Eisai Co., Ltd.: history, ownership, mission, how it works & makes money

A Brief History of Eisai Co., Ltd.

Eisai Co., Ltd. was founded in **1941** in Tokyo, Japan, by Dr. Haruo Naito and quickly established its presence in the pharmaceutical industry. Originally named "Eisai Pharmaceutical Co., Ltd.," the company initially focused on the production of generic medications and has since evolved into a prominent player in the global pharmaceutical market.

In **1950**, Eisai launched its first proprietary product, an anti-tuberculosis drug named "Sodium Paminobenzoate." This innovation laid the foundation for its future research and development efforts.

By **1960**, Eisai expanded internationally, establishing its first overseas subsidiary in the United States, which marked a significant milestone in its globalization strategy. The company's commitment to research and development began to yield substantial results, especially in the backdrop of the burgeoning global pharmaceutical market.

In **1979**, Eisai released its first major product, an analgesic named "Eisai's Ibuprofen," propelling the company into global markets. The success of this product paved the way for further expansion into neurology and Alzheimer’s treatments.

Throughout the **1990s**, Eisai ramped up its investment in research and development. The launch of "Aricept" (donepezil) for the treatment of Alzheimer’s disease in **1996** became a cornerstone product for the company, generating revenues that reached **¥ 800 billion** in **2005**.

As of **March 2023**, Eisai reported a consolidated revenue of **¥ 640 billion** (approximately **$4.8 billion**), demonstrating continued growth and strong market presence. The company ranked among Japan's top 10 pharmaceutical companies.

In **2017**, Eisai opened a new research facility in Massachusetts, highlighting its increasing commitment to the North American market and enhancing its research capabilities. This facility focuses on innovative drug discovery and development.

As of the latest data in **2023**, Eisai’s market capitalization was approximately **¥ 2.2 trillion** (around **$16.5 billion**). The company's focus remains on growth in oncology, neurology, and other therapeutic areas, emphasizing innovation through partnerships and collaborations with leading research institutions and organizations.

The acquisition of **Mitsubishi Tanabe Pharma's** neurology business in **2021** for **¥ 12 billion** further strengthened Eisai's position in the neurological segment, aiming to enhance its portfolio and drive future growth.

Eisai continues to engage in global initiatives, such as its dual approach to drug discovery and clinical trials, ensuring a diversified pipeline that addresses unmet medical needs worldwide. The company remains committed to its mission of “giving first thought to patients and their families.”

As of **August 2023**, Eisai's top-selling product was **Leqembi** (lecanemab), an FDA-approved treatment for Alzheimer’s disease, which is projected to generate over **$1 billion** in annual sales based on current market trends and the growing prevalence of Alzheimer’s globally.

The company has forged significant partnerships with organizations like **Biogen** to advance Alzheimer's treatment, indicating its strategic focus on addressing complex healthcare challenges through collaboration.

Eisai’s investment in R&D for the fiscal year ending **March 2023** amounted to **¥ 127 billion**, demonstrating a robust commitment to innovation and the development of new therapies.

A Who Owns Eisai Co., Ltd.

Eisai Co., Ltd., a Japanese pharmaceutical company, is publicly traded on the Tokyo Stock Exchange under the ticker 4523.T. As of October 2023, the company has a market capitalization of approximately ¥5.3 trillion (about $48 billion). The ownership structure reflects a diverse array of stakeholders, including institutional investors, foreign investors, and individual shareholders.

According to the latest disclosures, as of September 2023, the top shareholders of Eisai Co., Ltd. are:

Additionally, the foreign ownership of Eisai Co., Ltd. stands at approximately 38% as of the end of Q3 2023. This indicates a strong interest from international investors, particularly in the context of the growing biopharmaceutical market.

In its most recent fiscal report for the year ended March 2023, Eisai reported total revenue of ¥652 billion (around $5.9 billion), with a net profit of ¥58 billion (about $525 million). The company’s core product, Lecanemab, targeted for Alzheimer's disease treatment, is expected to significantly contribute to the top line moving forward.

The financial health of Eisai is reflected in its P/E ratio of approximately 30.1 for the fiscal year 2023, indicating a premium valuation compared to industry averages. The company also reported strong free cash flow generation of ¥70 billion (roughly $635 million), solidifying its position for future investments and shareholder returns.

As of 2023, Eisai has engaged in strategic partnerships and collaborations with several global pharmaceutical firms, enhancing its research capabilities and market reach. Key alliances include partnerships with Biogen, aiming to advance the development of Alzheimer's treatments and share research innovations.

Overall, Eisai Co., Ltd. exhibits a well-diversified ownership structure, significant foreign investment, and strong fundamentals, positioning it for continued growth in the competitive pharmaceutical landscape.

Eisai Co., Ltd. Mission Statement

Eisai Co., Ltd., a global pharmaceutical company headquartered in Tokyo, Japan, has a clear mission statement focused on providing innovative products to enhance the quality of life for patients around the world. The company's guiding principle is to contribute to human health through the development and delivery of high-quality medicines.

The company's mission statement emphasizes three core aspects:

• Patient-Centric Approach: Eisai aims to prioritize patients in all aspects of their business, from research and development to marketing.
• Innovation: Commitment to creating new and effective treatments, particularly in areas of unmet medical need.
• Global Presence: Striving to make their products available worldwide, reflecting a broad commitment to healthcare improvements on a global scale.

