Chugai Pharmaceutical's Core Operating Profit Rises on Strong Hemlibra Exports and Growing Royalty Stream
核心洞察
Chugai Pharmaceutical reported solid Q2 FY2026 results with core operating profit exceeding prior-year levels, driven by strong Hemlibra exports and growing royalty income from NEMLUVIO and FOUNDAYO (搜索).
Global sales of NEMLUVIO by Galderma reached $433 million in H1, capturing approximately 42% of new prescription share for prurigo nodularis (搜索) in the United States.
The U.S. FDA granted Fast Track designation to AQUA07 (搜索), an allosteric ALK (搜索) inhibitor utilizing Chugai's proprietary SnipeTide mid-molecule technology, based on preclinical data.
Chugai Pharmaceutical delivered a solid performance in the second quarter of fiscal year 2026, with flagship products maintaining strong momentum and core operating profit rising above the same period last year. The results, announced on July 24, 2026, underscore a structural shift in the company's revenue composition as royalty income from partnered products increasingly complements robust export sales.
President and CEO Osamu Okuda expressed confidence in the trajectory, stating, "We are progressing smoothly toward achieving our plan throughout the first half."
Domestic and Overseas Sales Drive Growth
Domestic product sales showed polarization between oncology and specialty segments. Oncology sales reached ¥117.4 billion (approximately $717.7 million), up 0.7%, with growth from Lunsumio and Polivy offsetting a decline in Avastin. The specialty segment performed more strongly at ¥120.5 billion (approximately $736.6 million), a 12.9% increase, as Vabysmo expanded its market share to over 30%, aided by the introduction of a pre-filled syringe format.
Overseas exports remained a critical pillar, led by Hemlibra at ¥173.7 billion (approximately $1.1 billion), representing a 13.3% increase. Hemlibra exports to Roche achieved a high first-half progress rate of 49.1% against the full-year plan. Actemra exports contributed ¥90.1 billion (approximately $550.8 million), up 1.7%.
Royalty Income Reshapes Revenue Structure
A significant structural development is the surge in other revenue, driven by sales-linked royalties. Global sales of NEMLUVIO by Galderma reached $433 million in the first half, capturing approximately 42% of new prescription share for prurigo nodularis (搜索) in the United States. Additionally, FOUNDAYO (搜索), launched in the U.S. in April as an obesity treatment marketed by Eli Lilly, began contributing royalties from the second quarter.
When questioned by Kazuaki Hashiguchi of Daiwa Securities about the flat quarterly royalty income of ¥4.1 billion (approximately $25.1 million) from partners other than Roche despite Galderma's growing sales, the CFO explained, "The rates are set on a tiered basis and can fluctuate quarter to quarter. Details are undisclosed, but NEMLUVIO is performing solidly," while also hinting at possible temporary inventory adjustments.
Pipeline Advances: AQUA07 (搜索) Fast Track and Late-Stage Progress
On the development front, the U.S. FDA granted Fast Track designation to AQUA07 (搜索), an allosteric ALK (搜索) inhibitor utilizing Chugai's proprietary mid-molecule technology SnipeTide. Senior Executive Officer Tsukasa Kusano noted, "It binds to a completely different site than existing ATP-competitive inhibitors and was recognized for its potential efficacy against resistant mutations."
Masashi Wakao of J.P. Morgan analyzed the designation as "rare and evidence that the novel mechanism of action was highly valued," given that it was based on preclinical data.
NXT007 (zemocimig), anticipated as a next-generation growth driver, has commenced two Phase 3 trials for hemophilia A (搜索), including a comparative study against Hemlibra. President Okuda stated, "In addition to switches from Hemlibra, we also expect to capture new patients, so there will be no overall sales decline."
The Phase 3 trial for divarasib in second-line non-small cell lung cancer (搜索) met its primary endpoint, accelerating the planned filing from 2027 to 2026. Meanwhile, the PiaSky Phase 3 trial for atypical hemolytic uremic syndrome (搜索) (aHUS) showed favorable results with a complete remission rate of 59.5% in adults, with filings planned in Japan, the U.S., and Europe within the year.
Strategic Investment and Capital Allocation
Chugai announced the establishment of a Strategic Investment Department on July 1, formally embarking on strengthening open innovation through M&A and in-licensing. President Okuda stated, "We have accumulated a considerable amount of cash and will utilize it effectively to accelerate growth. We will actively pursue M&A to acquire technologies themselves and investments for deeper collaborations."
When pressed by Atsushi Seki of UBS on investment scale, Okuda indicated that large-scale deals are within scope, backed by a substantial net cash position of ¥962.6 billion (approximately $5.9 billion). On shareholder returns, the company plans to maintain a 45% payout ratio against Core EPS, marking a tenth consecutive year of dividend increases with an annual ordinary dividend of ¥132.
Full-Year Outlook Maintained with Upside Potential
The full-year forecast remains unchanged at ¥1.34 trillion (approximately $8.2 billion) in revenue and ¥670 billion (approximately $4.1 billion) in operating profit. However, first-half progress rates of 49.3% for revenue and 49.1% for operating profit both outpaced last year's pace, consistent with the CFO's comment that results are "just slightly better than planned." A weaker yen, particularly against the Swiss franc, is expected to continue providing a tailwind for earnings.