Thank you very much for joining Astellas FY 2026 first quarter year-to-date financial results announcement meeting out of a very busy schedule today. I am delighted to serve as an emcee today. I am Kato, Chief Communications and IR Officer. Thank you very much for your time. Today, after our presentation, we will move on to a Q&A session. We will explain based on the meeting material posted on our website. Including Q&A, simultaneous interpretation is available in Japanese and English. We cannot guarantee the accuracy of simultaneous translation, so thank you for your understanding. You can select language from your Zoom webinar screen menu. If you select the original sound, you can listen to the original sound without going through simultaneous translation.
A precaution. This material or representation by representatives for the company and answers and statement by representatives for the company 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 on pharmaceuticals, including compounds under development. This information is not intended to make any representations or advertisements regarding the efficacy or effectiveness of these preparations, promote unapproved uses in any fashion, nor provide medical advice of any kind. Let me introduce the participants from our company, CFO Atsushi Kitamura, Chief Research and Development Officer Tadaaki Taniguchi, Chief Commercial and Medical Affairs Officer Claus Zieler. So we have three executives attending today. We now would like to go into presentation. Kitamura-san, please.
Hello, everyone. I am Atsushi Kitamura from Astellas Pharma Inc. Thank you very much for joining our FY 2026 first quarter year-to-date 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 am not going to read this page. On page three, I will give you an overview of FY 2026 first quarter year-to-date financial results. Towards record high full-year revenue and core operating profit, we made a strong first quarter progress. Revenue increased by 27% and core operating profit rose by 56% year-on-year. Both made a robust growth. Core operating profit margin increased by 6.4 percentage points year-on-year to 34.5%, exceeding 30%. Overall growth was driven by continuous strong strategic brands growth and by ensuring disciplined cost optimization.
There were favorable FX impacts due to the yen's depreciation, but even excluding Forex impact, revenue and core operating profit grew substantially by 15% and 38% respectively. Our pipeline also made a solid progress. PADCEV, in its development for MIBC, muscle-invasive bladder cancer, was approved in Europe and the United States. Filing was made in Japan and China. Furthermore, phase III study was initiated for bladder-sparing MIBC. PADCEV achieved multiple significant milestones. As for VYLOY, in phase III, the LUCERNA study to evaluate combination with pembrolizumab and chemotherapy, target enrollment was achieved well ahead of schedule. Two phase III studies were opened for recruitment for setidegrasib, NSCLC, and ASP2138 for gastric cancer. Development made steady progress. Also, new clinical data was presented for setidegrasib in BTC, biliary tract cancer and gynecologic cancer, as well as for ASP546C in gastric cancer.
Page four is the agenda for today. From the next page, I will explain these topics. On page five, I will explain FY 2026 first quarter year-to-date financial results. Following last fiscal year, we were able to make a great start to FY 2026 again. In addition to solid growth of strategic brands fueled by favorable Forex impact, revenue, core operating profit, and full operating profit all grew substantially. As a result, quarterly results hit a record high since the establishment of Astellas. Let me explain main items. Revenue reached JPY 640.9 billion, substantially up by 26.7% year-on-year. Core operating profits significantly increased to JPY 221.4 billion by 55.6% year-on-year. While continuing to steadily make investments necessary for future growth, we ensured disciplined cost management, which enabled us to expand our profits substantially. The bottom half of this page shows our full business results.
Operating profit was JPY 184.5 billion, and profit was JPY 141.8 billion, both increased by about twofold compared to the previous year. Page six shows FY 2026 first quarter year-to-date results of our main brands. Strategic brands continue to maintain strong momentum, driving overall revenue and profit growth for Astellas. First, sales of five strategic brands, namely PADCEV, IZERVAY, VYLOY, VEOZAH, and XOSPATA, exceeded JPY 160 billion in total, substantially up by JPY 48.3 billion or 43% year-on-year. All strategic brands achieved robust growth. PADCEV, in particular, exceeded the initial expectations. Other strategic brands are progressing as expected. The strong growth momentum of strategic brands is expected to continue throughout FY 2026. Next, I will explain individual strategic brands and XTANDI. As for PADCEV, sales increased to JPY 75.5 billion, up by JPY 20 billion or 36% year-on-year.
Overall, global progress is exceeding our expectations, driven by strong penetration in global first-line metastatic urothelial cancer. In particular, penetration is accelerating in markets outside of the United States. In Europe, progress in reimbursements in many countries also led to sales expansion as well. Also, penetration of CIS- ineligible MIBC in the United States, also contributed to sales growth. In addition, recently, we had important progress as well. Approval was granted for CIS- ineligible MIBC in Europe in June and for CIS- eligible MIBC in the United States in July. We are expecting our future sales contribution from these additional indications. On the other hand, market penetration is making rapid progress, particularly in the United States, so we are not assuming that the recent high growth rate will continue as is. In the future, along with expansion of penetration, the growth rate is expected to be milder gradually over time. Still, there is no change in our perception of growth potential PADCEV.
