Earnings call transcript: Astellas Pharma’s Q2 2025 stock dips despite profit surge

In its Q2 2025 earnings call, Astellas Pharma reported a robust financial performance, with revenue reaching 1,030.1 billion yen, marking a 10.1% year-on-year increase. Core operating profit surged by 54.4% to 282.6 billion yen, driven by strong sales in its strategic brands. Despite these positive results, Astellas Pharma’s stock price fell by 6.78%, closing at 1,968 yen. Currently trading at $10.38, the stock sits 12% below its 52-week high of $11.75, though InvestingPro analysis suggests the company is significantly undervalued based on its Fair Value assessment.

Key Takeaways

• Revenue rose by 10.1% year-on-year to 1,030.1 billion yen.
• Core operating profit increased by 54.4% year-on-year.
• Strategic brand sales grew by 43% to over 220 billion yen.
• Stock price dropped by 6.78%, closing at 1,968 yen.
• Challenges in IZERVAY’s market affordability in the US.

Company Performance

Astellas Pharma showcased a strong performance in Q2 2025, with significant growth in revenue and core operating profit compared to the previous year. The company’s strategic brands, including PADCEV and IZERVAY, contributed significantly to this growth, despite facing challenges in some markets.

Financial Highlights

• Revenue: 1,030.1 billion yen, up 10.1% year-on-year
• Core operating profit: 282.6 billion yen, up 54.4% year-on-year
• Strategic brand sales: Over 220 billion yen, up 43% year-on-year

Outlook & Guidance

Astellas Pharma revised its full-year revenue forecast upward by 100 billion yen to 2.03 trillion yen and core operating profit forecast by 80 billion yen to 490 billion yen. The company aims to achieve a 30% operating profit margin by FY2027, driven by continued investment in R&D and strategic brand development.

Executive Commentary

Naoki Okamura, CEO, expressed confidence in IZERVAY’s market development, stating, "We think we can do it." Klaus Saylor, Chief Commercial and Medical Affairs Officer, highlighted the potential of the company’s products, equating them to the size of XTANDI. Atsushi Kitamura, CFO, emphasized the ongoing nature of the Sustainable Margin Transformation initiative.

Risks and Challenges

• Patient affordability issues for IZERVAY in the US market could impact sales.
• The VYLOY GLEAM study’s failure to meet its primary endpoint may affect future growth.
• The stock’s proximity to its 52-week low indicates potential investor concerns.

Q&A

During the earnings call, analysts inquired about PADCEV’s potential in the muscle invasive bladder cancer market and sought clarification on IZERVAY’s affordability challenges. Executives also discussed their mid-term business planning and commitment to maintaining a stable dividend.

Full transcript - Astellas Pharma Inc CFD (4503) Q2 2026:

Kato, Chief Communications and IR Officer, Astellas Pharma: Thank you very much for joining this Q2YTD FY2025 earnings call by Astellas Pharma. I would like to serve as a moderator for today. I’m Chief Communications and IR Officer Kato. Thank you for this opportunity today. First of all, we would like to give you the presentation and after that we’ll have Q and A session. On our website, presentation material is available and in line with that we are going to make a presentation including Q and A. We will provide you the simultaneous interpretation service between Japanese and English. For simultaneous interpretation service, we are not going to guarantee the accuracy of it when it comes to the language. For this meeting, you can select from the Zoom webinar screen and if you select original then you can listen to the original voices without hearing the interpretation voices. These are some notes.

This material or representation by representatives for the company and answers and statement by representatives for the company in the Q and A session includes forward looking statements based on assumptions and beliefs in light of the information currently available to management as subject to significant risks and uncertainties. Actual financial results may therefore differ materially depending on a number of factors. Please do understand about this. They contain information on pharmaceuticals including compounds under development, but this information is not intended to make representations or out of that regarding the efficacy or effectiveness of these preparations, promote an approved uses in any fashion or provide medical advice of any kind. Now I’d like to introduce you participants here. Representative Director, President and CEO Naoki Okamura, Chief Research and Development Officer Tadaaki Taniguchi, Chief Commercial and Medical Affairs Officer Klaus Saylor, Chief Financial Officer Atsushi Kitamura.

We have these four representatives here. Now, first of all, Okamura is going to start the presentation.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Minasan, hello everyone, I’m Naoki Okamura from Astellas Pharma. Thank you very much for joining our.

Astellas Pharma: FY2025 second quarter year-to-date financial.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Results announcement meeting out of a very busy schedule today.

Astellas Pharma: This is a cautionary statement regarding forward-looking information as this was explained by Kato earlier. I’m not going to read this page. On page three I will explain the highlights of FY2025 second quarter year-to-date financial results. Overall we have made exceptional progress at performing expectations. We have made a significant upward revision of our full-year forecast driven by continued strong growth of our strategic brands. Revenue increased significantly year on year with underlying growth of 12% year on year excluding forex impact. As for SG&A expenses, thanks to the robust progress of SMT, Sustainable Margin Transformation company-wide cost optimization initiative, SG&A ratio improved by 3.1 percentage points year on year. Due to the growth of strategic brands and robust cost management through SMT, core operating profit rose significantly year on year with underlying growth of 57%.

Core operating profit margin increased by 7.9 percentage points year on year to reach 27.4%. Based on this exceptional progress exceeding our expectations, we revised our full-year forecast upward by ¥100 billion for revenue and by ¥80 billion for both core and full operating profit respectively. Regarding pipeline progress for PADCEV, we have unprecedented EV-303 study data in MIBC, muscle invasive bladder cancer, and our BLA for additional indication was accepted in the U.S. As for focus area approach, we obtained promising initial data with ASP3082 and ASP2138 and registration-enabling studies are now under preparation. Page four is the agenda for today. From the next page I will explain these topics. Page five shows FY2025 second quarter year-to-date financial results. Revenue, core and full operating profit all increased by about ¥100 billion year on year. Let me explain main items. Revenue reached ¥1,030.1 billion, up by 10.1% year on year.

Core operating profit rose to ¥282.6 billion, up by 54.4% year on year. The forex impact is shown on the right-hand side of the table. Forex had a negative impact on both revenue and core operating profit. Underlying growth excluding this impact was 12% for revenue and 57% for core operating profit, demonstrating a stronger growth. The bottom half of this page shows our full basis results. Operating profit was ¥199.4 billion, up by 112.8% year on year. Profit increased to ¥147.6 billion, up by 100.8% year on year. Page six shows FY2025 second quarter year-to-date results of our main brands. Strategic brands grew substantially, driven primarily by strong growth in PADCEV and VYLOY.

