Nxera Pharma Co., Ltd.

Business Details

The UK subsidiary is responsible for GPCR-targeted drug discovery and early-stage clinical development using the NxWave™ Platform, while the Japan and Korea subsidiaries handle late-stage clinical development through commercialization, forming a vertically integrated model. In Japan, the company sells Pivlaz® (Clazosentan Sodium; for cerebral vasospasm) and Quviviq® (Daridorexant; for insomnia) directly or receives royalties, and also receives royalties on Novartis' respiratory products. Milestones and upfront payments from collaborations with Neurocrine Biosciences, Eli Lilly, AbbVie, and others are also a key revenue source. The company's 2030 vision calls for revenue of ¥50 billion or more and an operating margin of 30% or more.

Recent Overview

In 1Q FY2026, revenue grew 69.4% and the company returned to profitability, driven by a surge in milestone income and strong performance from Pivlaz® and Quviviq®

1Q FY2026 revenue was ¥11,256 million (up ¥4,612 million year on year), with core operating profit of ¥5,495 million, operating profit of ¥3,244 million, and quarterly profit of ¥1,793 million, all turning positive. The main driver of the revenue increase was milestone income of ¥5,772 million (up ¥5,254 million year on year, from seven milestones achieved). Marketed products also performed well, with Pivlaz® up 21.3% and Quviviq® up 117.6%. On the other hand, cash balance declined to ¥11,597 million due to factors including the intangible asset acquisition (¥5,019 million) associated with the Vamorolone in-licensing. Developments continued from April onward, including the start of Neurocrine's NBI-1117570 Phase 2 trial ($22.5 million milestone), approval of Daridorexant in Taiwan, and achievement of a $10 million milestone from AbbVie. Following the announcement of Lilly's acquisition of Centessa (April 1), the company's rights to receive milestone and royalty payments for the orexin 2 receptor agonist series it co-created remain intact under the terms of the existing agreements.

Key Products

Growth Drivers

• Expansion of milestone income: Seven milestones were achieved in 1Q FY2026 (versus one in the same quarter of the prior year), generating ¥5,772 million. Multiple large milestones are expected from 2Q onward, including Neurocrine's NBI-1117570 Phase 2 start ($22.5 million) and AbbVie's $10 million milestone
• Rapid growth of Quviviq®: Revenue rose 117.6% year on year to ¥1,408 million in 1Q FY2026. Full-year FY2026 forecast is ¥5,000 million to ¥6,000 million (versus ¥4,327 million in FY2025 actual). APAC expansion is accelerating, with the Korea approval application submitted (approval expected in 2027) and Taiwan launch planned for 2026
• Stable growth of Pivlaz®: Revenue rose 21.3% year on year to ¥2,921 million in 1Q FY2026. Full-year FY2026 forecast is ¥13,800 million to ¥14,200 million (versus ¥13,511 million in FY2025 actual)
• In-licensing of Vamorolone (DMD treatment): Development and commercialization rights obtained for Japan, Korea, Australia, and New Zealand. Expansion of the rare disease/specialty portfolio contributes to future revenue diversification
• Value realization of the orexin 2 receptor agonists through Lilly's acquisition of Centessa: The company retains rights to receive milestones and royalties for cleminorexton/ORX750, ORX142, and ORX489, which it co-created, and value realization is expected to benefit from Lilly's development capabilities and financial resources
• Improved cost structure: Research and development expenses declined to ¥3,028 million (down ¥780 million year on year) and selling, general and administrative expenses declined to ¥3,570 million (down ¥131 million), reflecting progress in cost reduction. Approximately ¥3,500 million in cost savings are expected for full-year FY2026
• FY2026 full-year forecast: Substantial improvement is expected, with revenue of ¥33,800 million to ¥48,800 million, core operating profit of ¥7,800 million to ¥22,800 million, and operating profit of ¥700 million to ¥15,700 million

Risks

• Volatility of milestone income: Dependent on partners' development progress, resulting in significant fluctuation between quarters and years. 1Q FY2026 saw a sharp increase from seven achievements, but the number and timing of future achievements remain uncertain
• Decline in cash balance: The cash balance at the end of 1Q FY2026 fell to ¥11,597 million (down ¥8,767 million from the end of FY2025), due to factors including the intangible asset acquisition (¥5,019 million) associated with the Vamorolone in-licensing. Operating cash flow was also an outflow of ¥1,654 million
• Continued interest-bearing debt: The company carries corporate bonds of ¥26,156 million and borrowings (¥19,664 million non-current plus ¥5,798 million due within one year), resulting in ongoing financial burden. ¥1,450 million in long-term borrowings was repaid during 1Q
• Concentration of R&D expenses in the UK and foreign exchange risk: 87% of R&D expenses stem from UK operations, meaning GBP/JPY fluctuations directly affect expense levels. The average GBP/JPY rate for 1Q FY2026 was 211.46 (versus 192.04 in the same quarter of the prior year), reflecting yen depreciation
• Discontinuation of Tempero Bio's TMP-301 program: Formal discontinuation and business downsizing began in April 2026. A related goodwill impairment of ¥277 million was already recorded in 1Q
• Occurrence of restructuring expenses: Restructuring expenses of ¥469 million were recorded in 1Q FY2026 (none in the same quarter of the prior year). Expenses related to the business restructuring program may continue
• Wide range of earnings forecasts: The gap between the upper and lower bounds of the full-year revenue forecast is as large as ¥15,000 million, reflecting heavy dependence on the presence or absence of new partnership upfront payments and the timing of existing milestone achievements
• Korea/APAC approval risk: The Daridorexant marketing authorization application is pending with Korea's MFDS (approval expected in 2027), and development and approval of Vamorolone in Japan, Korea, and elsewhere remain uncertain