May 13, 2026 Conference on FY2025 Financial Results transcript（PDF/5,711KB）

Financial Results Briefing for FY2025 May 13, 2026

(Total: 102 minutes, Presentation: 30 minutes, Q&A: 72 minutes)

Toru Kimura Representative Director, President and CEO

Motoyuki Sakai Representative Director, Executive Vice President Global Corporate Strategy; Global Finance Administration External Affairs; Corporate Governance; Corporate Communications; IT Management & Data Analytics

Tsutomu Nakagawa Member, Board of Directors, Managing

Executive Officer North America Business President and CEO, Sumitomo Pharma America, Inc.

Yumi Sato Managing Executive Officer Research and Development Division Senior Vice President, Head of Research and Development Division Chief Development Officer, Sumitomo Pharma America, Inc.

Yutaka Wakemi Executive Officer Global Corporate Strategy; Global Finance

Megumi Maruyama Vice President, Head of Corporate

Communications

Hidemaru Yamaguchi Citigroup Global Markets Seiji Wakao JPMorgan Securities

Hiroshi Wada SMBC Nikko Securities

Jaeheon Lee Morgan Stanley MUFG Securities

Kazuaki Hashiguchi Daiwa Securities

I am Maruyama from the Corporate Communications and I will be the moderator.

Today's session will be held in a hybrid format from our Tokyo head office and via Zoom webinar for analysts, investors, and members of the press. Analysts and investors are participating online and members of the press are participating either in person or online.

To ensure smooth progress within the limited time, we have a request for those participating via Zoom. Please change your participant information displayed on your Zoom screen to your company name and your name.

Also, I would like to inform you about the survey. For those attending at the venue, we have distributed survey forms along with the briefing materials. For those participating via Zoom, a survey screen will automatically appear after the briefing ends. We would appreciate it if you could share your impressions and opinions regarding this briefing. We will use your feedback for future operations so please cooperate with us.

Today, we will first provide an explanation based on the briefing materials posted on our website, and then we will have time for a Q&A session. The briefing is scheduled to end at 4:30 PM.

Now, let me introduce today's attendees. Representative Director, President and CEO, Kimura; Representative Director, Executive Vice President, Sakai; Board Member, Managing Executive Officer, Nakagawa; Managing Executive Officer, Sato; and Executive Officer, Wakemi. That is all.

Now we will move on to today's presentation. First, Dr. Kimura will explain the results for FY2025 and the status of clinical development. Dr. Kimura, please go ahead.

I will explain the summary of the FY2025 financial results.

As announced at 1:00 PM, we are showing the business results for FY2025 on a core basis. As shown here, revenue was JPY453.3 billion, an increase of JPY54.5 billion or 13.7% YoY. On the other hand, gross profit was JPY256.9 billion, an increase of JPY11.2 billion YoY.

Regarding SG&A expenses, we are controlling them well through structural reforms, so they were JPY159.3 billion, down JPY8.4 billion YoY, and R&D expenses were also controlled, decreasing by JPY4.5 billion to JPY43.9 billion.

Although this was almost according to the budget, there was more than 30% of the budget remaining at the time of the Q3 results, so we on the management side expected that we would have some unused budget.

On the other hand, as we have introduced for some time, we have made the Research, Development, and Technology Research Headquarters, R&D, into one department and are operating it efficiently. Cooperation in that area went well, and we were able to proceed with R&D by using the budget properly. As a result, the budget spent was slightly more than expected at the time of the Q3 results announcement at the end of January.

Also, as you know, last year there was a gain on the transfer of the China and Asia business of JPY49 billion, so including that, core operating profit was JPY105.9 billion, an increase of JPY62.8 billion YoY.

On the other hand, net profit attributable to owners of the parent came in at JPY106.9 billion, an increase of JPY83.2 billion YoY.

In addition, although I skipped the explanation just now, both operating profit and net profit attributable to owners of the parent were the highest ever for the Company. Next slide please.

Regarding the revenue of major products, I will explain for both the US and Japan.

Please look at the center. In the US, revenue was JPY337.9 billion in FY2025. This is an increase of JPY86.1 billion, or 34.2% YoY.

Last year, there was the LOE, or the end of the exclusivity period for APTIOM, so sales of the main product APTIOM decreased significantly, but ORGOVYX more than made up for that, increasing by JPY71.9 billion to JPY155 billion, and GEMTESA increased by JPY30.2 billion to JPY96 billion. Furthermore, in the area of one-time payment income written in small letters, a sales milestone for ORGOVYX was received, with USD100 million for achieving the USD500 million milestone, and in total, revenue was JPY337.9 billion, which was a result well above expectations. Next slide please.

On the other hand, the revenue in Japan is shown here. It was JPY92.4 billion, a decrease of JPY7.5 billion YoY.

In Japan as well, during this fiscal year, the exclusive sales period for the main product EquMet ended, leading to a significant decrease in sales. In response to this, sales growth of TWYMEEG, the introduction of XEPLION/XEPLION TRI, as well as the sales of LATUDA and LONASEN Tape, which we are focusing on, progressed steadily. However, due in part to the JPY1.4 billion impact of drug price revisions, we did not reach the previous year's level. Next slide please.