For second quarter year to date, sales of five strategic brands driving Astellas Pharma’s growth, namely PADCEV, IZERVAY, VEOZAH, VYLOY and XOSPATA, exceeded ¥220 billion in total, substantially up by ¥66.2 billion or 43% year on year. Underlying growth excluding forex impact was 47%, showing a strong growth.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Due to high.

Astellas Pharma: Profitability of these brands. They not just contributed to revenues but also made a great contribution to profit growth on a consolidated basis. As a whole, we are expecting this strong growth momentum to continue in the second half of FY 2025. Next I will explain individual strategic brands and XTANDI. Part 7 global sales increased to ¥102.5 billion, up by ¥27.1 billion or 36% year on year. Robust global growth has been continuously driven by strong first line MUC demand momentum. Regional expansion in the first line indication is also making steady progress. First line MUC approval expanded to 25 countries. We are expecting further expansion of countries with approval as well as an increase in the number of countries where reimbursement will start, mainly based on the robust progress in the U.S. and Europe.

In the FY 2025 second half outlook, we revised our forecast upward by ¥10 billion to expect ¥210 billion on a full year basis. Next growth opportunity is expected from potential MIBC indication approval. EV-303 study in cis-ineligible MIBC presented at ESMO the other day demonstrated extremely promising results exceeding our expectations. Based on these results, we already filed a submission in the U.S. We are expecting contribution to sales post approval. Furthermore, based on this exceptional data exceeding our expectations, we are analyzing the possibility of any upside to our sales forecast including peak sales. Also taking into account the status of EV-304 study for cis-eligible MIBC.

Kato, Chief Communications and IR Officer, Astellas Pharma: We.

Astellas Pharma: Will share our latest outlook as soon as we complete our analysis. As for IZERVAY, sales rose to ¥34.1 billion, up by ¥6 billion or 21% year on year on a quarterly basis. Double-digit growth is continuously maintained, but patient affordability headwinds weighed on new patient starts and sales, so progress was lower than initially expected. Based on the second quarter year-to-date progress and FY 2025 second half outlook, we revised our forecast downward by ¥25 billion and are expecting ¥80 billion on a full-year basis. We revised our full-year forecast downward, but we are expecting continuous also from now on. One factor behind this: new patient starts recovery. Although it’s moderate, we are seeing signs of recovery in new patient starts from August. The share is also improving from the lower 50% level in June to the upper 50% level in August.

Another factor is the use of GATHER2 open-label extension study data presented at AAO, American Academy of Ophthalmology, this month. Over three and a half years post IZERVAY dosing, increased benefit was demonstrated according to long-term efficacy data. In addition, favorable long-term data was obtained also in terms of safety and tolerability as well. By broadly disseminating this kind of data in the market, we will aim to further increase the awareness of the importance of treating IGA and the benefit of IZERVAY. You can find GATHER2 extension study data on page 34 and 35 in the Appendix for your reference. Please refer to those pages at your leisure. We believe in the mid to long-term potential of IZERVAY, and we are expecting that we can reach the peak sales forecast range. We have high expectations on IZERVAY as an important growth driver for Astellas Pharma also into the future.

Global sales of VEOZAH increased to ¥22.9 billion, up by ¥8.1 billion or 55% year on year, demonstrating a solid growth continuous. We are anticipating this steady growth trajectory ahead in the second half of FY 2025. With regards to VYLOY, global sales reached ¥26.6 billion. Its outstanding performance is exceeding expectations due to active awareness campaign. We were able to realize exceptional coding 18 testing rate penetration and lower treatment discontinuation through appropriate information provision activities on adverse event management. Regional footprint is expanding steadily with approval in 47 countries and launches in 26 countries by now. Based on this strong global momentum as a whole, we have made a substantial upward revision of our full year forecast from ¥40 billion to ¥60 billion, which is 1.5 times compared to the initial forecast regarding XOSPATA. Global sales reached ¥34.4 billion.

There are some regional differences, but overall performance is largely on track. We are anticipating a moderate growth trend within the current indication of relapsed or refractory AML as a future growth driver. Top line results for the additional indication in newly diagnosed AML are anticipated in the first half of FY 2026. If approved, we can offer a treatment option to a new patient population, so we are hoping for contribution to sales. Last but not least, XTANDI global sales increased to ¥477 billion, up by ¥25.3 billion or 6% year on year. Sales expanded in all regions, reflecting strong global performance as a whole. We revised our full year forecast upward. Page seven is about cost items. The SMT initiative made more progress than our expectations. We realized cost optimization of about ¥16 billion in total for SG&A expenses, earned expenditure and cost of sales combined, excluding U.S.

Extended Core Promotion fees. The SG&A ratio improved by 3.1 percentage points year on year. Let me explain a specific breakdown of SG&A cost and R&D expenditure. SG&A expenses fell by 1.3% year on year, trending at a similar level compared to the previous year. The SG&A ratio was 26.9%. As SMT progressed, we realized cost optimization of about ¥7 billion through continuous global organizational restructuring, reduction of mature products related expenses, and streamlining IT infrastructure, etc. In addition to investments to maximize the potential of strategic brands driving our future growth, we will continue to make investments needed for SMT execution in order to realize further cost optimization. The expenditure decreased by 16.9% year on year as a main factor behind. In addition to forex impact, we made progress in outsourcing cost reduction through insourcing development capabilities including clinical trials, etc.

under SMT, which led to cost optimization of about ¥7 billion. Furthermore, due to the completion of large clinical studies for strategic plans, clinical development cost decreased by about ¥6 billion. In addition, one-time co-development cost payment booked in FY 2024 was another factor for cost decrease year on year. In the second half of FY 2025 onwards, we are expecting expansion of investments aligned with primary focus progress. In April this year, we implemented R&D organizational restructuring enabling active research to development all throughout. By pursuing operational efficiency, we are creating a cycle of making investments needed for the future continuously. Page eight is about the revision of FY 2025 full year forecast. Based on the robust progress exceeding our initial forecast up to the second quarter, we have made a significant upward revision of revenue, core, and full operating profit.

We are expecting core operating profit margin of 24.1%, improving by 2.9 percentage points compared to the initial forecast. We revised our full year forecast forex assumptions to ¥145 against the U.S. dollar and ¥170 against the euro. From the third quarter onwards, we are assuming forex rates of ¥144 against the dollar and ¥172 against the euro. We have made an upward revision of revenue forecast by ¥100 billion, including ¥20 billion for VYLOY, ¥10 billion for PADCEV, and ¥70 billion for XTANDI. We are expecting revenue of ¥2.03 trillion, exceeding the ¥2 trillion mark for the first time since the establishment of Astellas. We are expecting SG&A expenses excluding U.S. external promotion fees to decline from the initial forecast. If we exclude forex impact reflecting robust progress of SMT, we are expecting ¥586 billion.

