Earnings call transcript: Kyowa Kirin Q2 2025 sees restructuring impact

Kyowa Kirin Co., Ltd. reported its second-quarter 2025 earnings, revealing a slight decrease in revenue and a more significant drop in profits compared to the previous year. The company’s stock showed a mild decline of 0.82% in recent trading. According to InvestingPro analysis, the company currently appears undervalued based on its Fair Value assessment, with a P/E ratio of 31.2x and strong financial health metrics. The pharmaceutical firm is facing challenges from drug price reductions in Japan and increased R&D expenses, but it remains committed to its full-year targets and continues to focus on its innovative drug pipeline and global expansion.

Key Takeaways

• Revenue decreased by 1% year-over-year to ¥230.7 billion.
• Core operating profit fell by 21% year-over-year.
• Interim profit dropped by 57% due to restructuring and R&D costs.
• Crysvita saw a 10% increase in global sales, with notable growth in North America.
• The company is maintaining its full-year financial targets despite challenges.

Company Performance

Kyowa Kirin’s overall performance in Q2 2025 was marked by a slight decline in revenue and a significant drop in profits. The company attributed these results to several strategic and operational challenges, including a restructuring in the APEC region and drug price reductions in Japan. InvestingPro data reveals the company maintains robust financial health with a "GOOD" overall score of 2.89, supported by strong cash flow and profitability metrics. For deeper insights into Kyowa Kirin’s financial health and future prospects, subscribers can access the comprehensive Pro Research Report, available exclusively on InvestingPro. Despite these setbacks, the company demonstrated resilience through its innovative product offerings, such as Crysvita and Poteligeo, which showed impressive sales growth.

Financial Highlights

• Revenue: ¥230.7 billion, down 1% YoY.
• Core Operating Profit: ¥35 billion, down 21% YoY.
• Interim Profit: ¥16.3 billion, down 57% YoY.
• Global sales growth for Crysvita: 10%.
• Global revenue increase for Poteligeo: 14%.

Outlook & Guidance

Kyowa Kirin is maintaining its full-year financial targets despite the current challenges. The company is focusing on developing its pipeline, particularly in T-cell rebalancing and precision medicine. Upcoming milestones include potential payments and product launches, such as the anticipated FDA review of Ziftomenib.

Executive Commentary

"We continue to see very strong progress. We’re using advanced technologies now to identify patients that allow us to be much more efficient," said Abdul Mullick, President and CEO. The company is leveraging AI to enhance its marketing strategies and improve patient identification, which is expected to drive future growth.

Risks and Challenges

• Drug price reductions in Japan impacting profitability.
• Increased R&D expenses and restructuring costs.
• Global competition in specialty therapeutics.
• Sustainability challenges in the pharmaceutical market.
• Potential tariff impacts on pharmaceutical manufacturing.

Q&A

During the earnings call, analysts inquired about the impact of tariffs on pharmaceutical manufacturing and sought clarification on pricing strategies for Crysvita. The company also addressed questions regarding the progression of its R&D projects and the timelines for its pipeline development.

Kyowa Kirin’s second-quarter results reflect a period of transition and adaptation to external pressures. The company’s commitment to innovation and strategic focus on expanding its market presence in the U.S. and Europe are expected to support its long-term growth objectives. InvestingPro subscribers have access to additional valuable insights, including 8 more ProTips and comprehensive financial metrics that can help investors make more informed decisions about this pharmaceutical leader.

Full transcript - Kyowa Kirin Co Ltd (4151) Q2 2025:

Moderator, Kyowa Kirin Co., Ltd.: Joining us today for the online briefing session for the second quarter financial results for the fiscal year ending December 2025 Kyowa Kirin Co., Ltd. Before we start, please note the following. The names and the company names of all participants today will be retained in the participant list within our company for a certain period of time. We kindly ask for your understanding in advance. Today we will be providing simultaneous interpretation in Japanese and English using Zim’s interpretation feature. There are three options: Japanese, English, and Original audio. Please select your preferred language. Please note that if you select Japanese or English and wish to ask a question, you must speak in the language you selected. The content of this briefing session will be made available on our company website as an on-demand recording and transcript. Please be aware of this when making any comments.

