Astellas Pharma Inc

Thank you very much for your attendance in this fiscal 2025 Earnings Call by Acelus Inc. I am Kato, Chief Communications and IR Officer. I would like to serve as a moderator for today. Following our presentation today, we will move on to the Q&A session. The presentation will be based on the presentation materials available on our website. Some attendance interpretation in Japanese and English will be provided throughout the event, including the Q&A session. Please note that we cannot guarantee the accuracy of it. You can select your preferred language from the menu at the top of the Zoom webinar screen. If you select the original language, you will be able to listen to the audio in the original language without simultaneous interpretation. This is some notes from us. This material, oral presentation, and answers and statement in the Q&A session includes forward-looking statements based on assumptions and beliefs in light of the information currently available to management and subject to significant risks. and uncertainties. Actual financial results may differ materially depending on a number of factors. They contain information of pharmaceuticals including compounds under development, but this information is not intended to make any advertisements nor provide medical advice of any kind. Now, let me introduce you the participants from ASTELLAS here today. Naoki Okamura, President, CEO. Clinical Research and Development Officer, Tadaaki Taniguchi. Chief Commercial and Medical Affairs Officer, Klaus Seiler. CFO Atsushi Kitamura. So these four are attending in this meeting. Now I would like to start the presentation. Okamura-san, the floor is yours.

Hello, everyone. I am Naoki Okamura from Asteris Pharma Inc. Thank you very much for joining our FY2025 financial results announcement meeting out of a very busy schedule today. This is a cautionary statement regarding forward-looking information. As this was explained by Kato earlier, I'm not going to read this page. Page 3 is the agenda for today. First, I start with FY 2025 financial results. On page 4, I will give you an overview of FI 2025 results. Revenue reached over 2.1 trillion yen and core operating profit exceeded 550 billion yen. Both achieved record high results. Significant growth of strategic brands by over 140 billion yen year-on-year has driven double-digit revenue growth. As for SG&A expenses, thanks to the robust progress of what we call SMT, sustainable margin transformation, a company-wide cost optimization initiative, SG&A ratio improved by 2.3 percentage points year-on-year. Driven by strategic brands' growth and robust cost management through SMT, core operating profit rose significantly, up by 42% year-on-year. Core operating profit margin increased by 5.5 percentage points year-on-year to reach 26%. Our pipeline also progressed substantially. PAD-SEV made a significant progress in MIBC, muscle invasive bladder cancer development. Following POC achievement by Cetidegressive in PDAC, pancreatic ductoid adenocarcinoma in FI2024, a total of three POCs were achieved in FI2025, namely Cetidegressive for NSCOC, ASP2138, and ASP7317, For 30-day aggressive phase 3 study was initiated for PDAC in the first line settings. Promising external assets ASP546C and VIR5500 were licensed in and pipeline expansion made progress. On page 5, I will explain FI2025 financial results. Across revenue, core operating profit, and full operating profit, we broke records to hit all-time high since the founding of Astellas. Let me explain main items. Revenue exceeded the 2 trillion yen mark for the first time to reach 2 trillion 139.2 billion yen, up by 11.9% year-on-year, achieving the double-digit growth for two consecutive years. Co-operating profits substantially exceeded the 500 billion yen mark to reach 555.7 billion yen, significantly increasing by 41.6% a year. The bottom half of this page shows full basis results. Operating profit was 382.6 billion yen and profit was 291.6 billion yen. Both rose significantly year on year. On page six, I will explain FI 2025 financial results of our main brands. Sales of all brands increased across the board with strategic brand sales combined strongly growing by over 140 billion yen in total year on year. First, sales of five strategic brands, namely PadSafe, Isovay, Viroi, Vioza, and Zosparta, reached 480 billion yen in total, substantially up by 143.9 billion yen, or 43% year-on-year. PadSafe and Viroi, in particular, drove the strong growth, increasing by more than 50 billion yen, respectively. Strategic brands have high profitability, and their growth made a great contribution to the FI 2025 consolidated revenue and profit increase as a whole. Next, I will explain individual strategic brands and extend it. PADSEV sales increased to 221.2 billion yen, up by 57.1 billion yen, or 35% year-on-year. Global