Kaken Pharmaceutical, a Japanese mid-sized pharmaceutical company with roots in the research institute RIKEN, suddenly drew attention in February 2015.
The reason behind this is recently announced positive earnings in the third quarter of the 2014 fiscal year (April-December). On February 6th, Kaken Pharmaceutical's stock prices temporary reached a stop high, and became the second highest stock in terms of increase rate in the Tokyo Stock Exchange in the same day.
The reason for this is the strong sales of the new toenail fungus treatment product, “ Clenafin”. Toenail fungus or onychomycosis is the “Athlete’s foot of the nails” that occurs when bacteria that cause athlete's foot infects the nails of the feet and hands. The potential number of patients in Japan is said to be around 11 million people, of which 8 million also suffer from athlete’s foot.
Sales exceed predictions in just 4 months within launch
After its released in Japan in September 2014, Clenafin recorded a total sales of 4 billion yen until December 2014. The market prediction Kaken Pharmaceutical submitted at the time of drug price calculation estimated the peak to be seven years later, with 3.5 billion yen in sales. In just 4 months they have exceeded those predictions.
Clenafin also derives revenue not only domestically, but also internationally. Variants, Inc., a Pharmaceuticals firm in Canada started selling Clenafin in the United States and Canada from July 2014, under the product name “ Jublia”. Kaken Pharmaceutical did not disclose the numbers, but in addition to the domestic sales, the consideration for the formulation supply to Variant, Inc., and the royalty income directly linked to profits are seen to be growing.
Overseas sales seem to be going smooth. Variant forecasted Jublia’s US sales to be 150 million dollars in 2015, and 300 million dollars in 2016 in the announcement of the second quarter results of July 2014.
However, the outlook greatly changed in the 2015 forecast announced in January 8, 2015. Jublia’s sales in October to December of 2014 rapidly grew to more than 50 million dollars with the effect of TV commercials, and the sales forecast for 2015 were raised to more than double, to 300-400 million dollars.
In the documents that announced that Variant, Inc. has obtained American FDA sales approval in June 2014, the number of patients with onychomycosis was said to be around 35 million people, over 3 times the market of Japan.
Will Clenafin grow to become a flagship product?
Kaken Pharmaceutical explained about Clenafin, “The form of a topical cream is one factor that contributes to the newness. Until now, there have only been drinking drugs for onychomycosis treatment in Japan. However, treatment is now possible with merely one finger with the introduction of topical creams.”
In addition, the press release of Variant, Inc. in June 2014 stated that the efficacy of existing drinking drugs and topical creams were limited. The steady sales overseas can be explained not only by advertising effects, but also by the fact that doctors have appraised the treatment effects.
Kaken Pharmaceutical’s flagship product is the joint function improving agent “Artz”, (sales plan for 2014 was 30.5 billion yen), but this was not Kaken’s in-house product. The development of strong in-house products has been an issue for Kaken Pharmaceutical.
Clenafin, which expanded sales rapidly, is an in-house product with high profit rate.
With this momentum, annual sales are likely to exceed 10 billion yen solely with domestic sales. Will the new toenail fungus cream become a product that represents Kaken Pharmaceutical? Much attention is drawn to the sales trends of Clenafin.