Kyowa Kirin : Transcript of Results Briefing Fiscal 2025

Kyowa Kirin Co., Ltd.

Financial Results Briefing for the Fiscal Year 2025 February 10, 2026

Event Summary [Event Name] Financial Results Briefing for the Fiscal Year 2025 [Date] February 10, 2026 [Number of Speakers] 5

Motohiko Kawaguchi Managing Executive Officer and Chief

Financial Officer

Takeyoshi Yamashita Director, Executive Vice President and Chief

Medical Officer

Masashi Miyamoto Representative Director, President and Chief

Executive Officer

Abdul Mullick Representative Director, President & Chief Operating Officer

Hiroki Nakamura Global Corporate Communications Head

Presentation Nakamura: Hello everyone. Thank you very much for taking time out of your busy schedule today to attend the financial results briefing of Kyowa Kirin Co., Ltd. My name is Nakamura from the Global Corporate Communications of Kyowa Kirin and I will be your moderator today. Thank you for your cooperation.

We will now begin the financial briefing of Kyowa Kirin for the fiscal year ended December 31, 2025, which was announced yesterday at 3:30 PM.

Before we begin the briefing, we have a few housekeeping notes. Please note that we will retain the names and company names of all participants attending today, both in person and online, as a participant list for a certain period for internal use. We appreciate your understanding.

Simultaneous interpretation between Japanese and English will be provided for this briefing. Simultaneous interpretation receivers will be available at the registration desk. Japanese audio is on channel one and English audio is on channel two. For those attending online, Zoom interpreter function is available. There are Japanese, English and original audios to choose from, so please choose the language you prefer from the menu.

If you choose to speak in Japanese or English, please speak in the language of your choice when asking questions. Please note that the content of this briefing will be made available on demand and in transcript form on our website. Please keep this in mind when making your statements.

And the information presented today contains forward-looking statements. Please note that there is uncertainty due to various risks.

We will proceed with a general explanation and then a Question& Answer period will be followed.

I would like to introduce the board members who will be speaking today. Masashi Miyamoto, Representative Director, Chairman and CEO; Abdul Mullick Representative Director, COO; Takeyoshi Yamashita, Director, Executive Vice President, CMO; and Motohiko Kawaguchi, Managing Executive Officer, CFO. These are the four people who will be giving explanations and answering to your questions today. Thank you.

Today, Masashi Miyamoto, Chairman and CEO, will give a review of the FY2025, followed by an explanation of plans for 2026 and beyond by Abdul Mullick. Today's briefing is scheduled for approximately 100 minutes, including the presentation and Question & Answer session. Please note that due to the length of the presentation, the speaker officers will be seated during the presentation.

Miyamoto: Good morning, everyone. Thank you very much for joining with us. I would like to begin with a review of 2025, followed by a review of the five-year medium-term management plan starting in 2021. Then, Abdul Mullick will explain the medium-term management plan for 2026, 2030, and beyond, including the medium-term management concept.

Now please see the slide page four. We will begin to look back at 2025. I would like to briefly explain the qualitative review on this slide.

To mention only the main points, with regard providing pharmaceuticals for unmet medical needs, ziftomenib, for which we have a strategic alliance with Kura, was approved by the FDA in November last year. We will continue development on this to obtain first-line indications.

The ROCKET program, a Phase III study of rocatinlimab, is progressing well. In September, we announced the interim analysis results of the ROCKET-ASCEND study. The trial is progressing well, with all primary endpoints and all key secondary endpoints having been met, according to the trial results presented to date.

In the early development phase, products such as KK3910 have entered clinical trials and the development pipeline is being expanded. We have also out licensed a preclinical pipeline asset to Boehringer Ingelheim.

In terms of gaining the trust of society, the construction of the biopharmaceutical API manufacturing building in Takasaki, which we call HB7, has been completed. In addition, we are working to build a stable global production and resilient supply system, including steady progress on the construction of a biopharmaceutical manufacturing plant in Sanford, North Carolina in the US.

I will not go into the details of each of these activities, but we were generally able to carry out our planned activities as planned in terms of responding to patient-centric healthcare needs and reinforce human resources and structures that support the creation of Life-changing value.

The next slide is a summary of performance.