sales growth was driven by strong first-line MUC penetration continuously. Sales expanded in all regions. In addition, early momentum for CIS-ineligible MIBC, approved in November last year in the United States, also contributed greatly to sales expansion. As for ISAVE, sales rose to 77.6 billion yen, up by 19.3 billion yen, or 33% year-on-year. New patient starts, which are important metrics, steadily increased. In the recent fourth quarter between January and March, demand grew more than 10% quarter-on-quarter. treatment rate for implement complement inhibitors as a whole including the competitor's product rose to about 20 percent market penetration made steady progress with regards to vital sales reached 63.1 billion yen substantially up by 50.9 billion yen year-on-year Significantly exceeding our initial expectations, market penetration progressed extremely well across all regions. High clothing 18 testing rates contributed greatly to strong performance. Vioza and Zosparta sales rose steadily, respectively. Extended sales increased to 960.8 billion yen, up by 48.5 billion yen or 5% year-on-year, reaching projected peak sales levels 13 years after launch. Page seven is about cost items. With SMT initiative, we realized the cost optimization of about 25 billion yen in FY 2025 for SG&A expenses, earned expenditure, and cost of sales combined. Partly due to the SMT effect, excluding US extended co-promotion fees, SG&A cost ratio improved by 2.3 percentage points year on year. Let me explain a specific breakdown of SG&A costs and earned expenditure. SG&A expenses, excluding Forex impact, rose by 2.6% year-on-year. While increased our revenue by more than 10%, we are able to manage SG&A expenses at a level almost similar to the previous year. Investment toward further growth of strategic brands was increased by about 10 billion yen year-on-year. On the other hand, as an SMT progress, we realized cost optimization of about 11 billion yen through steady progress in continuous global organizational restructuring, reduction of mature products related expenses, and streamlining IT infrastructures, etc. As a result, while fully executing investments for strategic plans, we were able to offset the increase through SMT cost optimization according to assessment. Earned expenditure excluding forex impact decreased by 3.8% year-on-year. While clinical development costs for pipelines such as 30-day aggressive and ASP546C increased by about 5 billion yen, we made progress in outsourcing cost reduction through insourcing development capabilities including clinical trials, etc. under SMT, which led to cost optimization of about 10 billion yen, so we were able to fully offset the cost increase factors. In addition, with the completion of large clinical studies, development costs for strategic brands decreased by about 5 billion yen. Page 8 shows life cycle management of strategic brands. Let me explain main achievements in FI 2025. Updates since the last financial results announcement are shown in blue, including the achievements in April 2026. Strong development progress was made toward maximization of our strategic plans' value, notably for PatSafe. I will explain the latest status of PatSafe on the next page. Regarding Vioza, in Phase 2 study in China, primary endpoint was met in April this year. Based on the study results, we are planning to file a submission in China. On page 9, I will explain the latest status of PADSEV development in MIBC. In addition to development in the perioperative settings we have worked on so far, we also started development for bladder-sparing MIBC to potentially maximize PADSEV's impact. As for cis-eligible MIBC, shown on the left, we presented the latest data from EV304 study at ASCO-GU in February. As is shown in the figure, perioperative PADSEF and pembrolizumab significantly improved EFS event-free survival, a primary endpoint, compared to neoadjuvant chemotherapy. Also, OS overall survival and QCP, a PCR pathological complete response improved significantly as well. Based on the study results, we took procedures for an additional indication globally. Regulatory applications were accepted in Europe in March. In the United States in April this year. In U.S., we were granted priority review designation with PDUFA date set for the 17th of August, 2026. Next, let me explain the right-hand side, development for bladder-sparing MIBC as an opportunity to further growth. It is known that about 30% of MIBC patients are ineligible for or refuse radical cystectomy or RC. These patients will not be eligible for EV303 or EV304 studies. There are high unmet medical needs for treatment options that delays or avoids RC and preserves the bladder. Based on the extremely favorable data obtained consistently from clinical studies in MIBC by now, we initiated development of PADSEV for bladder-sparing