This is an explanation of the results for FY2025.

Next, I will explain the business forecast for FY2026.

As you know, our company had very harsh results in the fiscal year ended March 2024. Since then, we have implemented fundamental structural reforms, specifically proceeding with rationalization, selection and concentration of businesses, and reviewing R&D investment strategies.

Then, exactly one year ago, as a pharmaceutical company rooted in research and development, we announced a three year plan with several management goals to rebuild our value creation cycle.

Fortunately, we achieved that plan in one year. In response to that, in early March of this year, we announced a new three year management policy, Boost 2028, to become a company that can provide value from that new value creation.

In this, we aim for sales growth of the main products ORGOVYX and GEMTESA, the fastest launch of two oncology products, the cultivation of next generation growth engines, and since our financial base had significantly deteriorated after the very difficult fiscal year ended March 2024, we conducted a public offering last month to strengthen our financial base. Next slide please.

Following the very challenging results in the fiscal year ended March 2024, our equity ratio temporarily dropped to the 10% range. There were also financial constraints, and we had to have the parent company provide debt guarantees for our loans, and for subordinated bonds, we had to replace them with capital like funds. These issues and tasks remained.

By conducting the aforementioned public offering and achieving the record high profit explained at the beginning, our equity ratio has returned to a very healthy level of around 45% at present. At the same time, we implemented refinancing for loans and have refinanced into loans without debt guarantees.

In addition, regarding the subordinated bonds, through this capital increase, the capital like funding for the replacement has been recognized, so the previous tasks have disappeared. With this financial reorganization, we believe we have moved from the reconstruction phase to the growth phase.

Our future investment policy is shown below. We controlled R&D investment at JPY44 billion in FY2025, but as research and development are progressing smoothly, we plan to increase it by JPY7 billion to JPY51 billion this year. We have a plan to invest JPY180 billion over three years including FY2026.

Regarding regenerative medicine, since RACTHERA and S-RACMO are in the form of joint ventures, funds will be in the form of investment and loans, but including capital investment and investment and loans, we plan JPY12 billion in FY2026.

Another point is that for the past three years, we have continued to pay no dividends. We aim to resume dividends as soon as possible. At this point, partly because the capital increase was just recently conducted,

the amount and timing of the dividend resumption are undecided. However, we intend to proceed so as to meet the expectations of our shareholders as soon as possible. Next slide please.

Another point in our structural reform is that revenue recognition was previously disclosed by regional segment, such as Japan, the US, or China and Asia, according to the respective legal entity in charge.

On the other hand, at present, all IP for main products is transferred to Japan, and we have shifted to a form where the global business is controlled from within Japan, and the business operation itself is conducted globally. Based on this, we have reorganized into a single segment for the pharmaceutical business.

At the same time, we will disclose and explain the business for each market where our sales are generated, such as Japan, the US, Asia, or Europe. We intend to change from this year to inform every one of the business situation by region.

For example, in the case of Japan, there are naturally sales in the Japanese market, but there are also exports from Japan to overseas, specifically to the Asian region, or to North America and Europe. Similar things happen in North America as well. We decided to change the format to aggregate such areas into a market called others. Next slide please.

This shows the business forecast for FY2026 on a core basis.

Revenue is expected to be JPY540 billion, an increase of JPY86.7 billion compared to FY2025.

Gross profit is expected to be JPY295 billion, an increase of JPY38.1 billion. While continuing to firmly control SG&A expenses, we plan to increase R&D expenses by JPY71 billion to JPY51 billion.

As a result, it will be JPY91 billion, a decrease of JPY14.9 billion compared to the previous year, FY2025. At first glance, this looks like a decrease in profit, but in reality, as I mentioned last year, we recorded JPY49 billion from the transfer of the China and Asia business, so excluding that, it will be an increase in profit. I will explain a little more on the next slide.

Operating profit is forecast at JPY90 billion, and net profit attributable to owners of the parent is forecast at JPY77 billion. Next slide please.

This diagram explains the core operating profit in more detail.

I think you remember that in the fiscal year ended March 2024, there was a deficit of JPY130 billion at the core operating profit level.

On the other hand, as I explained, in the results for FY2025, we recorded a record high of JPY105.9 billion. I am sorry to repeat this many times but excluding the JPY49 billion gain from the transfer of the Asia business and JPY8.2 billion in profit obtained from the Asia business, as well as the contribution of main products whose exclusive sales periods ended in FY2025, as the product mix changed in both Japan and the US, this part is our current strength as of the end of FY2025.

In contrast, profits from existing businesses such as ORGOVYX and GEMTESA will grow, so our strength will improve to this level in the fiscal year ending March 2027. Three years ago, it was minus JPY130 billion, and I would like you to understand that our business structure reform is progressing very rapidly.

On the other hand, there is JPY30.7 billion for sales milestones and deferred revenue for ORGOVYX, and with pluses and minuses in R&D expenses and others, it comes to JPY91 billion. I would like you to understand that we are not simply comparing this and that. Next slide please.

