Shionogi & Co., Ltd.

Business Details

A single segment engaged in the research and development, procurement, manufacturing, and sale of prescription pharmaceuticals. It comprises three revenue pillars: domestic prescription pharmaceuticals (infectious disease drugs, QOL disease drugs, etc.), overseas subsidiaries/exports (Cefiderocol (Fetroja/Fetcroja), etc.), and royalty income (HIV Franchise for ViiV Healthcare Ltd.). In September 2025, Torii Pharmaceutical became a consolidated subsidiary, and in December 2025 the company succeeded to the JT Pharmaceutical Business through an absorption-type company split, significantly expanding its domestic business base.

Recent Overview

Business scale expanded significantly through M&A of JT Group's pharmaceutical business and additional investment in ViiV, achieving record-high results for the fourth consecutive period

In FY2026 (ending March 2026), revenue was ¥499,677 million (up 14.0% year on year) and operating profit was ¥166,725 million (up 6.5% year on year), marking a record high for the fourth consecutive period. The domestic business expanded significantly following the consolidation of Torii Pharmaceutical as a subsidiary (September 2025) and the succession of the JT Pharmaceutical Business through an absorption-type company split (December 2025). Following an additional investment in ViiV (¥416,446 million), the company became an equity-method affiliate, and total assets expanded to ¥2,576,870 million, up ¥1,041,521 million year on year. Short-term borrowings of ¥660,000 million were raised, and the ratio of equity attributable to owners of the parent to total assets declined from 88.7% to 65.4%. As a subsequent event, the succession of all global rights to Edaravone (Radicava) was completed in April 2026, and SASS was also consolidated as a subsidiary (equity acquisition of $100 million). For FY2027 (ending March 2027), revenue of ¥700,000 million (up 40.1% year on year) and operating profit of ¥220,000 million (up 32.0% year on year) are forecast.

Key Products

Growth Drivers

• Growth of ViiV Healthcare Ltd.'s HIV Franchise: Driven by expanded sales of long-acting injectable (LAI) formulations and two-drug oral combinations (Dovato, Cabenuva, Apretude, etc.), royalty income grew steadily, up 8.7% year on year in FY2026 (ending March 2026). Following the transition to equity-method affiliate status through additional investment, dividend income also expanded 30.0% year on year to ¥52.4 billion
• Penetration of Cefiderocol in U.S. and European markets: Continued high growth, with the U.S. business up 22.9% year on year and the European business up 23.4% year on year. Expansion into emerging markets also progressed following approval in China in January 2026
• Integration effects from Torii Pharmaceutical and the JT Pharmaceutical Business: Domestic prescription pharmaceutical revenue expanded 25.0% year on year following the consolidation of Torii Pharmaceutical as a subsidiary (September 2025). The succession of the JT Pharmaceutical Business (December 2025) brought a small-molecule drug discovery platform, an AI/quantum computing technology platform, and a promising pipeline. Torii Pharmaceutical is scheduled to be absorbed via merger in April 2027
• Expansion of the Edaravone (Radicava) business into the U.S. rare disease field: Succession of all global rights was completed in April 2026, and the Radicava business entity (RADIANCE NEWCO, LLC) commenced operations. U.S. revenue recorded by Tanabe Pharma was ¥94,491 million in FY2025 (ended March 2025) and growing, with business contributions expected from FY2027 (ending March 2027) onward
• Global expansion of Ensitrelvir (Xocova): Global indication expansion is progressing, including acceptance of the preventive indication approval application by the U.S. FDA, filing of approval applications in Europe, and approval of post-exposure prophylaxis domestically
• Growth of new products in the QOL disease area: Expanded prescriptions for Quviviq (insomnia) following the lifting of the dosing period restriction (up 224.1% year on year), and the launch of Zurzuvae (depression) sales in March 2026, building revenue pillars outside of infectious diseases
• Full-year recognition of JT Pharmaceutical Business-related royalties: In FY2027 (ending March 2027), royalty income formerly received by the JT Pharmaceutical Business will be recorded for a full year, contributing to a significant increase in other royalty income

Risks

• Revenue concentration risk in ViiV Healthcare Ltd.: Royalty income and dividend income are directly affected by ViiV's business trends and changes in the HIV treatment drug market. While involvement has deepened through the transition to equity-method affiliate status via additional investment, dependency has also increased further
• Epidemic dependency risk for infectious disease drugs: Performance of infectious disease drugs such as Xofluza and Xocova is affected by the scale of epidemics; in FY2026 (ending March 2026), sales of acute respiratory infection drugs declined 34.8% year on year due to a subdued COVID-19 epidemic
• M&A integration risk (PPA incomplete): The purchase price allocation for the acquisitions of Torii Pharmaceutical, the JT Pharmaceutical Business, and Akros has not been finalized (provisional accounting), and the final valuation of goodwill and intangible assets may change. Adjustments have already occurred, such as a ¥3,947 million decrease in Torii Pharmaceutical's goodwill from the provisional value
• Rising financial leverage risk: Short-term borrowings of ¥660,000 million were raised in connection with large-scale investments such as the additional investment in ViiV and the acquisition of Edaravone rights. The ratio of equity attributable to owners of the parent to total assets declined from 88.7% to 65.4%, and the ratio of interest-bearing debt to cash flow rose from 0.1 to 3.2
• Foreign exchange risk: The majority of royalty income and overseas business revenue is denominated in foreign currencies, creating a risk that yen-translated revenue will decrease if the yen appreciates
• Drug pricing revision risk: Annual drug price revisions are implemented in Japan, continuously pressuring the profitability of domestic prescription pharmaceuticals. Following the integration of Torii Pharmaceutical, the weight of the domestic business has increased, potentially amplifying the impact of drug price revisions
• Competitive and market risk in the Radicava business: There is a risk that U.S. sales of Radicava could fall short of expectations due to the entry of competing products in the ALS treatment market or changes in the insurance reimbursement environment
• Approval risk for Ensitrelvir: Although approval applications have been accepted in the U.S. and Europe, approval could be delayed or denied depending on the outcome of regulatory review