MIBC. EV209 is a single-arm Phase II study initiated in April. The study enrolls MIBC patients who are eligible for but select not to undergo RC to evaluate the efficacy and safety of PADSEV and pembrolizumab combination. PADSEV is administered in nine cycles. They are same duration of treatment with MIBC studies so far. Primary endpoint are clinical complete response, CCR, and bladder intact event-free survival, BIEFS, at two years. In addition, EV309 as a registration of Phase III study is under preparation in parallel. We are planning to start this study in the first half of FY2026. Also in China, regulatory application is under preparation based on EV303 and EV304 studies. Blood aspirin treatment in China are not factored in to our current peak sales forecast for parts sales, so if successful, there can be further upside potential. On page 10, regarding focus area approach, I will explain main achievements in FI 2025. Achievements made in April 2026 are also included in here. Over the past one year, our pipeline made a significant progress and expansion, with three POCs achieved, one Phase III study initiated, three clinical entries, and two promising external assets in-licensed. ASP2138 in immuno-oncology achieved POC in gastric and GEJ gastroesophageal junction adenocarcinoma. Preparation is now underway for rapid initiation of phase 3 study. Furthermore, as a follow-on program, we licensed in VIR5500, from Burr Biotechnology ASP2998 made clinical entry to expand our portfolio. Ceti-degressive in TPD-targeted protein degradation achieved multiple important progresses. In PDAC, where POC was achieved at the end of FY2024, Phase III study was initiated in the first-line settings. Furthermore, POC was achieved also in NSCLC. Phase III study is now under preparation. In addition, ASP5834, a pancreas degrader, also made the clinical entry. Pipeline expansion is making steady progress. As for ASP8845 in genetic regulation, additional analysis is ongoing for POC judgment. ASP2957 also made the clinical entry. New programs including ASPE-2998 in Immuno-Oncology will be explained in detail on the next page. ASPE-7317 in Blindness and Regeneration achieved POC in patients with severe vision impairment due to GA . The next study plan is now under discussion with the regulatory authorities. Also, we licensed in ASB 546C from Evopoint to further solidify our leadership position in the clothing 18.2 space. On page 11, I will explain new clinical programs. Next generation innovative programs have advanced into clinical development. ASP-2998 is a program which leverages a platform called immunostimulatory ADC, or IADC, generated from joint research with SUTRO. TROP2-directed monoclonal antibody is conjugated with two payloads, cytotoxic topoisomerase-1 inhibitor and immunomodulator sting agonist. In non-clinical studies in mouse model, superior efficacy was demonstrated versus the existing TROP2-directed ADCs. From now on, efficacy and safety will be confirmed in human in clinical studies. ASP2957 has been created as a gene therapy for XLMTM, X-linked myotribular myopathy, like AT132. It uses a novel muscle-targeted AAV capsid High muscle specificity and reduced liver targeting was demonstrated in non-clinical studies. This enables clinical study initiation at a dose level about 100-fold lower compared to AT132. With the progress of ASPE2957, we decided on a strategic hold for AT132. Moving forward, we will focus on the development of ASP2957 as a gene therapy for XLMTM. ASP2246 is a program to aim for recovery from motor dysfunction associated with ischemic stroke by using an approach called direct reprogramming. messenger RNA encoding human neuroD1 is encapsulated in novel LNP lipid nanoparticles to enhance efficiency of delivery into cells. Messenger RNA encoding human neuroD1 promotes conversion of brain astrocytes into neurons and induces neuronal regeneration. In a non-clinical study using a monkey model, improved motor dysfunction was demonstrated With intracerebral infusion of ASP2246, Phase 1-2 study enrollment has been initiated by now. FSD first subject dose is anticipated for the first quarter of FY2026. You can find non-clinical study data of these programs summarized on page 37 in the appendix, so please refer to it. At the leisure. From here, I will explain FI2026 outlook. On page 13, I will explain an overview of FI2026 outlook. In FI2026, our performance is forecasted to reach record high results. Revenue is expected to expand over 2.2 trillion yen. driven by growth of strategic plans by over 130 billion yen year-on-year, according to a forecast. Due to this significant growth, we're expecting a revenue increase. Regarding cost items, we will continue this empty initiative to achieve about 40 billion yen cost optimization. SG&A ratio is expected to improve by 2.3 percentage points year-on-year.