As for R&D expenditure reflecting operational efficiency in R&D reorganization, we are expecting ¥322 billion.

Kato, Chief Communications and IR Officer, Astellas Pharma: Reflecting the strong progress in our core business. Core operating profit is revised upward by ¥80 billion from the initial focus, now expected to be ¥490 billion. Hubei’s operating profit is also revised upward by ¥80 billion from the initial focus, now projected to be ¥240 billion. We continue to incorporate a certain amount into the focus for other expenses to prepare for risks such as impairment losses. Next, I will explain the progress of our pipeline. Page 10 shows the progress of key events expected in FY2025 for our strategic brands. A particularly significant development, as shown in the center of the slide, is the successful completion of the PADCEV EV-303 trial and acceptance of its supplemental BLA in the U.S. Details are provided on the next page. IZERVAY was approved in Japan in September for the indication of suppression of GA growth in atrophic AMD.

Aiming to rapidly deliver this treatment for severe GA with a high unmet need to Japanese patients, the development team engaged in constructive discussions with the authorities. This led to a submission based on overseas clinical trial results using the conditional approval system, resulting in approval just seven months later. Furthermore, as noted and outside of the table, approval was obtained in Australia in October as well. We’ll continue to pursue further submissions in other countries and regions with the aim of delivering IZERVAY to patients worldwide. In addition, we presented efficacy and safety data from the GATHER2 open-label extension study covering up to 3.5 years after administration of IZERVAY at the AAO. In October, the final analysis results of the Phase 2 GLEAM trial of VYLOY in pancreatic ductal adenocarcinoma, or PDAC, became available and the primary endpoint was not met.

We are currently analyzing the detailed data as part of the lifecycle management of VYLOY. The Phase 3 LUCENE trial evaluating its combination with pembrolizumab and chemotherapy in gastric cancer is ongoing. Page 11 shows the latest status parts of MIBC development. For details, please refer to the materials from last week’s online briefing on our oncology pipeline. The EV-303 trial yielded unprecedented data suggesting that PADCEV has the potential to become a new standard of care for cisplatin-ineligible MIBC. EV-303 trial compared the efficacy and safety of PADCEV plus pembrolizumab as neoadjuvant therapy before and after radical cystectomy, the current standard of care in patients with MIBC who were ineligible for or declined cisplatin-based chemotherapy versus surgery alone. The figure shows the efficacy results from the first interim analysis.

The left panel displays the primary endpoint event-free survival or EFS, and the right panel shows the key secondary endpoint overall survival or OS compared to surgery alone. The combination therapy group or arm showed a hazard ratio of 0.40 for EFS, representing a 60% reduction in the risk of tumor recurrence, disease progression, or death, and a hazard ratio of 0.50 for OS, indicating a 50% reduction in the risk of death. Subgroup analysis confirmed consistent improvements in EFS and OS regardless of age, sex, or PD-L1 expression status. The safety profile of the combination therapy arm was consistent with the previously reported trials with no new safety concerns identified. Following the top-line results in August, we rapidly advanced the process for additional indications within just over two months. The U.S. BLA was accepted and granted priority review designation with a target PDUFA date set for April 7, 2026.

We are also progressing discussions with regulatory authorities in other regions for other submissions. Furthermore, the Phase 3 EV-304 trial for cisplatin-treated MIBC is ongoing with interim analysis data anticipated in the latter half of fiscal year 2025. Page 12 for Focus Area approach, I will explain the progress on flagship programs ASP3082 targeted protein degradation and ASP2138 immuno-oncology, present promising clinical trial data in October. While details were already explained during last week’s online briefing, the following slides briefly recap the current status. Clinical trials for OTA4.5 in genetic regulation and ASP7317 in blindness and regeneration are progressing as planned, with POC assessment still scheduled for the second half of FY25. The current status of other programs is summarized on slide 41 in the appendix. Page 13 explains the progress of ASP3082 and the primary focus, targeted protein degradation.

Specifically, ASP3082 has presented promising data in NSCLC or non-small cell lung cancer, and we have initiated preparations for registration studies targeting PDAC and NSCLC. ASP3082 has achieved POC in both PDAC and SCLC. This time we presented clinical data for its monotherapy in second line analytic treatment settings for NSCLC at an October Congress. Last week’s online briefing preceded the Congress presentation, so we provided an explanation aligned with the abstract. Today, however, we will use the data presented at the Congress. As shown in the figure on the right, NSCLC has a high unmet medical need. The objective response rate with the existing standard of care in the second line and beyond is reported to be in the single digits, reaching at a maximum of around 18%.

ASP3082 monotherapy demonstrated significantly superior anti-tumor activity compared to standard of care, achieving an ORR of 37.5% across our second line and beyond and 42.9% specifically in second and third line. Furthermore, the median duration of response was 9.72 months and a median progression free survival or PFS in second and third line was 8.25 months, confirming sustained efficacy. The safety profile showed no major concerns with no treatment-related adverse events leading to discontinuation observed at the data cutoff date. Development of ASP3082 across various tumor types is progressing. For PDAC, preparations are underway to initiate a pivotal trial for first line treatment in the latter half of FY2025 with data presentation also targeted for the latter half of FY2025. For NRCOC, planning is ongoing to initiate restoration of studies as early as possible. For CRC, colorectal cancer, the POC judgment remains targeted for the second half of FY2025.

Furthermore, research and development for follow-on programs is advancing. ASP5834, upon KRAS degradation targeting diverse KRAS variants, achieved its first subject dosing in August. Under the new R&D structure launched in April, the team achieved its first subject dosing in a record 27 days after the FDA IND clearance. Thanks to close cross-functional collaboration, we will provide progress updates as data becomes available. From clinical trials, page 14 details progress on ASP2138 and primary focus seminar oncology specifically. ASP2138 is demonstrating the benefit of subcutaneous administration in combination with the standard of care, steadily progressing toward POC achievement. Phase 1 trials are currently underway for gastric and gastroesophageal junction adenocarcinoma or GGE as well as PDAC. These trials evaluate ASP2138 as a monotherapy in combination with standard of care IV and subcutaneous across multiple treatment lines.

