[Company analysis] Daiichi Sankyo Co., Ltd. (第一三共)

「Daiichi Sankyo Co., Ltd. (第一三共)」 is a pharmaceutical company who is the one of Japan's five largest pharmaceutical companies(「Takeda Pharmaceutical Company(武田薬品工業)」、「Astellas Pharma(アステラス製薬)」、「Daiichi Sankyo(第一三共)」、「Otsuka Holdings(大塚ホールディングス)」、「Eisai(エーザイ)」). As for the sales volume, they are fourth largest pharmaceutical company in Japan. The number of consolidated employees is about 15,000.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Daiichi Sankyo Co., Ltd.
Company name (Japanese)	第一三共
Date of establishment	Wednesday, September 28, 2005
Headquarters location	東京都中央区日本橋本町三丁目5番1号
Capital	50,000
Consolidated sales	929,717
Consolidated operating profit	83,705
Consolidated total assets	2,088,051
Consolidated capital	1,249,705
Capital adequacy ratio	59.9%
Consolidated number of employees	15,000

 

 

 

2. Summary and Features

 
In 2005, 「Daiichi Sankyo」was established by business integration between「Sankyo Shoten(三共商店)」 which was established in 1899 and「Daiichi Pharmaceutical Co., Ltd.(第一製薬)」which was established in 1918. This is the same method as「Astellas Pharma(アステラス製薬)」. By this business intergation「Daiichi Sankyo」became the second largest pharmaceutical company in Japan after「武田薬品工業(Takeda Pharmaceutical Company)」.

There were three reasons for the merger at the time: (1) to compete with「Astellas Pharma」, (2) to build a base for overseas expansion, and (3) to secure R & D expenses through increased scale. Initially, it was established as a pure holding company that own「Sankyo Shoten」and「Daiichi Pharma」, but now it became actually business holding company by incorporating and wholly owning the both company. 

In order to concentrate management resources to the pharmaceutical business, they decided to consolidate overseas subsidiaries and sell non-pharmaceutical related businesses. In 2008, they bought「Ranbaxy」, a major Indian pharmaceutical company. But this was a mistake. At that time, 「Daiichi Sankyo」purchased Ranbaxy for $ 4.6 billion to expand the generic drug market in areas such as hyperlipidemia and infectious disease.

Right after this purchase, however, the sanitary condition of the Ranbaxy's factory became a problem and making it impossible to export to the United States, the largest pharmaceutical market. This was fatal loss, as Ranbaxy's main business was selling pharmaceuticals to the United States. Therefore, 「Daiichi Sankyo」decided to sell Ranbaxy because of the delay in resuming business in the United States. This also had a significant negative effect on this company, so now their sales volume ranking in Japan dropped to fourth place.

 

 

3. Major Business

 

■ Pharmaceutical R & D, manufacturing, sales, etc.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		955,124	960,195	929,717
Consolidated operating profit		88,929	76,282	83,705
Consolidated total assets		1,914,979	1,897,754	2,088,051
Consolidated net assets		1,171,428	1,133,041	1,249,705
Breakdown of sales	Japan	579,883	618,308	595,901
	North America	235,316	185,751	160,220
	Europe	71,021	79,566	89,759
	Others	68,903	76,568	83,835