We plan to increase investment in R&D in line with the growing number of new Phase 3 trials. Co-OP is expected to increase by 12% to over 600 billion yen, and the Co-OP margin is projected to rise to 27.9%. In our pipeline regarding PACSA for MRBC, we plan to conduct multiple filings and regulatory decisions as well as initiate new phase 3 trials. We also plan to initiate phase 3 trials for CTD-aggressive and ASP2138. Regarding shareholder returns, we forecast dividend per share at 80 yen up to ¥2. On page 14, I will explain the full-year focus for FY2026. For FY2026, we anticipate revenue of over 2.2 trillion yen and core OP of over 600 billion yen, surpassing the record high achieved in FY2025. First, for forex rates, we are assuming 150 yen to U.S. dollar and 180 yen to euro for FY2026. We focus revenue of 2.22 trillion yen, an increase of 80.8 billion yen year-on-year. Although we anticipate a decline in sales of Xtendi, we expect to secure overall revenue growth driven by a strong performance of strategic brands. We focus on G&A expenses of 800 billion yen down 60.3 billion yen a year. Of this amount, extended co-promotion expenses in the U.S. are expected to decrease in line with the decline in its U.S. sales. Excluding co-promotion expenses, its G&A is projected to be 584 billion yen down 28.1 billion yen a year. The cost optimization through SMT is estimated to about 40 billion yen. The majority of this relates to SG&A optimization as expected to contribute to the reduction in SG&A. R&D expenses are projected to be 355 billion yen up 42.2 billion yen year-on-year. This increase is primarily due to the high clinical development costs, including in sessions of Phase III studies. To further solidify our mid-to-long-term growth, we will accelerate investment promising pipeline candidates, such as CDD-aggressive, ASP2138, ASP5460, and VIR5500, in addition to the life-cycle management of PASF and BILOI. As development progresses, we expect to continue investing at this level or higher. As a result, the focus is core OP of 620 billion yen up 64.3 billion yen year-on-year, representing double-digit growth of 12%. We anticipate that growth in strategic brands and cost optimization through SMT will contribute significantly to this profit increase. We expect the core P margin to be 27.9% up to percentage points year-on-year. Next is full basis operating profit. As a major adjustment item excluded from the core basis, we anticipate amortization of intangible assets of about 140 billion yen. Additionally, we have factored in about ¥80 billion in other expenses. This includes impairment loss risks of about ¥40 billion and costs associated with organizational restructuring. As a result, we focused operating profit of ¥395 billion and increase of ¥12.4 billion year-on-year. Page 15, the explanation, the outlook for our main branch of FY2026. The strategic brands will continue to drive growth in consolidated revenue and profit with the particular contributions expected from PADSEV, ISAFE, and VILOI. We anticipate adaptation growth for each of these brands with total sales expected to exceed the 600 billion yen mark and reaching 610 billion yen, yet on an increase of about 130 billion yen or 27%. But self-expect continued strong growth driven by further market penetration of first-line MUC. In particular, we anticipate growth in the EU where reimbursement is progressing. In the U.S., in addition to the full-year contribution from cisplatin-ineligible MIBC, we anticipate sales contributions from the cisplatin-eligible MIBC indication for which the filing was sufficiently accepted starting during the current year. As of it is expected to see steady sales growth building on the sales infrastructure expanded last fiscal year. We will further strengthen promotional activities and through GDC initiatives, we will aim to expand the complementing inhibitor market and increase the number of new patients. By the way, we anticipate a continued solid growth across all regions driven by a further increase in testing rates. and expansion of the patient base and market share. We expect steady growth for both Vioza and Zospada. Extended, the negative impact of price reduction associated with the IRA, which takes effect in January 27 in the U.S., is expected to become apparent starting in the fourth quarter. In addition, combined with the impact of patent expiration in certain countries, global sales are expected to decrease by about 50 billion yen year-on-year. Please note that starting in fiscal year 2026, we have discontinued the disclosure of sales forecasts for individual products. We believe it is important to grow five strategic brand as one whole, and we hope to engage in dialogue focused on third-mate to long-term growth trajectory rather than being