The Field That Does Not Widen

Slide 34 of Daiichi Sankyo's FY2025 results presentation is headed "5DXd ADCs Revenue (incl. Forex Impact)." For the year to 31 March 2026 the rows read Enhertu ¥819.5bn (US$5.003bn), Datroway ¥56.1bn (US$342.5m), HER3-DXd ¥13.1bn (US$80.0m), I-DXd ¥15.1bn (US$92.2m), R-DXd ¥21.5bn (US$131m), and the five sum to ¥925.3bn (US$5.649bn). Indented beneath all five is the sub-row Upfront and Milestone Payments, etc.; a Product Sales sub-row is printed under three of them — Enhertu, Datroway and I-DXd. The Japanese deck's version of the same table, page 34, carries the same split under the headings 製品売上 and 一時金・マイルストン収入等: Enhertu, ¥698.4bn (US$4.264bn) of product and ¥121.1bn (US$739.3m) of the other thing; Datroway, ¥47.6bn (US$290.6m) and ¥8.4bn (US$51.3m), which add to ¥56.0bn (US$341.9m) against a printed ¥56.1bn; and I-DXd, whose 製品売上 reads 0 where the English version prints a dash. HER3-DXd and R-DXd carry the 一時金・マイルストン収入等 line alone, ¥13.1bn (US$80.0m) and ¥21.5bn (US$131m), each equal to the product total. For the year, the three Merck-partnered compounds' revenue is upfront and milestone money entire.

The consolidated statement of profit or loss reports one revenue figure for the year: ¥2,123,045m (US$12,961m), against ¥1,886,256m (US$11,516m) the year before. The segment note says the group is a single reportable segment and omits segment information on that basis. The disaggregation by product and service gives three lines — prescription pharmaceuticals ¥2,029,538m (US$12,390m), healthcare ¥90,784m (US$554.2m), other ¥2,722m (US$16.62m). Those add to ¥2,123,044m (US$12,961m), one million yen (about US$6,100) below the stated total, which is what happens when a release truncates below the million.

The production and sales results table, from page 42 of the yuho, enters amounts under a segment name. Production is entered under 医薬品事業 at ¥1,267,455m (US$7,738m), stated at net selling price; sales under the same name at ¥2,123,045m (US$12,961m). Production is 59.7% of sales on those two figures (¥1,267,455m ÷ ¥2,123,045m), though the note says production is valued at net selling price and that the production series was recompiled this year with the prior year restated. Order backlog is omitted as immaterial. The yuho uses 医薬品事業 in both places the name is asked for, its segment note and this table; the results release's segment note, otherwise the same sentence, uses 医薬事業.

Counterparties are named where the form asks for them. 重要な契約等 opens on page 46, and its 販売契約等（導出） table, page 47, has columns for 契約会社名, 相手方の名称, 国名, 契約の内容, 対価 and 契約期間. AstraZeneca UK Limited: global co-development and co-commercialisation of Enhertu, from March 2019, and Datroway, from July 2020, with profit and development and selling costs split evenly outside Japan. Merck & Co., Inc.: HER3-DXd, I-DXd, DS-6000 and MK-6070, from October 2023, with profit and selling costs split evenly outside Japan and part of development costs borne. Under 対価 both rows read 契約一時金, マイルストーン, 一定料率の実施料 and then a split: 日本を除く全世界における利益と開発・販売等費用の折半 for AstraZeneca, and 日本を除く全世界における利益と販売費等費用の折半、開発費の一部の負担 for Merck. The column names categories and that split, and the Merck row carries a note sending the reader to consolidated note 37, 共同開発及び共同販促, where the dollar figures are. 製品購入価格 belongs to the in-licensing tables on the same two pages, not to these rows.

Two other tables set a numerical threshold for naming someone. Customers at 10% or more of total sales performance: McKesson ¥269,418m (US$1,645m, 12.7%), Cencora ¥251,034m (US$1,533m, 11.8%), and Alfresa Holdings and its group companies ¥232,433m (US$1,419m, 10.9%). The three disclosed shares sum to 35.4% of 総販売実績, which the same table puts at ¥2,123,045m (US$12,961m) — the figure on the face of the income statement. Group companies above 10% of consolidated revenue: Daiichi Sankyo Inc., ¥741,260m (US$4,525m), which is 34.9% of ¥2,123,045m on the basis the note specifies, the threshold being the subsidiary's own revenue excluding intra-group internal revenue, expressed as a share of consolidated revenue. Both thresholds are struck against revenue, and not the same party's: the first against what the customer buys, the second against what the subsidiary itself sells.