Data presented at ESMO in October showed no major safety or elaborated concern concerns and support a combination with current standard of care. Furthermore, the ORR, when combined with the standard of care by a convenient biweekly subcutaneous administration, demonstrated high antitumor activity in gastric cancer at a 2000 microgram dose: 62.5% in first line and 37.5% in second line. In the figure above right, the values indicated in red represent the CLDN18.2 expression levels for each subject by low IT targets patients with high expression 75 N and above. This data confirms efficacy not only in high expression patients but also in those with moderate to low expression levels, suggesting the potential to expand the patient population eligible for this treatment. A POC judgment is planned for the latter half of FY2025.

Given the compelling data obtained thus far, we have initiated discussions on the development plan to enable the prompt execution of the Restoration trial following POC achievement for CLDN18.2 targeted therapy. We aim to provide treatment options to a broader patient population. To strengthen our leading position, we are advancing the development of the antibody drug conjugate as in addition to ASP2138, research and development of follow-on programs are also progressing. Multiple programs utilizing a similar mechanism of action including the clinical stage ASB1002 are advancing including bispecific. Additionally, a research advantage toward clinical trials for IADC immunostimulatory antibody drug conjugate utilizing new antibody modification technologies. We will provide updates including updated explanations as progress is made in each program. Page 15 shows today’s key takeaways. The second quarter delivered exceptional financial results. PADCEV and VYLOY led the way with strategic brands demonstrating strong growth.

SMT progressed well, achieving robust cost optimization. Based on this strong progress in our core business, we have reversed our full year revenue forecast upward by ¥100 billion and both core and full operating profit by ¥80 billion. Our pipeline also showed robust progress. PADCEV showed unprecedented data in the EV-303 trial, significantly advancing its development for MIBC in the focus area approach. Promising data was obtained for ASP3082 and ASP2138 and preparations are underway to conduct registration trials throughout FY2025. We will aim for further profit growth and enhanced pipeline value at the end. I would like to announce upcoming events. On Tuesday, December 9, we plan to hold a discussion session with outside directors. At this session, we will explain the evolution of Astellas governance structure.

Additionally, directors newly appointed in June will share their perspectives on joining the Astellas Board of Directors as well as their experiences and impressions from their first 150 days in office. We encourage your participation. That concludes my presentation. Thank you very much for your attention. Hey Sakata, that’s all.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: As a presentation, we are going to entertain questions from the audience. If you have questions, please press the raise hand button at the bottom of your Zoom screen. If you are joining from your smartphone, if you tap details, the raise hand function will be shown, so please press it. I will name you one by one. If your name is called, please unmute yourself on your screen, mention your name and your affiliation, and then ask questions. We now would like to open the floor for questions. The first, Mr. Yamaguchi from Citigroup. Mr. Yamaguchi, please, can you hear me? I’m Yamaguchi from Citigroup. Yes, we can hear you. Thank you. First, about PADCEV, the data was better than you expected. Global sales are going to be ¥400 to ¥500 billion. MIBC is ineligible or data was better than expected in this area.

What is going to be the potential impact? How better compared to your initial expectations? Thank you for your question. I will respond briefly and then regarding.

Astellas Pharma: Sales forecast class may add and the data per se where necessary can be explained by Taniguchi. First of all, as I showed on.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: The slide 303 study results, even we non-experts see the separation in the Kaplan-Meier curve and the hazard ratio is 0.4 or 0.5. We don’t see these numbers so often. We presented this at ESMO in the first line of settings, we said the same. We made a presentation at Congress and there was a standing ovation naturally in the audience. We think we had unprecedented data. This great data exceeded our expectations. Is this going to lead to the sales forecast directly? Not necessarily. MIBC and after metastasis in the urothelial cancer muc, it’s not clearly separated completely in the current indication. Some part is covered in the United States if the additional indication is approved. How much we can expand the target patient population? It’s difficult for us to say clearly how much we can expand. CIS ineligible patient population was studied in 303 study.

Patients on cisplatin 3 or 4 study is ongoing and we’d like to look at the distribution of these patients in detail. To share our sales forecast with you first, Taniguchi-san, anything from you. Thank you very much. For me, regarding this data, I’d like to add a bit. As Okamura explained at ESMO, there was a very good response from the audience. First, the primary endpoint EFS hazard ratio was 0.40. This is unprecedented in terms of the risk reduction. Secondary endpoint overall survival consistently 0.5. Regarding secondary endpoint, whether we could meet this in the interim analysis, we made this much reduction. There was a statistically significant difference. Clearly, number three, PCR ratio was 57% or even exceeding that level and 8.6% are for the control group. This much pathological CR was seen at such a high probability.

Astellas Pharma: Such a drug is unprecedented.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: This was highly evaluated as well. These are the three effects. As for safety, the pembrolizumab combination was consistent in terms of safety. In that regard, this data is very innovative and unprecedented. Says ineligible was the indication unfit population, at high risk or with a variety of complications. The drug could be utilized in such patient population. There are high expectations because of this.

Klaus Saylor, Chief Commercial and Medical Affairs Officer, Astellas Pharma: Yes, so the question that you asked is how this translates into a sales forecast. There are a few considerations. Clearly, clearly such an unprecedented data will help us convince physicians that this should be the new standard of care in the labeled indication of locally advanced and then after approval also in the MIBC indication. There is, however, a difference between the two. If you look at the clinical trial in MIBC, there are two parts to it. There is the so-called neoadjuvant use, so you give it before you do the cystectomy, the removal of a bladder, and then you have the adjuvant use, which is after the surgery has been done. In clinical practice, these two parts are likely to be different from the clinical trial setting.

We need to observe carefully exactly how the market adopts the usage of PADCEV and Pembro in these two different phases of the MIBC. Those are things we still have to learn, and I think once we have more data points, we can make a more efficient, accurate sales forecast.

Kato, Chief Communications and IR Officer, Astellas Pharma: Thank you very much. Next question, a brief question again. This time performance was really good. However, from the midterm perspective, we are going to face the cliff of the patent and next year and afterwards a new midterm plan is going to be presented. Toward that, your foundational businesses are quite improved. Toward the next fiscal midterm plan, this performance level and also SMT included, how do you view about it? Would you give us a comment? Thank you very much. We are still in the middle of the discussion about this, so I think it is inappropriate to come into the details about this here. However, the XTANDI and MIBC, where the patent is expired, and we are going to extend their lives. In order to cover the loss of those sales, we will do something including business development or BD, that’s not something like that.

