The following is a summary of the Chugai Pharmaceutical Co., Ltd. (CHGCF) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Chugai Pharmaceutical's Q1 2024 revenue reported a decrease of 24.1% year-on-year due to last year's supply of Ronapreve to the government.

• Despite the fall in revenue, net income and operating profit only declined by 3.1%, maintaining a high operating profit margin of 43.1%.

• Significant investments were made, targeting ¥20.3 billion in facility improvements including R&D.

• Medium-term environmental targets expect capital expenditure to be around ¥109.5 billion.

• Depreciation and amortization costs resulted in unexpected costs of ¥400 million each for intangible assets and restructuring processes.

• Restructuring costs were prevalent due to the relocation of the old research center and ongoing business rebuilding expenses.

Business Progress:

• Chugai demonstrated strong growth for Hemlibra in overseas sales, and consistent growth for Enspryng both domestically and globally, despite negative shipment timing for Actemra and Alecensa.

• The company is continuing with its R&D pipeline, with promising Phase 3 studies for certain drugs, though an unsuccessful Phase 3 study led to the discontinuation of Enspryng gMG.

• Chugai has launched a Singapore CPR expansion project, expected to cost SGD 60m, and licensed zilebesiran from Roche to target unmet medical needs.

• Product updates include ongoing research into new dosage forms for Hemlibra and the continued development of NXT007 with ongoing Phase 1 and 2 studies.

• Fluctuating currency rates, specifically of Swiss Franc against the Euro and US dollar, could potentially impact future royalty revenue from Hemlibra.

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