Astellas Pharma : Financial Results (FY2021)

April 27, 2022

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Financial Results of Astellas for Fiscal Year 2021

Japan, April 27, 2022 - Astellas Pharma Inc. (TSE: 4503, President and CEO:

Kenji Yasukawa, "the Company") today announced the financial results for fiscal year 2021 (FY2021) ended March 31, 2022.

Consolidated financial results for FY2021 (April 1, 2021 - March 31, 2022) (core basis)

(Millions of yen)

FY2020	FY2021	Change (%)
Revenue	1,249,528	1,296,163	+46,635 (+3.7%)
Core operating profit	251,375	244,744	-6,631 (-2.6%)
Core profit for the year	209,906	190,584	-19,322 (-9.2%)

Cautionary Notes

In this material, statements made with respect to current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Astellas. These statements are based on management's current assumptions and beliefs in light of the information currently available to it and involve known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such factors include, but are not limited to: (i) changes in general economic conditions and in laws and regulations, relating to pharmaceutical markets, (ii) currency exchange rate fluctuations, (iii) delays in new product launches, (iv) the inability of Astellas to market existing and new products effectively, (v) the inability of Astellas to continue to effectively research and develop products accepted by customers in highly competitive markets, and (vi) infringements of Astellas' intellectual property rights by third parties.

Information about pharmaceutical products (including products currently in development) which is included in this material is not intended to constitute an advertisement or medical advice.

1. Overview of business performance and others

(1) Overview of business performance for FY2021

1) Overview of consolidated financial results for FY2021

(Note))>

Consolidated financial results (core basis) in FY2021 are shown in the table below. While revenue increased, core operating profit and core profit for the year decreased.

Consolidated financial results (core basis)

(Millions of yen)

FY2020	FY2021	Change (%)
Revenue	1,249,528	1,296,163	+46,635 (+3.7%)
Cost of sales	246,063	253,009	+6,946 (+2.8%)
Selling, general and administrative expenses	504,316	548,840	+44,523 (+8.8%)
R&D expenses	224,489	246,010	+21,521 (+9.6%)
Amortisation of intangible assets	23,763	28,283	+4,520 (+19.0%)
Gain on divestiture of intangible assets*	-	24,234	+24,234 (-)
Share of profit (loss) of investments accounted for using equity method	478	489	+11 (+2.2%)
Core operating profit	251,375	244,744	-6,631 (-2.6%)
Core profit for the year	209,906	190,584	-19,322 (-9.2%)
Basic core earnings per share (yen)	113.03	103.03	-9.99 (-8.8%)

* Established a new account, which includes gain on sale of rights of in-market products or pipeline assets, in the third quarter of FY2021

(Note) The Company discloses financial results on a core basis as an indicator of its recurring profitability. Certain items reported in financial results on a full basis that are deemed to be non-recurring items by the Company are excluded as non-core items from these financial results on a core basis. These adjusted items include impairment losses, gain/loss on sales of property, plant and equipment, restructuring costs, loss on disaster, a large amount of losses on compensation or settlement of litigations and other legal disputes, and other items that are deemed to be excluded based on the Company's judgment. A reconciliation table between results on a full basis and results on a core basis is provided in the "Supplementary Documents for FY2021 Financial Results."

Revenue

• - Main products XTANDI for the treatment of prostate cancer, XOSPATA for the treatment of acute myeloid leukemia, PADCEV for the treatment of urothelial cancer and EVRENZO for the treatment of renal anemia showed steady growth. In addition, the sales growth of Betanis / Myrbetriq / BETMIGA for the treatment of overactive bladder ("OAB") and EVENITY for the treatment of osteoporosis contributed to revenue growth as well.

• - Moreover, another factor for the increase in sales in FY2021 was the sales of pharmacologic stress agent Lexiscan returning to pre-pandemic levels which decreased mainly in the first quarter of the previous fiscal year by the impact of the spread of COVID-19.

• - The sales growth of the products above offset the sales decrease mainly due to the termination of sales agreements for Celecox for the treatment of inflammation and pain and Lipitor for the treatment of hypercholesterolemia, and the divestiture of Eligard for the treatment of prostate cancer.