Rather than that, we have the strategic brands in our hands, those are getting stronger. We would like to maximize its strength. That is going to be the focus of the next midterm plan. That’s what we expect. Meaning that from the outsider’s perspective, the breakdowns of the products are not really matters. Rather, the sales of the products will be reduced. That is one thing. However, we are already having the three important strategic brand products in the growth phase. We would like to maximize the value of that. That focus is going to be incorporated into the next midterm plan and also focus area approach, key products achieving their clinical POC or coming to the phase of the POC judgment.

For the next five years, those flagship going to get into the late phase of the development and on top of that the original focus area benefit, that is when initial compound is successful. Then with the same triangle, we come up with the following programs. We introduce some of the follow-on programs today. That will happen. We have the five strategic brands and on top of that, further ahead of the growth. Growth can be expected in these approaches and if that is recognized in that way or so, it’s going to be the one key aspect of the midterm plan. The current product sales increase is a job needed to be done by Okamura and next preparation is Taniguchi’s job. Kitamura, who is here, needs to think about changing the company with appropriate financial discipline in terms of the operation of this company based upon such background information.

Thank you very much. Thank you very much. Now I would like to move on to the next question, that is JPMorgan Chase. Mr. Wakao, please. JPMorgan Chase, Wakao is my name. Can you hear me? Yes, I can hear you now, please.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Thank you very much. Regarding strategic brands, how do you assess those products? As of now you made an upward revision, but extending the mirror background before in the previous upward revision, if you look at the total sales, the ¥470 billion, although the breakdown is different, you are progressing according to your initial forecast. EV-303 is successful and there are other factors as well. What is your current assessment? Also, the future outlook of strategic brands is of how it’s going to go up. That might be part of the question as well. Thank you for your question. I’d like to give you a rough overview where necessary. Klaus can add as I mentioned before, how Astellas Pharma is going to be from now on. Extending mirror background such immature products, how we can increase their value from now on is one question. We made an upward revision.

If you look at the face value, these two may be covering the majority of the upward revision at a glance. IZERVAY unfortunately on a dollar basis, $750 million was revised downward to $550 million. That reduction is covered by PADCEV and VYLOY. Because of their good performance, we are more than offsetting that decline. In total there is no change in the strategic brands. You may say so from outside, but there are special circumstances for IZERVAY and it may be difficult to perform as expected. Are we going to reduce the strategic brands? No, we would like to cover more than offset this decline and Astellas Pharma in the mid to long term needs to grow. To that end, this is going to be very important. In the world of pharmaceuticals, regulations may change and there can be something unexpected. We often see such events in this sector.

Instead of saying that this is what we can do only if there is something negative, we’d like to offset the negative and we can recover in the top line figures. Also, we’d like to do our best to control the cost and we would like to achieve core operating profit, the bottom line. That’s our discipline and how our management of the company should be. Anything additional from Klaus about individual products?

Klaus Saylor, Chief Commercial and Medical Affairs Officer, Astellas Pharma: I think, Naoki, you’ve summarized it very well. I think the five strategic brands as a group have the potential to replace XTANDI and maybe even grow beyond that. I personally think the total potential is beyond that of XTANDI as a single brand. Now, the different brands will vary and also in their phases. We see VEOZAH as a primary care, pretty much primary care product with a much slower trajectory than an oncology drug, which has a very, very fast uptake. We’ve seen that both with PADCEV and with VYLOY now. I think each therapeutic area has its own dynamic. As a group, the potential of these products is, as I said, in my estimation, at least the size of XTANDI.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Thank you very much. Secondly, SMT initiative status is something I’d like to know more. In the second quarter, cost reduction was achieved and I’m very surprised. Regarding your plan, OP margin is to improve. I think this was great and SMT is making very good progress as of now. OP 30% or higher. What do you think in terms of this progress? You may have other hurdles to clear or are you approaching the achievement? You may need to invest in R&D for some of the products. What is the current progress? Thank you very much. In the end, operating profit was revised upward. If you look at the guidance, 24.1% for operating profit margin. Are we satisfied? No, we are not completely satisfied yet. Still, in FY2027 we are targeting to achieve 30%. Towards that goal, we are beginning to solidify our basis. That’s how I feel.

It’s not easy to improve just 5% overnight. There are many things we have to do. As you pointed out, development cost would go back to the original number. We shouldn’t sacrifice the development cost. We have to do something else elsewhere. Anything to add from.

Kato, Chief Communications and IR Officer, Astellas Pharma: Thank you very much. Regarding SMT, in the past, I’ve already made an explanation as saying that this is not their single year short period of time of activity, this is the regular activities. I’ve mentioned that it’s going to be ¥120 billion to ¥150 billion. At the time of the announcement, it’s clear that for the 70%, yes, we will do that and we execute the plan and the remaining 30% idea is going to be generated. That was the approach and currently it is ¥150 billion. Internally, we accumulated our ideas and they are going to be executed. That’s the next phase. That’s the current status. Thanks to SMT, ¥40 billion of the impact was realized. This fiscal year, throughout the year, we are expecting to be ¥20 billion. For two years, it will be ¥60 billion. In the first half, it is ¥16 billion.

Against the target of ¥20 billion, I think we are doing quite well. As has been mentioned by Okamura, this is not the easy road. We have to steadily execute the plans. We have to have that in our mind. As long as we do what we need to do, we definitely can see the result. Therefore, we have a commitment, we have a confidence about it. Under Sir KU Leali. Thank you very much. Thank you very much. Next, Goldman Sachs Group. Mr. Weda, please. Goldman Sachs Weda is my name. My first question is about the follow-up question, is the currently discussed point, so R&D for this fiscal year, you changed the presumption for the Forex, meaning that there’s a wide range of review or revisit during the quarter. What did you do to come up with these big changes?

Also, in the current new plan, compared to the initial plan, the accuracy was increased. Would you please make your explanation for these two points. Thank you very much. First of all, in my presentation, as I’ve already mentioned, in terms of year on year, the major clinical trials of the strategic brands completed as their first phase. From year on year perspective, in the last year first quarter, one of cost increase was canceled. Because of that, seemingly there was a decrease. Overall flow depending on that, because of that, the cost is reduced. Toward the second half of 2025, the focus program achieved, the POC will come to the later phase of the development and this will come back. This portion will come back. That’s why we have this guidance. On top of that, of course we are doing the continuous work.

