Eisai Stock

It is now time. We would like to begin the briefing session on the financial results from Q1 fiscal 2026 of Eisai Co., Ltd. Today, this will be held in hybrid format, including in-person attendance and online attendance. Please download the materials from the website.

I would like to introduce the speakers today, Mr. Keisuke Naito, COO and Chief Growth Officer; and Mr. Takuya Oyama, CFO and Chief IR Officer. First, Mr. Oyama, CFO, will present the financial results, after which Mr. Naito, COO, will report on the overall business.

Mr. Oyama, CFO, please.

Everyone, thank you very much for gathering to attend this session out of your busy schedule. Let me begin with our financial highlights for the first quarter of fiscal year 2026. Revenue for the first quarter of fiscal year 2026 was JPY 234.3 billion, a 15.6% increase from a year earlier. The Pharmaceutical business, which is our organic business, grew significantly, achieving double-digit revenue growth. Operating profit reached JPY 24.7 billion, a 19.2% increase year-on-year. This double-digit increase was achieved, thanks to significant global growth in our major products, Lenvima, Dayvigo and LEQEMBI. Progress towards our 2026 performance forecast is steady with revenue at 27% and operating profit at 35%.

Next slide, please. This page provides details of our consolidated financial results for the first quarter of fiscal year 2026. Revenue increased by 16% to JPY 234.3 billion, driven by the growth of our Pharmaceutical business, which is centered on our major products, 3L, Lenvima, Dayvigo and LEQEMBI. Cost of sales was JPY 51.1 billion and the cost of sales ratio to revenue was 21.8%. Although the cost ratio increased year-on-year, it was approximately controlled within the planned range through cost reduction efforts. As a result, gross profit reached JPY 183.2 billion, up 14.5% year-on-year.

R&D expenses increased by 12.7% to JPY 43.7 billion, reflecting a proactive investment of resources in next-generation key projects. Selling, general and administrative expenses increased by 14.6% to JPY 114.8 billion due to increased profit sharing expenses associated with Lenvima revenue growth and aggressive proactive investment in LEQEMBI. As a result, operating profit was JPY 24.7 billion, up 19.2%. Core operating profit was JPY 24.7 billion, a 13.9% increase. And profit for the period was JPY 18.2 billion, up 26%. Progress towards achieving the full year forecast is on track with revenue at 26.5% and operating profit and core operating profit at 35.3%.

Next slide, please. This page shows the factors that increased or decreased revenue. As shown by the 7 light blue bar from the left, revenue for our major products, 3L, Lenvima, Dayvigo and LEQEMBI increased by JPY 24.8 billion from the previous year, and revenue for our Pharmaceutical business expanded by 16% to JPY 230.9 billion. Revenue of products other than the 3L was also strong. Overall revenue increased by JPY 31.7 billion to JPY 234.3 billion.

Next slide. This page shows the factors that caused increases or decreases in operating profit. Gross profit increased by JPY 23.2 billion due to the growth of the pharmaceutical business, driven by the growth of our 3L business. R&D expenses increased by JPY 4.9 billion due to continued proactive investment in key projects such as the clinical trial of LEQEMBI for preclinical AD and the anti-MTBR tau antibody E2814.

SG&A expenses increased by JPY 14.7 billion due to higher profit sharing expenses associated with Lenvima revenue growth and proactive investment in LEQEMBI. There are no other significant factors contributing to increases or decreases in other income and expenses. As a result of the above, both operating profit and core operating profit reached JPY 24.7 billion, representing a significant increase in profit. Furthermore, while we had planned to achieve profitability on a commercial basis this fiscal year, excluding LEQEMBI's R&D expenses, we posted our first ever profit in the first quarter. Thanks to LEQEMBI's strong growth, ongoing cost control and the prioritized allocation of SG&A expenses to key markets. We will continue to work diligently towards achieving full year commercial base profitability.

This concludes my part. Next, our COO, Mr. Naito, will give us an update on our business. COO, Naito, please.

From here, I will explain the recent business progress and the pipeline that will support medium- to long-term growth. First, I will present business updates for the 3 products, Lenvima, Dayvigo and LEQEMBI, which are driving our growth, so-called 3L products, business updates are as follows.