The year's amounts attached to partners are on page 35 of both decks. The Japanese version's 5DXd ADCs 一時金・マイルストン収入 table sets item rows — 契約時一時金, 開発マイルストン, Quid関連一時金, 販売マイルストン, Quid権利相当額 — against columns ending in 受領済対価（2026年3月末時点）, printed in the English version as Total Consideration (as of Mar 2026), and shows an alliance total of ¥129.6bn (US$791.2m) against アストラゼネカ and ¥49.7bn (US$303.4m) against 米国メルク, the English version's AZ Alliance Total and US Merck Alliance Total. The per-product table on page 34 gives upfront and milestone amounts of ¥121.1bn for Enhertu and ¥8.4bn for Datroway, the two AstraZeneca products, summing to ¥129.5bn (US$790.6m) against that ¥129.6bn. The three Merck-partnered compounds' upfront and milestone lines — ¥13.1bn, ¥15.1bn and ¥21.5bn — sum to ¥49.7bn, which is the 米国メルク total on page 35. The two tables meet, on the deck's own rounding.

The per-product table's category ends in 等; the alliance-total table sets out what the 等 covers, item by item, and the English deck's revenue vocabulary on pages 34 and 35 includes Quid Related Payment and Satisfaction of Quid Rights alongside Upfront Payment, Regulatory Milestones and Sales Milestone. A reader who wants one number per partner can take that table's last column, 受領済対価（2026年3月末時点）: ¥685.1bn (US$4.183bn) against アストラゼネカ, ¥697.8bn (US$4.260bn) against 米国メルク — cumulative to 31 March 2026, on a different clock from the year's ¥129.6bn and ¥49.7bn.

The counterparty's half of the economics leaves through operating expenses. On the core basis — the yuho's ＜連結業績（コアベース）＞ table, page 34 — selling, general and administrative expenses rose ¥134.8bn (US$823.0m), or 18.6%, to ¥859.6bn (US$5.248bn), with the increase in profit share to AstraZeneca named as a driver; the ＜連結業績（IFRSベース）＞ table two pages later puts the same line at ¥780.6bn (US$4.766bn), up ¥49.5bn (US$302.2m), or 6.8%. The profit-share line itself is disclosed at ¥305.6bn (US$1.866bn), which is 35.6% of the core SG&A figure (¥305.6bn ÷ ¥859.6bn) and 14.4% of the ¥2,123,045m of consolidated revenue on the face of the income statement (¥305.6bn ÷ ¥2,123.0bn). The mechanism, in the deck's own words: outside Japan, in countries where Daiichi Sankyo records the sale, it pays alliance partners 50% of gross profit. Revenue is entered whole and half the gross margin walks back out through SG&A.

There is a second thing to know about ¥698.4bn: it is a product-sales measure on a slide, not a line from the consolidated statements. The asterisk on slide 14 of the English presentation sits on the $5 Bn alliance figure, which the note defines as Daiichi Sankyo and AstraZeneca booked sales combined, worldwide except Japan; the ¥698.4bn Global Product Sales line beneath it carries no marker. The Japanese deck's version of the slide prints four regional bars — US ¥386.3bn (US$2.358bn), Europe ¥174.8bn (US$1.067bn), ASCA ¥99.7bn (US$608.7m), Japan ¥37.7bn (US$230.2m) — which add to ¥698.5bn against a stated ¥698.4bn, US$4.264bn either way at this publication's rate, the ¥0.1bn difference being about US$611,000. The Japan bar sits inside a total the asterisked $5 Bn excludes: consolidated note 37 says Daiichi Sankyo records the revenue in Japan, the United States, and the Asian, European and South American countries where it has a base, and AstraZeneca records it in China, Hong Kong, Australia, Canada and Russia among others. The deck places the ¥698.4bn inside Enhertu's ¥819.5bn (US$5.003bn) and the five products' ¥925.3bn (US$5.649bn), against consolidated revenue of ¥2,123,045m (US$12,961m).

AstraZeneca's own report, which calls itself Annual Report and Form 20-F Information 2025, files the same molecules in a different taxonomy. Total Revenue there is defined at company level as Product Sales plus Alliance Revenue plus Collaboration Revenue: $55,573m plus $3,067m plus $99m, or $58,739m. The key marketed products table on page 13 shows Enhertu at $2,775m of Total Revenue, up 40%, and Datroway at $78m, each footnoted as jointly developed and commercialised with Daiichi Sankyo. Page 57 disaggregates by product: Alliance Revenue, which the same page describes as AstraZeneca's share of gross profits, share of revenues and royalties, is $1,798m for Enhertu and $77m for Datroway, and the Collaboration Revenue table beside it carries Farxiga, Lynparza, Beyfortus and Koselugo, none of them Enhertu. Taking those printed names as they stand, about $977m of the $2,775m is Product Sales. It still cannot be netted against the ¥698.4bn (US$4.264bn): the $2,775m is AstraZeneca's own product sales plus its share of the gross profit where Daiichi Sankyo sells, and the ¥698.4bn is what Daiichi Sankyo books. Two companies, one antibody-drug conjugate, two numbers that do not subtract.

