Nxera Pharma Co.,Ltd. Q4 FY2025 earnings call

• FY 2025 operating profit level unacceptable; initiated management, research strategy changes and cost controls.
• FY 2025 sales of PIVLAZ and QUVIVIQ exceeded JPY 17 billion net product sales. In-licensed vamorolone for Duchenne Muscular Dystrophy. U.K. drug discovery unsuccessful in high-value BD deal but began new Phase II trial. Post-merger integration in Japan near complete. U.K. drug discovery progressed 5 Phase I, 5 Phase II, 2 Phase III trials. Japan commercial business grew strongly with PIVLAZ and QUVIVIQ. Newly introduced DMD treatment drug AGAMREE has sales synergy with PIVLAZ.
• R&D focus renewed, 2 Phase II-ready assets, NXE'149 and NXE'744 undergoing licensing, NXE'732 in Phase IIa trials. Partner portfolio strong with Neurocrine and Centessa advancing programs.

Revenues were JPY 29.6 billion in FY 2025, slight increase from JPY 28.8 billion last year. Milestone revenue decreased from JPY 11.2 billion to JPY 7.9 billion. Product sales grew from JPY 14 billion to JPY 17.8 billion, driven by QUVIVIQ product supply and royalty. Core OP was minus JPY 400 million, IFRS basis was minus JPY 8.4 billion. SG&A compressed by 4% - 5%. R&D expenditure increased by JPY 2.7 billion. Platform business profit largely dependent on milestones, commercial business growing steadily with core profit JPY 6.5 billion.

• Priority objectives for 2026: net product sales over JPY 19.5 billion, secure additional late-stage product, execute/sign high-value partnership deals, initiate new Phase II trial, reduce total costs over 10%, achieve full-year profitability on IFRS basis.
• Drug discovery platform to reach breakeven core basis. Japan and APAC commercial business expected to continue strong growth. Second half of 2026 to see benefits from changes.
• 2030 vision: build high-growth, highly profitable Japanese biopharma company, aim for $50 billion annual revenues and over 30% operating profit margins by 2030.

Q: Hashiguchi from Daiwa Securities asked about performance forecast basis, milestone uncertainty and JPY 15 billion rationale.

A: Hironoshin Nomura and Chris Cargill responded on milestone uncertainty, aspirational target.

Q: Matsubara from Nomura Securities asked about EP4 agonist differentiation and licensing discussions, and obesity development strategy.

A: Patrik Foerch and Chris Cargill responded on EP4 agonist mode of action, partnering discussions, and obesity development strategy.

Q: Yamakita from Jefferies asked about cost, SG&A, buffer for profitability, and out-licensing environmental change.

A: Hironoshin Nomura and Chris Cargill responded on cost details, cost reduction buffer, and out-licensing position.