In particular, regarding LEQEMBI, I will explain the progress toward maximizing its value from the perspectives of IQLIK subcutaneous injection with auto-injector approved in the U.S. for initiation treatment. The establishment of a platform that connects its high dosing convenience to access to treatment, the real-world evidence supporting the long-term treatment value presented at AIC 2026 and the implementation of blood-based biomarker or BBM.

Regarding the pipeline, I will explain the progress of next-generation AD disease-modifying drugs, including the announcement of the etalanetug biomarker data presented at AIC. Furthermore, I will introduce our drug discovery aimed at realizing Make AD a curable disease, where amyloid tau and neurodegeneration are considered as an AD continuum, the orexin pathway platform and the future key events for the pipeline.

Let's talk about Lenvima. First quarter revenue reached JPY 97.3 billion, up 16% year-on-year. In addition to the impact of exchange rates, sustained demand growth, particularly in the United States is driving this growth. In the U.S., it continues to hold a top market share in the TKI market for renal cell carcinoma, endometrial cancer, hepatocellular carcinoma and thyroid cancer. 11 years after its launch, it has grown into a strong revenue foundation for our company, contributing to approximately 620,000 patients in 83 countries.

The addition of a new indication based on the results of LITESPARK-11 on patients with advanced renal cell carcinoma with prior treatment with anti-PD-1 or PD-L1 therapies is scheduled to reach a PDUFA action date, the target deadline for FDA's review in the U.S. on October 4, 2026. We aim to achieve our full year forecast of JPY 345 billion through both the sustained growth of existing indications and the expansion of indications through life cycle management.

Next is Dayvigo. First quarter revenue reached JPY 18.9 billion, up 38% year-on-year with growth across all regions. We are on track to achieve our full year forecast of JPY 73.5 billion. In Japan, supported by its ability to improve both sleep onset and sleep maintenance, it has maintained the #1 market share in both sales and the number of patients treated in the dual orexin receptor antagonist segment according to our estimate based on JMTC data. It has continued the steady growth in the U.S., Canada and China as well. Furthermore, in July, we submitted applications for approval in the U.K. and Europe for the treatment of chronic insomnia. Having already been approved in 29 countries and territories, it will further accelerate growth as a global brand. The knowledge we've gained in orexin drug discovery with Dayvigo is also leading to our next-generation orexin platform, which I will explain later.

Next, please. Next is LEQEMBI. First quarter revenue reached JPY 29.3 billion, up 27% year-on-year. Excluding our estimated temporary impact of stockpiling by distributors in China that occurred in the same period last year, revenue increased by 64% year-on-year, indicating continued strong growth on a real demand basis. In the United States, in particular, supported by the increase in the number of patients with early AD and the expansion of blood biomarker testing volumes, LEQEMBI continued to grow, maintaining its leading share in terms of the number of patients treated based on our estimates. Furthermore, on July 13, LEQEMBI IQLIK was approved by FDA for initiation treatment.

In Japan, demand is expanding while absorbing the impact of drug price revisions. In China, reimbursement has commenced under several commercial insurance programs and negotiations with authorities for reimbursement are ongoing in various countries across EMEA. Currently, we have obtained approval in 53 countries and territories for early AD. We aim to achieve our full year forecast of JPY 143.5 billion by leveraging new technological innovations such as IQLIK and BBM to drive growth.

I would now like to share with you our efforts to maximize the value of LEQEMBI. LEQEMBI is the only anti-A-beta antibody that can be administered long term that suppresses the disease progression as well as slows the decline in cognitive function and activities of daily living. In the United States, on July 13, IQLIK initiation treatment approval was granted and sales is expected to begin in late August.

With this approval, from the start of the treatment, patients are able to choose from IV or IQLIK. From the initiation therapy to maintenance treatment, treatment options can be offered based on patient circumstances. The major value of IQLIK comes not only from its new formulation, but after two consecutive treatments under the direct guidance of health care professionals, home administration becomes possible for patients when deemed appropriate. This reduces the burden to travel to clinics for patients and care partners. It also is expected to reduce burden on medical institutions in terms of infusion-related human resource and equipment need.

At AAIC 2026, modeling and simulation-based analysis was presented showing equivalent exposure between once-weekly subcutaneous and IV treatment and projected equivalency of clinical efficacy and amyloid removal, exposure-related AEs are projected to be similar to IV administration and the safety profile of SA administration is generally similar to IV. According to the device evaluation, 94% responded that it is easy to use. We believe IQLIK will expand the treatment options for patients, making LEQEMBI treatment easier to start and to stay on.

