May 30, 2014 2:00 am JST

Astellas seen hiking dividend annually through fiscal 2018

TOKYO -- Astellas Pharma will likely continue to raise its dividend each year through fiscal 2018, thanks to the anticipated success of major drugs under patent in the U.S.

     The Japanese company plans to pay out an annual dividend of 29 yen (28 cents) a share this fiscal year. The fiscal 2013 dividend came to 135 yen. But taking into account a 5-for-1 stock split carried out last month, this fiscal year's dividend represents an effective 2 yen increase.

     U.S. sales of the Xtandi prostate cancer drug are seen swelling nearly 30%. Net profit is expected to grow 16% this fiscal year to 154 billion yen on a core basis, excluding such items as impairment losses in light of Astellas' adoption of International Financial Reporting Standards last fiscal year.

     Other major drugs in the lineup include Vesicare, for overactive bladder, and Tarceva, for cancer. Astellas has exclusive rights to these products in the U.S. until their patent protection expires in the second half of 2018.

     The company has not set a target dividend payout ratio but plans to steadily increase its dividend based on earnings, likely raising it between 1 yen and 2 yen each time.

     One aim of the dividend hikes is to broaden the shareholder base.

     Since Astellas was formed in 2005 from the merger of Yamanouchi Pharmaceutical and Fujisawa Pharmaceutical, it has narrowed its focus to such areas as cancer and urinary diseases to more efficiently make use of research and development funds. This strategy has gotten high marks from foreign investors, who owned 53% of the company as of the end of March.

     But retail investors hold only a 7% stake -- far less than at other major pharmaceutical companies. Astellas aims to boost this to 10%.