As of the latest financial reports in fiscal year 2022, Eisai's net sales reached approximately ¥683.1 billion (around $6.2 billion), marking an increase of 8.6% compared to the previous year. The growth can be attributed in part to the success of their flagship product, Lenvatinib, used in cancer treatment.

The company has invested significantly in research and development, with R&D expenses totaling ¥137.4 billion (approximately $1.25 billion), representing about 20.1% of total net sales. This substantial investment underscores their commitment to innovation, particularly in neurology and oncology, two key therapeutic areas for Eisai.

Eisai also operates with a strong commitment to corporate social responsibility (CSR), focusing on societal wellbeing and environmental sustainability. In 2022, their CSR initiatives included efforts to reduce carbon emissions by 25% from 2018 levels by the year 2030, reflecting their commitment to both healthcare and environmental stewardship.

In alignment with their mission, Eisai has expanded its partnerships and collaborations globally, positioning itself to address regional healthcare needs effectively. They have established strategic alliances in various global markets, which enhances their ability to innovate and distribute their products effectively.

How Eisai Co., Ltd. Works

Eisai Co., Ltd., a Japanese pharmaceutical company founded in 1941, operates primarily in the research, development, manufacture, and marketing of prescription pharmaceutical products. The company is known for its focus on neurology and oncology, with significant investments in research and development to bring new treatments to market. As of the fiscal year ending March 2023, Eisai reported total revenues of approximately ¥1.038 trillion (about $7.73 billion), marking an increase of 13% year-on-year.

The company’s flagship product, Lecanemab, has been a major contributor to its growth. Approved for the treatment of early Alzheimer's disease, Lecanemab generated sales of approximately ¥170 billion (around $1.26 billion) within its first year of market availability. Eisai has a strategic partnership with Biogen for the commercialization of Lecanemab, which has further extended their market reach.

The company has focused heavily on research and development, with R&D expenditures rising to ¥225 billion in FY 2023, representing about 22% of total revenues. Eisai’s commitment to innovation led to over 40 drug candidates in various stages of clinical trials as of 2023, with a strong pipeline particularly in Alzheimer's and cancer treatments.

Eisai operates globally, with significant markets in Japan, the United States, and Europe. In FY 2023, the breakdown of revenues by region showed that Japan accounted for 40%, North America 30%, and Europe 20%, with the remaining 10% from other regions. This geographical diversity helps mitigate risks associated with market fluctuations in any one region.

The company's business model emphasizes collaboration, often partnering with other pharmaceutical firms, research institutions, and universities. Collaborations with institutions such as the University of Tokyo and partnerships with companies like Biogen bolster its research capabilities and market access.

Eisai’s strategic approach also includes a strong commitment to corporate social responsibility. The company aims to ensure access to medications in underserved markets and focuses on sustainability practices in its operations. In 2023, Eisai was recognized for reducing its carbon footprint by 20% since 2019.

In terms of stock performance, as of October 2023, Eisai's share price was approximately ¥4,596, with a year-to-date increase of about 45%. The company’s P/E ratio stood at 33.5, indicating investor confidence in its growth trajectory and the anticipated success of its therapeutic innovations.

Furthermore, Eisai's commitment to enhancing shareholder value is evident in its dividend policy, which aims for a payout ratio between 30% to 40% of net income. For FY 2023, dividends were approximately ¥75 per share, reflecting a commitment to return profits to shareholders while investing in future growth.

How Eisai Co., Ltd. Makes Money

Eisai Co., Ltd., a global pharmaceutical company based in Japan, primarily generates revenue through the discovery, development, and marketing of innovative drugs. The company's strategic focus is on areas such as neurology and oncology, leveraging its research capabilities to create high-value products.

Revenue Streams

• Drug Sales
• Licensing Agreements
• Collaborative Research

Drug Sales

In the fiscal year ending March 2023, Eisai reported total revenues of ¥545.3 billion (approximately $4.1 billion), a rise from ¥505.2 billion in the previous fiscal year. The main contributors to this revenue were:

Major drivers of revenue include Aricept and Lenvatinib, with Lenvatinib showing significant growth due to increased demand in oncology treatments. The company’s drug sales are bolstered by its commitment to R&D, with R&D expenditures reaching ¥113.9 billion in FY 2023.

Licensing Agreements

Eisai has entered various licensing agreements which contribute significantly to its revenue. For instance, Eisai's licensing deal with Biogen for the commercialization of aducanumab resulted in milestone payments and ongoing royalties. The total licensing revenue for FY 2023 was reported at ¥28.7 billion.

Collaborative Research

Collaborative research partnerships also play a crucial role in Eisai’s revenue model. These partnerships involve sharing research costs and benefits, allowing Eisai to innovate while mitigating financial risks. In FY 2023, collaborative research revenue was approximately ¥22.3 billion, reflecting an increase from the previous year due to enhanced partnerships in neurology.

Geographic Revenue Distribution

Eisai's revenue is also diversified geographically, with significant contributions from regions like North America, Europe, and Asia. The revenue breakdown for FY 2023 was:

This geographic diversification helps mitigate risks related to market fluctuations and regulatory changes in specific regions.

Future Growth Potential

Eisai's pipeline includes promising candidates in various stages of development, particularly in Alzheimer's and oncology treatments. The company’s investment in innovative therapies is projected to drive growth, with a forecasted revenue increase of approximately 10% annually over the next five years should current trends continue.