SAWAI GROUP HOLDINGS Co., Ltd.

Business Details

A single reporting segment centered on Sawai Pharmaceutical Co., Ltd., comprising five subsidiaries: Kaken Seiyaku, Trust Pharmatech, Medisa Shinyaku, and FrontAct. The company manufactures and sells generic drugs across a broad range of therapeutic areas, including cardiovascular agents and central nervous system agents, with major wholesalers as primary customers. Following the completion of the transfer of the U.S. business in April 2024, management resources have been concentrated on the domestic business. Under the medium-term management plan "Beyond 2027," the company is pursuing "steady growth in the generic drug market," "establishing sustainability of the generic drug business," and "continuous investment in growth areas."

Recent Overview

Operating profit from continuing operations recovered sharply, up 292.5% year on year, while core operating profit declined 3.6%

For the full year of FY2026 (ending March 2026), the company achieved revenue of ¥201,676 million (up 6.7% year on year) and operating profit of ¥15,894 million (up 292.5% year on year). Operating profit recovered sharply due to a large decrease in other expenses to ¥4,499 million (prior period: ¥17,035 million), reflecting the impact of a large provision reversal (¥16,902 million) recorded in the prior period. Meanwhile, core operating profit was ¥24,778 million (down 3.6% year on year), indicating a slight decline in recurring earnings power. Due to a loss of ¥1,098 million from discontinued operations (the U.S. business), profit attributable to owners of parent was ¥10,438 million (down 12.8% year on year). For FY2027 (ending March 2027), the company forecasts revenue of ¥208,400 million, operating profit of ¥27,200 million, and core operating profit of ¥29,600 million.

Key Products

Growth Drivers

• Continued expansion of generic drug volume share (preliminary figure of 88.8% as of September 2025) and promotion of generic drug demand through the selected medical care system (introduced October 2024)
• New product launches (nine products across five active ingredients, including dapagliflozin tablets and lacosamide tablets, in December 2025) and strengthening of the cardiovascular area (assumption of Warfarin rights)
• Increased production capacity through completion of the new solid dosage form building at the Second Kyushu Plant (July 2024, ultimate capacity of 3.5 billion tablets) and establishment of an annual production system of 25 billion tablets (additional capital investment planned for the Second and Third Kiyoma Plants)
• Improved profitability from the increase in minimum drug prices under the FY2025 drug price revision, and a forecast of core operating profit of ¥29,600 million (up 19.5% year on year) for FY2027 (ending March 2027)
• Response to industry restructuring and strengthening of stable supply systems through a collaboration agreement with Nichi-Iko Pharmaceutical (September 2025) toward integration of generic drug product lines, etc.
• Expansion of the digital healthcare business product lineup and cultivation of new revenue sources through the FrontAct subsidiary acquisition (June 2025)

Risks

• Core operating profit declined 3.6% year on year to ¥24,778 million, indicating weakening recurring earnings power, with cost increases from surging energy prices, inflation, and yen depreciation expected to continue in FY2027 (ending March 2027)
• Administrative disposition (December 2023) related to a violation of the Pharmaceutical and Medical Device Act at Sawai Pharmaceutical's Kyushu Plant, and ongoing burden of costs for trust restoration and recurrence prevention measures
• Downward pressure on selling prices from annual drug price revisions (including mid-year revisions) and working capital burden from increased inventory (¥117,607 million, up ¥7,740 million year on year)
• Sharp decline in cash flows from operating activities to ¥7,433 million (prior period: ¥27,851 million), and increased financial burden from the widening gap with investment cash outflows of ¥22,898 million (non-current liabilities' bonds and borrowings increased to ¥90,348 million)
• Risk related to the final determination of price adjustment clauses and contingent consideration associated with the transfer of the U.S. business, and recording of a loss on sale of shares of affiliated companies of ¥1,458 million in the current period
• Continued supply instability in the generic drug industry and costs of responding to changes in the competitive environment and resolving the small-volume, multi-product structure amid accelerating industry restructuring