On the other hand, approval and sales of products alone do not lead to the start of actual treatment. To translate convenience offered by IQLIK to improve patient access and LEQEMBI growth, development of three key foundations is important. First, streamlining the treatment access, including coverage and reimbursement and prior authorization. Second, standardization of diagnosis and treatment initiation flow from testing to documentation of results, benefits verification for each patient and coordination with specialty pharmacies. Third, enhanced support structure for home administration and treatment continuation, including drug delivery, administration cleaning, storage and continuous shipping management and sending of reminders about drug administration and MRI.

Our aim is to establish conditions not only for clinics to prescribe LEQEMBI but for patients to actually start receiving treatment and continue with treatment. Towards the launch in late August, we will proceed in collaboration with the payers, medical institutions and specialty pharmacies to ensure the establishment of the three key foundations. We will translate the convenience of IQLIK into better patient access and advance LEQEMBI into the next phase of medium-term growth.

Next, turning to real-world data that demonstrates long-term treatment continuation. This is not RCT, but this is an observation data using chart. At AAIC 2026, LEADER study data from 432 early AD patients across 13 clinical practices in the U.S. was presented, 82.5% of patients whose disease stage were evaluated were stable or improved. Treatment retention rate was 86.6% at the time of chart extraction of all 432 patients. Safety observations were consistent with the FDA-approved label. Most area events were asymptomatic or mild on imaging. There were no reports of macro hemorrhage or treatment-related deaths.

Among 204 patients treated for more than 18 months who continue to be on treatment at the time of chart extraction, 161 or 78.9% transitioned to maintenance treatment with IQLIK or IV and remains on treatment. Based on these, we consider the data to be important real-world evidence that supports LEQEMBI treatment continuation, consistency in safety and the current usage of maintenance therapy.

To maximize treatment opportunities with LEQEMBI, it is important to standardize A-beta diagnosis and to improve patient access. Blood-based biomarkers put less burden physically on bodies and can alleviate geographic constraints and PET and CSF testing capacity constraints.

By using BBM as triage, PET and CSF A-beta positivity rates can be increased to efficiently use limited testing resource. BBMs that satisfy certain performance standards may be a means of A-beta pathology confirmation in place of PET or CSF.

According to estimates by Eisai in the U.S., BBM tests increased the number by 75% in fiscal '25 year-on-year. The ratio of BBM in A-beta confirmatory testing is expected to increase from 15% in fiscal '25 to around 50% in fiscal '28.

The environment surrounding BBM is rapidly becoming ready, centering around p-Tau217 in the U.S., Europe and Japan, there has been progress in approval, regulatory filing and commercial testing availability. Development of guidelines and treatment infrastructure is accelerating. With BBM, we aim to expand the base of patients who will seek diagnosis and reduce time required for diagnosis to expand LEQEMBI treatment initiation opportunities. The combination of BBM for diagnosis and IQLIK for treatment are expected to improve the overall flow from diagnosis to treatment continuation for patients.

I would now like to turn to the next-generation AD drug discovery. Etalanetug is at the core of tau aggregates and targets MTBR tau responsible for tau propagation. Through binding with tau Cs, etalanetug promotes removal of microglia to suppress tau -- removal in microglia to suppress tau propagation and aggregation. 103 Study in dominantly inherited Alzheimer's disease, patients achieved 62% reduction of eMTBR-tau243 in CSF in 3 months and 89% reduction in 9 months. 78% reduction in plasma in 3 months and over 90% reduction in 9 months were also observed, demonstrating consistent changes in biomarkers in both CSF and plasma.

In tau PET, the tendency of suppressing progress on reducing tau pathology was also observed in each participant. As of now, these do not demonstrate efficacy in clinical symptoms, but we believe that lowering of eMTBR-tau243 and tau PET tendency support, the effect on tau pathology targeted by etalanetug, and we believe that proof of mechanism was obtained. As presented at AAIC, plasma eMTBR-tau243 may potentially be used as blood biomarker for more convenient way to evaluate tau pathology in the brain.

