中外制药公布2026年二季度业绩，收入和核心利润双位数增长但全年指引未上调

Intel down as investors lock in gains despite strongest revenue growth in 15 years
Introduction & Market Context
Chugai Pharmaceutical Co., Ltd. (TYO:4519) presented its fiscal 2026 second quarter results on July 24, 2026, showcasing robust growth across both domestic and international operations. The company, a member of the Roche Group, reported revenue of JPY 663.3 billion for the first half, representing a 14.7% year-over-year increase, while core operating profit surged 21.0% to JPY 329.1 billion. Shares rose 2.83% to JPY 7,416 following the presentation, though the stock remains well below its 52-week high of JPY 10,700.
The results reflect strong momentum in Chugai’s out-licensed global products, particularly NEMLUVIO and FOUNDAYO, which are generating significant royalty income streams. The company also highlighted what it described as a record year for regulatory filings, with eight applications completed in the first half and eight more planned for the remainder of 2026.
Quarterly Performance Highlights
As detailed in the company’s financial overview, Chugai delivered growth across all major revenue categories in the first half of fiscal 2026.
Total revenue reached JPY 663.3 billion, up JPY 84.8 billion from the prior year period. This comprised product sales of JPY 566.5 billion (up 10.8%) and other revenue of JPY 96.8 billion (up 44.5%). The substantial increase in other revenue stemmed from one-time income and higher royalty payments related to Hemlibra and NEMLUVIO.
Domestic sales grew 6.5% to JPY 237.9 billion despite national health insurance drug price revisions and generic competition, driven by strong performance from mainstay products including Vabysmo, Polivy, Enspryng, and Phesgo, as well as new launches Elevidys and Lunsumio. Overseas sales climbed 14.1% to JPY 328.6 billion, propelled by increased Hemlibra exports to Roche and NEMLUVIO shipments to Galderma, along with favorable foreign exchange movements.
The following chart illustrates the specific drivers of revenue growth across each business segment:
Detailed Financial Analysis
Profitability metrics showed even stronger improvement than top-line growth. Core operating profit of JPY 329.1 billion represented a 21.0% year-over-year increase, pushing the operating margin to 49.6%, up 2.6 percentage points from the prior year. Net income reached JPY 238.4 billion, up 23.2%, translating to earnings per share of JPY 144.84.
The company’s year-over-year profit and loss statement demonstrates the breadth of financial performance:
Cost of sales increased 11.8% to JPY 195.9 billion, with the cost-to-sales ratio rising slightly to 34.6% from 34.3%, primarily due to changes in product mix. Research and development expenses grew 4.5% to JPY 90.2 billion, reflecting investments in drug discovery and early development as well as advancement of clinical programs. Selling, general and administrative expenses increased 7.9% to JPY 49.0 billion.
The company’s sales performance by disease area and product revealed concentrated growth in key franchises:
Hemlibra led overseas growth with sales of JPY 173.7 billion (up 15.3%), while Actemra contributed JPY 90.1 billion (up 3.7%). Among domestic products, Vabysmo posted JPY 15.1 billion (up 25.8%), Polivy reached JPY 19.7 billion (up 15.9%), and newly launched Elevidys generated JPY 4.4 billion. Lunsumio demonstrated particularly strong momentum with JPY 4.3 billion in sales, representing 330% year-over-year growth.
The waterfall analysis of operating profit growth shows how various factors contributed to the JPY 57.1 billion increase:
Domestic sales volume contributed JPY 22.1 billion after absorbing a JPY 7.5 billion impact from drug price revisions. Overseas sales volume added JPY 41.6 billion, though export unit prices declined by JPY 19.9 billion. Foreign exchange provided an JPY 18.8 billion tailwind, while other revenue surged by JPY 29.8 billion. These gains were partially offset by a JPY 20.7 billion increase in cost of sales.
Global Product Portfolio Expansion
Chugai’s strategy of licensing innovative therapies to global partners is generating substantial returns. The company provided detailed updates on two key out-licensed products that are driving revenue growth.
NEMLUVIO (nemolizumab), licensed to Galderma for markets outside Japan, achieved first-half net sales of USD 433 million, maintaining strong momentum following its U.S. and European launches. In the United States, the drug captured approximately 42% new-to-brand prescription share in prurigo nodularis and 9% in atopic dermatitis as of mid-2026. Regulatory reviews are progressing in multiple additional countries, setting up further geographic expansion.