The content presented today includes forward-looking statements. Please be aware that there are uncertainties due to various risks. Today the speakers are the four individuals: Chairman and CEO Masashi Miyamoto, President and CEO Abdul Mullick, next Vice President and CMO Takeyoshi Yamashita, and as CFO Motohiko Kawaguchi. Today the online meeting is scheduled for up to 90 minutes. We will first provide an overview with necessary results followed by a question and answer session, and please download the materials from our IR website. We will now begin with an overview of the financial results. Mr. Miyamoto, please proceed. Yes, good morning and thank you for joining us. Let me begin with slide number five. Here’s our summary. Compared to the same period last year, revenue was ¥230.7 billion, a decrease of ¥2.3 billion or 1%.

Core operating profit was ¥35 billion, a decrease of ¥9.1 billion or 21%, and interim profit was ¥16.3 billion, a decrease of ¥21.5 billion or 57%. Regarding revenue, while global strategic products grew primarily in North America and EMEA, the impact of business restructuring in the APEC region last year and the reduction in drug price standards in Japan resulted in a 1% decrease. Core operating profit decreased by 21% due to a decrease in gross profit and an increase in research and development expenses. With limited non-ordinary market, interim profit decreased by 57% due to the impact of extraordinary expenses. This is related to the implementation of a special early retirement program in Japan that was announced in May.

Regarding the progress toward the full year, forecast revenue and gross profit are both at 48%, but this is in line with the usual trend where revenue intends to increase in the latter half of the fiscal year. Also, progress is on track with the plan. SG&A as well as research and development expenses are also progressing in line with the plan. As a result, core operating profit is progressing at a rate of 44% in line with the plan. On the other hand, the progress rate for insurance operating is 29%. While we had already factored in a certain amount of additional severance period to the introduction of Japan’s special early retirement program, the actual amount was slightly higher than expected. That did have an impact. We will continue to strive to achieve our full year plan as these fundamentals are still strong for us.

Here is the year-on-year analysis of sales revenue by region. Now starting this year, we have changed the format to explain the actual increase degrees excluding Forex in Japan. Crysvita and Poteligeo continue to grow and in Japan our region saw a 1.9% decrease in revenue due to factors such as a ¥3.9 billion decrease in revenue from the Dobova and as with the sales partnership agreement in December last year. The impact of drug price reductions between April last year and this year as well, and in North America, excludes the impact of Forex. Revenue increased by 9.6%, around 10% on a real basis. Crysvita continued to grow strongly at 11% in local currency terms and Poteligeo grew by 16%. In EMEA, revenue increased by ¥2 billion on a real basis while Crysvita grew by 9% and Poteligeo by 22%.

The EMEA region as a whole saw only a slight increase compared to the previous year due to the absence of one-time revenue from the transfer of post-translation and the decrease in royalty income from the transfer of three established pharmaceutical operations. In addition, sales of established pharmaceuticals and other products in the same region, which were previously categorized as ABAC, are now included in addition to an increase in royalty. The form of stem cells of Libmeldy or Lenmeldy hematopoietic stem cell gene therapy began to be recognized in the U.S., resulting in a significant increase. However, revenue decrease was ¥6.5 billion due to business restructuring and acquisition-related revenue decrease with Poteligeo and Forex impact. Revenue was negative ¥1.6 billion. Please turn to page 7. Major item sales revenue forecast. This page shows frustration by the major products including forex effects and contributor.

Sales increased by ¥89 million or 10%, and in North America and Japan are just continuous growth and potentially also continue to grow in North America, achieving an over year increase of ¥2.6 billion. Also, 10% melted lmod in an initial steady performance in Europe recorded for the sales in the U.S. this year, achieving significant increase of ¥30 billion and 206%, and for the belt, it’s been steadily gaining market penetration since launch in February 2024, achieving year on year increase of ¥2 billion, 119% revenue, and the sense of decrease in the new ¥1.4 billion was 13% due to the impact of price reductions for competing products and technology. Revenue increased by ¥1.2 billion or 5% year on year due to an increase in realities from Hyderabad. Please turn to paycheck. This is year on year analysis for the corporate profit.

This is also the actual increased decrease excluding forex. Gross profit decreased by ¥3.4 billion excluding negative foreign exchange impact of ¥1.3 billion due to a 1 percentage point decline in the gross margin caused by decrease in sales revenue and the current one time cost is in a cost of sales. SG&A decreased by ¥5 billion due to a reduction rate to the reorganization of the APEC business despite new growth of expenses as such as what represents voluntary this year. R&D expenses increased by ¥3.3 billion. Regarding project expenses, the estimation method changed to activity based costing starting this year that is resulting in higher upgrades rate compared to previous years. Overall, I expect this to be in line the plan.