One receipt is disclosed in both currencies at once. The deck records that global alliance product sales of Enhertu reached US$5bn and that a sales milestone of US$537.5m, stated as ¥86.0bn, was received. Divide: ¥86.0bn ÷ US$537.5m is ¥160.0 to the dollar, the rate embedded in that sentence. At this publication's fixed rate the same ¥86.0bn is US$525.0m (¥86.0bn ÷ ¥163.8). The trigger is stated as global alliance product sales reaching US$5bn. The ¥86.0bn is carried on page 35 as an item row of its own, 販売マイルストン, beside Enhertu's 契約時一時金 ¥10.2bn (US$62.3m), 開発マイルストン ¥23.8bn (US$145.3m) and Quid関連一時金 ¥1.2bn (US$7.3m); the English version prints those four as Sales Milestone, Upfront Payment, Regulatory Milestones and Quid Related Payment. They sum to ¥121.2bn (US$739.9m) against the ¥121.1bn (US$739.3m) page 34 puts on Enhertu's 一時金・マイルストン収入等 line, on the deck's own rounding, and consolidated note 37 says the 契約一時金 and 開発マイルストーン等 the company receives are taken into 売上収益 over the period the contractual performance obligation is satisfied.

On the Merck side, the amounts are printed as dollars in a Form 10-K, and three of the terms below are printed as dollars in the yuho's note 37 as well: the refundable $1.0bn and its $500m-and-$500m split, the 75% of the first $2.0bn, and Daiichi Sankyo's responsibility for manufacturing and supply of the three. Upfront payments of $4.0bn in 2023 across patritumab deruxtecan, ifinatamab deruxtecan and raludotatug deruxtecan, of which $1.0bn — $500m each for patritumab deruxtecan and ifinatamab deruxtecan — is refundable pro rata on early termination of development; an aggregate pretax charge of $5.5bn to research and development expenses, including $1.5bn of continuation payments; $750m paid in October 2024 for patritumab deruxtecan and $750m in October 2025 for raludotatug deruxtecan; up to an additional $5.5bn of sales-based milestones for each of the three. For these three DXd ADCs, Daiichi Sankyo is solely responsible for manufacturing and supply. R&D costs are shared equally, except that Merck bears 75% of the first $2.0bn on raludotatug deruxtecan. Each compound is listed with its generic name, its short form, and Merck's own development code.

Merck also discloses what the collaboration did to its own income statement in 2025: cost of sales $66m, selling, general and administrative $28m, research and development $524m. These are Merck's own recorded amounts, the cost of sales line being certain inventory-related costs it bears. The corresponding items on Daiichi Sankyo's side are not in the pages verified here, so the two sets cannot be laid against each other. What can be said is that the clocks differ: Merck's year ended 31 December 2025, Daiichi Sankyo's on 31 March 2026. The overlap is nine months.

Which matters for the one place the counterparty surfaces in Daiichi Sankyo's cash flow narrative. The consolidated cash flow statement in the results release gives operating cash flow of ¥77,655m (US$474.1m), investing outflows of ¥148,241m (US$905.0m) and financing outflows of ¥97,875m (US$597.5m); the discussion attributes part of the operating inflow to receipt of an upfront under the R-DXd strategic alliance. The year's amount for that item is printed in the deck instead, where page 35 puts R-DXd's 契約時一時金 at ¥21.1bn (US$128.8m) for the year and ¥225.7bn (US$1.378bn) of 受領済対価 to 31 March 2026, a revenue-recognition column rather than a cash one. Merck's filing records a $750m continuation payment for raludotatug deruxtecan in October 2025. One document says 契約一時金, the other says continuation payment, and no page verified here sets the two amounts against each other.

The vocabulary is itself a structural fact. The alliance terms visible on pages 34 to 37 of the English deck are Upfront Payment, Regulatory Milestones, Sales Milestone, Upfront and Milestone Payments, etc., Quid Related Payment and Satisfaction of Quid Rights on the revenue side, and, running the other way, DXd ADC profit share, printed on slide 37 as a sub-line of SG&A expenses beside Other SG&A expenses — a list that carries an etc. inside it and is not exhaustive. The word for a running royalty appears in the yuho's contract table as 一定料率の実施料, and on slide 70, where out-licensed drugs are said to be expected to generate milestone and running royalties under their agreements. AstraZeneca's word, Collaboration Revenue, carries $99m of its $58,739m, and page 57 splits it: Farxiga sales milestones $87m and Other Collaboration Revenue $12m, with Lynparza, Beyfortus and Koselugo at nil for the year. None of that $99m is the Daiichi Sankyo alliance: the same page says the share of gross profits and royalty income from Daiichi Sankyo is recognised as Alliance Revenue. The word a payment arrives under is set by the filing it arrives in.