As an important product to continue to drive Astellas' growth, mid to long-term growth is expected. As for IZERVAY, sales rose to JPY 27.2 billion, up by JPY 11.2 billion or 70% year-on-year. In addition to a steady increase in new patient starts, adoption across the retinal community is also making good progress. IZERVAY is achieving market leadership in GA, geographic atrophy. Also, we are strengthening awareness activities for both physicians and patients. We are continuing to work to drive awareness of the importance of early diagnosis and early treatment of GA. Furthermore, through DTC campaigns using insights from patients, we are trying to increase the diagnosis rate and the treatment rate as well. These initiatives are steadily resulting in our achievements through market expansion and the progress of treatment penetration. Growth momentum of IZERVAY is expected to continue into the future.
With regards to VYLOY, sales reached JPY 21.1 billion, up by JPY 7.1 billion or 51% year-on-year. Penetration of Claudin-18 testing is continuing steadily. Based on that progress as a background, sales grew solidly in all regions. The current testing rate is over 90% in Japan. Also, in the United States and Germany, penetration is rising to the 70%-80% level. Due to the increase in testing rates, prescription to appropriate patients is making steady progress. We are expecting solid growth of VYLOY sales into the future. Sales of VEOZAH increased to JPY 14.9 billion, up by JPY 5.3 billion or 55% year-on-year. Since last fiscal year, competitor product has entered the market, but the launch impact is just in line with assumptions. VEOZAH is continuing to grow steadily while holding a strong share position versus new competition in the United States.
Regarding XOSPATA, sales reached JPY 21.6 billion, up by JPY 4.6 billion or 27% year-on-year. Globally, steady growth is continuing. XTANDI sales increased to JPY 276.6 billion, up by JPY 43.6 billion or 19% year-on-year. For XTANDI, favorable Forex impact from the yen's depreciation, in particular is contributing greatly to its sales increase. Excluding the Forex impact, the growth rate is about 7%. This is a high progress rate vis-a-vis our full year forecast. As we said at the beginning of the year, towards the second half of FY 2026, we're expecting a decrease in sales due to price reduction in the United States and the impact of patent expiry in some of the countries. So the first quarter progress is in line with our full year forecast expectations.
From the second quarter onwards, strategic brands are expected to have a higher presence as growth pillars and further drive Astellas revenue and profit growth strongly. Page seven is about cost items. While we steadily executed investments necessary for our future growth, we were able to manage SG&A expenses, excluding U.S. external co-promotion fees and Forex impact, at a level similar to the previous year. As a result, also due to revenue increase, SG&A expense ratio improved by 3.5 percentage points year-on-year. Thanks to what we call SMT, sustainable margin transformation, our company-wide cost optimization initiative, we realized cost optimization of about JPY 8 billion year-on-year for SG&A, R&D expenditure, and cost of sales combined. Next, let me explain a specific breakdown of SG&A costs and R&D expenditure. SG&A expenses, excluding Forex impact, almost remained flat, up by 0.1% year-on-year.
While we increased our revenue substantially, we were able to hold SG&A expenses flat at a level similar to the previous year. While we increased investments for future growth, further growth of strategic brands as an SMT initiative, we realized cost optimization of about JPY 3 billion through efficiency benefits from global capability center establishment, AI and digital capabilities, etc . As a result, while fully executing investments for strategic brands, we were able to offset the increase through SMT cost optimization, according to assessment. Excluding the Forex impact, R&D expenses increased by 5.9% year-on-year. In line with the steady progress and development, clinical development costs for our pipeline, primarily for setidegrasib ASP2138 and ASP546C, increased by approximately JPY 4 billion. In addition, lifecycle management for PADCEV and VYLOY is progressing smoothly, and clinical development costs for these increased by approximately JPY 2 billion.
On the other hand, outsourcing cost reduction through insourcing development capabilities, including clinical studies and so on, as part of our SMT initiative, continued to progress smoothly, resulting in a cost optimization of about JPY 3 billion. This helped offset part of the cost increase. Looking ahead with the phase III initiation and the patient enrollment progress as clinical trials advance, we expect a further increase of investment from the second quarter onwards. By steadily advancing disciplined cost optimization, we are making steady progress in building a robust financial foundation that allows us to make sufficient growth investments in our strategic brands and pipeline while maintaining high profitability. We will continue to balance profitability improvements with growth investments to drive sustainable growth. I will now explain our pipeline progress. On page nine, I will discuss progress of the lifecycle management of our strategic brands.
We have achieved significant milestones, notably the phase III trials for PADCEV in MIBC and VYLOY. Regarding PADCEV, for CIS platinum-ineligible MIBC, we obtained approval in Europe in June based on the EV-303 trial. Next, for CIS-eligible MIBC, we filed in Japan in May based on the EV-304 study, and in the U.S., we received approval in July, one month ahead of the PDUFA date. Furthermore, in China, based on both the EV-303 and EV-304 studies, filing was accepted in July. We also initiated the phase III EV- 309 trial in June for bladder-sparing MIBC. For IZERVAY, the filing in China based on overseas clinical trial data was accepted in May. Regarding VYLOY, the phase III LUCERNA trial, which is evaluating the efficacy and safety of combination with pembrolizumab and chemotherapy, is currently underway.