Similarly, SG&A also increased due to the one month impact of the new consolidation orchestras that is compared to the previous year and equity massive investment income, and this is primarily due to the decrease in sales of the FKB, and we have decreased by ¥15 billion from last year ¥31 billion, and forex impact is negative ¥13 billion. As a result, corporate profit decreased by ¥9.1 billion compared to the same period last year. Please turn to page nine. We will now introduce the lines below the corporate income. This may be hard to see, but here on this slide we still including forex impact and financial and other segments decreased by ¥15.4 billion, and this was mainly due to the impact of special severance payments and reemployment support costs totaling ¥9.4 billion related to the introduction of a special early retirement program in Japan announced in May.

There is also a forex gain loss that was ¥4.0 billion lower compared to the previous year, contributing to a year-on-year decrease in profits. The interim profit decreased by ¥21.5 billion compared to the same period last year. Here is a commercial update. At least duplicate increase, Visa cumulative sales for the second quarter totaled ¥99.8 billion globally, representing a 10% increase compared to the same period last year, and the previous writings 47%, and it’s slightly higher than typical progress rate for the second quarter. In previous years, North America sales growth has continued very in line with expectations, and through strategic initiatives such as identifying and addressing barriers to treatment innovation and continuation for patients in collaboration with specialty e-pharmacies, patient penetration continues in progress.

Additionally, at specialty pharmacies, increased inventory in anticipation of an interim price adjustment is resulting in an 11% increase in sales on a local currency basis compared to the same period last year. Growth also continued in EMEA. In Europe, the publication of public guidelines for XLH treatment, including Crysvita prescriptions, has supported disease awareness and commercial activities, resulting in a nearly 30% increase in the number of patients receiving treatment, primarily among adult patients compared with sabre glasia. In Japan, there’s a system dedicated to bone metabolism specialists that is established, and awareness among adult patients is increasing, resulting in a steady growth. Please turn to page 12. Next is product review. The acute revenue was ¥21.6 billion globally, representing a 14% increase compared to the same period last year and for great progress against the annual plan, and it is in line with expectations and continuing steady growth.

Insurance in North America on the local currency basis increased by 15% and we are continuing to promote use of Poteligeo through evidence-based promotion to increase fairness among patients with tumor cells in the pioneer blood and to provide information containing treatment with pathology for patients who develop skin symptoms after administration. In addition, the use of machine learning and AI-driven patient identification technology in our promotion activities and focus on medical facilities with higher administration potential are also contributing to our strong growth. In EMEA, we are strengthening our marketing infrastructure and expanding regional coverage while continuing to enhance access to patients with skin symptoms following our efforts and we are also maintaining growth as a patient after injective teeth aimed at range harmness around the updated fleet gives insulation the safety.

Unidentified Speaker, Presenter, Kyowa Kirin Co., Ltd.: Development pipeline local in TMAL is currently being investigated for long term efficacy and safety in ongoing Phase 3 ROCKET program with top-line data without ROCKET, ASCENT, and ASTRO trials are expected, and for Ziftomenib represented the result of the COMET-001 trial for monotherapy in relapsed refractory acute myeloid leukemia at ASCO in June and submitted NDA to FDA. The application has received priority review designation and target review completion. PDUFA for November 30, 2025, and for first point combination therapy result from RAPIDS-1007 trial were present at European Hematology Association. We will share some of the data later regarding OTL-2.3. The pivotal trial currently underway has completed treatment for the last patient. This was achieved ahead of the original schedule and the development is progressing smoothly. Please see next slide. Explore Ziftomenib is several small molecules, menin inhibitor indicated for acute myeloid leukemia with NPM1 mutations or KMT2A rearrangement.

In the U.S., approximately 22,000 new cases of AML are diagnosed annually and it is estimated that half of these cases are associated with gene expression regulation involving the menin proteins. The disease is characterized by a high relapse rate which is a significant challenge. The global status is shown here at the bottom. We hope to start three trials for menin combination therapy in the second half of this year. Today we will present a summary of the data presented at ASCO and EHA. Please proceed to the scheme. This shows an overview of the development of this we are advancing for both first line and relapsed refractory setting and today I’m able to present results from COMET-001 and 1007 trials and first the COMET-001 trial which represented at ASCO for efficacy data.

In the Phase 1b/2 trials in all patients, CR/CRh rate was 25% and overall response rate was 35%. What is to be noted is 65% of patients who achieved CR/CRh also achieved MRD negativity, a marker of deep remission. In Phase 2 alone, the CR/CRh rate was 23% which is significantly higher than the 12% observed with conventional chemotherapy. Please proceed to the next slide. This is for the safety data. In existing AML treatments, dual myelosuppression has been a concern. However, for Ziftomenib it has found to have a low incident rate. Among adverse events related to this product, grade 3 or higher occurred in 40%, at a different was 13%, and acute disease prolongation occurred in 3% overall, and 3% of patients discontinued Ziftomenib due to adverse events. This is the summary of the findings to Ph19 in the trial targeting refractory AML.