The next important data to consider will be the top line data from Phase II study in sporadic AD patients expected in fiscal 2027 and from tau next-gen study expected in fiscal 2028.

About tau and etalanetug, I have just discussed, but AD progression is considered in 3 domains of A-amyloid, T-tau and N-neurodegeneration. As we pursue the next-generation drug discovery regarding amyloid in AHEAD3-45 study in preclinical AD patients before the onset of cognitive symptoms to demonstrate the AD would not develop LEQEMBI is tested. This is a Phase III study designed based on FDA and EMA guidance. We expect to obtain data in fiscal '28.

Preclinical AD population is estimated to be 400 million globally, but not all will be target patients. Considering testing, diagnosis and treatment access, Eisai assumes that there are approximately 2.3 million patients for AD-DMT treatment. We intend to select target patients with biomarkers and aim to respond to the unmet medical need of intervention before the onset.

As for tau, etalanetug aims to suppress disease progression through intervention of tau propagation. In the future, we expect to combine A-beta pathology control with LEQEMBI and tau pathology intervention with etalanetug. Moreover, by adding intervention in neurodegeneration and neuronal function, we aim to establish treatment approach to prevent onset and progression of AD. We call such long-term vision of combining pre-onset intervention and suppression of disease progression, make AD curable.

Next, moving on to orexin platform. Eisai has been addressing sleep wake regulation in insomnia with Dayvigo, which blocks orexin receptor. Leveraging expertise from that drug discovery, currently, we are developing ledasorexton, an in-house developed agonist, which activates orexin 2 receptor agonist. In Study 101 in patients with NT1, it was shown that single-dose administration significantly reduced excessive daytime sleepiness. At the dose that demonstrated efficacy, ledasorexton was considered well tolerated with no liver dysfunction or visual abnormalities observed.

Currently, Phase II Study 202 evaluating NT1 and NT2 in the same study is ongoing. Top line data is expected before the end of fiscal '26. The strategic significance of orexin drug discovery is not limited to insomnia treatment. Nighttime sleep is supported by Dayvigo, while daytime wakefulness is supported by ledasorexton. We are developing these from both directions. And in the future, we aim to expand the potential of drug discovery to regulation of brain function networks that support daytime functioning, including cognition, behavior and social participation. This page shows the major pipeline events and strategic positions of each project in the 3-year plan.

In neurology, after the U.S. approval of IQLIK initiation treatment approval in Japan is expected in Q2 fiscal '26. Ledasorexton Phase II top line data as well as E2025 CSF biomarker data are also expected in fiscal 2026. In the medium term, important data is expected from sporadic AD etalanetug study or 202 study in fiscal '27 and from AHEAD3-45 and tau next-gen in fiscal '28.

In oncology, for Lenvima and WELIREG combination therapy, U.S. PDUFA action date is scheduled in October 2026. Serplulimab regulatory filing in Japan and E7386 top line data are also expected. These events are linked to our 3-year plan strategy, establishing LEQEMBI as standard of care, making Dayvigo a global brand, next-generation drug discovery, including etalanetug and enhancement of oncology pipeline.

By determining the scientific and business values and success probabilities of each project based on strategic positioning, resource will be allocated and plans will be executed according to the priorities so that 3-year plan can be achieved.

I would like to summarize the key points from today before I end. In regards to management foundation, the strength of 3 growth products, namely Lenvima, Dayvigo and LEQEMBI drove year-on-year increase in both revenue and operating profit company-wide. We are making steady progress towards achieving the fiscal '26 forecast.

In terms of business growth, LEQEMBI continues to achieve sustained growth, primarily driven by the U.S., Dayvigo growth across all regions accelerated global expansion. With respect to LEQEMBI, IQLIK is offering more options for treatment. BBM is advancing diagnosis environment. Combining these advances, we are enhancing foundation to expand diagnosis and treatment access for patients.

In product development, in neurology, based on 8-year framework of continuum of amyloid tau and neurodegeneration, we are pursuing next-generation AD drug discovery. In orexin, leveraging the sleep wake regulation, we will expand drug discovery possibilities to data functions of cognition behavior and social participation.

In oncology, in addition to Lenvima, additional indications, licensing products and in-house products will be combined to enhance pipeline for the future growth. Going forward, we will continue to enhance the revenue earnings foundation with three growth products, and we will also drive growth through next-generation drug discovery. We will create a cycle of investment that links the current growth to the next phase of growth with disciplined resource allocation and steady execution to achieve sustained enhancement of corporate value.

