Sumitomo Pharma has answered a short seller point by point, and the number in the report's title turns up in the company's own reply
116.2 billion yen.
That is the figure Sumitomo Pharma says it took off the book value of its Swiss subsidiary's shares in the year to March 2026, and a number close to it sits in the title of the report the company spent Friday answering.
Sumitomo Chemical, which owns the drugmaker, filed the answer to the Tokyo Stock Exchange at 13:35 on Friday afternoon and attached the release its subsidiary issued the same day. It is the second response in four days. The first, on 4 August, ran to five sentences. Friday's runs to three pages and takes four points in order.
One limit belongs at the top rather than the bottom. Gotham City Research publishes its work behind a terms of service agreement a reader must accept before viewing it. This desk did not accept those terms and has not read the 3 August report, so every claim attributed to it below is the company's description of it, drawn from the company's own filing.
The dividend
Sumitomo Pharma Switzerland GmbH paid its parent 164.5 billion yen in the year to March 2026. In the parent-only accounts, prepared under Japanese standards, the company says it split that: 116.2 billion yen deducted from the carrying value of the shares it holds in the Swiss company, and 48.3 billion yen recognised as dividend income. Shares in affiliates on the parent balance sheet fell 109.5 billion yen over the year, which the company offers as the cross-check.
The report used 164.0 billion. The company says it reads that as a rounding of its own 164.5 billion, which is a quiet way of saying the two sides agree on the size of the thing.
What was actually paid over was not cash. It was a receivable against the parent that the Swiss company had picked up in an intra-group transfer in August 2025 of assets tied to three main United States products. All of it is internal, and the company says it is eliminated on consolidation, so the consolidated statements show none of it. The company says the report suggested the arrangement may have been made to generate profit ahead of a share offering. It says that does not reflect the substance of the transaction or the accounting.
The receivables
Here the company's answer is arithmetic rather than intent.
The report is described as reading the rise in the receivable balance at the March 2026 year end as a sign of pushed sales, pulled-forward revenue or fictitious revenue. The company says the report simply sets the growth rate of revenue beside the growth rate of receivables, and that the two are not built the same way, and it gives three reasons they diverged. A North American subsidiary factored receivables at the March 2025 year end, which reduced the balance then, and did not do so at March 2026. Revenue is reported net of returns, discounts and rebates while the receivable is carried gross of them. And the Asia business receivables were classified as held for sale at March 2025 and therefore sat outside the receivables line, while that business's revenue stayed inside the income statement.
What the company puts behind it
A gain of 49.0 billion yen on the partial transfer of the Asia business, which it says it flagged in a release on 13 May 2025. An unqualified audit opinion from KPMG AZSA on both the consolidated and the parent-only statements for the year to March 2026. A description of its own approval, verification and review procedures.
Friday's document also goes further than the one on 4 August. It says the report contains its own assertions about the business and the accounting, that many of them clearly differ from fact, and that the company will take appropriate steps including legal measures where necessary against inaccurate or misleading information.
It also records that the report itself discloses a short position. That much can be checked without the report. Gotham City Research's public site tells readers they "should assume" the firm "stands to profit in the event the issuer's stock declines" as of the publication date of anything it puts out.
Neither company has said the report moved anything. Neither has published a revision.