Many have achieved the primary endpoint and demonstrated a statistically significant higher CR/CRh rate compared to chemotherapy alone. Additionally, the safety profile was favorable with low frequency of bone marrow suppression, differentiation syndrome, and QTc prolongation. This data we submitted for FDA approval in June, and the next is the result of the Comet 007 DHEA. This is the safety data. Only the 31st century had the grade 0 higher adverse events. The main adverse events were febrile neutropenia, thrombocytopenia, anemia, and neutropenia, and however, no additional bone marrow suppression was observed. When this was used in combination with other therapies, differentiation syndrome occurred in one case and QTc prolongation was observed in two cases. Overall, the data demonstrated good tolerability, and this product shows potential for use in treatment of AML over a broad patient population for extended period of time.

Please see the next efficacy in patients with NPM1 mutation. The CR/CRh rate was 93% and MRD negativity rate 68%, and for KMT2A rearrangement the CR/CRh rate was 89% and MRD negativity rate was 83%. Those gene mutation groups demonstrated high efficacy and high MRD negativity rate, which suggested that this may lead to improved prognosis. Please proceed to the next slide. The DCC summary, so in this trial targeting first line AML, Ziftomenib also demonstrated high efficacy and high tolerability. We believe it has demonstrated good potential as first line combination therapy. Please go to the next slide. In the second half of the year, we are planning to conduct KC trial Comet 017 targeting first line patients, especially consist of two trials, non-invasive chemotherapy NIC and invasive chemotherapy IC.

As I said today, Ziftomenib has shown good results so far, and we expect good results in this C3 trial as well. Please proceed to the next slide. Bukotini Babu is a novel apolosterating pathogenic T cells, Brox40. It is considered one of the root causes of chronic inflammation diseases and reducing their numbers. We believe this mechanism, which we refer to as T cell rebalancing, enable to provide unique life changing value. The key point here is tied to immune cells, namely T cells, so these cells remember past experiences with atopic dermatitis and even after symptoms temporarily subside can trigger inflammation again. Even if such symptoms temporarily subside, the presence of these memory T cells can trigger an excessive immune response to allergens, leading to the recurrence of atopic dermatitis and its chronic progression.

Rocatinlimab is believed to act on these memory T cells and may reduce their numbers. The ongoing Phase 3 trial is currently investigating this effect, so please see the next slide. This is an overview of the Phase 3 trial. The ROCKET program today, over 3,300 patients have participated in ROCKET Horizon, Ignite, Shuttle, and Voyage, and all four trials achieved their primary endpoints. In the second half of this year, the ROCKET ASCENT trial is scheduled to have top-line data. Please go to next slide. The ROCKET PASSING trial is the trial for patients who have completed the other trials mentioned earlier and will participate to verify mid and long-term efficacy and safety as shown in the key questions on the top right, which are of particular note. For example, what questions can be expected from long-term administration at four-week intervals?

Will the effects persist even if intervals are extended to eight weeks? Will the effects persist even if treatment is discontinued? We will conduct multifactor evaluation from these perspectives. We are currently preparing for the presentation of new findings on long-term efficacy and improvement of inflammation, recurrence, and chronicity, which are considered to be the strengths of Rocatinlimab. From page 28, year-to-date news is available. Please have a look at them. Finally, page 30, on the 7th, we announced the special early retirement program and there is that 432 employees, the employed workers, are retiring under the program. In the midst of increasing challenging global environment for pharma companies, Japan faces significant challenges related to sustainability of the healthcare system due to population decline and aging society.

To address such rapid environmental changes and to ensure realization of the 2030 vision, we are advancing reforms, aligning with the story for Vision 2030 that we announced last year. During this transformative period, we will expand career development options for employees, provide maximum support for those seeking to transition to roles outside the company, and pursue board reforms to achieve a more sustainable business structure in Japan while further strengthening organizational capabilities. That concludes my explanation. Thank you very much. Now we would like to have a question and answer session. If you have a question, please click the raise hand button located at the center of your screen. You’ll be called in order and once prompted to unmute, please do so yourself and state your company name and your name if asking questions. If you wish to cancel your question while waiting, please click lower hand.