In July, we reached the target enrollment of 500 patients in approximately one year, 20 months ahead of the initial schedule. We believe this achievement is due not only to the high level of interest in a new treatment option for Claudin-18.2 positive gastric cancer, but also to concerted efforts of Astellas' multidisciplinary team, which worked together to accelerate enrollment. Given the smooth progress of patient enrollment, we expect the data readout from the interim analysis during FY 2027. In April, VEOZAH met its primary endpoint in the STARLIGHT 3 trial, which is evaluating long-term safety in Japanese women.
We plan to do filing in Japan based on the results of this study in the second quarter. Page 10. I will discuss progress in our pipeline. In our CSP2026 to accelerate the pipeline growth, we set key deliverables to invest more aggressively in R&D and aim to initiate more than 10 phase III or pivotal trials by FY 2030. Focusing particularly on those which have already achieved POC, highlighted in pink, we expect to initiate more than five phase III or pivotal trials by FY 2027. We have recently begun a patient enrollment in phase III for setidegrasib as second-line or later treatment for NSCLC and for ASP2138 as first-line treatment for gastric cancer, making steady progress in line with the CSP2026. Please refer to page 33 and 34 of the appendix for details on the design of each study.
We also announced new clinical trial data for several programs. We presented clinical trial data for setidegrasib in BTC at the ESMO GI meeting in July. Additionally, we presented data from the phase II study of ASP546C in China at the ASCO meeting in June. Details are provided on the next two pages. We presented additional data from the phase I-B trial of ASP7317 at ARVO meeting in May. Please refer to page 36 of the appendix for details on the data. Page 11 provides an update on the development of ASP546C. ASP546C is an antibody drug conjugate or ADC that targets Claudin- 18.2. Under an exclusive license agreement with Evopoint, Astellas holds the rights to develop and commercialize the compound worldwide excluding Mainland China, Hong Kong, Macau, and Taiwan. Currently, a global phase I-B/II study led by Astellas is underway.
Additionally, phase III trial led by Evopoint for gastric cancer is ongoing in China. The figure on the right shows efficacy data from the phase III trial in China led by Evopoint, which was presented at ASCO in June. This study evaluated the efficacy and safety of ASP546C as a monotherapy in patients with gastric or GEJ or pancreatic ducts adenocarcinoma or PDAC receiving second-line or later treatment. For gastric cancer, the objective response rate or ORR, a measure of efficacy, was 65.4%, demonstrating a very high response rate that exceeded previously reported figures. Furthermore, the median progression-free survival, PFS, was 5.7 months overall, and the median overall survival, OS, was 11.7 months. Furthermore, in PDAC, the overall PRR was 26.7%. The median PFS was 4.1 months, and the median OS was 10.0 months. These results confirm that drugs targeting Claudin 18.2 demonstrate anti-tumor activity also in PDAC.
Leveraging our leading position in Claudin 18.2-targeted therapy established by VYLOY and ASP2138, we will continue to accelerate the development of ASP546C. On page 12, I will explain the update of setidegrasib's development. We presented preliminary clinical data from phase I trials in BTC and gynecological cancers at ESMO GI. Promising early anti-tumor activity was observed, and this was most pronounced in patients with BTC receiving second to fourth line treatment. As shown in the figure on the left, the ORR, a measure of efficacy, was 35.7% for all BTC patients, 44.4% for those receiving second to fourth line treatment, and 50.0% for all gynecologic cancer patients. Furthermore, as shown in the figure on the right, the median PFS was 4.8 months for BTC patients, 7.1 months for those receiving second to fourth line treatment, and 4.2 months for gynecologic cancer patients.
We will announce our future development plans for KRAS G12D mutation-positive cancers, including BTC and gynecologic cancers, at the appropriate time once they are finalized. Page 13. I will now explain the expansion of primary focus. We have expanded the scope of primary focus targeted protein degradation or TPD into broader primary focus induced proximity platform. To date, through the induction of TPD, we have been engaged in drug discovery targeting causative proteins of disease that cannot be adequately addressed by conventional drug discovery approaches. However, there are still many disease-driving proteins remain difficult to target with conventional approaches, creating significant room for innovation. In induced proximity, in addition to the target protein degradation we have been developing, we utilize modalities such as RIPTAC and molecular glue to intentionally bring two intracellular molecules, which would not normally interact, closer together.
By creating new connections inside the cell, we are able to overcome barriers of traditional treatments, that is, to remove harmful proteins and regulate the disease processes. Building on the insights and competitive advantages cultivated through TPD, we aim to unlock differentiated pipeline potential in hard to treat cancers with long-term growth. Page 14. Key takeaways of today's presentation. Following last fiscal year, we were able to get off to a great start this fiscal year as well. Revenue and profits grew significantly. Our strategic brands grew strongly and drove the growth of overall revenue and profits. We expect this strong growth momentum to continue throughout FY 2026. Furthermore, through rigorous discipline cost optimization, we managed SG&A flat year-on-year. We believe we have successfully achieved both revenue and profitability growth. Our pipeline also made solid progress. We achieved several key milestones in lifecycle management of strategic brands.
