Astellas Unveils Five-Year Strategic Plan Targeting $16.5 Billion in Revenue by 2026

Compiled and Translated by | Fan Dongdong

Recently, Japanese pharmaceutical company Astellas announced its new five-year strategic plan, outlining optimistic financial targets for the next five years.

According to the strategic plan, Astellas expects its sales to surge from 1.25 trillion yen for the fiscal year ending in March to approximately 1.8 trillion yen (about $16.5 billion) by March 2026. Compared with the blueprint outlined in 2018, the company has raised its peak sales estimates for nearly all of its "strategic products," whereas it had previously projected that total sales of these products would reach 1.2 trillion yen by 2026.

Jefferies analyst Stephen Barker noted in a Wednesday investor memo that, according to the report, the sales target reflects an 8% annual growth rate, 10% above consensus estimates. Notably, Barker expressed a "positive impression" of the plan and stated that achieving these targets is "realistic."

Xtandi, a prostate cancer drug developed in collaboration with Pfizer, is Astellas's largest revenue source. Following a 14.6% year-on-year increase, the drug generated 458.4 billion yen ($4.21 billion) in revenue for Astellas in fiscal year 2020. In its updated plan, Astellas projects that Xtandi's peak sales are expected to reach between 600 billion and 700 billion yen.

Barker noted that given its impressive performance since launch, it is hardly surprising that the projected future sales figures for Xtandi have been increased by a full 200 billion yen. In May, Xtandi received successive positive regulatory updates in the European Union and the United Kingdom. Early in the month, the European Commission (EC) approved a new indication for Xtandi for the treatment of adult patients with metastatic hormone-sensitive prostate cancer (mHSPC). Shortly thereafter, the UK Medicines and Healthcare products Regulatory Agency (MHRA) also approved Xtandi for the treatment of adult male patients with metastatic hormone-sensitive prostate cancer (mHSPC).

In addition to its current indications, Astellas and Pfizer also plan to expand the use of Xtandi to non-metastatic castration-sensitive disease in 2022, which could add an additional 10,000 U.S. patients to its potential market. However, the loss of patent protection for Xtandi around 2027 poses a significant risk to Astellas. By that time, Xtandi is projected to account for 30% of the Japanese pharmaceutical company's total sales.

To address this, Astellas has already devised a solution. Under this plan, the company outlined a ¥500 billion investment in early-stage "focus area" projects and stated that it expects to bridge the revenue gap resulting from the patent expiry of Xtandi by fiscal year 2030. Meanwhile, investors also hold high expectations for Padcev, an antibody-drug conjugate (ADC) co-developed with Seagen.

In December 2019, Padcev received accelerated approval from the U.S. FDA for the treatment of patients with locally advanced or metastatic urothelial cancer (UC), making it the first antibody-drug conjugate (ADC) approved for UC. In May, Astellas announced the latest positive results from two clinical trials evaluating Padcev in combination with the anti-PD-1 therapy Keytruda for urothelial cancer (UC). Following a two-year follow-up, this platinum-free regimen of Padcev plus Keytruda demonstrated durable efficacy, with an objective response rate (ORR) of 73.3%.

In 2020, the FDA approved the combination of PADCEV and KEYTRUDA as a breakthrough therapy for patients with unresectable locally advanced or metastatic urothelial carcinoma who are ineligible for cisplatin-based chemotherapy in the first-line setting. Astellas now expects peak sales of the drug to reach 300 to 400 billion yen.

In addition, Astellas has also raised its peak sales forecast for fezolinetant, a women's health drug, to approximately JPY 300 billion to JPY 500 billion. Earlier this year, Astellas announced positive results from two Phase 3 clinical trials of the non-hormonal drug for moderate to severe vasomotor symptoms or menopause-associated hot flashes. Barker observed that the clinical data accumulated to date "has made Astellas more optimistic about the sales prospects for rapidly expanding to patients with severe symptoms."

Other drugs in Astellas' strategic portfolio include the targeted leukemia therapy Xospata and the anemia drug Evrenzo, co-developed with FibroGen (available only in the Japanese market), as well as a gene therapy named resamirigene bilparvovec. Overall, Barker believes Astellas offers an "attractive valuation" for investors. The company currently trades at an enterprise value-to-earnings ratio of 8.5x, which is below the approximately 15x average for Japanese biopharmaceutical companies.

Source: Xtandi raise, Padcev lift and a women's health surprise: Astellas outlines $17B 5-year plan