FOUNDAYO (orforglipron), Chugai’s oral GLP-1 receptor agonist licensed to Eli Lilly, commenced royalty income accrual in the second quarter following its U.S. approval for obesity treatment. Prescriptions are being driven primarily by GLP-1-naïve patients, with access expanding through commercial insurance and Medicare beyond Lilly’s direct-to-consumer channel. Label expansion for type 2 diabetes in the U.S. and international launches are expected later in 2026.
Pipeline Development Progress
Chugai emphasized what it characterized as unprecedented momentum in its development pipeline, with 16 regulatory submissions planned for 2026—the highest number in company history. Eight applications were completed in the first half across multiple therapeutic areas.
The company’s key research and development milestones for 2026 show significant progress:
Notable developments include regulatory approvals for Alecensa in advanced ALK fusion gene-positive solid tumors and Enspryng’s Priority Review designation in the U.S. for thyroid eye disease. The company also initiated two Phase 3 studies for NXT007/zemocimig in hemophilia A, comparing the therapy against both Hemlibra and coagulation factor VIII products.
Two early-stage programs highlighted Chugai’s proprietary drug discovery capabilities. REVN24, a small molecule project, met go criteria for Phase 2 study after confirming biological proof of concept in healthy volunteers, with preparation underway for a Phase 2 trial in postoperative complications after cardiac surgery—an indication with no approved treatments.
The company provided extensive detail on AQUA07, its third macrocyclic peptide project to enter clinical development:
AQUA07 represents an allosteric ALK inhibitor that binds outside the ATP pocket, unlike conventional ALK inhibitors. This unique mechanism, enabled by Chugai’s SnipeTide macrocyclic peptide platform, is designed to overcome acquired resistance to existing therapies and enhance efficacy when combined with first-line treatments. The U.S. FDA granted Fast Track designation in May 2026 based on preclinical data, and patient dosing in ALK-positive non-small cell lung cancer commenced shortly thereafter.
The detailed mechanism of action illustrates AQUA07’s differentiated approach:
Late-Stage Clinical Results
Chugai presented compelling Phase 3 data for PiaSky in atypical hemolytic uremic syndrome (aHUS) at the 2026 European Renal Association Congress. The COMMUTE-a and COMMUTE-p studies demonstrated solid efficacy and high patient preference for the therapy.
In treatment-naïve patients, PiaSky achieved complete TMA response rates of 59.5% in adults/adolescents (COMMUTE-a) and 70.6% in pediatric patients (COMMUTE-p) at week 25, exceeding the pre-specified 40% threshold for study success. Among patients switching from eculizumab or ravulizumab, 100% maintained complete TMA response across both studies. Notably, all treatment-naïve patients on dialysis at baseline successfully discontinued dialysis by week 25.
Treatment preference data revealed strong patient and caregiver endorsement: 89.2% of adult/adolescent switch patients and 100% of pediatric patients aged 12-17 preferred PiaSky over their previous therapy. Among caregivers of younger pediatric patients, 70% expressed preference for PiaSky. The safety profile remained consistent with known data, with no new signals identified.
Another emerging opportunity is DONQ52 for celiac disease, which initiated a Phase 2a study in April 2026. The multispecific antibody binds more than 25 gluten peptides and inhibits T-cell activation, addressing a disease affecting an estimated 80 million patients worldwide for which no treatment currently exists. The program is advancing through accelerated go/no-go decision-making, with earlier Phase 1 studies showing promising signals.
Strategic Capital Allocation
Chugai outlined a comprehensive capital allocation framework balancing growth investment with shareholder returns. The company maintained a strong financial position with net cash of JPY 962.6 billion as of June 30, 2026, and an equity ratio of 82.8%.
The company established a new Strategic Investment Department to formulate M&A policies, strengthen execution capabilities, and lead project evaluation. This organizational change signals Chugai’s intent to deploy its substantial cash position for external innovation opportunities beyond internal R&D and organic growth initiatives.
For shareholder returns, Chugai targets a consolidated dividend payout ratio of 45% on average compared to Core EPS, balancing stable profit distribution with strategic funding needs. The company forecast an annual dividend of JPY 132 per share for fiscal 2026, marking the tenth consecutive year of dividend increases.