In PADCEV's MIBC development, in addition to obtaining multiple approvals and filings, we have initiated the phase III EV309 study for bladder-sparing MIBC. VYLOY has achieved enrollment of the target number of patients in the phase III LUCERNA study, evaluating pembrolizumab in combination with chemotherapy at a rate significantly faster than planned. We also made steady progress toward the pipeline-driven growth strategy outlined in CSP2026. We have begun patient enrollment in new phase III studies for setidegrasib in NSCLC and for ASP2138 in gastric cancer. At the first quarter of the CSP2026, we believe we have built strong momentum toward achieving our targets. That concludes my presentation. Thank you for your attention.
That's all from us as a presentation, so we now would like to take questions from the audience. If you have a question, please press the raise hand button at the bottom of your Zoom screen. If you're joining from your smartphone, please tap details, then raise hand will be shown, so please press it. I'm going to name you one by one. If your name is called, please unmute yourself on your screen, mention your name and affiliation, and ask us your questions. Now we'd like to open the floor for questions. First, Mr. Yamaguchi from Citigroup Securities, please.
Yamaguchi from Citigroup Securities, can you hear me?
Yes, we can hear you. Thank you.
First, slide six shows the progress of main brands and also on the previous page as well. There was the Forex impact. PADCEV exceeded the impact. XTANDI had an initial good start, so it is going to come down. Zolbetuximab is in line with the assumptions, as I heard. But profit progress is very good, it seems in the end. What about the difference compared to your initial assumptions or expectations? The progress rate seems to be very strong. Is my understanding correct, excluding Forex impact? Please comment.
Yamaguchi-san, thank you very much. Your question is about the sales, not just the sales of strategic brands, but the progress of the business as a whole. What about the progress compared to the initial plan? Is that your question?
Yes.
FY 2026 is the first year in the CSP2026. Following last year, a record high revenue and record high profit is what we try to achieve in the current fiscal year. The first quarter made a very strong progress, as you said, particularly in terms of revenue and sales. PADCEV had very good sales, and we had the cost management in line with our plan. For us, the first quarter was very strong in our view. The progress rate, it is not just the 1/4 of the annual plan, but we still think that the first quarter was very strong. In the second quarter and beyond, we would like to accelerate science from now on. The expenditure is going to be used later this fiscal year more, and we developed a full year plan based on that. Looking at the first quarter only, it was very strong.
Thank you very much. Secondly, new primary focus is going to be induced proximity. As explained, there is no specific pipeline yet. I haven't checked the details myself yet. TPD has an output for anti-cancer agents. Regarding the induced proximity, what about its therapeutic areas? What are you aiming for in this field?
As an applied therapeutic area, we are very excited. Primary focus is going to be expanded. We can identify opportunities to create drugs, so this is very exciting. Rather than me talking about exciting topics, I'd like to hand over to Taniguchi to explain further.
Thank you very much. Targeted protein degradation is going to be expanded to induced proximity. We had proteins. We have binders bound to proteins, and that is making a lot of progress. Recently, target protein degradation or RIPTAC, molecular glue, in these fields, research is progressing. Various target proteins can be used with the various modalities to pursue new treatments. That is going to be a focus. As for the induced proximity, it's going to be focused on the oncology fields, and induced proximity technologies can be utilized. First, to determine a pathway as a new target for cancer using the new technologies. More pathways and more tumor types can be addressed so that we can expand the therapies.
Other than oncology field, how this can be applied? Including that point, currently in R&D, we've been working for the wider scope of consideration. First start is oncology, and afterwards, we are thinking about extending it to other fields as well. That's the current strategy.
Thank you very much.
Thank you for the question. Next, JPMorgan Securities, Mr. Wakao, please.
Thank you. JPMorgan, Wakao is my name.
Thank you. Please start.
Thank you for this opportunity. First quarter SG&A XTANDI co-promotion fee, excluding others. The progress of that, how should we look at it in the second quarter afterwards? Our full year core OP margin. I would like to hear how you think about it.
First quarter, the cost control is good, excluding FX impact. It is almost the same level as the previous term. That is great. This JPY 584 billion, that is the plan for this fiscal year. Excluding XTANDI co-promotion fee, I think the level is just like that. The approved level currently is around 25%. This others, the portion of this others is likely to move in the second quarter and afterwards. For the first quarter, top line is rigorous and cost is well controlled. The profit margin is really good. If you control the cost well and top line is good, then OP margin 30% is likely to be achievable. I would like to hear how you think about it.
Thank you very much for your question. First of all, SG&A prospect. Basically, it is not something we will think about in the short term. Rather, to long-term perspective, we are working for the SMT. We would not expect some trend will be changed later on. Rather, we continue SMT. JPY 40 billion is something we would like to realize first quarter, JPY 8 billion, and second quarter afterwards, we have to accelerate it, not only for SG&A, but we have to just keep the plan. SG&A, we would not expect it will be greatly changed later on. We will just try to achieve the target. That is our base plan. The first quarter, 34.5% core OP, that is about just three months or one quarter matter, but this is first time that we achieved more than 30%. In that sense, as you pointed out, the sales revenue increases, and if cost is well controlled, then 30% is not impossible number.
We have been always saying 30%, so this is always the target, and we would like to realize that. However, The result is only four from this first quarter, and we have remaining three quarters. As has been mentioned, in these five years, we would like to create the pipeline that is leading to the future growth and currently the seats are available. As Taniguchi is sitting here, he has strong intention to accelerate the development. With taking balance, we are going to operate what we need to do. I do not know this is answering your question, but that is the very initial feeling that we have.
