Daiichi Sankyo said changes in projected demand for several antibody-drug conjugate (ADC) cancer medicines in its pipeline and commercial portfolio have led the company to revise its manufacturing and supply strategy, resulting in major financial charges tied to production commitments and facility investments. The adjustments follow clinical trial developments, revised patient population expectations, and delays affecting multiple oncology programs, including Datroway and patritumab deruxtecan.
The Japanese drugmaker said the revised ADC supply planning is expected to produce an extraordinary loss of 149.4 billion Japanese yen ($950 million) in its non-consolidated fiscal year 2025 results, despite revenue remaining on track to exceed previous guidance and reach a record level.
According to Daiichi, the charges include a 75.7-billion-yen payment to contract manufacturing organizations and a 19.3-billion-yen impairment loss and compensation expense connected to ADC-related equipment at its Odawara manufacturing plant in Japan. The company recently postponed the release of its annual report while determining the financial impact of the supply changes, a move that contributed to a decline of more than 10% in its share price on April 24.
Daiichi said its earlier manufacturing strategy was shaped by expectations of rapid growth in demand for ADC medicines after the 2019 FDA approval of Enhertu, the company’s partnered product with AstraZeneca. To secure supply capacity, Daiichi entered long-term agreements with contract manufacturers, committed to minimum purchases and reserved dedicated production lines.
The company stated that subsequent clinical data and development changes altered projected patient populations and launch timelines for several ADC programs, reducing expected demand levels. Daiichi said it has now revised its supply planning model to include risk adjustments. The contractor compensation payments reflect short-term differences between the previous and updated manufacturing plans, while longer-term changes have not yet been determined because of uncertainty around future demand.
In a May 8 statement, Daiichi said it “adopted a policy of securing manufacturing capacity sufficient to cover maximum demand without risk adjustment, with the highest priority placed on ‘ensuring a stable supply to all patients.’”
One program that contributed to revised forecasts was Datroway, Daiichi’s TROP2-directed ADC partnered with AstraZeneca. The therapy showed limited efficacy in second-line non-small cell lung cancer, leading to a revised FDA application before later receiving approval for a narrower EGFR-mutated patient population. Following the trial results, Daiichi and AstraZeneca modified several phase 3 studies, including the Avanzar trial in first-line non-small cell lung cancer, to include analyses of an artificial intelligence-enabled TROP2 biomarker as a primary endpoint.
During AstraZeneca’s first-quarter earnings call, oncology research and development head Susan Galbraith said data from several studies showed improvements in progression-free survival and overall survival among biomarker-positive patients in first-line settings, both as monotherapy and in combination with immuno-oncology treatments.
Another Daiichi ADC program facing delays is patritumab deruxtecan, developed with Merck & Co. The HER3-directed therapy encountered regulatory setbacks after the FDA rejected the application in 2024 because of manufacturing issues at a contractor facility. The companies later withdrew the filing after the treatment missed an overall survival target in EGFR-mutated non-small cell lung cancer.
Meanwhile, ifinatamab deruxtecan, another ADC partnered with Merck, is awaiting an FDA decision by Oct. 10, 2026, for previously treated extensive-stage small cell lung cancer, although competition among B7-H3-targeted therapies continues to increase.
As part of the revised manufacturing strategy, Daiichi also decided to discontinue planned investment in ADC-related equipment at its Odawara site, resulting in the one-time charge of 19.3 billion yen. The company is also stopping production expansion in Japan while investing up to 56 billion yen ($351 million) in additional facilities at its Ohio plant.
Daiichi is expected to report its official fiscal year 2025 financial results and a new five-year business plan on May 11.
Daiichi Adjusts ADC Supply Strategy Amid Changing Market Forecasts
Daiichi Sankyo has revised its antibody-drug conjugate (ADC) supply plans following updated forecasts for cancer drug demand. The move reflects changing expectations in the oncology market as pharmaceutical companies continue adapting manufacturing strategies to evolving healthcare needs.
The updated planning approach is expected to help Daiichi better align production capacity with anticipated global demand for its oncology therapies. Industry analysts view the decision as part of broader efforts to improve operational efficiency and manage long-term growth opportunities within the cancer treatment sector.
Daiichi Focuses on Flexible Oncology Manufacturing
The latest adjustments highlight how Daiichi is responding to rapidly changing conditions in the global pharmaceutical market. Demand forecasts for cancer therapies can shift due to competition, regulatory developments, clinical trial outcomes, and healthcare spending trends.
By revising supply plans, Daiichi aims to maintain flexibility while supporting continued investment in advanced oncology programs. The company remains focused on strengthening its position in the growing ADC market, which has become one of the most competitive areas in cancer drug development.
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