Kyowa Kirin Q2 2025 slides: Revenue stable as profit falls amid restructuring

Published 15/10/2025, 00:08
Kyowa Kirin Q2 2025 slides: Revenue stable as profit falls amid restructuring

Introduction & Market Context

Kyowa Kirin Co., Ltd. (TYO:4151) reported its second-quarter 2025 financial results on August 1, showing stable revenue but significantly lower profits as the company navigates through a period of strategic restructuring and increased research investment. The Japanese pharmaceutical company, which specializes in rare diseases and specialty medicines, maintained its focus on global expansion with overseas markets now accounting for 73% of total revenue.

The company’s stock has shown a mild decline of 0.82% in recent trading, reflecting investor caution amid the profit decline despite the company’s pipeline advancements.

Quarterly Performance Highlights

Kyowa Kirin’s Q2 2025 financial performance revealed mixed results, with revenue holding relatively steady while profits declined substantially due to restructuring costs and increased R&D expenses.

As shown in the following comprehensive financial overview from the company’s presentation:

Revenue decreased slightly by 1% year-over-year to ¥230.7 billion, with overseas markets now representing 73% of total revenue, up from 71% in the same period last year. The company has completed 48% of its full-year revenue target of ¥478 billion.

Core operating profit fell more significantly, dropping 21% to ¥35 billion (15% margin compared to 19% in the previous year), representing 44% progress toward the annual target. The steepest decline came in profit, which plummeted 57% to ¥16.3 billion, primarily due to business restructuring expenses and foreign exchange losses.

The following chart breaks down the year-over-year revenue changes by region:

North America emerged as the growth driver with a ¥9.6 billion increase, while Japan saw a ¥6.9 billion decline. The company attributed the Japanese market challenges to the termination of sales partnership agreements and drug price reductions. The EMEA (Europe, Middle East, and Africa) region showed modest growth of ¥0.2 billion, while other regions declined by ¥3.6 billion due to restructuring in the Asia-Pacific business.

Product Performance Analysis

Despite overall revenue challenges, Kyowa Kirin’s global flagship products continued to demonstrate strong growth, offsetting declines in mature products affected by biosimilar competition and price cuts.

The following breakdown shows the performance of the company’s major products:

Crysvita, the company’s treatment for X-linked hypophosphatemia, increased sales by 10% to ¥99.8 billion, driven by continued market penetration in North America and Europe. The product’s growth trajectory is illustrated in this detailed chart:

Similarly, Poteligeo, used to treat certain types of non-Hodgkin lymphoma, saw a 14% increase to ¥21.6 billion as the company expanded promotional activities and increased access to medical facilities:

Other growth drivers included Libmeldy/Lenmeldy, which more than tripled from ¥1.4 billion to ¥4.4 billion following FDA approval in March 2024, and Phozevel, which more than doubled from ¥1.7 billion to ¥3.7 billion through increased market penetration.

These gains were partially offset by declines in mature products like Nesp/Nesp-AG and G-Lasta, which fell due to biosimilar competition and price cuts in Japan’s National Health Insurance system.

Pipeline Development Progress

Kyowa Kirin continued to invest heavily in its R&D pipeline, with expenses increasing 7% year-over-year to ¥52.5 billion, representing 23% of total revenue. The company highlighted significant progress with key pipeline candidates.

A major development was the FDA’s acceptance of the New Drug Application for ziftomenib, an oral small molecule Menin inhibitor targeting Acute Myeloid Leukemia (AML):

The FDA set a PDUFA date of November 30, 2025, for ziftomenib in adults with relapsed/refractory NPM1-mutant AML. The company presented Phase 2 KOMET-001 results at ASCO 2025, showing the treatment met its primary endpoint with a 29% complete response rate compared to a 12% historical control rate.

The company is also advancing rocatinlimab, a potential treatment for moderate to severe atopic dermatitis, through its Phase 3 ROCKET program comprising eight global studies with over 3,300 patients enrolled.

Strategic Initiatives and Outlook

Kyowa Kirin implemented a Special Voluntary Early Retirement Program as part of its restructuring efforts, which saw 432 employees participate. The company described this as an initiative to support employees seeking career opportunities elsewhere while optimizing its organizational structure.

The following chart details the factors contributing to the significant year-over-year profit decline:

Business restructuring expenses of ¥7.8 billion and foreign exchange losses of ¥4.0 billion were the primary drivers of the 57% profit decrease, alongside smaller declines in gross profit, SG&A/R&D expenses, and equity method investments.

Despite these challenges, Kyowa Kirin maintained its full-year 2025 financial targets, with current progress at 48% for revenue and 44% for core operating profit. The company continues to focus on its global expansion strategy and pipeline development to drive future growth.

The company highlighted several upcoming catalysts in its news flow, including regulatory decisions and clinical trial milestones:

With its increasing focus on overseas markets, pipeline advancements in oncology and immunology, and strategic restructuring initiatives, Kyowa Kirin is positioning itself for future growth despite the current profit challenges. The company’s ability to execute on its pipeline opportunities while managing the transition through restructuring will be crucial for its performance in the coming quarters.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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