preoccupied with the short-term fluctuations in individual products. Regarding Stanley and Amira Bagram, we anticipate that they will be significantly affected by external factors such as patent situations in the future. So, as an exception, we are disclosing their sales focus for your better understanding of our assumptions and outlook. Going forward, through timely and appropriate information disclosure and communication, we will continue to strive to enhance our meat to long-term corporate value by engaging in constructive dialogue with investors. Page 16, about the life cycle management of the strategic brands, I will explain the major events expected in FY26. We are expecting multiple regulatory events across strategic brands. For PACEF, we expect regulatory decisions on the EU and Japanese filing based on the AB303 study for cisplatin-ineligible MIBs in the first and second halves of the fiscal year, respectively. In addition, expected Japanese filing based on the AV304 study for cis-bluctin-eligible MRBs in the first quarter, with regulatory decisions for the U.S. and EU submissions anticipated in the second quarter and the second half of the fiscal year, respectively. Furthermore, we plan to file in China based on both the EV303 and EV304 studies in the first quarter. We also plan to initiate the Phase III EV309 study for blood sparing therapy in the first half of the fiscal year. As of today, we plan to file in China in the first quarter. There are currently no approved treatments in China for geographic atrophy and serious condition. In following constructive discussions with the authorities, we plan to file based on data from overseas clinical trials. We expect study data readout from the Starlight 3 trial, which evaluates long-term safety in Japanese women, to become available in the first quarter, and we plan to file in Japan in the second quarter based on those results. We also plan to file in China in the third quarter. On page 17, this is an outline of the key pipeline events expected in FY26. We plan to initiate phase three trials for ASP2138 in first-line gastric cancer and for CT digressive in second-line or later non-small cell lung cancer in the first half of the fiscal year. We are also considering announcing additional data for each of these studies within the current fiscal year. Details will be provided once the announcements are officially confirmed. Although this is an ex-event that has already been achieved, we initiated a global Phase 1B2 study of ASP546C led by Astellas in April. ASP7317 will present additional data from Phase 1B trial at Arvo Association for Research Innovation and Ophthalmology in May. 48845, we are currently conducting additional analysis of POC judgment and expect to reach a decision in the first half of the fiscal year. Finally, I would like to review corporate strategy plan for our SSB 2021. On page 19, I will explain the transformation of our organizational culture and operating model that we undertook during the CSB 2021 period. As a foundation to continuously generate innovations, we have implemented various initiatives related to human resources and organizational structure and have embedded them across the company. In fostering organizational culture, we established organizational health goals at the start of the CSB 2021 and advancing efforts company-wide. As reported in previous sustainability meetings, we have achieved many results directly linked to our business over the past five years. Furthermore, in April 2025, we simplified and consolidated our cultural foundation to define organizational values and behavior by ensuring that every employee acts based on a clear shared understanding We aim to strengthen collaboration and create and deliver greater value to patients more quickly. We have also significantly transformed our operating models. Under the new structure launched in April 25, we shifted the top-level management focus from vision or function to patient access and introduced an end-to-end business model. With empowering cross-functional teams organized around programs and brands, and strongly promoting agile ways of working, we have enabled clear and rapid decision making thereby improving productivity and efficiency. Page 20, the review of the performance goals in SSB 2021. Overall, we believe we have succeeded in establishing a foundation to overcome extended exclusivity and deliver sustainable growth beyond it, which was our original objective. Regarding Performance Goal 1, Revenue, thanks to newly launched products such as Vioza, Isovay, Vialoy, and the acceleration of lifecycle management centered on ParchSafe, the total sales of the strategic brands and extended exceeded 1.43 million. Performance Go-To Pipeline Value. We face a situation where programs