ENVALITH
参天製薬株式会社 logo

SANTEN PHARMACEUTICAL CO., LTD.

4536・Prime Market・Pharmaceuticals

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参天製薬株式会社 logo
SANTEN PHARMACEUTICAL CO., LTD.4536

Business

Santen Pharmaceutical Co., Ltd. (Santen Group), founded in 1890, is a global specialty pharmaceutical company specializing in the ophthalmology field. The company researches, develops, manufactures, and sells prescription pharmaceuticals, over-the-counter drugs, and medical devices addressing a wide range of eye diseases, including glaucoma, dry eye, infections, allergies, age-related macular degeneration, and myopia. The group consists of 33 consolidated subsidiaries and 1 equity-method affiliate, providing products and services in more than 60 countries and regions worldwide. Santen operates globally under a four-region structure comprising Japan, China, Asia (excluding China), and EMEA (Europe, Middle East, and Africa), and reported revenue of ¥291,624 million for FY2026 (ending March 2026).

Business Model

In addition to in-house research and development, the company has built a product portfolio combining externally sourced technology (license-in) with the out-licensing of its own products (license-out). It generates revenue primarily by selling prescription pharmaceuticals in Japan, China, Asia, and EMEA. Core-basis operating profit, which excludes amortization of intangible assets related to products and other items, is used as the key indicator of business profitability, with the core operating profit margin for FY2026 (ending March 2026) at approximately 18.9%. The company's capital allocation policy is to return value to shareholders through progressive dividends and flexible share buybacks, while prioritizing investment in expanding production capacity and in research, development, and business development.

Company Strengths

Since its founding in 1890, the company has continuously concentrated its management resources in the ophthalmology field, maintaining a product portfolio that covers a wide range of eye diseases including glaucoma, dry eye, retinal diseases, myopia, and blepharoptosis. It provides products and services in more than 60 countries and regions worldwide, and its accumulated ophthalmology expertise makes short-term imitation by competitors difficult.

The company has built a four-pillar structure consisting of the Japan business (revenue equivalent to ¥146,800 million), EMEA business (equivalent to ¥80,100 million), Asia business (equivalent to ¥33,300 million), and China business (equivalent to ¥30,000 million). As of the end of FY2026 (ending March 2026), the ratio of equity attributable to owners of the parent stood at a high 70.2%, indicating strong financial soundness, with ROE improving to 13% and ROIC improving to 19%.

The company has obtained exclusive development and marketing rights for ophthalmic products from multiple domestic and overseas companies including Daiichi Sankyo, AGC, UBE, Alcon, RVL, Sydnexis, and RemeGen, while also out-licensing technology to Glaukos, Ocuvex, and Harrow Health. Through this bidirectional in-licensing and out-licensing strategy, the company diversifies its own R&D risk while expanding its product lineup.

ENVALITH's Perspective

For FY2026 (ending March 2026), core operating profit declined to ¥55,143 million (down 7.1% year on year), but IFRS operating profit increased to ¥47,797 million (up 2.0% year on year), securing profit growth. For FY2027 (ending March 2026 plus one year), the company forecasts core operating profit of ¥59,000 million (up 7.0% year on year) and revenue of ¥311,000 million (up 6.6% year on year), marking a shift to a forecast of both revenue and profit growth. This confirms a return to a growth trajectory following the first year of the 2025-2029 medium-term plan (which exceeded initial guidance). However, attention should be paid to the fact that the assumed exchange rates (1USD=¥155, 1EUR=¥180) are set at a weaker yen level than actual market rates.

In Japan, the combined impact of a drug price revision in the high-1% range, market expansion repricing, generic entry, and the selected medical care system for long-listed products led to a sharp decline in Japan revenue for FY2026 (ending March 2026) to ¥146,812 million (down 11.2% year on year). Eylea (Retinal Disease Treatment) also struggled, down 15.9%. In China, growth was limited to +0.5% (+0.6% excluding foreign exchange effects) due to adjustments in distribution inventory levels. These structural headwinds are also factored into the FY2027 (ending March 2026 plus one year) forecast, and overseas growth (EMEA and Asia) offsetting them is a precondition for achieving the medium-term plan.

Due to the discontinuation of development of sirolimus formulations targeting Fuchs' endothelial corneal dystrophy (STN1010904) and meibomian gland dysfunction (STN1010905), the company recorded an impairment loss of ¥3,841 million in the current period. On the other hand, multiple new pipeline candidates are progressing, including olodaterol hydrochloride (dry eye / allergic conjunctivitis), nintedanib (pterygium), and eflimrufusp alfa (diabetic macular edema / exudative AMD), maintaining diversification of development risk. R&D expenses for FY2026 (ending March 2026) increased to ¥26,185 million (up 6.1% year on year), indicating a continued stance of investing in the future.

Growth Strategy

Deepening ophthalmology-focused strengths across all regions, aiming for revenue of ¥400,000 million and core operating profit of ¥80,000 million in FY2029

Diquas LX Eye Drops 3%, for which shipments resumed in December 2025, recorded ¥1.9 billion in FY2026 (ending March 2026). The FY2027 (ending March 2027) forecast calls for rapid expansion to ¥10.4 billion (+454.2%), driving revenue recovery as the mainstay product in Japan's corneal and conjunctival disease area.

Launched in Japan in April 2025 (STN1012700), and in Europe launched in Germany in July 2025 (STN1012701). In Asia, a marketing application was filed in July 2025, and Phase 2/3 trials are underway in China. The FY2027 (ending March 2027) forecast of ¥6.0 billion (+273.4%) reflects the full-scale creation of new markets.

Manufacturing and marketing approval was obtained in Japan in December 2025. Phase 3 trials are underway in Europe and China. The FY2027 (ending March 2027) forecast of ¥1.4 billion is expected to create a new market area. In the United States, RVL Pharmaceuticals already markets the product, while Santen is responsible for development in Japan, Europe, and China.

In Japan, a manufacturing and marketing approval application was filed in July 2025 for the ROCK/NET inhibitor (STN1013900). In Europe, the product has been marketed since February 2023, and it launched in South Korea in November 2024. The combination drug STN1014003 is undergoing Phase 3 trials in Japan. The FY2027 (ending March 2027) forecast for Rhopressa/Rhokiinsa combined is ¥1.3 billion (+597.7%).

Achieved a combined total of ¥8.1 billion (+34.2%) in FY2026 (ending March 2026), with strong growth across all regions: Japan +42.0%, EMEA +30.5%, and Asia +56.8%. The FY2027 (ending March 2027) forecast of ¥9.7 billion (+19.6%) reflects continued stable growth as the mainstay product in the medical device area.

Continued investment in a new plant for Santen Pharmaceutical (China) Co., Ltd. Capital expenditure was ¥7.3 billion in FY2026 (ending March 2026), with a significant increase forecast to ¥22.5 billion in FY2027 (ending March 2027). In March 2026, a syndicated term loan agreement totaling ¥30.0 billion was concluded with MUFG Bank as arranger, securing funds for capital investment in Japan.

Achieved a combined total of ¥13.6 billion (+20.8%) in FY2026 (ending March 2026), with strong growth in both regions: EMEA ¥11.4 billion (+24.6%) and Asia ¥2.2 billion (+12.3%). The FY2027 (ending March 2027) forecast of ¥15.2 billion (+11.2%) reflects continued stable growth as the mainstay overseas product in the corneal and conjunctival disease area.

Last updated: July 19, 2026