Thank you very much. Second is about PADCEV. The first quarter U.S. dollar-based progress, that is quite strong, which is quite surprising for me. Your expectation is this is more than your expectation. What is exceeded your expectation? Because I thought you a bit conservative to looking at the partner market penetration. The market penetration is better than you have expected. Is that the cause? PADCEV, I think that our patients' cells for the product is booked in an early phase, and MIBC peak achieved in earlier, or MIBC potential itself is likely to be bigger than you have expected. Would you please make a comment about this point?
The first quarter PADCEV sales were good, as you said. I would briefly respond and then Claus will add later. As for PADCEV, very strong growth was achieved in the first quarter. There are two factors behind. Outside of the United States, first-line indication expanded partly due to reimbursement. There is a steady growth in the United States. First-line plus MIBC. MIBC catch up. Initially, there is a faster trend compared to the initial outlook. The same phenomena occurred for the first-line indication in the United States. This is a very effective drug, so the drug can be used earlier. That happened for MIBC. Claus, anything to add from you?
Yes. I think you have outlined the two main factors. The reimbursement for the first line, particularly in Europe and some of the international markets was very strong. The take-up was very strong. But the other factor is the MIBC take-up in the U.S. Let me put a little bit more color onto that. As you know, in the last quarter, we only had the approval for the 303 study. For the CIS-ineligible patients in MIBC. The approval for the 304 study for the CIS-eligible patients, we only got recently. But when I talk to doctors, for instance, when I went to ASCO, doctors in the academic centers are no longer distinguishing between CIS- ineligible and CIS- eligible. They are putting everyone on PADCEV who can tolerate the drug. We are getting a much faster pickup in the United States in MIBC than we expected.
Because essentially there is a non-promotional part that is being used where this drug is already being used, which we didn't expect because we didn't have the label. Let me also temper your expectations a little bit going forward, because what that essentially does is it draws forward sales of PADCEV or growth of PADCEV that we would have expected with the approval of the 304 study in the United States, right? We're getting a much earlier adoption of PADCEV in both CIS-eligible and in CIS-ineligible patients almost at the same time. We also know that from our past indication expansions, we know that the first six months after the labeling of a drug, we get very fast uptake, and then we get a flattening of the growth curve into the single-digit growth trajectory. We very much expect that to happen in the United States.
Because we've seen the strong pickup in MIBC, essentially with the labeling of the 303 study in November. The six months are now over. We're now expecting that leveling off into a single-digit growth rate. Yes, very strong quarter with MIBC in the U.S., much more so than we expected because doctors are really not distinguishing, at least in the academic centers, not distinguishing between CIS- eligible and ineligible, and are adopting PADCEV in both patient cohorts. But that also means it will now start leveling off into a single-digit growth rate going forward. That's the picture in the U.S. And as Atsushi said, in the ex-U.S. picture, it's really the reimbursement of the first-line indication that's been very strong in the first quarter. I hope that answers your question.
Yes, very clear. Thank you very much.
Thank you very much. Next, Goldman Sachs Securities, Mr. Ueda, please.
Ueda from Goldman Sachs Securities speaking. My first question is about full-year forecast and the progress against the full-year forecast program. PROGRAF, mirabegron, a relatively established product. Vis-à-vis your plan, their progress might be high compared to your full-year plan. Are they going to decline into the future according to your plan? Mirabegron in the United States is growing a lot, in the United States. What about the progress against your plan? There can be a huge impact in terms of profits. Could you please comment?
Thank you. First, mirabegron. As has been pointed out, it is better than expected. Looking at the result of the first quarter, especially the press perspective, it was really good. Other strategic brands and so on, basically, they are on track. Toward the second half of the fiscal year, there will be the matters of the pricing and so on, but that taken into consideration, overall, we are on track.
Understood. Thank you very much. Second question, that is the progress of XTANDI against the plan. Basically, you just mentioned this is also on track. On the other hand, looking at the situation region-wise, Greater China, international, there is great growth in those regions. Do you think this growth is likely to continue? Are there any differences depending on the regions? Thank you.
XTANDI as a whole, yes, we are on track. As is pointed out, region-wide, sometimes flat, or some areas, growth is confirmed. Talking about the future at each region, there are several events. In the case of the United States., there will be price matter, and in several markets, the loss of exclusivity would be coming. So remaining period, what would happen? Well, depending on the regions, the colors are different. Claus do you have any additional comment on this?
I think Atsushi correctly explained the XTANDI. We are quite proud to have a drug that after 14 years on the market, still grows 7%. That is quite exceptional. Having said that, of course, our growth rate is coming down. We are having pricing pressures, as Atsushi said. That also includes gross-to-net effects in the U.S., right? So that is something that we are going to have to factor in, going forward into the rest of FY 2026. So I would say to you, XTANDI actually is in line with expectation. It is not above expectations. It is in line with expectations.
What is above expectations is Myrbetriq, right? As Atsushi pointed out. There are different effects, but it also includes the royalty payments from the generics in the U.S. You remember that we settled with various generic manufacturers on the Myrbetriq formulation patents. I would say Myrbetriq did exceed, as did also Prograf did exceed in Q1. XTANDI is more in line with expectations.