We would now like to take questions first from the analysts and then questions from the members of the media. [Operator Instructions] I would first like to invite questions from analysts.

Mr. Yamaguchi from Citigroup.

This is Yamaguchi from Citigroup Securities. I am asked to limit the number of questions to one. Regarding the progress of Q1, I would like to ask you questions in one question. And there is a high progress against the medium-term plan and year-on-year decline was observed for the gross profit. And however, at the start of the fiscal year, I think it is a relatively good gross profit. And do you have any take on this progress against the plan as well as the gross profit and ForEx? Any better impact or positive impact from ForEx than expected? Could you please share with us?

Thank you very much for your questions. Our CFO, Oyama, is going to respond to your question.

Thank you very much for your questions. For the first quarter, given the strong growth of 3L products as well as other products and organic business continued to grow. Therefore, operating profit was better than the full year forecast. During the first quarter, our plan for the first quarter was exceeded by the actual results.

Regarding revenue, as you said, there was an impact by foreign exchange rate. But excluding ForEx impact, even after that, the results exceeded our plan. And fourth, LEQEMBI, Dayvigo and the cost ratio of key major products have been reduced. In some areas, there are prioritized launching, but in principle, organic business has continued to grow steadily.

So let me ask you one follow-up question. LEQEMBI and Dayvigo revenue has been strong. Therefore, mix has been improved. LEQEMBI and Dayvigo individually cost of sales have been reduced for each of these?

Yes, the cost for individual products have been reduced.

Compared to your expectation for the full year forecast?

We believe that we have been able to make a steady start, good start to achieve the full year forecast.

Next, Sakai-san from UBS Securities.

This is Sakai from UBS. Congratulations on the approval of IQLIK initiation treatment. About the Medicare reimbursement possibility starting from next month, what is your view? I believe that there is a window opening for document revision in August according to the information that I've heard, we will be making use of that. And although it was past deadline when approval was given, is it possible to still receive insurance reimbursement starting next month? LEQEMBI IQLIK one dose, and I believe it was the same BLA number. So ordinarily, the Medicare insurance reimbursement rather than new product reimbursement, this is additional indication. So the current reimbursement may be applied for initiation treatment. What is your current outlook?

Thank you for your question. About IQLIK initiation treatment and the question was on insurance reimbursement. Regarding maintenance treatment through medical exception, insurance reimbursement is provided. And therefore, for IQLIK initiation treatment, we believe we expect a similar scheme to be applied. And from 2027, payers will begin to list LEQEMBI in Medicare Part D formulary. In this way, we expect expansion of reimbursement. But based on priorities, we would like to work on ensuring reimbursement from major payers. I hope this addresses your question.

Thank Mr. Haruna responsible for LEQEMBI in U.S. may have additional comments.

Thank you for your question. I am Haruna responsible for LEQEMBI globally. I would like to offer some additional comments.

COO, Mr. Naito responded earlier. In particular, regarding the formulary listing, maintenance therapy and initiation therapy, we expect to have both on the formulary and initiation therapy approval was granted recently. And therefore, we expect a listing in the formulary for both maintenance and initiation therapy eventually.

I'd like to invite the next person to ask questions. From JPMorgan Securities, Mr. Wakao.

Mr. Wakao from JPMorgan. I also have a question about the U.S. situation of LEQEMBI, particularly IQLIK for initiation treatment. price and also contribution by IQLIK can be expected at this timing. Could you please elaborate on this? And WACC for IQLIK considering the news release regarding the IQLIK in the United States, 250 milligram per or $385 per vial, then that means the price can be double the price of maintenance treatment. With this pricing, do you think that you will be able to secure enough sufficient profitability?

Thank you very much for your question. Mr. Yasuno, who is in charge of the U.S. business is going to respond.

Thank you very much for your question. I am in charge of U.S. business. My name is Yasuno. First, regarding the basic concept for pricing is as follows: Basic concept is to achieve price parity between the IV and IQLIK SC, on the basis of total medical costs. IQLIK, which has been explained today, will allow patients to do the self-administration at home, which will provide convenience and also reduce the cost related to the travel as well as the burden for care partners and also it will do away with the resources at medical institutions, which will be required for IV. Therefore, these are considered to be added value. These added values are reflected on the price for the IQLIK.

