Daiichi Sankyo Lifts Sales Outlook on Cancer Drugs, Trims Profit Forecast on Tax Bill

Daiichi Sankyo's quarter looks like two different companies depending on which line you read. Revenue for the three months to June 2026 rose 21.1% year-on-year to ¥574.7bn, and core operating profit, the company's preferred underlying measure, grew 6.2% to ¥107.3bn. But statutory operating profit fell 12.0% to ¥85.1bn, and net profit attributable to shareholders dropped 19.7% to ¥68.6bn. The company has now raised its full-year revenue and operating-profit guidance while cutting its full-year net profit forecast — a split that says more about tax timing and partner economics than about the underlying drug business.

What is driving the growth

The engine is oncology. The Oncology Business Unit, which books US and European sales of Daiichi Sankyo's antibody-drug conjugates, grew revenue 50.5% to ¥197.4bn, led by Enhertu and Datroway. In May 2026 the US approved Datroway as a first-line treatment specifically for patients with metastatic or locally recurrent, unresectable triple-negative breast cancer who are not candidates for PD-1/PD-L1 inhibitor therapy, and the company began promoting the drug for that indication. A weaker yen added a further ¥41.9bn to revenue.

Where the margin gets squeezed

Growth has a partner cost attached. Because Enhertu and Datroway are co-developed with AstraZeneca, Daiichi Sankyo pays the profit-sharing partner half of gross profit in most territories outside Japan; that expense rose 60% to ¥96.9bn and was the biggest driver of a 25.5% increase in selling, general and administrative costs. Cost of sales also rose 43.9%, partly on higher sales volumes and a loss-compensation payment to a contract manufacturer. Statutory operating profit still fell versus a year earlier because the quarter absorbed restructuring charges tied to the EU specialty business, even after a partial offset from reversing a provision linked to a halted investment at the company's Odawara plant.

Why the bottom line still shrinks

The tax line did the most damage. The effective tax rate jumped to 24.9% from 18.9% a year earlier, which is why net profit fell faster than pre-tax profit. Management has now raised its full-year revenue forecast by ¥60bn to ¥2.34tn and operating profit by ¥5bn to ¥320bn, citing stronger US Enhertu sales and the Odawara provision reversal. But it cut its full-year net profit forecast by ¥9bn, to ¥251bn, citing an expected increase in corporate taxes.

The dividend forecast is untouched at ¥100 per share for the year, up ¥22 from the prior year, so shareholders are being told the cash return is safe even as the accounting profit line moves the other way from the sales line.