Understood. Thank you very much. That is all from me. Thank you very much.
Thank you. Next, UBS. Mr. Seki, please.
UBS, Seki is my name. Thank you very much for your explanation. The sales is good, and it seems that the sales receivable is also on the increase. What is the current status about that? Could I confir m about it?
Thank you very much. The first quarter, the sales is really good. Organically, the sales is really good. Organically, revenue increased 15%, although there is some Forex impact. That is because from last year, two years ago, the strategic brands are on the increase. That is the foundation. This is not the one-time factor. In line with that, as you know, the working capital AR is on the increase. The working capital, the improvement is something we have been working for these two years. With the increase of the sales, then AR also increases. The sales increases and at the same time, inventory is well controlled. So overall, working capital, that is stabilized. That is our understanding.
Thank you very much. Point two, probably to Taniguchi-san, setidegrasib on slide page 12. For BTC, the result is really good. The second line for folks. Comparison, I think that is really good and my understanding is right. Other KRAS, recently developed KRAS product. It is not head- to- head, but if you make a comparison, what do you think? Do you think your product is better?
Thank you for your question. Inability to track cancer, as you may know, like pancreatic cancer, prognosis is very poor, it is one of such cancers. The current treatment options are very limited, particularly in the second line settings and beyond in BTC. Other than chemotherapy, there is no effective treatment other than chemotherapy right now. Generally speaking, chemotherapy could be used. ORR, generally speaking, is around 10% or even under 10% in many cases. Median PFS is up to four months, according to my understanding. Regarding setidegrasib in BTC, about 10% of the BTC patients have KRAS G12D mutations, and we have a phase I data by targeting them. As you can see, its efficacy, ORR overall is 35.7%. First line to the third line. With less prior treatments, that is 44.4%.
This is unprecedented compared to the existing therapies with a very strong efficacy to reduce tumor. Median PFS. First to third prior lines of treatment. Seven months or even more than seven months are the median PFS. Doctors in this field, when we talk with them, this can be very promising according to them and their assessment. Regarding other KRAS inhibitors by other companies. As far as we know, according to the competitor's data, they haven't published their data, so it is very difficult to compare setidegrasib BTC and gynecological cancer. This is data in a small sample size, but this is very promising data in my view.
Thank you very much. That is all from me.
Thank you very much. Next, Nomura Securities, Mr. Matsubara, please.
Matsubara from Nomura Securities. Can you hear me?
Yes, we can hear you.
Thank you for the presentation. My first question is about IZERVAY. In the first quarter, JPY 470 billion was the sales. Biogen acquired A pellis. Any change in the prescribing trend and the competitive environment? At the conference by Biogen, there was a focus on SYFOVRE. I would like to hear your comments.
We do not think there is going to be a big change in the execution, but if there is anything to be added by Claus, please.
Yes, that is correct. I mean, we do not expect Biogen to have a different approach with SYFOVRE than Apellis had. We are continuing to compete in the same market for complement inhibitors to treat geographic atrophy, and that remains unchanged. I do want to point out, however, that we have now, for two years in a row, established our leadership in the new patient share. In the last quarter, it was around 55%. In the last quarter, we, for the first time, established overall market leadership. You can clearly see that if you compare the disclosed numbers on IZERVAY versus SYFOVRE.
We are clearly establishing ourselves with IZERVAY as the leader in this market. That is quite an achievement in my view, because as you remember, we were the second to launch in this market. We have come from behind and we have now overtaken the first mover in this market. I think that clearly points to the profile of IZERVAY in treating geographic atrophy and the adoption by physicians of this treatment to help patients.
Thank you. Additionally, Biogen is planning to self prefilled syringe. Do you think this is going to be a threat for you?
We know that prefilled syringes in this market have a preferred usage by some physicians because it simply facilitates their injection routine. So the short answer is yes, PFS will have an impact on the market. As you know, we have our own prefilled syringe in development, so we will be launching a little bit after Biogen with the prefilled syringe. So that will then level the playing field again. I do not expect the prefilled syringe to change the market leadership that we have established.
Thank you very much. Now, second question. That is AT845, POC has not been established yet. Why it takes time for additional analysis?
Let me respond to that. AT845, that is for Pompe disease. This is a gene regulation or genetic therapy. So far, while phase I, phase I-B have been conducted, and in February, data was announced or presented. And currently, together with the data confirmation and at the same time regularly work like with the FDA, with EMA in Europe, we have been discussing so that we can identify the overall picture, including what kind of studies will be requested for the future. So with having overall knowledge, we would like to make a final decision about the investment. So when the final decision is made, then we would like to report you our decision.
Understood. Thank you very much.
Thank you. Next, SMBC Nikko Securities. Mr. Wada, please.
Wada from SMBC Nikko Securities. Can you hear me?
Yes. Please start.
I have also two questions. First question, that is about your slide. Slide 12, ASP546C, that is the Claudin- 18.2 franchise. That is the question I would like to ask you. Your competitor's a bit active. For example, AstraZeneca licensed a pipeline from China, and this global phase III second line development is in success. So Claudin gastric cancer segment, how are you going to win this market? You have VYLOY and also 2138 and 546C. According to page 10 and 11 of your slides, 2138, I think it is mostly the same segment like you are doing with VYLOY. So how are you going to develop your overall pipelines?