To allow as many participants as possible to ask questions, we kindly ask you to limit your questions to a minimum of two. If you have selected either Japanese or English in Z, please make sure to ask your question in the language you have selected. Please start.

Moderator, Kyowa Kirin Co., Ltd.: Our first question is from Yamaguchi from Citigroup Inc. Good morning, can you hear me.

Abdul Mullick, President and CEO, Kyowa Kirin Co., Ltd.: Speaking.

Moderator, Kyowa Kirin Co., Ltd.: From the physic group? My first question is about bio laoscopy. This is quite loud and when I took it and then possible to eliminate other codes for the lower to find out on a flat basis. Thank you for your question. This is the COVID cruises booking. As we have explained, there are a lot of factors for QT that cause a cost of goods. I think there are in Japan where we need enough lionel elimination, but this is one point it was not incorporated into the plan, so there will be some impact to mine. The amount is about ¥2 billion and in Q1 and Q2 the difference of the cost of the goods are seasonal to an extent and that can be a revolving plan as to this one time factor that is to begin. Thank you. My second question is for the principal.

I’m sure there will be any more questions. It should balance for the adults especially in the U.S. or North America. I like to note this question and because of the inventory it was about, there may be some ups and downs so they will have to be internal control. How do you see Q2? Yes, I think it’s 0.5 each. Thank you for your question. Abdul Mullick, would you like to take this question?

Abdul Mullick, President and CEO, Kyowa Kirin Co., Ltd.: Yes, thank you very much for the question regarding adult Crysvita penetration in the U.S. We continue to see very strong progress. We’re using advanced technologies now to identify patients that allow us to be much more efficient. If we look at the total growth rate in the U.S., the majority of that growth is coming from adults. When we look at inventory levels, it leads to a very volatile picture. When we look at actual patient demand, we see continued and consistent growth in that respect. Thank you. Can you give me how much % you are penetrating?

Moderator, Kyowa Kirin Co., Ltd.: In terms of percentage, I do have the figure for the adults penetration.

Abdul Mullick, President and CEO, Kyowa Kirin Co., Ltd.: The adult penetration in the U.S. is around about 14% now, one four.

Moderator, Kyowa Kirin Co., Ltd.: Thank you. That’s all for the question. Thank you, Mr. Yamaguchi.

Unidentified Speaker, Presenter, Kyowa Kirin Co., Ltd.: Now let’s move to next question from Morgan Stanley and UFG Morgan please. Yes, hello, I’m Muraoka speaking. I think I always ask this question and now ASCENT study. So Nemolizumab company as long as they can differentiate the product is very strong. Having said that, if differentiation can be done by the result of ASCENT study, if not good enough then. Are you going to increase the value of the product by conducting another study? What are you accelerating the RNA? Fifth, what kind of measures are you thinking if the result last study is not satisfactory? Although it is just if question. Thank you very much. This is Miyamoto. Yes, this is just if so it’s hard to answer. First, the ASCENT study we are conducting.

First we need to make sure the results of that and after that if we find it additional studies necessary then we will have a discussion and make an action. Here are the points. As you write, the differentiation is one of the points. It’s very important. As I explained, the T cell rebalancing is what Rocatinlimab can target and based on that, what can do? I think we need to think about that getting clear mark and also the switching study from the Dupixent. I think that is one of the things I think it’s good, but have not. Thank you very much for that question. This is Yamashita speaking in the ASCENT study. There were patients who have used the Dupixent and enrolled in this study and see the result in the future. We have an expectations for Rocatinlimab that expectations details will be qualified by the result.

We think that it’s clinically useful. Depending on the result of the study we will also consider that opportunity. Depending on the result of the ASCENT study, the subgroup analysis can be needed like switching from the Dupixent. This kind of. Probably if you can demonstrate that result of the analysis as to what finding I do not know, but that would be great for us. Yes, analysis. Actually at this stage we cannot tell you our plan for the subanalysis. However, the impact of the pre-treatment we need to look at that to the analysis that give us very important information. It will depending how much information becomes available. The data is available and we will do the analysis and we like to consider based on that. Thank you very much. Another question is for the Porter AI promotion mentioned. I think.

I’m not sure if I’ve heard this in the past, but what do you mean by AI promotion? Specifically, how do you use AI? You probably identify the doctors of the site by using AI. Maybe are you planning to roll out this method to other medicines or you have already been doing well. Khasan, thank you very much for that. Interesting question. Abdul is very familiar with the. Maybe Abdul, can you.

Moderator, Kyowa Kirin Co., Ltd.: One question.

