Navitas Semiconductor tumbles after missing Q3 expectations
Introduction & Market Context
Astellas Pharma Inc (TYO:4503) presented its Q2 YTD/FY2025 financial results on October 30, 2025, showcasing significant growth in both revenue and profitability. Despite the strong performance, the company’s stock price fell 6.78% to 1,968 yen following the announcement, suggesting investors may have concerns about certain aspects of the business not fully addressed in the presentation.
The Japanese pharmaceutical company reported that its exceptional progress is outperforming expectations, leading to a significant upward revision of its full-year forecast. However, challenges with patient affordability for IZERVAY in the US market and a failed pancreatic cancer trial for VYLOY may have contributed to the negative market reaction.
Quarterly Performance Highlights
Astellas reported revenue of 1,030.1 billion yen for Q2 YTD/FY2025, representing a 10.1% increase year-over-year, or 12% growth when excluding foreign exchange impact. Core operating profit surged by 54.4% to 282.6 billion yen, with the core operating profit margin expanding significantly to 27.4%, an improvement of 7.9 percentage points compared to the previous year.
As shown in the following comprehensive financial results table, the company achieved growth across most key metrics:
The strong financial performance was driven by robust growth in strategic brands and effective cost optimization through the company’s Sustainable Margin Transformation (SMT) initiative. SG&A expenses decreased by 0.6% to 403.8 billion yen, while R&D expenses declined by 16.9% to 143.3 billion yen, partly due to the company’s efforts to reduce outsourcing costs through insourcing development capabilities.
Strategic Brands Performance
Astellas’s strategic brands portfolio exceeded 220 billion yen in sales, growing by 43% year-over-year. This growth was primarily driven by strong performance from PADCEV and VYLOY. The following chart details the performance of each strategic brand:
PADCEV led the strategic brands with sales of 102.5 billion yen, increasing 36% year-over-year. This growth was driven by robust global demand in first-line metastatic urothelial cancer, with approvals now expanded to 25 countries.
VYLOY demonstrated exceptional growth, with sales increasing by more than 100% to 26.6 billion yen. The company attributed this outstanding performance to exceptional Claudin 18 testing rate penetration and lower discontinuation rates.
IZERVAY generated 34.1 billion yen in sales, growing 21% year-over-year. However, the presentation noted that "patient affordability headwinds weighed on new patient starts and sales," leading to a downward revision of forecasts. The company expects growth to resume in the second half of the fiscal year, driven by new patient start recovery.
Xtandi, while not classified as a strategic brand, remains a significant revenue contributor with sales of 477.0 billion yen, up 6% year-over-year.
Pipeline Progress
Astellas highlighted significant progress in its pipeline, particularly with PADCEV (enfortumab vedotin) in muscle-invasive bladder cancer (MIBC). The EV-303 study demonstrated unprecedented data, showing the potential to become a new standard of care for cisplatin-ineligible MIBC patients.
The following survival curves illustrate the significant benefit observed with PADCEV plus pembrolizumab compared to chemotherapy:
Based on these compelling results, the FDA accepted Astellas’s supplemental Biologics License Application (sBLA) in October 2025, granting it Priority Review with a PDUFA date of April 7, 2026.
The company also presented promising data for ASP3082, a targeted protein degradation therapy being developed for non-small cell lung cancer (NSCLC). The following waterfall plot demonstrates the antitumor activity observed in advanced NSCLC patients:
ASP3082 monotherapy showed an objective response rate (ORR) of 37.5% in the overall population and 42.9% in second and third-line treatment settings. The median duration of response was 9.72 months, with a median progression-free survival of 8.25 months in second and third-line patients. Based on these results, Astellas is preparing registrational studies for both pancreatic ductal adenocarcinoma and NSCLC.
Additionally, early data for ASP2138 in the immuno-oncology focus area showed benefits of subcutaneous administration in combination with standard of care treatments:
Forward-Looking Statements
Based on the strong performance in the first half of the fiscal year, Astellas significantly revised its full-year forecast upward. The company now expects revenue of 2,030 billion yen (an increase of 100 billion yen from the initial forecast) and core operating profit of 490 billion yen (an increase of 80 billion yen).
The following table details the revised forecast compared to the initial projection:
The upward revision reflects strong performance across multiple strategic brands, with VYLOY (+20 billion yen), PADCEV (+10 billion yen), and XTANDI (+70 billion yen) all contributing to the improved outlook. The company also expects to achieve a core operating profit margin of 24.1%, which is 2.9 percentage points higher than the initial forecast.
Despite these positive developments, investors should note that the VYLOY GLEAM study for pancreatic cancer failed to meet its primary endpoint, which could impact future growth prospects for this product. Additionally, the affordability challenges facing IZERVAY in the US market may continue to affect its commercial performance in the near term.
In summary, Astellas delivered strong financial results in Q2 YTD/FY2025, driven by robust growth in strategic brands and effective cost management. The company’s pipeline continues to advance, particularly with PADCEV’s promising data in muscle-invasive bladder cancer. However, challenges with certain products and indications may have contributed to the negative stock price reaction despite the overall positive financial performance.
Full presentation:
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