Revenues totaled JPY496.8 billion, an increase of JPY1.3 billion from the previous year. This is mainly due to the growth of global products and the increase in technology income. Core operating profit increased by JPY7.7 billion, or 8%, to JPY103.1 billion, thanks to an increase in gross profit and cost reductions, including optimization of budget execution throughout the Company. Both revenue and core operating profit reached record highs.

Although we had previously provided guidance for a YoY decrease in revenues and profit, we ultimately achieved YoY increases in both revenues and profit due to an increase in technology revenues, the continued depreciation of the yen, and cost reductions.

See page six. Here is a YoY analysis of sales revenue by region.

Crysvita and Poteligeo showed steady growth in each region. However, sales in Japan declined YoY due to the termination of the marketing collaboration and the impact of NHI price revisions. Sales in EMEA declined due to a decrease in license transfer income. On the other hand, North America grew significantly, driving overall growth.

We will skip the explanation of revenue from sales of major products on page seven, as we recognize that there is no significant change in trend from Q3 explained so far.

Page eight, this is a YoY analysis of core operating profit.

In addition to the increase in gross profit, the reduction in SG&A and R&D expenses resulted in an increase in core operating profit of JPY7.7 billion to JPY103.1 billion, as explained earlier, achieving a record-high income exceeding JPY100 billion for the first time.

Next is page nine. Although there were no one-time gains such as the gain on the sale of the Chinese subsidiary that was recorded in the previous year, the increase in core operating profit resulted in an increase of JPY7.2 billion for the year.

We would like to skip the news flow due to time constraints. Please go to page 15. This will be a review of the five-year mid-term business plan that started in 2021.

On pages 16 and 17 is an overview of the medium-term business plan, which you may be already familiar with, but due to time constraints, we will skip this page today as well.

This is a summary of quantitative goals and results. In terms of maximizing the value of global products, Crysvita and Poteligeo are steadily increasing the number of patients treated, and sales are growing 3.7 times than in FY2020.

We have begun in-house Crysvita sales in North America from 2023, which means that we have steadily built up our commercial capability in North America. We will continue to make an effort to further raise awareness of the disease and identify potential patients.

To establish a stable global supply system, in addition to the introduction of eQMS, we have built a robust global QA system by operating Q-TOWER, a quality-related complex facility in Takasaki. In addition to the completion of the biopharmaceutical API manufacturing building HB7, investments in Sanford plant in North Carolina have been decided and construction is now well underway.

In terms of securing a pipeline that will drive growth beyond 2025, unfortunately, we had expectations for ME-401, RTA402, and other pipelines, but we have had to discontinue their late-stage development. Meanwhile, Phozevel in Japan and Lenmeldy and KOMZIFTI have been launched in the US. In addition, the pipeline of early-stage development products is being enhanced. We will continue to expand our late-stage development pipeline and create innovative drugs.

In terms of fostering a corporate culture aligned with global expansion, we have focused our resources toward the realization of our 2030 Vision by establishing the Story for Vision 2030 and enhancing the resolution of the path to the realization of the vision.

We have also formulated the KABEGOE Principles, which articulate how our people and organization should be, in order to strongly drive this strategy and realize the continuous creation of life-changing value. We will continue to work to transform our corporate culture into a strength by spreading KABEGOE culture and further accelerating the speed of management.

Next page, please. This is quantitative summary.

At the start of the mid-term plan, we set five financial KPIs, including ROE. We aimed to achieve a core operating margin of 25% or higher and ROE of 10% or higher through sales growth, while actively investing in R&D.

As a result, we have achieved record high core operating profit except for 2024, and ROE exceeded 10% in 2023, which means that we have achieved steady growth throughout the period of this medium-term plan. On the other hand, with regard to the 2025 financial targets, we announced in February 2024 that the timing of achievement would be pushed back.

The next slide shows the transition during the period of this medium-term plan.

Although there have been various changes in the environment both internally and externally, I believe we have made steady growth throughout the period of the medium-term business management plan. We will explain the details later, but we continue to view ROE and core operating profit as the most important management indicators among the financial targets in the current mid-term business plan.

Finally, we have capital allocation.

We have shown both the planned and actual sources and uses of funds. During the period of this medium-term business plan, we have generally executed the plan as planned. We will continue to prioritize capital allocation for investment in growth while providing more stable shareholder returns.

This is a recap of what we have seen so far. Mr. Mullick will explain the rest of this section.

