Shionogi
Shionogi's ethical sales declined by 31.3% in 2002 to $2,019m. This is partly due to the challenging domestic market, with an average 6.3% reduction in National Health Insurance drug prices implemented in April 2002.
Shionogi's ethical sales are forecast to record little growth over the period to 2008. A steady decline in sales of the company's large but mature infectious disease franchise will negate growth elsewhere.
The company's core competency is its Japanese sales operations and it plans to concentrate its resources on the domestic marketing of new drugs. Shionogi's aim, as part of a five year plan announced in 2000, is to have the largest sales force in Japan and to be the market leader in antibacterials.
Although dependence on the Japanese market is expected to decrease as royalties from Crestor accrue and the joint venture established with GlaxoSmithlClinc bears fruit, Shionogi lags behind other major Japanese pharmaceutical companies in the development of its international operations.
Shionogi has a healthy balance sheet, with relatively low long-term liabilities and a substantial cash reserve. However, it is less profitable than other Japanese companies. Profitability is expected to improve following the divestment of the loss-making wholesale business in 2002.
In the face of increasing competition, sales of Shionogi's lead product, Flomox, will display only limited growth, up from $274m to S295m from 2002-05.
Shionogi is attempting to extend its reach beyond its current therapeutic markets, in-licensing compounds such as duloxetine from Lilly for the CNS market. However, Shionogi may struggle to penetrate this market, as it is inexperienced in this area and will face tough competition from Western companies.
Shionogi is the most promising of Shionogi's pipeline products. Potential launch in Japan at the end of 2004 could drive sales to $250m in 2008.