 FY2025 performance: strong organic growth, record revenue, profit weighed down by lumpy items - Revenue: JPY 619.9bn (+3.1% YoY), described as a record-high Q3, with growth almost entirely from organic business (i.e., core brands rather than one-offs). - Operating profit (OP): JPY 54.5bn (down vs. prior year) primarily due to the absence of temporary/out-licensing profit items that existed last year. - Investors takeaway: the underlying engine looks healthier than the headline OP—management emphasized organic OP contribution approximately doubling YoY (qualitative).

Full-year outlook maintained: forecasts unchanged despite Q4 cost pressures - Guidance kept: FY2025 revenue JPY 790bn and FY2025 operating profit JPY 54.5bn. - Q4 headwinds planned/expected: - Structural reform costs in EMEA (explicitly mentioned for Q4). - Higher spend in R&D supporting “next-generation” pipeline programs (notably anti-Tau antibody etalanetug and narcolepsy therapy E2086). - Management stance: these are already built into expectations; structural reform costs are expected to be contained within the plan.

“3Ls” driving results: Lenvima +4%, DAYVIGO +18%, LEQEMBI >2x expansion - The CFO/COO attributed the growth to the core portfolio: - Lenvima Q3 revenue: JPY 258.1bn (+4% YoY); notes: - U.S. IRA impact absorbed via strong demand. - U.S. Medicare Drug Price Negotiation inclusion: price revision expected to take effect ~2 years later (Jan 2028). - Patent/purity dispute suggests limited generic entry until July 1, 2030 (unless contingencies). - DAYVIGO Q3 revenue: JPY 47.7bn (+18% YoY); Japan grew to JPY 35.2bn, despite 14% drug price reduction (still +4% YoY). - Management confidence: full-year DAYVIGO forecast JPY 58bn. - LEQEMBI Q1–Q3 revenue: JPY 61.8bn, +109% YoY; expansion across Americas/Japan/China/EMEA. - Management: full-year global LEQEMBI revenue forecast JPY 76.5bn progressing well.