Mullick*: Good morning, everyone. I am Abdul Mullick, Representative Director and Chief Operating Officer of Kyowa Kirin. Today, I would like to explain our medium to long-term management strategy for 2026 and beyond.

Please see page two of the presentation material for Vision 2030 and beyond, as well as the medium and longterm strategies. It is available on our IR website.

First, achieving the vision reflects a commitment to listening to those facing disease and a deep understanding of the unmet medical needs that still exist in the medical community. The voices of patients, families, and healthcare professionals are diverse, each highlighting different issues and needs.

We believe it is essential to take this perspective as the starting point of research and development or broader business activities. This concept forms the foundation of our growth story in Vision 2030 and beyond, guiding our medium to long-term strategy and approach to sustainable growth.

Next slide, please. However, as we look to the future, it is important to recognize that the internal and external environment is changing. We are surrounded by a variety of uncertainties, challenges, and opportunities. The uncertainty of healthcare systems, especially in the US and other countries, has made the development of new drugs more challenging than in the past. At the same time, however, new opportunities are emerging, including innovative drug discovery technologies, AI, and the use of big data.

In response to this environment, we aim to realize our vision of creating and providing life-changing value as a global specialty pharmaceutical company from Japan, ultimately leading to smiles on people's faces.

Over the past several years, we have offered global products. We have built a very unique company by combining our Japanese DNA and an DNA from abroad. Our goal is to contribute to people who are currently not receiving adequate medical care.

Next slide, please. One of the challenges going forward is the patent term for our core products. Fasenra, for which we have signed a licensing agreement with AstraZeneca. And royalty income is earned. Royalty income from the US will end in May 2028. Royalty income from other regions will continue but will be phased out by region.

The exclusivity period for Crysvita will end in 2032 and for Poteligeo in 2030, but we have strong plans in place to enhance lifecycle management and patent life to continue to deliver life-changing value in these disease areas.

Next slide, please. This shows how do we respond to current and future challenges and opportunities. This is our strategy to realize our vision.

After 2026, we will continue to move forward based on this Vision 2030 story. Building on our deep therapeutic expertise in our focus areas, we will fully leverage the innovation and freedom of our scientists for strategic alliance assets and create new value through external collaborations to leverage advanced antibody and GCT modalities.

After 2026, we will be in an era of dramatic and rapid changes in the internal and external environment, and we must respond flexibly and agilely to these changes while maintaining a firm focus on our long-term goals. Therefore, like many other companies in the industry, we will switch from setting KPIs based on the conventional five-year vision to a method of announcing single-year plans and three-year forecasts.

This will allow us to respond agilely to changes in the environment and continually optimize our plans as we work to achieve our long-term goals for Vision 2030 and beyond.

Next slide, please. We will achieve sustainable medium to long-term growth through the following three pillars

First, to create innovative life-changing values, and second, to deliver those values to patients. The third is to pursue operational excellence with super team.

Regarding the creation of innovative life-changing values and advanced creation, we will accelerate research and development by leveraging our strengths in advanced antibody technology and hematopoietic stem cell gene therapy. In addition, we will steadily advance the development of rocatinlimab and ziftomenib. Furthermore, through strategic investments, we aim to capture new pipeline and revenue-generating opportunities.

Life-changing value for patients but building on the capabilities we have built over the past several years and our deep engagement with patients, we will continue to grow our global products in areas where many patients are not yet being treated, and we will work to ensure that KOMZIFTI, and Rocatinlimab to patients.

The pursuit of operational excellence through super teams, but also the teams and processes that enable the creation and delivery of life-changing value, is critical. We will further strengthen our ability and team to strongly execute our strategy, transform our operating model through the use of AI and DX, and simplify our internal systems to enable an agile way of working that can respond quickly to change.

Through these efforts, we target more than 20 new pipeline assets and FDA global approval in more than 10 indications by early 2030. Financial targets include a core operating margin of 30% and ROE in the low 10% range.

In the next pages, I will explain each pillar.

Next slide, please. The first pillar.

In particular, this is about creation of life-changing value. We will focus on modalities such as advanced antibody technologies and hematopoietic stem cell gene therapy, as well as disease areas where we have strengths, while further enhancing our research capabilities through global cross-functional research collaboration.