I will explain the revenue of major products in the US and Japan.

We forecast that ORGOVYX will exceed JPY200 billion and reach JPY209.9 billion. This is an increase of JPY54.9 billion compared to the previous year.

Also, GEMTESA is expected to exceed JPY100 billion, with an increase of JPY10.3 billion YoY.

On the other hand, there is a large increase of JPY28.7 billion in the others section. This is because there is a contract where a sales milestone of USD325 million will be received if ORGOVYX sales reach USD1 billion in a calendar year. In our sales forecast, we expect to hit this in the autumn, probably Q3, so a large figure appears in the others section.

With that, we forecast revenue of JPY406.4 billion, an increase of JPY84.6 billion YoY. Next slide please.

I will explain the status of the main products in more detail. First is ORGOVYX.

It is a treatment for prostate cancer. For the FY2025 results, the initial budget forecast was USD710 million, but the actual result significantly exceeded that at USD1,029 million. Also, compared to the previous year, very strong sales were achieved, almost doubling.

Even now, the number of new patients in this March reached a record high, and it continues to trend strongly.

We forecast sales of USD1,350 million. Currently, urology is our main battlefield, and it is being adopted by many urologists.

On the other hand, for oncology doctors or specialized hospitals, there is a drug with a similar efficacy called leuprolide, which is an injectable, and that is still mainly used. We know that the overall market for that is larger. Our ORGOVYX is an oral drug, and its features are that it is very easy to use and has few side effects. We want to proceed with promotion to tell doctors and patients that they do not need injections.

However, Medicare, the US insurance system, has been revised, and the out of pocket costs for patients have decreased significantly. But this is not necessarily well known, so we plan to continue promotion for that as well. Next slide please.

Moving on, we have GEMTESA. This is a drug for overactive bladder. The initial forecast was USD572 million, but the actual result was USD637 million, exceeding the estimated budget by 11%. Compared to the previous year, it grew by 48%, which was also very strong.

We believe this is because the ease of use and excellence of our GEMTESA in the beta 3 market for overactive bladder is becoming well known.

On the other hand, as I will explain on the next slide, because there were some temporary factors last year, the increase for this year FY2025 compared to FY2026 will be in the single digits.

In this context, we want to promote clinical differentiation and also firmly promote the indication for overactive bladder associated with benign prostatic hyperplasia, which is for male patients, as an indication that only this drug has. Next slide please.

I mentioned that there were some temporary factors. Last year, as I mentioned several times in financial results announcements, we continued business and sales by deciding to maintain prices firmly, even if it meant temporarily reducing insurance coverage.

Usually, this would lead to a decrease in usage. However, there were many patients and doctors who strongly wanted to use GEMTESA even without coverage. As a result, we were able to ship large quantities and at very high prices, which combined to achieve high growth from USD431 million to USD637 million.

This year, insurance coverage has returned, so the volume will increase sufficiently, but there will be negative factors in revenue due to rebates and other issues. If you compare both, it looks like the growth rate has slowed down, but if you look at the overall trend, I think you can see the whole picture.

One way to show this is the trend of prescriptions by year, and we expect that prescription shipments will increase by more than 30% from FY2025 to FY2026.

In the 2030s, we want to grow it to a scale of JPY150 billion in revenue. Next slide please.

As I mentioned earlier, this shows the revenue and gross profit by segment.

Japan has revenue of JPY87.6 billion and gross profit of JPY35.5 billion. North America has JPY406.4 billion and JPY253.7 billion. Others have JPY46 billion and JPY5.8 billion. The total is JPY540 billion as explained in the FY2026 budget.

On the other hand, comparing with FY2025, North America is performing very well, but for the Japan business, although revenue will grow, gross profit will decrease slightly due to the product mix.

In addition, the China and Asia business is affected by the transformation of the business structure. Next slide please.

I'll move on to R&D.

The entire picture is shown here, and I will explain each topic. Next slide please.

The main R&D topics from January to May of this year are summarized here.

First, in the psychiatry and neurology area, AMCHEPRY, an allogeneic iPS cell derived dopamine neural progenitor cell, received approval for manufacture and marketing on March 6. Also, the drug price was decided today by the Central Social Insurance Medical Council, and insurance reimbursement has been approved.

Regarding the iPS cell derived retinal sheet 3077, it received orphan drug designation in March. Clinical trials are progressing in the US.

For lurasidone, an application for a partial change was made for the addition of pediatric dosage and administration. If this is approved, the drug price will increase and will not decrease in the future, which we are looking forward to.

As for new items, the administration for the Phase Ib trial of 0051 for tremor due to Parkinson disease and DSP 0378 has also started. Next slide please.

In the oncology area, for enzomenib, a Phase I trial of combination therapy with venetoclax and azacitidine for newly diagnosed acute leukemia has started. For nuvisertib, interim analysis data of combination therapy with momelotinib will be announced at the EHA to be held in June, and the abstract was released on May 12.

Another point, which I will explain later, is that very good data is coming out for the universal influenza vaccine. Next slide please.