This time, within the SMT and strategy discussions, portfolio prioritization started to be more and more rigorous. With that, selected projects with the keen eyes will receive more and more investment. Our R&D investment usage is shown in that way. Also, clinical trials overall relied on the external CRC, but those are currently conducted more and more internally. Outsourcing cost is reduced and that is replaced as the internal expenses. Seemingly, you see that the subtraction calculation leads to this reduction level as a number. However, with a long-term perspective, having this approach, we can realize more effective clinical trials, which leads to the shorter period of time of the study. A clinical study design is going to be further precise. With our execution of the studies, we can make the fine tuning during the study. I think that’s the way it should be for conducting clinical trials.

I believe we can realize that. Under Taniguchi, the R&D and R&D were separated, but now it’s merged as one organization. Research division and development divisions, those exchange between these two business units became smooth. Outsourcing changed to insourcing. It was just a simple deduction. Come up with this number. You see only this because it’s just started, but for a longer time thinking about the next plan, business plan, I think it’s going to be more financially reflected into our actual business way of doing. Can you miss them, please?

Astellas Pharma: Thank you.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Thank you very much. Most of the things already explained by Okamura. If I may add one thing, insourcing of clinical trials. Through insourcing we can reduce outsourcing costs. We paid before and then we should develop our own system. AI and automation is fully leveraged for further cost reduction. Also, the speed of enrollment. Where are the patients and how much, which institutions we should go to. We want to roll this out globally. By doing this, further business and clinical trial efficiency can be enhanced as well as the acceleration of the speed. We can reduce a further cost reduction as well. We’re expecting an increase in the late stage development costs would also rise. As much as possible, we’d like to enhance the cost efficiency so that we can cover. Thank you very much.

As a follow up question, originally, compared to the initial forecast, in terms of the gap compared to the initial forecast.

Astellas Pharma: Overall.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: All the items are progressing smoothly. Should I understand that way? Basically that understanding is fine. Okay, understood. Thank you very much. Secondly, regarding the US business environment, how do you see it right now? Up until now, regarding the tariff, the situation is still unclear and it was difficult for you to comment. As I said before, right now you have a large exposure to the United States, including the risk of being imposed a tariff. How are you addressing the situation or how are you planning to address the situation from now? Also, including MFN, the drug prices, how do you see the risk factors? I’d like to hear from you. Thank you very much. First, as for the tariff, at one point in time, we didn’t know what could happen. From there, the situation is settling a lot.

I shouldn’t say that’s our assessment, but we are feeling relieved. As we said before, from your perspective as that as revenue times US ratio, times COGS times tariff, it’s going to be a huge amount. You may say so, but in reality, what we sell in the United States, majority of those products are manufactured in the United States. As we said before, if that’s the case, the denominator is small where tariff is going to be imposed. It’s not going to be a huge amount. That’s a response. The tariff might be imposed. There can be such announcement into the future. We have a supply chain. By understanding our supply chain, if there’s going to be any grave impact, as I said before, our profit should not decrease. If the profit may decrease, where are we going to recover? Elsewhere, we should start such discussions.

Also, the MFN pricing, most favored nation pricing. As you might have heard in the press report, 17 companies received letters.

Astellas Pharma: This does not include a status.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: In particular, Pfizer reached agreement with the authorities or the government. According to the media report, we didn’t receive such a letter. We don’t know what are the contents of the letter. In the industry through a variety of routes, what is being communicated in the letter is captured by us. Regarding the agreement with the government and Pfizer, we don’t know the details, but we can assume and imagine what’s going on and what’s being done before we receive a letter. Nothing will be done by us or overreaction and doing a lot of things too much in advance. Rather, monitoring the situation to take necessary action where necessary. Of course, experts in the company gather to form a team and they are monitoring the situation all the time.

If we need to take action, if it’s time to take action and move forward, the team will come to the executives management team so that we can discuss and take the best action. Understood. Thank you very much. That’s all from me. Thank you very much.

Kato, Chief Communications and IR Officer, Astellas Pharma: Thank you very much. Next question, Nomura Securities. Mr. Matsubara, please. Thank you. Matsubara speaking. Can you hear me? Yes, we can hear you now. Please start. First question. That is about SMT. In the previous discussions, SMT is exerting its strength and if that is so, then this fiscal year we are going to see further cost reduction. Thank you very much. Originally, ¥20 billion is our plan and to the second quarter we came to the ¥16 billion and can you achieve ¥32 billion? The calculation is not in that way. What is decided is steadily being conducted, that’s one thing. However, we’ve been always looking for what else, other, something else we can do. If we make a certain evaluation for a certain idea, even if a certain advanced investment is necessary, then still we try to secure commitment.

In the first two quarters, what’s being planned is already realized and you came up with the cost reduction, but at the same time you can think about the investment to the next idea. We have to take the balance of reduction and investment, so that is going to be final end of FY2025. Of course, the planned ¥20 billion, that is something we would like to secure, but at the same time, something it might go beyond. Is that going to be reflected into the profit? It’s not necessarily so, so please do understand in that way. Kitamura-san, please. What Okamura mentioned is exactly right. Again, this is the repetition. SMT is not a singular year but rather multiple, so there are some things should be done with a short period of time and mid to long term, those ongoing in a parallel manner.

If time, things can be realized in an accelerated manner, then we can get the benefit in earlier phase, that’s true. Understood very well. Thank you very much. Next question is about VEOZAH on slide page 6. It is true that the competition is available, so that is the market competition considered, but the competitor has less, not necessary to do the blood testing and specific for the driving in the case of the design attendant, and what do you think about it? Yes, of course there’s an advantage for the predecessor. Our level is not perfect, but we’ve been doing our activities, so definitely there are advantages as the first comer or pioneer for this. Within just one sentence, what I wanted to say is that another company or the competitor, rather, is very strong in this treatment area, and we are not really so.

Compared to us doing the business in this field alone, together with them, the two companies toward the same targeted patients with the same efficacy products, we can do the patient educational awareness increase activities. With that, I think we can increase the awareness more. However, they are very strong in this field. Till then, we are the just player in the market, but now we have two, and they have experience, so the share is going to obviously be smaller. To what extent we can have, to what extent of the market share we can have, that is of course something that we can tell from the data. Clinical data is well controlled. Total number of the subjects are controlled.

The competitor launches their products, and what kind of data will be available in the actual market or real market, I think that really determines, besides the competitive situation of these two companies.

Astellas Pharma: Klaus?