already underway at the start of SSP 2021 did not progress as anticipated. However, as explained at the R&D Day in March, we thoroughly focused on strengthening discipline and improving productivity through the transformation of our R&D organization. And by accelerating the development of priority programs, we achieved significant progress and expansion of the pipeline, including the achievement of a total of four POC. About performance goals three, co-operating margin, while we made investment associated with the launch of multiple new products, the SMT initiative progressed well, achieving cumulative cost optimization of 65 billion yen over two years. As a result, the co-OP margin for FY25 reached 26 percent, up four percentage point compared to FY2020. Page 21. To ensure the reliable execution of CSP 2021, we set three enterprise priorities closely linked to our performance goals and launched full-scale implementation in FY 2024. Growth strategy aims to maximize the potential of strategic brands. Board ambition aims to increase pipeline value, and sustainable margin transformation aims for company-wide cost optimization. The following slides will explain the result of each. Page 22. I will explain the result of maximizing the potential of strategic brands. In addition to patch 7 and Zospada, which were already on the market at the start of CSP 2021, we successfully launched Vioza, Isovay, and Avilo during the period of CSP 2021. establishing a diverse, high-emotion portfolio of strategic brands. Furthermore, we obtained approvals for Parsev as first-line treatment for MUC and for the additional indication of MIBC, which serves as key growth drivers, thereby further strengthening our growth foundation. As a result, our strategic brands expanded robustly, achieving a remarkable growth of 10 poles over five years. Since the majority of strategic brands are fully owned and are high-margin brands, they have strongly elevated Astellas' overall revenue and profit growth during the CSP 2021 period. The solid track record built over the past five years has further increased the certainty of our future growth, where we carry this growth momentum forward into the next corporate strategic plan. On page 23, I will explain the increase of pipeline value. We accelerated the development of flagship programs in each primary focus area and achieved a from three assets. Furthermore, we strategically and systematically generated programs and incorporated innovation based on our focus area approach, thereby expanding our pipeline. As a result, we have established a franchise in multiple therapeutic areas, such as prostate cancer, clothing 18.2 targeted therapies, and retinal diseases, where we have cultivated strengths through the development and sales of main products, thereby building a foundation for sustainable growth. Page 24, I will explain the outcome of the SMT. Since launching the SMT in FY24, we have achieved cumulative cost optimization of 65 billion yen over two years. Furthermore, cost optimization measures for FY26 and FY27 have already been identified, and we are now at the stage of ensuring their reliable execution. We are fully on track to achieve total cost optimization target of 150 billion yen. In addition, the SG&A ratio improved by a total of more than five percentage points over the two-year period from FY24 to 25, and we are gaining clear traction toward improving profitability. Moving forward, we will continue to advance cost optimization through SMT to establish a highly profitable financial structure. Page 25, I will explain the revenue and co-op growth over CSB 2021 period. Revenue expanded 1.7 folds over the five years, driven by the strong growth of strategic brands. Co-OP expanded 2.2 folds over five years, driven not only by the revenue growth but also by significant contributions from cost of optimization through SMT starting in FY24. The Co-OP margin also improved significantly. Page 26, today's key takeaways. Our strategic plans delivered exceptional growth, raising confidence for future expansion. Furthermore, we have established a robust pipeline and built foundation towards post-extended loss of exclusivity growth. Additionally, through SMT cost optimization, we have made significant progress toward resilient cost structure. Over the five-year period of CSB 2021, we are now fully prepared to overcome the extended loss of exclusivity and to continue to grow. In our next corporate strategic plan, we aim to demonstrate how we will achieve sustainable growth by building on the foundation we have established to date. At the end, I would like to remind you of the briefing session for SCSP 2026. It will be held on May 26, and we hope you will be able to attend. That concludes my presentation. Thank you for your attention.