ENVALITH
小野薬品工業株式会社 logo

ONO PHARMACEUTICAL CO., LTD.

4528・Prime Market・Pharmaceuticals

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小野薬品工業株式会社 logo
ONO PHARMACEUTICAL CO., LTD.4528

Business

Ono Pharmaceutical is a long-established pharmaceutical company founded in 1717, operating as a research and development-driven pharmaceutical company under its corporate philosophy of "Fighting Disease and Pain for the Sake of Humanity." The company operates as a single business segment engaged in the research, development, manufacturing, and sale of prescription pharmaceuticals, with a focus on the oncology, immunology, inflammation, and neurology fields. In Japan, the company markets multiple flagship products centered on the anti-PD-1 antibody Opdivo, and in 2024 acquired US-based Deciphera Pharmaceuticals to establish a sales foundation in the US and Europe. The company comprises Ono Pharmaceutical and 28 subsidiaries, with business locations in Japan, South Korea, Taiwan, the US, and the UK. It is a pharmaceutical company accelerating its global expansion, recording revenue of ¥515,785 million (FY2026 (ending March 2026)).

Business Model

Revenue is broadly divided into "Product Sales" and "Royalties and Other." Domestic product sales are centered on mainstay products such as Opdivo, reaching approximately ¥281,400 million in FY2026 (ending March 2026). Overseas product sales are driven by Deciphera's Qinlock (ripretinib) and Romvimza (vimseltinib), totaling ¥61,200 million. Royalty income comes from anti-PD-1/PD-L1 antibody patent licenses granted to BMS, Merck, Roche and others, generating ¥173,200 million, and the company invests ¥147,093 million in R&D expenses to continuously create next-generation pipeline products.

Company Strengths

The company continues to generate royalty income related to anti-PD-1/PD-L1 antibody patents through technology licensing agreements with BMS, Merck, Roche, Incyte, Regeneron, and others. Royalty Income (BMS, Merck, etc.) and other income for FY2026 (ending March 2026) is expected to reach approximately ¥173,200 million, up 10.9% year on year, accounting for about 33% of revenue and serving as a highly profitable income source.

As of FY2026 (ending March 2026), the company has 28 new drug candidates in clinical development, of which 19 are proprietary in-house discoveries. With a focus on oncology, immunology, inflammation, and neurology, the late-stage pipeline is substantial, including the Phase III trial of ONO-8531 (povetacicept) in IgA nephropathy and the domestic regulatory filing for ONO-2017 (cenobamate). The company is also leveraging Deciphera's development infrastructure in the US and Europe to accelerate global development.

In June 2024, the company acquired Deciphera Pharmaceuticals in the US, gaining sales infrastructure in the US and Europe. Overseas sales of Qinlock (ripretinib) (gastrointestinal stromal tumors) rose 50.6% year on year to ¥38,400 million, while Romvimza (vimseltinib) (TGCT), already approved in Europe, recorded sales of ¥8,300 million. Total overseas product sales surged 56.5% year on year to ¥61,200 million, forming an increasingly solid track record for the company's global business.

ENVALITH's Perspective

Due to the termination of the co-promotion agreement for Forxiga Tablets with AstraZeneca, product sales for FY2027 (ending March 2027) are expected to decline 21.2% year-on-year to the equivalent of ¥270,000 million. Revenue is forecast at ¥455,000 million (down 11.8% year-on-year), making a substantial revenue decline unavoidable. On the other hand, core operating profit is projected to be limited to ¥124,000 million (down 9.6% year-on-year) due to a corresponding decrease in cost of sales and SG&A expenses, and the fact that the decline in profit is not as large as that in revenue is worth noting positively.

IFRS operating profit for FY2026 (ending March 2026) recovered substantially to ¥92,236 million (up 54.4% year-on-year), but the comparison base was low due to the recording of a ¥13,600 million expense related to the Forxiga sales achievement milestone in the previous fiscal year. In the current fiscal year, amortization of intangible assets of ¥25,600 million and other expenses of ¥12,012 million (including differences arising from the transfer of marketing rights, losses from retirement benefit plan revisions, and losses from voluntary recalls, etc.) were also incurred, resulting in a large gap between the core basis and the full basis (core operating profit of ¥137,135 million vs. IFRS operating profit of ¥92,236 million). In assessing the company's underlying earnings power, emphasis should be placed on the trend in core-basis figures.

During the current fiscal year, there were successive discontinuations of development, including the discontinuation of Phase III trials of Opdivo IV Infusion (nivolumab) for gastric cancer and bladder cancer, as well as ONO-7018, ONO-7475, DCC-3116, DCC-3084, ONO-4578 (breast cancer), and ONO-7913, among others. On the other hand, progress in the late-stage pipeline can also be confirmed, such as the filing of a U.S. approval application for Velexbru Tablets, the progression of ONO-8531 to Phase III, and the filing of a domestic approval application for QINLOCK. The company intends to maintain R&D expenses at a high level exceeding 30% of revenue, and the success or failure of development remains the most critical variable affecting medium- to long-term shareholder value.

Growth Strategy

Advancing four pillars: maximizing product value, strengthening the pipeline, expanding global direct sales, and developing new therapeutic areas

Expanding the number of patients treated through new approvals for hepatocellular carcinoma, MSI-H/dMMR colorectal cancer, and other indications. Royalty Income (BMS, Merck, etc.) is projected at ¥185,000 million (up 6.8% year on year) for FY2027 (ending March 2027), functioning as a stable earnings pillar.

Promoting expanded prescriptions of Qinlock (ripretinib), a treatment for gastrointestinal stromal tumors, and Romvimza (vimseltinib), a treatment for tenosynovial giant cell tumor. Romvimza obtained European approval in September 2025. The domestic approval application for QINLOCK (submitted in March 2026) has also been completed, with entry into the Japanese market now in view.

Advancing the U.S. approval application for Velexbru Tablets (tirabrutinib hydrochloride) (a BTK inhibitor) for relapsed/refractory primary central nervous system lymphoma (December 2025), progressing the Phase III trials of ONO-8531 (povetacicept) for IgA nephropathy and membranous nephropathy, and pursuing the domestic approval application for ONO-2017 (cenobamate). Accelerating international joint trials by leveraging Deciphera's U.S. and European development capabilities.

Maintaining R&D expenses of ¥143,000 million (over 30% of revenue) in FY2027 (ending March 2027) as well, conducting global trials for sapablursen, ONO-4578, and others. Continuing to bring in promising candidates through open innovation and licensing activities (with Vertex, Seikagaku Corporation, and others).

Last updated: July 19, 2026