On the other hand, the cost related to infusion for other costs than the drug itself in terms of IV, such as infusion procedure on a total medical cost basis, we have designed the pricing for IQLIK so that there will be no change in the copayment by the patients. And based upon these, we have come up with the pricing.

250 milligram per vial, $385 per vial, is this correct?

Yes, that is correct about WACC.

Understood. Then for maintenance, and then this shall secure the profitability. An IQLIK initiation treatment, the timing of launching the IQLIK and at which point in time do you expect this IQLIK to start contributing to your performance? Do you think that there will be signs of a contribution in the second quarter onward or even ahead?

Thank you very much for your question. Currently, IC has just been launched. In the future, the convenience of IC will exceed the IV. So the share is exceeding that of IV in the future.

In my presentation, I mentioned earlier, there will be additional optionality for patients to do the home administration and then introduction of new patient will be accelerated. And also the penetration of the BBM-based confirmatory diagnosis is going to be the key point for further penetration of LEQEMBI.

As I mentioned in the presentation, there will be a preparation and establishment of various foundations and platforms. Therefore, for patients to be able to receive the benefits of SC should be made easier by our efforts.

Have you started selling this?

Well, regarding actual situation, I'd like to ask Mr. Haruna, who is in charge of U.S. business -- global business.

My name is Haruna. I am in charge of global LEQEMBI business. I would like to respond. Regarding the commercial launch timing, it's scheduled to be late August. From that point onward, actual drugs will be delivered to patients. But having said that, the product itself has been approved already. Prescriptions can be started based upon the description of the medical institutions. When we visit the medical institutions in the United States, I see prescription has started, and we are seeing -- they are seeing increasing number of inquiries for IQLIK initiation treatment is gaining a lot of expectations throughout the United States from many medical institutions. That is the current status we see. Thank you.

On a monthly basis, you mean that you have started to see the booking of sales?

Sales have not been recorded yet, although prescriptions have started. But the IQLIK 250 milligram to be launched in the United States, which is to come around late August. So from that point onward, I believe that the sales will start to be booked.

Next, Mr. Tony Ren from Macquarie Securities.

So my question is about your effort in the U.S. to convert patients from Kisunla which is a fixed duration therapy. I understand that you have been trying to convert Kisunla patients who stopped their fixed duration therapy, but who are also concerned about redeveloping plaques, preventing them from coming back. So can you give us some color about how that effort is going?

Thank you for your question. About the share between LEQEMBI and I understood your question to be on market share between the two drugs. First of all, IQVIA and other external data are the source of market share calculation. And I would like to remind you that oftentimes, these data do not cover some of the major IDNs that prescribe LEQEMBI. And about the new patients, recently, both drugs have about 50-50 market share. However, in -- after the launch of initiation therapy IQLIK, as we have been discussing, we believe that the market share may change. And this may overlap with the earlier response, but I would like to ask Mr. Haruna responsible for global business to respond further.

Thank you for your question. As I've mentioned earlier, in initiation therapy, IQLIK was granted approval. And in the United States, doctors began to prescribe IQLIK for initiation therapy. And I feel the expectations for IQLIK. Patients may wish to have only once monthly administration, but with the at-home administration with IQLIK, not only for patients, but for health care professionals, we expect the burden will be reduced significantly. And as presented in the presentation today, we've reported on the results from LEADER study, more than 18 months, 80% or thereabouts the patients, the majority of the patients, 80% or so wish to be -- to stay on treatment and are given maintenance therapy. And so whether patients will discontinue or stay on the therapy, which was part of your question and as a matter of fact, majority of the patients wish to stay on the treatment. And what we have been consistently saying is that or our position -- a consistent position is accepted by patients and health care professionals. And with the introduction of highly convenient IQLIK, we believe that we will have greater competitive advantage. And we believe that as a result, our market share will further expand. Thank you for your question.

Yes. If I may, I just have a quick follow-up. So for the patients -- for those patients who stopped Kisunla because they've reached the end of their fixed duration therapy, have you been able to convert some of them to take maintenance LEQEMBI?

The answer is it is possible. I would like to once again ask Mr. Haruna to address that question.

