Financial Results (Q2/FY2021)

October 29, 2021

Contact:

Corporate Advocacy & Relations,

Astellas Pharma Inc.

TEL [phone]

Financial Results of Astellas for the First Six Months of FY2021

Japan, October 29, 2021 - Astellas Pharma Inc. (TSE: 4503, President and CEO: Kenji Yasukawa, "the Company") today announced the financial results for the first six months (April 1, 2021 - September 30, 2021) of the fiscal year 2021 (FY2021) ending March 31, 2022.

Consolidated financial results for the first six months of FY2021 (core basis)

			(Millions of yen)
	First six months	First six months	Change
	of FY2020	of FY2021	(%)
Revenue	615,480	651,666	+36,186
(+5.9%)
Core operating profit	130,278	125,293	-4,985
(-3.8%)
Core profit	106,158	98,756	-7,402
(-7.0%)

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

1. Qualitative information on consolidated financial results for the first six months of FY2021

1. Business performance

(Note))>

Consolidated financial results (core basis) in the first six months of FY2021 are shown in the table below. While revenue increased, core operating profit and core profit decreased.

Consolidated financial results (core basis)

			(Millions of yen)
	First six months	First six months	Change
	of FY2020	of FY2021	(%)
Revenue	615,480	651,666	+36,186
(+5.9%)
Cost of sales	119,549	124,736	+5,186
(+4.3%)
Selling, general and	242,135	270,506	+28,372
administrative expenses	(+11.7%)
R&D expenses	111,700	119,060	+7,359
(+6.6%)
Amortisation of	11,550	12,379	+829
intangible assets	(+7.2%)
Share of profit (loss) of			+576
investments accounted	-268	308
( - )
for using equity method
Core operating profit	130,278	125,293	-4,985
(-3.8%)
Core profit	106,158	98,756	-7,402
(-7.0%)
Basic core earnings per	57.15	53.30	-3.85
share (yen)	(-6.7%)

(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 Q2/FY2021 Financial Results."

2

Revenue

• Main products XTANDI for the treatment of prostate cancer, XOSPATA for the treatment of acute myeloid leukemia and PADCEV for the treatment of urothelial cancer showed steady growth as expected. In addition, the sales growth of EVRENZO for the treatment of renal anemia and Betanis / Myrbetriq / BETMIGA for the treatment of overactive bladder ("OAB") contributed to revenue as well.
• Moreover, other factor for the increase in sales in the first six months of FY2021 was the sales of pharmacologic stress agent Lexiscan returning to pre-pandemic level which decreased mainly in the first quarter of the previous fiscal year because of 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 and distribution 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 the first six months of FY2021 increased by 5.9% compared to those in the corresponding period of the previous fiscal year ("year-on-year") to ¥651.7 billion.

Core operating profit / Core profit

• Gross profit increased by 6.3% year-on-year to ¥526.9 billion. The cost-to-revenue ratio fell by 0.3 percentage points year-on-year to 19.1%, mainly due to changes in product mix.
• Selling, general and administrative expenses increased by 11.7% year-on-year to ¥270.5 billion. The total amount increased mainly due to the increase of co- promotion fees associated with the growth of sales of XTANDI in the United States (increase of ¥10.2 billion year-on-year), investment in systems associated with globalization (increase of approximately ¥5.0 billion year-on-year), the increase in sales promotion expenses for new product launch readiness (increase of approximately ¥3.0 billion year-on-year), and the impact of the foreign exchange rates (increase of ¥8.4 billion year-on-year).
  Excluding co-promotion fees of XTANDI in the United States, selling, general and administrative expenses increased by 10.0% year-on-year to ¥199.4 billion.
• Research and development (R&D) expenses increased by 6.6% year-on-year to ¥119.1 billion. While there was a decrease in development expenses for fezolinetant, a selective neurokinin-3 receptor antagonist, for which patient enrollment in Phase III trials in the United States and Europe has been completed, the total amount increased mainly due to 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 7.2% year-on-year to ¥12.4 billion.

3

As a result of the above, core operating profit decreased by 3.8% year-on-year to ¥125.3 billion, and core profit decreased by 7.0% year-on-year to ¥98.8 billion.

Impact of exchange rate on financial results

The exchange rates for the yen in the first six months of FY2021 are shown in the table below. The resulting impacts were a ¥24.5 billion increase in revenue and a ¥11.5 billion increase in core operating profit compared with if the exchange rates of the first six months of FY2020 were applied.

Average rate		First six months	First six months		Change
		of FY2020	of FY2021
US$/¥		107		110		¥3
			(Weakening of yen)
€/¥		121		131		¥10
			(Weakening of yen)
Change from beginning		As of September 30,		As of September 30,
to end of period		2020				2021
US$/¥		¥3				¥1
	(Strengthening of yen)		(Weakening of yen)
€/¥		¥5				¥1
	(Weakening of yen)		(Strengthening of yen)

4

Consolidated financial results on a full basis in the first six months of FY2021 are shown in the table below. While revenue and operating profit increased, profit decreased.

The full basis financial results include "Other income," "Other expenses," which are excluded from the core basis financial results. In the first six months of FY2021, "Other income" was ¥2.8 billion (¥4.3 billion in the corresponding period of the previous fiscal year) and "Other expenses" was ¥38.0 billion (¥47.7 billion in the corresponding period of the previous fiscal year).

The increase of the fair value on the contingent consideration recorded at the time of the acquisition of Ganymed was booked as "Other expenses" (¥8.7 billion) in the first six months of FY2021 as a result of the revision of the development plan for zolbetuximab for pancreatic adenocarcinoma.

Consolidated financial results (full basis)

			(Millions of yen)
	First six months	First six months	Change
	of FY2020	of FY2021	(%)
Revenue	615,480	651,666	+36,186
(+5.9%)
Operating profit	86,872	90,169	+3,296
(+3.8%)
Profit before tax	89,091	89,085	-5
(-0.0%)
Profit	72,838	71,609	-1,229
(-1.7%)
Basic earnings per	39.21	38.65	-0.57
share (yen)	(-1.4%)
Comprehensive	78,100	70,077	-8,023
income	(-10.3%)

5