Daiichi Sankyo (4568.T) Aims to Become a Top 5 Oncology Company by 2035 with Enhertu-Based Strategy and $1.3 Billion in Cost Savings
Global Market Expansion Strategy for ADC Leadership
Daiichi Sankyo has announced its ambition to become a global top 5 oncology company by 2035, leveraging its strength in antibody-drug conjugate (ADC) technology. Driven by the growth of Enhertu (fam-trastuzumab deruxtecan), a HER2-targeted ADC co-developed with AstraZeneca, and Datroway (datopotamab deruxtecan), a TROP2-targeted ADC, the company expects to achieve 2.3 trillion yen (approximately $14.6 billion) in oncology sales by 2030. This represents a significant increase from the 954 billion yen (approximately $6.1 billion) in oncology sales recorded in fiscal year 2025. The strategy involves securing more than 20 additional indications in the oncology field to further solidify its market share.
Diversification of Late-Stage Pipeline and Commercialization Roadmap
In addition to its two blockbuster drugs, Daiichi Sankyo plans to rapidly introduce three new ADC candidates to the market, utilizing its proprietary DXd technology platform. Ifinatamab deruxtecan (I-DXd), a B7-H3-targeted ADC co-developed with Merck, is being developed as a treatment for small cell lung cancer (SCLC) and is awaiting FDA approval on October 10, 2026. Raludotatug deruxtecan (R-DXd), a CDH6-targeted ADC for ovarian cancer, and patritumab deruxtecan (HER3-DXd), a HER3-targeted ADC for breast cancer, are also undergoing active Phase 3 clinical trials. This pipeline diversification will expand the target molecules and serve as a crucial stepping stone to outpace competitors such as Gilead's Trodelvy in the TROP2 market.
$1.3 Billion Cost Optimization Initiative Based on AI
To offset the financial burden associated with its growth strategy, Daiichi Sankyo is implementing a robust cost optimization plan to achieve cumulative cost savings of 200 billion yen (approximately $1.3 billion) over the next five years. CEO Hiro Yuki Ohkawa stated that the company will introduce generative and specialized artificial intelligence (AI) technologies into procurement management and overall global operations to automate routine tasks and maximize workforce efficiency. The resulting financial resources will be reinvested in research and development (R&D) to explore new growth opportunities, with Daiichi Sankyo planning to invest a substantial 2.9 trillion yen (approximately $18.5 billion) in R&D over the next five years. This approach, which focuses on technological integration rather than simple workforce reductions, is being recognized as a model for overcoming productivity challenges in the pharmaceutical industry.
Rationalization of CMO Costs and Medium- to Long-Term Financial Implications
Rationalizing the previously overexpanded ADC production facilities is also a key component of this financial improvement plan. In fiscal year 2025, Daiichi Sankyo incurred significant operating losses totaling 95 billion yen, including 75.7 billion yen in contract manufacturing organization (CMO) compensation and 19.3 billion yen related to the cancellation of investments in the Odawara plant. In fiscal year 2026, approximately 80 billion yen in CMO compensation costs are expected, which will keep core operating profit at around 36 billion yen. However, by completing supply chain efficiency improvements, the company's long-term profit margins are expected to improve significantly. Investors view Daiichi Sankyo's five-year plan as a process of overcoming short-term financial fluctuations and building a solid foundation for becoming a global oncology leader by 2035.
Daiichi Sankyo aims for 2.3 trillion yen (approximately $14.6 billion) in oncology sales by 2030, driven by the growth of Enhertu and Datroway, and the addition of new pipeline products, which will strengthen its position in the TROP2 market against competitors like Gilead's Trodelvy. In the research area, the FDA PDUFA date of October 10, 2026, for Ifinatamab deruxtecan (I-DXd) for small cell lung cancer (SCLC) is a key short-term catalyst, and the Phase 3 entry of subsequent CDH6 and HER3-targeted ADCs will establish new clinical standards. Across the industry, the company plans to reduce cumulative costs by 200 billion yen (approximately $1.3 billion) over five years through the integration of artificial intelligence (AI) and the implementation of enterprise resource planning (ERP) systems, demonstrating a model for operational optimization through workforce redeployment. However, the 95 billion yen in CMO losses from past overcapacity and the anticipated 80 billion yen in CMO compensation costs in 2026 are short-term margin pressures, making rapid efficiency improvements crucial for securing long-term value.