As Mr. Naito, COO responded, according to the label from IV to IQLIK conversion is possible. And similarly, patients who stopped the treatment of Kisunla, it is possible to transition or convert to LEQEMBI. And in actual clinical practice, we are seeing such conversions.

Next, from Tokai Tokyo Intelligence Lab, Yoshida-san.

Tokai Tokyo Intelligence Lab, my name is Yoshida. On Slide #3, Mr. Yamaguchi asked a similar question as a follow-up, and the cost of sales ratio seems to be much lower than the plan. So what is the background for this better result? In your explanation earlier, the revenue was a bit larger than the expectation and also costs were lower than the expectation. Could you please elaborate on that? And comparing the first half and the second half, first half, do you think that the loss decreasing time for LEQEMBI, then it will accelerate the reduction of the loss. And once profitability is achieved, do you think that the recovery rate of the cost is going to be slowing down? Do you -- how do you think? Could you please give us your take on this?

Thank you very much for your question. Our CFO, Oyama, is going to respond.

Thank you very much for your questions. Cost of sales ratio was explained earlier in our response. LEQEMBI and Dayvigo individual products, cost of sales ratio were reduced. And Lenvima, Lenvima's revenue has been very strong, including the positive impact of ForEx, Lenvima's cost of sales ratio was very low, that also contributed to this better result.

Regarding LEQEMBI, regarding your point about LEQEMBI, we still have the second, third and fourth quarter where we expect to see further increase of the revenue for LEQEMBI. So towards that, we are continuing to invest SG&A expenses. And excluding the R&D expenses, we would like to secure achievement of the commercial basis profitability. So as of now, it is difficult for us to mention to -- mention any trend so far. So I hope you understand.

Could you please share with us LEQEMBI, Dayvigo, Lenvima, what is the contribution ratio by -- among these three products?

Lenvima is contributing the most. Compared to the last fiscal year, all these have stayed at almost the same level. And compared to the plan, Lenvima revenue was larger than expectation. That was a great factor for this better result.

Moving on to the next question. Hashiguchi-san from Daiwa Securities.

I'm Hashiguchi from Daiwa Securities. About vaccine drug discovery potential, you've made mention of this several times. You are conducting a study on narcolepsy, but for other indications about research and development, you've also mentioned potential research and development outside of narcolepsy indication. So regarding these indications, in ledasorexton, we will be pursuing these new indications or with a different compound, will be pursuing research and development? And regarding these indications, when do you expect to be able to begin clinical studies? What is the time line that is expected at the moment?

Thank you for those questions. Dr. Ido responsible for R&D, will respond to your question.

Thank you for your question. I'm Ido, responsible for R&D. Regarding your question, we are considering both, that will be our response. As you've referred to in your question, ledasorexton Phase II study, this is covering both narcolepsy type 1 and type 2, and this study is making steady progress and compound profile will be clearly elucidated, and we expect the top line within this fiscal year.

Based on the profile that is understood, we would like to develop plans for more detailed development in next fiscal year beyond. This is a platform, and we will also do research of biomarkers and relationship with other diseases may be indicated and what is the desired profile that is also explored -- in exploratory research and next-generation compounds will also be considered in the research and development. I hope this answers your question.

About ledasorexton drug discovery, the history of the drug discovery was presented before. I believe that a very large number of candidates were considered and one out of many candidates was identified, which gave me an impression that there is not much progress with regards to other compounds. There are compounds with different profiles that are being explored. And to what extent are you making progress in this exploratory research?

As you've mentioned in your question, we presented the drug discovery story of the initial discovery out of several hundreds of thousands, we found this compound, which was a hit. But as we continue with this development, we were able to expand the library of similar compounds, family of compounds. And we are not able to disclose information, but there are compounds with very interesting profiles. So combining that library and the biology, we are pursuing next-generation drug discovery.

From Bernstein Securities, Mr. Sogi.

Regarding IV and IQLIK, I have a question about margin profitability. The WACC basis calculation per patient per month. IQLIK can enjoy the WACC of 4.5x as much as IV. And monthly volume of API for drug. IQLIK consumes double because IQLIK uses 2x2, so 4 for 1 month. The other day, I asked you the question, COGS driver is mainly by API. So I assume that IQLIK can enjoy higher profitability than IV. On the other hand, Lenvima is shrinking in mix and then that is considered to be a driver for COGS improvement. IQLIK, IV and LEQEMBI. LEQEMBI itself as a whole is going to see better profitability going forward. Is this correct understanding?