Major capital investments are focused on manufacturing capacity and research infrastructure. The company detailed its investment pipeline:
Key projects include JPY 80 billion for a new research building at the Ukima Site to strengthen small and mid-size molecule drug and biopharmaceutical process development, JPY 20.3 billion to modify the UK3 manufacturing building for bio drug substance production, and an estimated JPY 136.2 billion in environmental investments through 2032 to achieve Mid-Term Environmental Goals 2030.
Financial Position and Cash Flow
The company’s cash flow generation remained robust despite significant capital deployment. A detailed waterfall analysis shows the movement in net cash from year-end 2025 to mid-2026:
Operating profit after adjustment (including depreciation and amortization) contributed JPY 339.1 billion, while a decrease in net working capital added JPY 12.4 billion. Total investment of JPY 35.9 billion included JPY 21.2 billion in property, plant and equipment, JPY 9.9 billion in intangible assets, and JPY 4.8 billion in lease payments. After income taxes paid of JPY 89.5 billion, free cash flow reached JPY 227.0 billion. Dividend payments of JPY 241.9 billion exceeded free cash flow, resulting in a net cash decrease of JPY 17.1 billion to JPY 962.6 billion.
Performance Against Forecast
Chugai’s first-half results showed strong progress toward full-year targets across all key metrics. The company’s comparison against annual guidance reveals balanced execution:
Revenue reached 49.3% of the full-year JPY 1,345.0 billion forecast, compared to 46.0% progress in the same period of 2025. Operating profit achieved 49.1% of the JPY 670.0 billion target, well ahead of the 43.6% progress rate from the prior year. This performance is particularly notable given that Chugai typically experiences heavier sales in the second half due to seasonal patterns in the pharmaceutical industry.
Management maintained its full-year forecast unchanged, indicating confidence in achieving targets while acknowledging that first-half strength does not warrant a formal guidance increase. CFO Iwaaki Taniguchi noted during the presentation that the company is "getting close to 50% progress rate right now, even for the operating profit," which he characterized as ahead of the usual pace but consistent with expectations for the business.
Sales performance by product category showed generally consistent progress against forecast, with overseas products slightly ahead at 54.6% of annual guidance compared to 47.8% for domestic products. This reflects the timing of Hemlibra shipments and the ramp of NEMLUVIO royalty income.
Forward-Looking Statements
Looking ahead, Chugai outlined several catalysts expected to drive performance through the remainder of 2026 and beyond. The company anticipates completing eight additional regulatory filings in Japan during the second half, including submissions for PiaSky in aHUS, divarasib in non-small cell lung cancer, and vamikibart in uveitic macular edema.
The NXT007 program represents a significant medium-term opportunity, with two Phase 3 studies (ZEBRHA1 and ZEBRHA2) now enrolling patients with hemophilia A. The trials are designed to demonstrate superiority or non-inferiority against both Factor VIII products and Hemlibra, potentially establishing NXT007 as a next-generation treatment in a franchise where Chugai already holds leadership with Hemlibra.
For NEMLUVIO, continued geographic expansion is expected to drive incremental royalty income as Galderma progresses regulatory reviews in multiple countries beyond the U.S. and Europe. The product’s strong prescription share gains in both approved indications—prurigo nodularis and atopic dermatitis—suggest sustained commercial momentum.
FOUNDAYO’s trajectory will depend on Eli Lilly’s execution of its label expansion plans and international launches. The oral GLP-1 market is expanding rapidly, and FOUNDAYO’s convenience advantage over injectable alternatives positions it favorably as insurance coverage broadens beyond early direct-to-consumer channels.
President and CEO Dr. Osamu Okuda stated in the presentation: "For the first half of FY 2026, we recorded increases in both revenue and profit. Given the steady progress made in the first half, we expect to achieve our full year forecast." He emphasized the company’s focus on maximizing value from its innovative pipeline while maintaining financial discipline.
The company faces several execution challenges in the second half, including managing product mix pressures that have elevated cost of sales ratios, navigating potential drug pricing reforms in key markets, and advancing multiple clinical programs simultaneously. Foreign exchange volatility also presents uncertainty, as a portion of first-half profit growth stemmed from favorable currency movements that may not persist.
Nevertheless, Chugai’s combination of a profitable base business, growing royalty streams from out-licensed products, and a deep pipeline of proprietary assets positions the company to sustain momentum beyond 2026. The establishment of the Strategic Investment Department signals potential for inorganic growth opportunities that could further diversify the portfolio and accelerate long-term value creation.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.