Higher R&D Costs to Eat Sales Gains for Daiichi Sankyo

Daiichi Sankyo raised its sales estimates for fiscal 2007 almost 5 percent to $7.68 billion, but increasing R&D costs will consume most of the sales gains.

The firm raised its 2007 operating income forecast by $26 million while its sales forecast was raised $341 million. The FDA approved the firm’s high blood pressure medication Azor (amlodipine/olmesartan medoxomil) in September.

The forecast was issued after Daiichi Sankyo and partner Eli Lilly suspended two small clinical trials for the blood-thinner prasugrel, indicating a need for a dose adjustment in patient subpopulations.

The study compared the effects of the drug to Bristol-Myers Squibb’s blockbuster Plavix (clopidogrel bisulfate).
 
The main driver of Daiichi Sankyo’s R&D costs relates to its licensing agreement with Amgen for denosumab, an investigational osteoporosis and cancer treatment, the company said. The agreement, announced in July, grants the firm rights to commercialize the product in Japan. 

Denosumab is in Phase III clinical testing for bone loss induced by hormone ablation therapy for breast cancer or prostate cancer, the prevention of cancer-related bone damage and postmenopausal osteoporosis.

Daiichi Sankyo agreed to pay Amgen $20 million upfront and $150 million in worldwide development costs through 2009. The company also will receive milestone payments from Amgen concerning its intellectual property upon the antibody’s approval in Japan and the European Union.