Thank you very much. For Claudin- 18.2, as has been pointed out, we first to market with VYLOY, and following with that two ASP2138 and 546C that we have. We believe that this is quite an important asset and area. So our ways of thinking toward Claudin- 18.2 is now going to be explained by Taniguchi.
Claudin- 18.2, as has been mentioned by Kitamura, of course we have VYLOY to come first and this is already approved. This is the strong expression of Claudin that accounts for about 1/3 of the gastric cancer, or more than 75% of the patients have the expression of that, and that is an indication approved. With the LUCERNA trial, PD-1 high strong expression is also what we've been developing and also that is available. 2138, the targeting is 18.2 and it is in engagement is added. So 2138 is from Claudin expression low to mid. Even for those patients, efficacy is observed. This is not competing with VYLOY. Phase III is started.
Chemotherapy and checkpoint inhibitor pembrolizumab and 2138 combination versus chemotherapy plus pembrolizumab are compared in a comparative study we initiated. So first line, gastric cancer from Claudin low to mid, 2138 and VYLOY for high expression. We can separate clearly. ASP546C, Claudin- 18.2 ADC. As we showed data earlier Gastric cancer second line, very high response rate is already shown in the second line therapy for gastric cancer for this drug. Gastric cancer second line, as we mentioned before, AstraZeneca is already conducting its study.
As far as we see, our data in terms of efficacy and safety, our compound is showing very strong efficacy. So we think we can offer a higher value to the patients. So in the second line settings and beyond, we'd like to aim to get an indication there. We have to come up with the data in the end, but if possible, chemotherapy free treatment would reduce burden for the patients, according to our belief. So in the future, we'd like to consider such a setting as well when we consider the overall strategy and proceed with the development.
Thank you very much. From this slide, including Claudin- 18.2 expression, according to the top one, more than 20%, the bottom, 5% or so. AstraZeneca has a 25% cutoff, so the expression is lower here for 546C, where you demonstrated its effect.
The top panel is the gastric and GEJ adenocarcinoma. The bottom is PDAC or pancreatic cancer. Please understand that difference.
Understood. Thank you. Also, another question. Regarding the induced proximity, you cultivated a TPD technological competitive advantage compared to the competition. What is that? Beyond Rule of five, the science is often like the middle molecule. Compound selection is very difficult. There are many TPD ventures in the United States. They have difficulty when they move on to phase II. In this area, do you have a competitive advantage? Do you have any other differentiating points in terms of your technology?
First, with the TPD, we have setidegrasib, which is already in phase III. Our differentiating point is as follows. Setidegrasib, we have a lot of experience 3082. Target protein degradation can be used in what kind of patients to demonstrate effectiveness, and what kind of biomarkers should we take, and what is going to be the combination to be used in the end? We have lots of experiences, maybe more than the competitors, in our view. It's not included in today's presentation, but pan-KRAS degrader is also making progress. We'd like to use our clinical experiences, such as ASP5834, and we'd like to develop this compound with a higher value compared to the competitors. As for the molecules and research, protein binders will be identified. We have to do so. In such a field, KRAS and pan-KRAS protein binders, how to identify and create them.
We can use our experiences by now. For other targets, these protein binders can be identified. Compared to other companies, we have more experiences and we have a better structure. We will continue TPD, but RIPTAC and molecular glue, in addition to TPD, would also be addressed based on our expertise and experiences as a basis we'd like to expand so that we can cover broader targets. Then we can apply this to other tumor types as well. I think that's a big difference compared to the other companies.
Thank you very much. I understood it quite well. Thank you.
Thank you very much. Next, Morgan Stanley, MUFG. Muraoka-san, please.
Thank you. Morgan Stanley. Muraoka is my name. First question, probably like a follow-up of Ueda-san's question. XTANDI international market. The sales in yen basis is twofolds. I feel something strange here. You cannot make it fourfolds. Probably there are some specific reasons with this. If there's nothing particular, then can we make it fourfolds? Could you explain the background?
Happy to do that. The international effect that you referred to is timing. These are shipment timings. If you look at the underlying demand, that's very much in line with expectations. But the timing essentially draws forward some of the sales, and that's why international looks slightly inflated. That will wash out over the course of the year, so we don't believe that that's an impact that will continue. I hope that answers your question.
Thank you very much. Is this happening to certain specific countries? Or in many countries, this front-loading took place?
Effect in certain countries like Russia. Tenders is not something you can time with a lot of accuracy, so that's why we're seeing this effect in Q1.
Understood. Thank you very much. Taniguchi-san, this is a question to you about induced proximity platform. You have TPD technology. According to my memory, this is for injectables, and this technology is difficult to be applied for the oral medicine. This induced proximity, is this also basically injectable alone, or can you apply this for the oral medication? In other words, this technology can cover broader formulation?
Thank you for your question. As has been pointed out, TPD that we have, because of the complexity of molecular structure, it's difficult to make oral medication. However, we are working on basic research so that we can realize oral formulation. We've been making effort. This is water soluble or the membrane permeability. Those areas are impacted. With using several technologies, we are trying to make oral medication.