Abdul Mullick, President and CEO, Kyowa Kirin Co., Ltd.: Yeah. This is a new approach that we’ve adopted now over the past year. It looks at the symptoms of various patients who have cutaneous T cell lymphoma and classifies them as an appropriate patient. Because of AI, we’re able to use big data to identify where these patients are. Historically, we’ve had to go with our reps office to office. AI offers us a much more efficient approach, and we’re seeing that now with the increased momentum with Poteligeo. We’ve also now started adopting this approach with Crysvita too, and we’re beginning to see effects as well. This is very exciting technology which we’re looking to expand. Thank you for your question.

Unidentified Speaker, Presenter, Kyowa Kirin Co., Ltd.: Thank you very much. That’s all for me. Thank you very much.

Moderator, Kyowa Kirin Co., Ltd.: Next question. Is Wakao from JPMorgan Chase & Co. This is Oka from JPMorgan Chase & Co. My first question is as far as tariff impact. We were previously in a meeting there wasn’t any comment on this and now such details have seen a changing, so can you give us the latest update and military feedback? Thank you for your question. If there was news just came up in the morning, so this should be in everybody’s interest. As of now, we don’t know the details on everything yet. There isn’t really any concrete action plan yet. In the U.S., we are starting a task force team and it is a dedicated place in Washington and there is one at Woodstrad as well. We work with our local team and Japanese teams and we work closely on exchanging information to talk about our latest updates and countermeasures.

We feel this is a corporate company-wide effort and we are able to share the information quite quickly and even the news back this morning before the newspaper report we already have this machine, so that’s how we work on a tariff as well as our most favorable national status impact compared to Q1. We still have more information still when it comes to details. For example, I want to what extent we don’t really know yet, so we are troubled as well. Canada is one big beautiful bill act and that is going to come into effect in 2027. There are a number of challenges because pharmaceutical medical, so we have to see the comprehensive picture to really understand these steps. On a tariff, especially the Crysvita and Poteligeo, these are major art projects. This is where these drug substances should be manufactured.

That is one of the topics that we have to discuss by various levels. Towards the end of this year, whether there are any action plans or not, we don’t really have anything yet throughout the question. Thank you. That was informative, but still you must have to build up the inventory and take up other countermeasures for your fiscal year. Do you see any possible impact or even if there is, do you think that’s still limited? There may or may not be, but it should not be that much significant for this fiscal year. That’s how we see. Thank you. I’ll be looking for more updates. Second question is about the drift management. There are data quite good and we can see the potential, then other population of the potential patient. I think you are now cut off. Are you still speaking because we are losing the audio.

I would like to entertain the next question.

Unidentified Speaker, Presenter, Kyowa Kirin Co., Ltd.: Hello. First question is about the sales of Crysvita in North America and you said the impact came from the emulated stock, but if you know the impact in numerical number, could you tell us? Thank you, Dimas, for that question. In July, we made announcement of the increase of price and because of that, the high order increased. I cannot share with you the detail, however, there are certain degree of the impact from that perspective. For the third quarter, there’s no possibility for the drop because of that, but throughout the year we expect the sales to be in line with our, so if my memory stops me right. Did you do the same thing last year? Do you expect the same transition from the second quarter through third quarter? Or compared with the previous year?

There’ll be a major movement from the second quarter, third quarter this year. This is Kawaguchi. The interim change of price was conducted this time, but it was not conducted last year. Having said that, for this year the impact is felt larger this year, so compared with the movement last year, the second quarter came with the high year and the lower third quarter, but rather it will be averaged out throughout the year and we do not see major impact. Okay, thank you very much. The second point to OTT03, you mentioned ahead of the schedule the first patient dosing was completed and because of that, the timing of the siding, so what kind of impact do you expect? As shown in the materials in the slide deck, the information is most updated, but can we expect the advancement in the time schedule?

The time frame of the primary endpoint is 2 years, but for the secondary endpoints require 3 years observation, most of them 5 years, like 5 years, but then are you going to file or you do not know unless you see the data. This is Yamashita speaking. Thank you for the question. The enrollment of the study is ahead of the schedule for that, it’s the overall schedule advanced and that’s how adequate and for the follow up are the result, so for how long we will do that on that point. Looking at 5 years is the standard plan, but efficacy of this drug and needs of the drug for it, drug should be applied with earlier for use of biomarkers and the predictability of the efficacy if we can do that.

We need to consider this for the follow up period, so based on the data we will do the negotiations and if we see some opportunity, we will find that. Okay, thank you very much.