Klaus Saylor, Chief Commercial and Medical Affairs Officer, Astellas Pharma: Yes, I think two points. One Naoki already made very, very well, which is this is a market we have to develop. Two companies developing a market is always much better than a company doing it alone. I think in that sense the entry of a competitor actually helps grow the class. The other point I would make is that the label that elinzanetant has received in the U.S. takes into account the fact that this particular molecule acts on two receptors, the NK1 and the NK3. They have a warning on inducing sleep. We will not know how the market will react to that. That is not something that’s in our label. You pointed out that they have less liver monitoring. That is true, but that’s what we also had when we began this journey. What real world evidence will then produce over time?

Because remember, these liver incidences are very, very rare. You don’t see them in clinical trials, you only see them in real world practice. Only time will tell how that really plays out in the marketplace.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Yes, very clear. Thank you very much. Thank you very much. Next we’d like to receive questions from UBS Investment Bank. Mr. Sakai, please. Sakai from UBS speaking. Initially, sorry if a negative question, but VYLOY didn’t work in a PDEC. You are now examining the details of your data. CLOVER 18.2 and any learnings are in association with CLOVER 18.2 as the reason for the failure of the study. ASP2138. This is also CLOVER 18.2 targeting PDEC. You are planning a clinical development including these compounds. Could you give us an update on this? That’s my first question. Thank you very much. It’s technical and expert, so I.

Astellas Pharma: Shouldn’t say too much.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: I’d like to hand over to Taniguchi from the beginning. Thank you very much. First of all, VYLOY GLEAM study for PDAC. It was a phase two study, but a randomized trial in phase two. If the results are good, it could be registrational so that we can file a submission. That’s how we were discussing with the regulatory authorities in this study. VYLOY and first line pancreatic cancer chemotherapy combination and chemo monotherapies were compared. This was close to POC study. We are analyzing the results of the study through the analysis in what kind of patients there was a good response and in what kind of patients no response. We can know more details by analyzing, so in the GLEAM study we haven’t made public the results yet. Once we are able to analyze the details with a deeper understanding, then we’d like to share.

Regarding the results of the study, ASP2138 targeting Claudin 18.2, this is a bispecific antibody. This is CD3 of T cell engager is also added to this bispecific antibody. ASP2138 in PDAC, how does any potential impact on PDAC with this compound CD3 T cell engagement portion.

Kato, Chief Communications and IR Officer, Astellas Pharma: How.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: It’s going to affect a PDAC in clinical studies phase 1b. Right now we are studying that part. We haven’t published the data yet, but in the near future once we collect.

Astellas Pharma: The data.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: We will announce the results including our future outlook. This bispecific antibody and VYLOY, the differences between the two can also be examined. Once we have the data, I will explain such a perspective as well. Cloning 18.2, so you haven’t changed your way of thinking in the development concept. As a concept, the Gleam Study, ASP2138, any direct impact? I could say no impact. Understood. Thank you very much.

Kato, Chief Communications and IR Officer, Astellas Pharma: Another question is about your response of the mid-term plan. Okamura-san, you mentioned that the very reinforced the strong or something like that. If that is the case, the number you come up with might be drastic. That is a bit of the concern that I feel. You are working on making the numbers so you would not probably disclose anything specific, but the comment you made a little while ago is probably your honest thinking. Based upon that, we have to also come up with the focus or our numbers. Do you think is it okay that we approach in this way? Thank you very much. We get learnings every day. For example, CSP 2021 review is currently ongoing and based upon that we are going to come up with a next plan.

Frankly speaking, overpromise, underperform, that such criticism is what we’ve already accepted, and so that we can avoid the repetition of that, we can place a more disciplined and well-balanced corporate plan that is going to be announced. In that sense, Kitamura is looking at the numbers with a perspective and Klaus as well, being based upon that number is calculated and coming up with. You can feel safe about that as well. Understood. Thank you very much. Thank you. Next, Morgan Stanley. Mr. Fuji. Mr. Muraoka, please. Thank you very much. Muraoka from Morgan Stanley. I think almost all the questions are covered already, but just one question. It was like this last year, so it’ll be okay this year. This might be a bit mean question, but that is about IZERVAY impairment loss risk is the question.

Last year in the second quarter it was okay in Europe, but in the third quarter impairment loss was incurred, and this time the U.S. sales is a relatively bigger reduction. Looking at this number, thinking about the future value, impairment loss triggered risk is likely to be higher compared to three months ago. I wouldn’t say. Of course, you cannot say. It’s all right, no problem. However, how can we evaluate these potential risks? Thank you very much. The valuation base is the sales prediction and forecast that Klaus is going to make additional comment if necessary. The way of my description is that when evaluation is conducted, the underlying uncertainty is increased. That’s the kind of status. If you ask me, impairment loss is higher.

At this moment, I wouldn’t think that impairment loss risk is higher, but for the valuation compared to what we’ve originally considered, kind of situation is lower. That is true. If this is going to be recovered or ultimately this will decide the trajectory of IZERVAY, that’s something we have to always have sharp eyes. Just like Klaus mentioned, peak sales, we do not think that we have to revisit it right away.

Klaus Saylor, Chief Commercial and Medical Affairs Officer, Astellas Pharma: There is undoubtedly in the U.S. market a dynamic on the affordability part where a part of the patients can’t afford the co-pay that they need to contribute for their injections. That is different from when we look at the peak potential and the size of the market that we can still develop in this disease. One is a timing effect, the other is effective. The question is what’s the potential of this agent in the geographic atrophy market. I’m very confident that the long-term potential for IZERVAY is intact. The question of how we solve the current dynamic in the U.S. is a tactical problem that we are working through. We hope to find solutions in tactical to come.

Kato, Chief Communications and IR Officer, Astellas Pharma: Kitamura also has a comment. Thank you very much.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: May I add? Sorry? Yes, please. Last year regarding ISA and impairment loss, the trigger was whether we can get the approval or not. It was about that probability. Now, as you know, intangible assets in the U.S. and outside of the U.S., as we are registering U.S. intangible because of the launching in the United States already, we are going to sell it out, including the competitors. Our drug is also a new treatment. How to develop the market is the main task force. It’s our job. Klaus is going to do a good job according to him. We think we can do it. Of course, there is a big asset number on the balance sheet. I have to evaluate and assess it. I will do so. The company stance has not changed, and we had impairment loss which was incurred last year, but the root cause is different.

Please understand. Thank you very much. One more question if I may. Earlier you talked about CSP mid-term business plan. I know you would say don’t ask so many questions on this. Regarding the dividend, I understand the message that there can be a decrease. The dividend level during the course of the next CSP on an absolute basis, do you think you can maintain the amount? Can we feel assured? Sorry, what do you mean by decline? Which, what are you talking about? The top line may decrease on a temporary basis. If you are talking about it, yes, you are right. That may not necessarily lead to a decline in the bottom line. Regarding the specific numbers, in May next year, CSP 2026 will be announced according to plan. Please wait till then.

