The acquisition of Daiichi Fine Chemical as a consolidated subsidiary last June played a part in the dramatic increase but Kyowa also pointed to strong overseas demand for its home-grown pharmaceutical raw materials, with amino and nucleic acids selling particularly well.

Sales of raw materials for generic pharmaceuticals also rose in Japan, helping global net sales to rise 29.3 per cent to $836m and operating income reach $378m.

Yuzuru Matsuda, president and CEO of Kyowa Hakko said: "We have significantly exceeded our plan targets for sales and operating income driven by strong performances in pharmaceuticals and bio-chemicals and chemicals."

For the next financial year Kyowa is predicting a slight downturn in operating income for its biochemical department. This is despite a predicted increase in sales as rising overheads eat into profits. Research and development costs are earmarked to rise and amortization of goodwill will provide an additional cost.

Fortunately for Kyowa the market for amino acids is predicted to continue growing in coming years, which should help offset the rising cost of production. Frost & Sullivan predicted in 2005 that the European amino acid market would reach $1.94bn by 2012.

This growth is underpinned by amino acids importance in pharmaceutical manufacturing, with around 20 per cent of the top-500 selling drug products using them as pharmaceutical intermediates.

In addition to its biochemical arm Kyowa has a pharmaceutical sector, into which Kirin Pharma is being integrated as part of the acquisition of Kyowa by Kirin's parent group which completed earlier this month.

This is due to be completed on 1 October and should significantly increase Kyowa's pharmaceutical sales and profits, which saw a 26.8 per cent increase in operating profits in 2007.

With the financial results Kyowa also issued details of its three-year business plan, which states the companies' desire to establish itself as a major presence in other Asian nations.

The company is seeking to expand its fine chemicals portfolio, by combining fermentation technology and synthesis to create high value-added fine chemical products. In addition to this the company is seeking to extract maximum value from its antibodies business.

This could help swell the company's overall operating income by a further 44.7 per cent.

If this target is realised it would be a vindication of Kyowa's canny acquisition policy at a time when many fine chemical suppliers are under increasing pressure.