Daiichi Sankyo, Japan's third-largest drugmaker, posted a $3.7 billion quarterly loss and forecast its first ever annual loss, hit by a slide in the value of its stake in Ranbaxy Laboratories.
Shares of Daiichi Sankyo were down about 1 percent after the announcement, outperforming a 3.7 percent fall in the benchmark Nikkei average.
Japanese drugmakers, under growing price pressure and hurt by the yen's strength, are also seeing their earnings battered by one-off costs and losses stemming from recent acquisitions.
Like their global rivals, they are using acquisitions to head off large drops in revenue after patent expirations on key drugs.
Daiichi Sankyo bought a controlling 63.9 percent stake in Ranbaxy, a major generic drugmaker, last year for nearly 500 billion yen to diversify its revenue base
Earlier this month Daiichi Sankyo said it would book an appraisal loss of 354 billion yen on the stake after Ranbaxy shares lost more than half their value amid the stock market turmoil and after the U.S. blocked dozens of Ranbaxy drugs due to procedural violations at the drugmaker's plants in India.
Daiichi Sankyo, created through a merger in 2005, incurred a net loss of 331.8 billion yen ($3.7 billion) in the three months to December, compared with a 36.18 billion yen profit a year ago, while revenues shrank 12 percent on a stronger yen and government-mandated price cuts.
For the full year to March, the company now forecasts a net loss of 316 billion yen ($3.5 billion), compared with the previous estimate of a 65 billion yen profit and the average forecast for a 280.4 billion yen loss from seven analysts polled by Reuters Estimates.
The company, however, kept unchanged its plan to pay a dividend of 80 yen per share for the full year, up from 70 yen last year.
Shares of Daiichi Sankyo lost 22 percent in October-December, roughly in line with the Nikkei average.
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