Ajinomoto (2802) Investor Day 2024 summary

Strategic direction and growth outlook

• The 2030 roadmap aims for exponential growth in biopharma, with Forge Biologics as a key driver, targeting significant expansion in the CDMO business and gene therapy manufacturing capabilities.

• The acquisition and integration of Forge Biologics strengthens the group’s position in gene therapy, enabling business synergies and leveraging proprietary technologies like Ignition Cells™ and PEMBR™.

• A synergy team has been launched to promote joint R&D, optimize manufacturing processes, and consolidate API and plasmid manufacturing at Forge, leveraging Ajinomoto's global network.

• The integration of Forge has led to management succession, with a new CEO focused on operational excellence and advancing clients to late-stage and commercial manufacturing.

• The gene therapy CDMO market is forecasted to grow from $7 billion to $46 billion by 2030, with Forge positioned to capture growth across rare and non-rare disease segments.

Financial guidance and growth targets

• Forge is expected to surpass JPY 10 billion in sales in 2024, with a projected operating loss of JPY 7.5 billion, but aims for EBITDA profitability in 2025 as order volumes and production stabilize.

• Ajinomoto targets a CAGR of over 10% in healthcare business profit from FY2021 to FY2030, aiming for ROIC around 17%.

• CDMO business revenue is projected to triple by FY2030 compared to FY2022, with Forge's sales expected to grow over 2x in FY2024 and about 12x by FY2030.

• Orders for Forge in April–July FY2024 were approximately 2.5 times higher than the same period last year, reflecting strong market demand.

• Forge’s business profit loss in FY2024 is due to amortization of intangible assets, with EBITDA targeted to turn positive in FY2025.

Business operations and technology

• Forge operates the world’s largest AAV manufacturing facility, with 20 GMP suites and two 5,000-L bioreactors, enabling large-scale, high-quality gene therapy production.

• Proprietary technologies, such as the pEMBR helper plasmid and Ignition Cells, improve yield and allow for the production of larger gene constructs, supporting a broad range of therapeutic applications.

• The company’s main revenue currently comes from clinical-grade GMP production, with commercial manufacturing expected as client therapies advance to late-stage trials and approvals.

• Supply chain optimization included transferring drug substance manufacturing from Ajinomoto Althea to Forge, resulting in cost reductions and enhanced production capacity.

• The facility is designed for future expansion, with robust infrastructure and quality systems to support regulatory compliance and scalability.