Staring down a $6 billion patent cliff for its prostate cancer drug Xtandi, Astellas aims to counter the inevitable revenue decline with a 200 billion yen ($1.3 billion) cost-savings program anchored in its new five-year strategic plan. But to CEO Naoki Okamura, “it’s not simply saving the cost or reducing the headcount.”
The Tokyo-based pharma is launching a suite of cost-optimization initiatives. While some low-hanging fruit will have an immediate effect on the company’s bottom line, more systemic changes will take time to fully mature, Okamura said in an interview with Fierce. Consequently, the 200 billion yen target will be achieved progressively over the coming years, starting with 40 billion yen for fiscal 2026 and 45 billion yen the following year.
With the groundwork laid by both a prior efficiency drive and the new corporate plan, “we are shifting from the investment phase to the harvesting phase in ’26 and ’27,” Okamura said.
“It is not simply the cost optimization, but the way we do our business,” Okamura said.
The new blueprint relies heavily on internalizing core R&D capabilities, adopting new technologies and centralizing scattered functions to turn Astellas into a more flattened organization.
“We will try to achieve much more effective, more efficient organizations to really support our strategic brands, as well as the products coming out of our focused approach,” Okamura said.
Improving agility
Astellas already squeezed out 65 billion yen in annual expenditures during the last two years, split roughly evenly between selling, general and administrative expenses and R&D cuts, Okamura said. Moving forward, Okamura expects that the ratio of cuts will remain largely similar but tilt more heavily toward the commercial department by virtue of its bigger size.
On the R&D side, Astellas has been internalizing clinical development operations, a departure from its past dependence on CROs.
“The pipeline has changed,” Okamura said. “We no longer have 1,000-subject, three-arm study type of things.”
Again, the goal goes beyond reducing vendor costs but also improving efficiency and delivering drugs to patients faster, Okamura stressed. By stripping away the vendor layer, Astellas was able to establish direct communication lines with clinical investigators and dramatically boost clinical trial agility, cutting back-and-forth with contractors when launching and amending a study.
The shift has already yielded an internal record-breaking 27-day turnaround from an Investigational New Drug acceptance to dosing the first patient, a process that used to drag on for three months on average.
In parallel, AI recently became part of the medical writing process at Astellas. Even though human oversight remains mandatory for final reviews, having AI draft up the first documents saves a lot of time, Okamura said.
Reducing hierarchy
Perhaps the most disruptive component of Okamura’s new plan is a reimagining of Astellas’ corporate architecture
In the past decade or so, Astellas has been shifting away from a geographic management model in favor of a function-oriented organization. Today, the 21-year-old company is pushing that evolution further, structuring its operations to revolve around a subject matter, or asset, axis.
Under this new framework, cross-functional teams are granted full decision-making authority—along with the responsibility and accountability—for programs beginning with early research and then on to the end of the product life cycle.
“The membership changes over time, but just one team is responsible,” Okamura explained. “They can make their own judgment. They can make the course correction. That’s the most recent agile way of working at Astellas.”
This structural redesign also stems from frustrations with legacy corporate bureaucracy. Under Astellas’ traditional model, cross-functional teams already existed, but their hands were tied. Every member had to constantly report back to their respective departments, climbing the corporate ladder to reach a decision-maker. By the time feedback filtered back down to the asset team, the group needed to conduct its own discussions to reach an initial conclusion. And the cycle repeated in what Okamura described as a “time-consuming, counterproductive” loop.
Moving on, the function heads will only have a supporting role to play, while the asset teams call the shots.
“It’s much quicker and much more relevant because the team is the closest […] to really tackle the issues at hand,” Okamura said.
To support that structural design, Astellas is establishing global capability centers.
“Global capability centers [are] not simply labor arbitrage, it’s consolidating the fragmented capabilities to one site,” Okamura said.
Rather than having members of the same function scattered in different countries, leading to communication delays, Okamura is unifying them at one site. Asset teams and local commercial organizations can then tap into the centers’ services and capabilities in a more efficient way.
As one example, Okamura expects big cost savings in the coming years from centralizing marketing materials.
“Now, it is every single country, every single brand team has their own vendors to produce their materials,” Okamura explained. “Of course, there’s a difference in the languages [and] the medical practices in each country, but the core content should be the same for each brand.”
Looking at the bigger picture, the changes are designed to dissolve organizational hierarchies across regions and potentially, in Okamura’s words, “line them up at one layer.” With a leaner organizational structure, the chief executive sees an opportunity to develop deeper ties with customers and potentially expand the company’s footprint to smaller countries.
“We can really focus on customer engagement in each country operation, and then all the supporting function[s] can be pulled out from those country operations and put them in the global capability centers,” he said.
“Sometimes people think that, of course, we are losing Xtandi, therefore revenue comes down, therefore they have to reduce the footprint,” Okamura said. “No, I think the opposite way, because we can use the technology, we can even expand.”
Building a bridge back to growth
Ultimately, all of these structural shakeups are intended to benefit the company’s products. Besides Pfizer-partnered Xtandi, which will start to see patents expiring in different parts of the world this year, Astellas has identified five strategic brands: Pfizer-partnered antibody-drug conjugate Padcev, stomach cancer therapy Vyloy, eye drug Izervay, menopause med Veozah and leukemia treatment Xospata.
Together, these six brands are expected to cover 50% of Astellas’ revenue mix by fiscal 2030, compared with 23% in fiscal 2025, which ended in March this year.
In the pipeline, Astellas is eyeing at least five pivotal study launches by fiscal 2027 to potentially buoy a revenue inflection point in 2029. In addition, the company aims to reach proof-of-concept judgment for six candidates by fiscal 2027. All told, Astellas has estimated its pipeline could deliver risk-adjusted revenue of about 1 trillion yen ($6.25 billion) by mid-2030s.
Okamura suggests Astellas’ current pipeline is “in a pretty good shape” and “properly diversified,” with no single product representing more than 50% of the overall revenue projection. That said, the company’s business development team remains busy.
In parallel to the cost reductions, Astellas is allocating 850 billion yen ($5.3 billion) over the next five years to strategic investments, including dealmaking. And according to Okamura, the company fully intends to make use of those funds.
The company will pursue deals where it already has an established presence “in either technology platform or the therapeutic area or the franchise,” Okamura said. Before becoming CEO in 2023, Okamura had previously spent years leading Astellas’ BD function as chief strategy officer.
He pointed to Astellas’ recent collaboration with Vir Biotechnology on the latter’s PSMA-targeted T-cell engager VIR-5500. Prostate cancer is a strong area of focus for Astellas, and the company has been studying TCEs for several years.
Next, he said Astellas may add an asset in ophthalmology to take advantage of its existing experience with Izervay and its stem cell therapy candidate ASP7317, which is entering pivotal testing for geographic atrophy.
The $5.3 billion allocation loosely translates into $1 billion at the maximum per year for dealmaking, Okamura noted.
“That means we don’t want to do the significant level of company acquisition and exhaust the reserve of the strategic investment,” he said. “We will pursue rather [a] de-risked, risk-sharing type of structure with partners.”
With the new five-year plan just beginning, “we can carefully select the opportunities,” he said.