A Commitment to Financial Discipline: Q&A with Astellas’ CFO Atsushi Kitamura

Atsushi Kitamura
CFO
Astellas

Pharmaceutical Executive: What cost management initiatives have you undertaken to enhance efficiency?
Atsushi Kitamura: As CFO, my commitment to financial discipline and strategic decision making is rooted in driving sustainable growth and delivering long-term VALUE, both to the people we serve and Astellas as a whole. With accountability and efficiency at the core of my approach, we’ve strengthened the balance sheet.

Our cost management initiatives are focused on improving our organizational effectiveness, costs and ways of working across the company, setting Astellas up for future growth and transformation. For example, we’ve optimized resource allocation throughout our global network to ensure we’re directing resources to areas of the company with the highest potential for growth. We do this by incorporating innovative analytics tools to help us manage our resource use in real-time.

We’re also investing in the growth of our employees by building critical in-house capabilities, especially related to clinical trials and research and development (R&D), to reduce outsourcing. This strategy has had a direct impact on our core operating profit growth.

Improving Astellas’ cost optimization is one of the accomplishments I’m most proud of since joining the company in 2023. In our last fiscal year (April 1, 2024-March 31, 2025), we achieved cost optimization of 40 billion yen, and we continue to make steady progress in FY25.

PE: How are you positioning Astellas to weather near-term challenges while pursuing future opportunities?
Kitamura: Before joining Astellas, I had the opportunity to work in diverse sectors, including electronics, food service, logistics and consumer goods. This experience provided valuable insights as I’ve stepped into the pharmaceutical industry, which has its own unique challenges, including a higher risk profile, higher revenue to R&D expense ratio, and longer pathway to product launches and commercialization – factors that impact cash flow. The cyclical nature of the pharmaceutical industry requires constant transformation to address challenges.

I’m focused on maintaining and improving profitability while investing in innovation. To be successful, close alignment with our R&D group has been critical because sustained investment in the pipeline is essential for driving long-term growth. My team works to ensure they understand the science behind our on-market and investigational therapies and can clearly articulate how our products differentiate in the market, especially when speaking with the investment community or informing business decisions.

In collaboration with our Business Development and R&D teams, we prioritize financial flexibility to pursue bold, forward-looking collaborations that will create and deliver VALUE. From a finance perspective, I’m focused on reducing interest-bearing debt so we can improve our financial leverage. We also strive to take a creative, solutions-oriented approach to structuring agreements, taking into consideration the needs of all stakeholders involved. This strengthens our ability to ensure we’re forging strategic partnerships and acquisitions that will drive future growth. Through successful partnerships, in-house innovation and acquisitions, Astellas has built a portfolio that delivers life-saving treatments with future potential to address wider unmet patient needs through new modalities.

PE: How do you plan to sustain growth despite market volatility?
Kitamura: To sustain growth in a volatile market, we must prioritize pragmatism and strategic long-term planning in tandem. From exchange rate fluctuations to policy shifts and evolving business laws, the pharmaceutical industry is facing unique challenges that can hinder both patient care and business growth. To overcome these, I’ve implemented strategies that address immediate operational needs while building long-term resilience.

For example, I’m focused on reducing interest-bearing debt and prioritizing high-growth markets or aligning operations with emerging trends to enable the company to remain agile and sustain momentum, even during uncertain times. We continually review changing global regulations and business laws, assessing their impact and ensuring our own priorities are aligned with local and global requirements so we can quickly adapt to industry changes.

In addition, we’re tapping into the latest technology to implement new integrated cash flow management systems and robust financial planning frameworks, including in-depth scenario analyses, to anticipate and adapt to fluctuations in the market. My team has also incorporated robust financial forecasting and situational planning systems to help anticipate shifts in the market and potential risks to our business goals. This approach has been integral to our ability to quickly respond to challenges while ensuring we have smooth financial operations and strong budget control.

As the pharmaceutical landscape evolves, we’re making deliberate decisions to focus our resources where they can deliver the greatest impact. This helps us reduce the impact of market volatility on our operations, allowing us to stay focused on delivering innovative solutions for patients.

PE: In what ways are you securing capital for strategic partnerships?
Kitamura: Strategic partnerships have played an important role in establishing Astellas’ proven track record of successful innovation, our broad pipeline, and our expertise in novel modalities. More than 50% of our pipeline and products originate from external partnerships. These include academic alliances, emerging and established company collaborations, licensing arrangements, global pharma partnerships, and acquisitions.

From an M&A perspective, we’re focused on late-stage assets where risks have been reduced. We know this will require larger investment compared to early-stage assets. To withstand this, I am working to strengthen our balance sheet as well as our core operating profit – which is the source of free cash flow generation – while also reducing the balance of interest-bearing debt. We have made steady progress across these efforts, which helps us have the financial flexibility to pursue bold and forward-looking collaborations with organizations who share our dedication to transforming patient outcomes.

Based on the capital allocation guidelines, we have the opportunity to think about how to make effective decisions and optimize within that framework. I organize and provide information in a way that makes it easier for decision makers to make choices while posing questions from a neutral standpoint. Ultimately, my job is to ensure we’re managing our resources and risks carefully to help create open discussions with potential partners to find the best opportunities for future, sustainable growth.