Furthermore, a unique feature of our company is that our researchers spontaneously create themes and take on the challenge of creating new value by combining the needs of patients with innovative science.

Next slide, please. And let me tell you about our product pipeline.

We will continue to support this rich pipeline and its long-term growth. We will maximize the value of the pipeline.

We will bring the product to market and then proceed with asset-lighting approach. We will then work from early-stage assets, using a variety of methos, and then work on focus areas, and then non-focus areas.

And the indications, this [inaudible], and horizontal access are being worked on with the launch product, clinical trials Phase III, and with the development assets.

This Phase III asset, and product launch, also represents an important part of royalty income in terms of relative size. The early-stage assets, the pipeline, are shown here in addition to [inaudible] as in the upper left corner, and the rest of the groups are categorized by modality.

Each asset shows sales potential as in the slide; however, this is the directions, not indicating peak sales.

Next slide, please. And, we will maximize the optimal strategy based on this Vision 2030, which also applies to the pipeline to maximize the value. And, building on this foundation, we aim to pursue inorganic growth, including through acquisitions, while continuing to collaborate with our partners and leverage the assets of our strategic partners.

Commercial capability is also very important. We are using AI or machine learning technology in addition to our experience to identify where patients with unmet medical needs are located [inaudible], and this is an approach that has been very successful in Crysvita and Poteligeo.

We will also use this approach to more effectively reach physicians involved in the treatment of the diseases we address. We are also strengthening our market access capabilities and policy responsiveness to secure reimbursement in global markets. In addition, we are advancing patient care. In the US, recent progress has been seen in the unification of MLD recommendations and in additions to newborn screening programs and the RUSP. We have worked with governments to improve patient care.

In addition, we will build a robust patient support system to help patients access and stay on treatment, thereby maximizing clinical outcomes. At the same time, through strong partnerships with patient associations and advocacy groups, we will incorporate patient insights and address ongoing research and development as well as commercialization efforts. These capabilities will be maximized and enhanced in the launch of KOMZIFTI and rocatinlimab to deliver more life-changing value to patients and further accelerate future growth.

Of course, a strong team is essential to executing this strategy. We will boldly shift this operating model to leverage AI and DX in addition to strengthening our human resources and organization based on the KABEGOE Principles. We will pursue operational excellence.

So, we are making a bold transformation of both our new leadership team and our operating model. We will also further improve management transparency and agility and update our executive and governance structure with a new leadership team that is more expansive and interactive, and a transition to a company with an Audit and Supervisory Committee.

This will allow management to focus on driving the core business with proper oversight by the Board of Directors. This is an example of an effort to improve agility and focus.

This slide shows members of the new Board of Directors and Audit Committee team that will be formed after the Annual General Meeting of Shareholders in March.

This is another management team that will be formed after the shareholders' meeting in March. Our global and diverse team will strengthen our global presence and lead our management.

Next slide. As for financial targets, in addition to the single-year plan for 2026, a forecast for 2028, three years from now, will be published, as indicated earlier.

Profit margins are expected to remain moderate due to continued upfront investment in R&D and SG&A expenses for rocatinlimab through 2027, as well as an expected decline in royalty income from Fasenra in 2028.

On the other hand, beyond that point, we expect a significant, full-scale contribution from rocatinlimab to revenue, in addition to the continued growth of our global products. In addition, we will move into the payback phase through the expansion of KOMZIFTI's first-line indications and the launch of new products in focus areas such as KK8123, KK2845, and OTL-203. Through these efforts, we aim to achieve an operating margin of 30% and ROE in the low 10% range by the early 2030s.

Lastly, and this is somewhat technical, I would like to explain the [inaudible] of core operating profit from FY2026. Anticipating the impact of IFRS 18, we will revise our performance metrics to enhance comparability with global pharmaceutical companies and to more appropriately reflect the Group's sustainable profitability, by excluding amortization of intangible assets and equity method investment profit or loss. The table below shows the [inaudible] with the traditional core operating profit. And it is shown in this indicator.

This concludes our explanation of the medium to long-term vision for 2026 and beyond.

Now, please return to page 22 of the financial results presentation for the full year 2025. From now on, this is a qualitative plan for the year 2026.