R&D is disclosed twice at two sizes. Page 48 gives ¥466.0bn (US$2,845m), up 6.9%, at 21.9% of revenue, and says the figure is on an IFRS basis; the ＜連結業績（コアベース）＞ table on page 34 of the same document gives ¥462.1bn (US$2,821m), up ¥29.3bn (US$178.9m), or 6.8%, and the deck's page 7 summary shows FY2024 at ¥432.9bn (US$2,643m) and FY2025 at ¥462.1bn. The difference is ¥3.9bn (US$23.8m), and the core table's own note says what the basis is: cost of sales, selling and administrative expenses and research and development are shown there with 一過性の収益・費用 taken out. The published ratio reconciles with the larger figure — ¥466.0bn ÷ ¥2,123.0bn is 21.95% — while ¥462.1bn ÷ ¥2,123.0bn is 21.8%, and a reader tracking R&D intensity should know which numerator produced the ratio they are quoting.

Manufacturing has counterparties of its own. The risk section, page 29, states that long-term manufacturing contracts for ADC products with multiple CMOs include annual minimum purchase obligations, and that if demand forecasts and supply plans move such that the minimums are not met, compensation may be payable. The provision note, page 143, states the year in its own words: the supply plan was reviewed in light of clinical trial results and the like and re-cut with risk adjustment, a difference arose against the minimum purchase obligations under the CMO contracts, and ¥169,498m (US$1,035m) was recognised as 損失補償引当金, a loss compensation provision, on the best estimate at present. The same note adds that the compensation is reduced where the CMO capacity attaching to the unmet volume can be reallocated to a third party, and that which years the compensation falls in, and how much, are not yet determined, turning on order volumes, the state of that reallocation and the outcome of discussions with the CMOs. FY2025 temporary expenses were ¥152,974m (US$933.9m); slide 36 breaks the CMO charge inside them as ¥169.5bn (US$1,035m) gross in cost of sales less an ¥81.5bn (US$497.6m) offset in SG&A, net ¥88.3bn (US$539.1m). Slide 37's definition-change table takes core operating profit from ¥360.0bn (US$2,198m) under the previous definition down by ¥88.3bn (US$539.1m) for the CMO compensation fee and ¥10.1bn (US$61.7m) for inventory write-downs, then up by ¥20.8bn (US$127.0m) for amortisation of product-related intangibles, arriving at ¥282.4bn (US$1,724m). From FY2026 the first two items sit inside core rather than outside it.

So the year has two core operating profits — ¥359,962m (US$2,198m) on the old definition, ¥282,369m (US$1,724m) on the new, against operating profit of ¥229,089m (US$1,399m), down 31.0% — and the FY2026 forecast for core operating profit is ¥360,000m (US$2,198m), set in the release's forecast table beside the ¥282,369m, with a note that the FY2025 core figure printed there reflects the definition change too. Revenue is forecast at ¥2,280,000m (US$13,919m) and operating profit at ¥315,000m (US$1,923m), at ¥150 to the dollar and ¥180 to the euro, with the increase in profit-share payments to AstraZeneca named among the drivers of the core line.

On 31 March 2026 the 個人以外 sub-column of 外国法人等 in the 所有者別状況 table held 8,525,938 units of 18,931,944, which the yuho states as 45.03% and which computes to 45.03% (8,525,938 ÷ 18,931,944); the 個人 sub-column beside it holds 5,288 units, 0.03%. The two versions of the results presentation carry the same date, 11 May 2026, and the exchange maintains a page for English disclosure that links a status list and a 日英対訳集, described there as a glossary and links to related sites. Read across, the alliance is stated in more than one currency and more than one fiscal calendar; read in one place, consolidated note 37 sets out both partners' upfronts, maximum receivable totals and cost-and-profit splits in dollars, on pages 177 and 178, and names which company books the revenue in which country. The segment note reports one reportable segment, and the production and sales table enters both production and sales under that one name.

Conversion method: yen amounts are converted at ¥163.8 = US$1, the rate on 24 July 2026, applied uniformly to every period, with significant figures kept as published in yen. Dollar amounts stated as dollars in the source documents — AstraZeneca's report, Merck's Form 10-K, and the US$537.5m sales milestone — are quoted as they appear and are not reconverted. Percentages, ratios, multiples, unit counts and share counts are not converted.