Moderator, Kyowa Kirin Co., Ltd.: Thank you. We’d like to go back to Wakao from Deputy Market Security. Can you unmute yourself? Yes, this is Wakao speaking and I’m sorry. I was asking a question about adipose mutation and now in a phase one. I think there is the therapy of combination. For the phase 3 mutation patients as well, there may be a combination with ID fluid 3 inhibitor, so it’s got the quite outstanding. Yes, this is speaking and thank you for your questions. This is for no mutations or very low mutations. On hindsight of this, for the patients with ammunition, I did recommend it used in handle. This may be used as an add-on to see if there is any outside difficulty to get as we will see how the result.

Abdul Mullick, President and CEO, Kyowa Kirin Co., Ltd.: Works.

Moderator, Kyowa Kirin Co., Ltd.: These two, for many inhabitants now, even with effect 3 in mutations of skills and on a science basis, we can expect an escalate. That’s true, there’s many pathways in acute myeloid leukemia as well. This is costly to be important. Also, for NPM1 medication condition, quickly, we are there. There are another patient who have both. This could be applied impact or difficulty in those patients. We understand. Thank you very much, thank you.

Unidentified Speaker, Presenter, Kyowa Kirin Co., Ltd.: For concerning, hello, I’m Vedasman Gomanson. I’d like to ask about the impact from the special early retirement program. What position of people are applying in the new DWDB before target researches, but now it’s exploded, so maybe sales and development headquarters. What kind of impact do you see from that program? More than expected, the number of applications were higher, you mentioned, and the costs tend to be bigger and before tax. Do you see any impact other than the core operating profit? You do not need to worry about that, okay. Much Vedo San, this is Miyamoto speaking. Yes, the program we conducted last year is due to the shift of the modality, so we scale down these small molecules, so that was quite limited.

The targeted departments were limited, but we are not disclosing which divisions or functions were targeted, but just basically we look at the ages, length of the service, and we invited the applications. Of course, it includes sales and headquarters office department and application, so although I cannot disclose in detail, we received the application from various. Going forward, by the end of September, they are retiring, and from October 1 at each delivery, we need to think about the unstructured organization and maybe can explain the impact. Financial impact, ¥9.4 billion is recorded in other expenses and in our plan, so we have an above mark budget and compared with that, actual was slightly higher and that it will remain as a non-negative factor, but we’ll have a forecast for the year performance and like to achieve. For our core business, we will have an upside.

We like to pursue upsides down at that point, and the line below core operating profit, upside events can happen, although they are not factored in yet. There are uncertainties, but we like to make sure to achieve the full year target. That is how we consider that. Okay, thank you very much. The second point, for the progress of R&D, in the first quarter it was larger, but in the second quarter it reduced. The accounting method was changed. Now you are incurring this on a project basis. Do you have an extra budget still, or do you also expect the R&D projects coming in? R&D will be coming active. What is your perspective of the progress? Thank you much for question.

For R&D costs, as you said, from this year we are now recording on activity and for the project, now the costs average out and the progress is 49%, and for the second quarter again, I will see this average out to periods of the costs to answer the question. We are on the track to the plan. Thank you very much. That’s all for me. Thank you. Thank you very much.

Moderator, Kyowa Kirin Co., Ltd.: Next question is from UBS Securities. This is the supply from UBS. Regarding our progress of the pipeline since first time in about 16 time period I developed much progress and as well the schedule wise I how things are going on because I don’t really see much difference is now looking at this pipeline program. I am sure how do we think about it and then also if there are any possibilities of actually starting to build a project. If you want to discuss about stationary pipeline. Yes, thank you for your question this evening. Things are progressing up quite well at the Hawaiian situation now I hope to lie not data is what we are preparing for now then as I said maybe they can find us. This is doing well and we have very good message with every Orchard hotel as well.

As we have explained we made an unexpected program for our next pipeline. Is my evaluation that things are moving ahead quite well. We still need to conduct further activity and there are also involved with demand creation. We don’t really have anything to present to you as of today. There are but there to be so grateful to us. I think if you follow up on this question. You know I’ve already asked and if you apply with the illustration of the package is it by the end of this year 2025 or is this something forward that you want into so Kiran you in terms of timeline or how you see the timeline. At some point of time I think there will be the milestone from Amgen and I think there are.

Abdul Mullick, President and CEO, Kyowa Kirin Co., Ltd.: Multiple.