This is a qualitative plan and is for 2026. With regard to providing pharmaceuticals for unmet medical needs shown in the upper left, we will advance initiatives toward regulatory approval and commercial launch of rocatinlimab for atopic dermatitis. At the same time, we will continue to promote the development of ziftomenib as a first-line treatment, as well as advance clinical trials of our hematologic oncology pipeline, including KK2845.

Also, in the upper right corner, in terms of addressing patient-centric healthcare needs, we will aim to further improve access to medicines, especially in the disease areas of global strategic products, through patient advocacy and patient engagement activities. Then there are government affairs, and also evidence [inaudible], and market access.

With regard to strengthening our talent and infrastructure to realize life-changing value shown in the lower left, we will further foster the KABEGOE culture and accelerate our human resource development efforts. This will be done through the spread and establishment of the KABEGOE Principles.

These transformations will employ AI and DX and will also create new manufacturing plants in the US [inaudible], in terms of product quality and supply. And we will continue to improve our environmental footprint.

This is the earning forecast for 2026. As mentioned earlier, I will explain the newly defined core basis to be applied from FY2026.

First, we plan to increase sales revenue by JPY23.2 billion, or 5%, to JPY520 billion in FY2026. SG&A is expected to increase by JPY11.1 billion, and R&D expenses are expected to increase by JPY20.8 billion. And the newly defined core operating profit is planned to decrease by JPY9.8 billion, or approximately JPY10 billion, representing a 9% decline, to JPY100 billion. Profit is expected to increase by JPY8 billion, a 12% increase. The growth of our global products and an increase in technology-related income will drive performance, and we aim to achieve record-high earnings.

On the other hand, R&D expenses for rocatinlimab and SG&A expenses for future growth are expected to increase by approximately JPY24 billion YoY, so core operating profit is expected to decrease despite the increase in revenue.

This slide shows sales and earnings forecast by major item. We will discuss global strategic products in the Commercial Update, so we will only discuss the other products here.

Libmeldy/Lenmeldy aims for JPY10 billion in Europe and the US combined. The foundation for patient detection is being built, including the recent addition of MLD to the US Recommended Uniform Screening Panel, announced last December. Phozevel has been growing steadily since its launch in February 2024 and plans to continue to grow by over 40% in 2026. In addition, we continue to expect an increase in technology revenues, including sales royalties from Fasenra.

This slide explains core operating profit.

Gross profit is expected to increase by JPY17 billion. Gross profit is expected to increase due to global product growth, especially in North America and EMEA, and higher technology revenues, despite the impact of NHI price revisions in Japan and expected decreases in royalty income and upfront payments from the transfer of the established medicine joint venture in EMEA.

SG&A is expected to increase by JPY9.8 billion. The main factors are expected to be an increase of approximately JPY7 billion in preparation costs for the launch of rocatinlimab in the US and an increase of JPY19.6 billion in R&D expenses. The main factor is that the development cost of rocatinlimab will increase by approximately JPY17 billion. As a result, the R&D expense ratio is expected to increase by 3%, from 20% to 23%.

Following the recent announcement regarding the development of rocatinlimab and the repurchase of commercial rights, we have recorded total additional expenses of JPY15 billion to JPY20 billion in SG&A and R&D. Due to these factors, core operating profit is expected to decrease by JPY9.8 billion YoY. We will be fully prepared to maximize the value of this rocatinlimab, which we believe it will provide life-changing value.

Next slide, please. This explains profit.

Profit is expected to increase by JPY8 billion YoY. This is mainly due to the end of the cycle of restructuring-related costs incurred in the prior year, resulting in an increase of JPY23.8 billion in finance and other items, as well as the expected recognition of a one-time gain from the divestment of the established products joint venture in the EMEA region.

Next, we will discuss shareholder return and capital allocation. The year-end dividend for FY2025 is JPY32 per share, for an annual dividend of JPY62 per share. This is an increase of JPY4 from the previous fiscal year. Furthermore, we plan JPY70 for FY2026. This will be an increase of JPY8, and it will be the 10th consecutive year of dividend increases.

In our mid-term plan from 2021 to 2025, we targeted a dividend payout ratio of 40% as a benchmark for continuous dividend increases. The weighted average dividend payout ratio for the five-year period, including the 2025 dividend, was 40.8%, achieving the targeted level of shareholder return.

From 2026 onward, we will adopt a dividend policy based on a DOE of at least 4% and a progressive dividend approach. We will explain the details on the next page.