Ribo-Tag and molecule glue, those are a bit smaller compared to TPD. Needless to say, for molecule glue, there is a high possibility to be made as oral medication. Including what kind of formulation should be made or developed, including the perspectives we would like to pursue further for our research.
Thank you very much. For oncology, there will be no problem whether it is injectables or not, but other diseases than cancers. When we see some ASP XXX for other than oncology, we could expect something oral will be available. Well, of course, for some tumor types, oral medications will be viable. We are not really sticking to the injectable for oncology. Just like you mentioned, if it is chronic disease, oral medication will be better, that is easy to use and less burden for patients. That is the direction that we intend to go.
Thank you very much. LUCERNA study, the interim analysis readout will be available in the next fiscal year. With that, you are going to submit. For the submission, not only the United States Japan and China as well, you are going to do the submission based upon LUCERNA study?
LUCERNA study, as has been explained a little while ago, VYLOY plus chemo and PD-1 inhibitor pembrolizumab combination study is what it is. This study is a global study. We are aiming at the global submission. This study's purpose is like that.
If the interim analysis data is good, you can file submission based on this single study.
Yes. That is our understanding.
Understood. Thank you very much. That is all from me.
Thank you very much. Due to the limited time, we will take the last question. Sanford C. Bernstein, Ms. Sogi, please.
Thank you very much. I have a question about your pipeline. Claudin- 18.2 ADC, AstraZeneca, global phase III, PFS was not statistically significant. OS endpoint was met with ADC. What is the difference between your company and AstraZeneca for Claudin- 18.2? PFS may not be successful, but OS might be met. Any insight from your company?
I would like to explain. As for AstraZeneca's product, it was still at the level of a press release, so I do not know the details yet. Please, allow me to refrain from commenting. AstraZeneca's Claudin- 18 ADC and our ASP546C, as you can see on the slide, payload is different. Topoisomerase I inhibitor. We are using topoisomerase. MediLink linker is mentioned here. This is special. Linker technology is very good, which we use. This linker would be serving as a linker once it is close to the tumor.
In terms of safety, it is superior according to our belief, and that is also been demonstrated by the data, and the drug's features are demonstrated by the data as well. Looking at the data, ORR is shown here. Overall, 65.4%. In second line and beyond in gastric cancer, the efficacy is very high as a monotherapy. So 546C can be a best-in-class ADC targeting Claudin- 18.2. With that belief, we would like to continue with our development regarding the linker, tumor microenvironment, cleavable linker. In the more acid environment, this technology would enable the linker to serve as is. For the details, we would like to explain to Sogi-san on a separate occasion. There are many different features, so I would like to explain to you on a separate occasion.
Okay, understood. Next, I have a question about the induced proximity platform. As a pipeline asset, preclinical compound may be here. Do you have a lead molecule already? Revolution Medicines compounds, compared to them, effector protein may be different. Of course, the connector protein, the molecule may also be different. Could you explain the difference compared to Revolution Medicines compounds?
Regarding the induced proximity, we start from our TPD, with a different target. It is in research stage, so we have not published the information yet, but we have several compounds close to candidate nomination. Targeted protein degraders with a different target or RIPTAC and others. We are making a lot of progress here as well. From now on, we will accumulate basic data so that they can be brought to clinic. We have to judge. As soon as we understand the situation more clearly, we would like to share that with you. Regarding your second question, RevMed compounds and the difference compared to them. As for RevMed, molecular glue is being used for RevMed compound RAS(ON) inhibitor. zoldonrasib KRAS G12D inhibitor.
Setidegrasib is a TPD degrader. The shape of the molecule is very different. As for the binder, the shape is different. We cannot compare generally, but a similar protein binder is going to be found to target KRAS, so the basics are similar. As for the difference- The difference? With the inhibitors, prospective survival data is already disclosed in molecular glue. The treatment-refractory patients, with what reasons this molecular glue does not work? For example, KRAS mutation binding will lead to amplification in different pathway. There are several directions. For TPD, we are coming up with data later on, but against the KRAS amplification, because the protein itself will be degradated, there is a possibility that efficacy is established.
If that kind of characteristic is observed or not, that is under the study now. When the data is available, we are happy to show you the difference of the characteristics of the product.
Sorry, I might have a misunderstanding. For TPD, ubiquitin mechanism is utilized. Put the marker to the protein of interest, saying that you are not necessary. This induced proximity, like the molecular glue, physically, in the case of KRAS, GDP or GTP bindings are physically blocked. That is what I assume for this induced proximity as well. This works more like a degrader?
The ubiquitin proteasome protein degradation is what you are assuming? Probably you have a misunderstanding. Induced proximity includes TPD, RIPTAC, molecular glue. These three are under the umbrella of induced proximity, so this is a name of a class. RIPTAC, as you see, effector protein and actual targeted protein are bound, and by doing so, the degradation is started. That is the mechanism. Molecular glue, just like you mentioned, the bound protein signal itself is inhibited. Each has its characteristics. The basic technology are closer. That is why those are applied to expand from TPD to RIPTAC to molecular glue.
I see. Understood. Thank you very much.
Thank you very much with so many questions. With this, because of the time, we would like to close this session. Thank you very much for your participation. With this, we would like to close this meeting. Thank you.