Moderator, Kyowa Kirin Co., Ltd.: Now the timings would be perhaps application signing or prevail signing. If you are making, I think it is more than how you make an announcement. Without it, how are you going to make an announcement what you have done because that will have a major impact on the stock price? Previously, answering the ROCKET, that’s what happened. How are you preparing for this? Thank you for your question. Now, regarding the announcement, yes, there was some confusion previously, but we learned our lesson. We are now communicating across with stakeholders, so we are going like that. Then, part application process, we are progressing in our class and now we have the updates available and we have to understand and we are going to find some application as to what that is going to happen, how much time, are doing complete analysis.

We still have to write up all the data to be available, but we will be able to proceed smoothly and for the application process in our guard action for a disclosure method or how we generated. Again, we’d like to make the plan quickly enough and once we have the data ready, so we can still commit to our original timeline. Maximum is $850 million and that’s what we are analys. When it comes to what kind of milestone did you currently, unfortunately, we were not able to share the information as of today, but then there is coming in, the payment is being made at the milestone and I must say for this career plan for the local, we are not factoring in mileage, the related income for this fiscal year. Thank you.

Unidentified Speaker, Presenter, Kyowa Kirin Co., Ltd.: Hello, I’m Hiroshi Wada from SMBC Nikko Securities Inc. I have two points. I have one question for the business. The difference, the percentage of overseas sales has changed. What are the assumptions? How assumptions were changed from the initial. Thank you very much for the question. This is Motohiko Kawaguchi. We are very sorry at the time of the first quarter we made a revision. When we made the announcement in February, 70% was a simple mistake. We are very sorry and it was corrected to 73%, so that’s the only correction. Compared with last year, rather because the growth is made in the United States, that’s why the percentage of overseas increased to 72%. Yes. Another point, clinical trial.com primary completion date is actually behind. It’s now 2027, although it was June 2025. Are there any factors? Interim data is coming this year.

Insufficiency about the data documentation, the first data was the interim data in the second half. My impression is that they are advancing the time for the filing, and based on that, have you seen any changes in your filing strategy? I think this is Takeyoshi Yamashita speaking. We are analyzing ASCENT data for the findings. That itself is not changed. As in the study, it is the continuation, collecting the data as we go. We will look at and we will think we may want to have extra data or not. We are always doing such discussions. For how long we will continue ASCENT, we will make an adjustment as we go for that filing plan. It is not changed, so do not worry. Thank you. Thank you very much.

Moderator, Kyowa Kirin Co., Ltd.: Are there any other questions? Even if you have asked the question or not, I will still have more time for the second round. From JPMorgan Chase & Co. This is from JPMorgan Chase & Co. Just one thing about Crysvita. In July their growth rate increased. Now until last year price increase was just one at the beginning of the year. This year price increases have increased. Is there any change in Crysvita pricing plan? Thank you. Abdul Mullick, would you like to take this question?

Abdul Mullick, President and CEO, Kyowa Kirin Co., Ltd.: We look at the pricing on a year-by-year basis. The normal practice in the U.S. is to take two price increases a year. Last year, rather than take two, we just took one of 5%, which kind of balances out the same value. It really depends on the circumstances of the year. Thank you.

Moderator, Kyowa Kirin Co., Ltd.: There is no change in the Kyowa Kirin plan. Thank you.

Unidentified Speaker, Presenter, Kyowa Kirin Co., Ltd.: The question is about 4,951. I had a little discussion with IELTS people and the timing was shifted up to September 2026. That was a conversation we had and I heard enrollment method is quite unique. On top of that, could you tell us the reason why it is delayed? Probably you are increasing the probability of success. What reports are you doing? As shown in the clinical.com, in September next year there will be no update 1. Should we give up or could you tell us as long as you can? Thank you. This is Yamashita speaking, 951. I’m not going to. I cannot tell the detail of the study design because it’s not precedented. We are planning the study which has not been tried before. We started with the Solar Conservation Protocol. However, the enrollment speed was not as fast as we had hoped for.

We were hoping that we will have the momentum in the mobile momentum, but still enrollment is taking time. We also made an amendment to the protocol. At this stage, now patients are being recruited and the overall plan is delayed. However, under the current plan, the progress is on track. Thank you so much. Which means until next year, the end of the year, as long as we wait for next year, the end of the year we will be able to have some updates for Japan as well. Yes, that’s how we are trying to achieve. Thank you very much. Thank you very much.

Moderator, Kyowa Kirin Co., Ltd.: Any other question? Any questions? The audio recording today on the meeting will be available on demand on our Kyowa Kirin website. Additionally, we will provide a transcript including the Q stage for your reference. Thank you very much for joining us today and thank you for your continued support over Kyowa Kirin.

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