As a result of the above, revenue in FY2021 increased by 3.7% compared to those in the previous fiscal year ("year-on-year") to ¥1,296.2 billion.

Core operating profit / Core profit for the year

• - Gross profit increased by 4.0% year-on-year to ¥1,043.2 billion. The cost-to-revenue ratio fell by 0.2 percentage points year-on-year to 19.5%, mainly due to changes in product mix, despite the foreign exchange rate impact from the elimination of unrealized gains in intra-group transactions.

• - Selling, general and administrative expenses increased by 8.8% year-on-year to ¥548.8 billion. The total amount increased mainly due to the impact of the foreign exchange rates (increase of ¥25.0 billion year-on-year), the increase of co-promotion fees associated with the growth of sales of XTANDI in the United States (increase of ¥11.3 billion year-on-year), investment in Digital Transformation (increase of approximately ¥8.0 billion year-on-year), and the increase in sales promotion expenses for new product launch readiness (increase of approximately ¥5.0 billion year-on-year), despite a decrease in expenses due to the global optimization of personnel aligned with transformation of product portfolio (decrease of approximately ¥9.0 billion year-on-year). Selling, general and administrative expenses, excluding co-promotion fees of XTANDI in the United States, increased by 6.6% year-on-year to ¥409.5 billion.

• - Research and development (R&D) expenses increased by 9.6% year-on-year to ¥246.0 billion. The total amount increased mainly due to the impact of the foreign exchange rates and also increases in development expenses for zolbetuximab, an anti-Claudin 18.2 monoclonal antibody and R&D investment for Rx+ business (related to iota).

• - Amortisation of intangible assets increased by 19.0% year-on-year to ¥28.3 billion.

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Gain on divestiture of intangible assets was ¥24.2 billion, including transfer of five products to Cheplapharm which were sold in Europe and other regions (¥12.3 billion), transfer of a pipeline asset (¥9.2 billion) and transfer of Bendamustine (¥2.0 billion) in the third quarter of FY2021.

As a result of the above, core operating profit decreased by 2.6% year-on-year to ¥244.7 billion, and core profit for the year decreased by 9.2% year-on-year to ¥190.6 billion.

Impact of exchange rate on financial results

The exchange rates for the yen in FY2021 are shown in the table below. The resulting impacts were a ¥59.6 billion increase in revenue and an ¥18.5 billion increase in core operating profit compared with if the exchange rates of FY2020 were applied.

Average rate	FY2020	FY2021	Change
US$/¥	106	112	¥6 (Weakening of yen)
€/¥	124	131	¥7 (Weakening of yen)

Change from beginning to end of period	As of March 31, 2021	As of March 31, 2022
US$/¥	¥2 (Weakening of yen)	¥11 (Weakening of yen)
€/¥	¥10 (Weakening of yen)	¥5 (Weakening of yen)

Consolidated financial results on a full basis in FY2021 are shown in the table below.

Revenue, operating profit and profit for the year increased across the board.

The full basis financial results include "Other income," "Other expenses," which are excluded from the core basis financial results. In FY2021, "Other income" was ¥15.3 billion

(¥7.6 billion in the previous fiscal year) and "Other expenses" was ¥104.3 billion (¥123.0 billion in the previous fiscal year).

As "Other expenses," the Company recorded impairment loss of intangible assets (¥31.2 billion) in relation to a revision of the development plan for the gene therapy AT132, impairment loss of intangible assets (¥11.3 billion) in relation to the termination of DNA vaccine ASP2390 and impairment loss of goodwill (¥5.2 billion) in relation to the termination of GITR agonistic antibody ASP1951 in the fourth quarter of FY2021.

Consolidated financial results (full basis)

(Millions of yen)

FY2020	FY2021	Change (%)
Revenue	1,249,528	1,296,163	+46,635 (+3.7%)
Operating profit	136,051	155,686	+19,635 (+14.4%)
Profit before tax	145,324	156,886	+11,563 (+8.0%)
Profit for the year	120,589	124,086	+3,497 (+2.9%)
Basic earnings per share (yen)	64.93	67.08	+2.15 (+3.3%)
Comprehensive income	181,499	208,117	+26,618 (+14.7%)