Daiichi Sankyo has revised its full-year guidance upward after discovering an accounting error that understated operating profit in its fiscal year 2025 results.
The Japanese pharmaceutical company identified a mistake in the aggregation process for selling, general and administrative expenses following its Q4 FY2025 results announcement on May 11, 2026.
As a result of the correction, operating profit for FY2025 has been revised upward from 229.1 billion yen to 258.0 billion yen, a significant change that rattled investor confidence despite the underlying business performing strongly.
The company confirmed that the corrections apply to previously disclosed presentation materials for FY2025 financial results and its five-year business plan covering FY2026 to FY2030.
Daiichi Sankyo stressed that the errors do not affect its consolidated financial results for the year ended March 31, 2026, providing some reassurance to investors following the disclosure.
Despite the accounting distraction, first quarter FY2026 results showed robust commercial momentum, with global revenue rising 21.1% year-over-year to 574.7 billion yen, driven by the company’s oncology portfolio.
President and CEO Hiroyuki Okuzawa struck a confident tone on the results, saying: “Daiichi Sankyo delivered strong revenue growth in the first quarter of fiscal year 2026 as we began execution of our new Five-Year Business Plan.”
Operating profit for the quarter fell 12.0% year-over-year to 85.1 billion yen, primarily due to restructuring expenses tied to the company’s EU Specialty Business operations.
Growth was led by flagship antibody drug conjugates Enhertu and Datroway, which drove oncology revenues across multiple regions including the ASCA segment, which posted revenue of 68.7 billion yen.
The EU Specialty Business recorded revenue of 74.7 billion yen, supported by cardiovascular treatments Lixiana and Nilemdo and Nustendi, adding further breadth to the company’s revenue base beyond oncology.
Three new breast cancer indications were approved in the United States within a single week in May 2026 for Enhertu and Datroway, including two simultaneous approvals for Enhertu in the neoadjuvant and adjuvant HER2-positive early breast cancer setting.
Full-year FY2026 guidance has been revised upward, with global revenue now expected to reach 2.34 trillion yen, up from a previous forecast of 2.28 trillion yen, driven by stronger anticipated US sales and favourable foreign exchange rates.
Operating profit guidance was also lifted, increasing from 315.0 billion yen to 320.0 billion yen, reflecting management’s increased confidence in the company’s commercial trajectory for the remainder of the fiscal year.
Jefferies Financial Group moved to downgrade Daiichi Sankyo from a “buy” rating to a “hold” rating following the results, signalling some caution among analysts despite the raised guidance.
Shares in OTCMKTS: DSNKY opened at $18.23 on the day of the report, reflecting ongoing investor unease over the accounting irregularity even as the underlying operational numbers pointed to a business in strong growth.