I think this is Tamra’s scope of responsibilities, but I also have my own views, so allow me to speak. Regarding the dividend, just increasing the dividend would not happen. Also, even if the company’s overall performance is good or bad, it’s not something we should change dramatically. I’m talking about the dividend for the past few years. By now, intentionally the dividend level may be too low, and to increase it to a competitive level, we increased the dividend at quite a fast pace. From now on, for the company’s growth in the longer term, we’d like to gradually increase the dividend in line. That’s Astellas Pharma’s basic stance. In the next five years, with the next CSP, there’s going to be some dip in revenues. We have no intention to decrease the dividend because of that. In that sense, you can feel assured. Kitamura-san, please.

As Okamura said, I may be repeating myself, but a stable return to shareholders is an important factor as part of the capital allocation. According to understanding, we are doing this already, so it’s not going to change in my view. On the other hand, when it comes to dividend, how much profit do we have? Cash flow is better or balance sheet is better. Are we working on this meticulously? Whatever is going to happen, we should have funds for investments, for stable growth, and we have to have a stable return to shareholders. This is my, including my personal view. I think this is an important factor. It’s not going to change substantially according to my assumptions. Understood. Thank you very much. That’s all from me. Thank you very much. Next, Macquarie Capital Securities. Tony Renson, please.

Tony Ram from Macquarie. Can you guys hear me? Yes.

Kato, Chief Communications and IR Officer, Astellas Pharma: Yes, we can.

Okay, perfect. Thank you very much for the opportunity. The first question is a simple one on gross profit margin. Your cost of sales in the first half appears to be increasing faster than revenue, which probably suggests that the gross margin is declining a little bit. I just wanted to understand why that might be the case. Thank you. I think the simple answer to your question is the change in the product mix. If you would like to know a little bit more in detail, I will pass the baton to Achi. Yeah, it’s all about product mix. Okay. Okay, perfect. Understood. The second question and my last question is about your ASP2138. It appears to me that you guys are really pursuing this clinical asset as part of combination therapies, but not as monotherapy.

At ASMO 2025, which I attended, I think the monotherapy response rate was fairly modest. The KOLs who I spoke to also think that the duration of response was good, but probably not something that knocked it out of the park. What’s your thinking about using ASP2138 either as combination or as a monotherapy? Thank you. Thank you very much for the question. I will ask Daniel-san to answer those questions.

Daniel, Astellas Pharma: Thank you. Question. As you describe, if you take a look at therapy of ASP2138, the ORR is relatively modest. It’s around the 15% range. I think this is quite consistent with what we see in other CPI such as PD1 or PD-L1 inhibitors. It’s also seen a very similar tendency that we see once tumor actually responded, the duration of response is longer. This is exactly what we see in other immuno-oncology products. I think that this is also quite encouraging data from monotherapy by saying that if you’re thinking about PD1, most of the cases are actually coming to the earlier line in combination with other agents like chemotherapy or ADC as you see in PADCEV and pembrolizumab.

What we believe is that thinking about the development of ASP2138, we believe that it makes sense for us to go into the earlier line in combination with the current standard of care. That’s what we believe. This is the space that we can actually work on. I think that this is also based on the data coming up from phase one, current ongoing phase one. Please wait. The data is coming up, but I think we believe that these data we are actually showing in ESMO is quite encouraging.

Okay, understood. You have a very clear combination in earlier line with other current standard of care. Thank you very much.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Thank you.

Kato, Chief Communications and IR Officer, Astellas Pharma: Thank you very much. Because of the time, we would like to ask the next question as the last question. Sanford C. Bernstein, Mr. Sogi, please. Thank you very much. MIBC commercial potential. How do you feel about that? I would like you to explain more details. To simply put, the patient number times market share times duration of therapy times price. It seems it’s not that simple. Listen to you, first line treatment overlapping and actual clinical practice, adjuvant, neoadjuvant usage differentiation seems also complicated. Could you be a little bit more specific about this? Also, on top of that, this adjuvant, neoadjuvant for MIBC regarding first line and second line, the number of the patients including their China major markets number were disclosed. For MIBC, China is excluded according to the description here. Is this significant? Would you please explain about these two points?

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Your first question, your understanding is correct. We do research. We should be able to respond with responsibility. We would like to respond to your question. Please give us some more time till then. I don’t know the background of the second question. Klaus, do you know the background for the second question?

Klaus Saylor, Chief Commercial and Medical Affairs Officer, Astellas Pharma: He would have to come back on China. Yes, I would have to come back.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Sorry. Among the participants today, we do not have a full understanding of the background. We would come back to you through our IR team at a later date. Okay, next, about IZERVAY. I have a question about IZERVAY. Of course, you’re going to expand the market from now on. You’re still on the way. On the other hand, this year from the first half, Good Day is a charity foundation for patients on Medicaid. Patient support funding is no longer available, and there was such an impact on your business. What’s the current status right now?

Klaus Saylor, Chief Commercial and Medical Affairs Officer, Astellas Pharma: Yeah, you’re absolutely right. The drying up of the foundation support in the U.S. is causing some patients to drop off from therapy because they simply can’t afford the co-pay that the foundations picked up in the past. We see that both in the geographic atrophy market and in the wet amount. What we see the retina clinics doing in the U.S. is trying to adjust to that new situation. Remember, it’s not all the patients who can’t afford the co-pay. There’s still 70% or something like that. It’s an estimate, but it’s at least 60% of the patients who can afford the co-pay. I think it’s a question for the clinics now to understand when they accept patients, how do they deal with a patient that can afford versus what support mechanisms are available for patients who can’t afford.

That’s the turbulence in the market that we’re seeing right now. We believe also on the basis of past analogs that the market will learn how to triage that and how to provide the right solution for different patient types. How long that will take and what the curve after that will be, that is the part that I’m still exactly struggling with. That’s why we’ve been more cautious to take down the projections for this year.

Great.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Thank you. If we did have enough funding this year, would that fill the gap that you currently lowered in your guidance?

Klaus Saylor, Chief Commercial and Medical Affairs Officer, Astellas Pharma: It would for the coming quarters, but we have lost time. I don’t think the original forecast is realistic simply because of the timing element that we have within a fiscal year.

Naoki Okamura, Representative Director, President and CEO, Astellas Pharma: Thank you very much. Now time has come. With this, we’d like to close today’s explanatory meeting. Thank you very much for joining us today.

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