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Chugai profits may exceed forecast

Chugai, the Japanese subsidiary of Swiss pharmaceutical company Roche, may exceed its own profits forecast

Chugai, the Japanese subsidiary of Swiss pharmaceutical company Roche, may exceed its own profits forecast, according to Mitsubishi UFJ securities analysts.

Chugai's net income rose 8.5 per cent in Q3 FY07, which means that the company may meet its target for operating profit of JPY 100bn (USD 872m) by 2010, say the analysts.

Epogin, which is Chugai's best-selling product, increased its share of the Japanese market for anaemia drugs to 62 per cent. The company reduced the drug's price in Japan in July 2007 in order to compete effectively with Kirin's own product Nesp. Later in August, the company suggested it might not meet its profit target because of increased competition and the end of a marketing agreement with French pharmaceutical company sanofi-aventis.

The analysts said that Epogin Q1 FY07 sales were not as badly affected by Nesp as Chugai first thought. They added that the company could reach its target of operating profit by 2011, if not before.

Chugai's shares increased 5.3 per cent (JPY 95) to reach JPY 1,897 on the Tokyo Stock Exchange on 24 October.

A survey of 16 analysts by Bloomberg revealed that Chugai's net income could hit JPY 36.7bn for FY07. In July 2007, the company forecast FY07 profit of JPY 33.5bn, a fall on the FY06 profit of JPY 38.4bn.

For Q3 FY07, Chugai posted net income of JPY 9.1bn, compared with JPY 8.4bn in Q3 FY06, according to Bloomberg.

30th September 2008

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