Thank you very much for your question. My answer may be overlapping partly with what we responded. Mr. Yasuno, who is in charge of the U.S. business is going to respond to your question.

My name is Yasuno. I am in charge of U.S. business. Thank you for your assessment. Of course, the volume of IQLIK is increasing, and we, of course, expect to see lower COGS ratio. So we expect to see a better COGS rate.

Then we would like to entertain questions from the members of the media.

I'm Yoshino from Nikko I have a question on details. On Page 9, regarding LEQEMBI, maintain top share in patients receiving treatment. In what market is this anti-amyloid beta market? And maybe it is needless to mention, but could you specify market share in which market?

Thank you for your question. This is in anti-amyloid beta market. And based on claims data, this is an in-house estimate.

Any other questions from the media? [Operator Instructions]

My name is Nakada. I'm from the Nikkei Newspaper. With the weaker yen, what is going to be positive impact of the weaker yen? Or do you see any negative impact on the profitability or earnings?

CFO, Oyama is going to respond. Thank you for your question.

Thank you very much for your question. Well, with the weaker yen, what is going to be the impact on us. We have revenue -- majority of our revenue is foreign currency denominated. There is an impact on the revenue by ForEx. But on the other hand, there are R&D expenditures and others SG&A expenses on foreign currency. So for your information, revenue year-on-year, JPY 18.9 billion was the impact of ForEx. I mean this was positively impacted by ForEx.

When it comes to the SG&A and R&D expenses considered and the operating profit based upon the same ForEx, there was a JPY 1.38 billion positive impact. So out of the JPY 24.7 billion operating profit, part of which was due to ForEx impact. In principle, revenue and costs, majority of those are on foreign currency denomination, but the impact on the operating profit was limited.

Would there be any other questions?

If not, and later, if you have additional questions, please contact IR or PR. And with that, we would like to conclude today's briefing session. Thank you very much for joining us today.

It is now time. We would like to begin Investor Day corporate strategy. This is held in hybrid format, including in-person attendance and virtual attendance. Those of you who are attending in person, we have distributed presentation materials. For those of you who are participating online, please find materials on our website. Today, there will be simultaneous interpretation between Japanese and English. Those of you who are attending virtually and also in person, please select the language of your preference.

Let me introduce the presenters. Mr. Keisuke Naito, COO and Chief Growth Officer; Dr. Katsutoshi Ido, Chief Scientific Officer; Mr. Takuya Oyama, Chief Financial Officer and Chief IR Officer.

First, COO, Mr. Naito will discuss long-term vision in the 3-year plan, which is based on the long-term vision, which will be followed by presentation by Dr. Ido, Chief Scientific Officer, to discuss drug discovery R&D that supports long-term growth. And then Mr. Oyama, Chief Financial Officer, will discuss business growth and value creation, which are supported by new financial policy. And at the end, Mr. Naito, COO, will summarize the 3-year plan.

Mr. Naito, COO, please.

Hello, everyone. I am Keisuke Naito, COO for Eisai. Today, -- thank you very much for gathering to participate in this Investor Day on corporate strategy of Eisai Company Limited.

Today, I would like to talk about the long-term vision based upon how this company is supposed to spend under this long-term vision for the coming 3 years.

Next slide, please. First of all, we, at Eisai -- how Eisai has advanced the drug discovery in the field of Alzheimer's disease and how our understanding of AD has evolved. This is what I would like to explain using this slide. By advancing our drug discovery from Aricept to LEQEMBI, we have pioneered an era of addressing dementia through medical care and have further moved toward an era in which AD is understood not merely a set of symptoms, but as a disease entirety -- entity defined by biomarkers.

In the 1960s, dementia was not well understood, and the patients were treated as misunderstood and isolated individuals. Descriptions of this harsh reality can still be found in books from that era.

Later in the 1980s, the acetylcholine hypothesis was proposed. And in 1983, we began our drug discovery efforts. Then in 1996, Aricept was approved in the United States. Aricept was a major step forward in pioneering an era where dementia is addressed through medical care.

Against the backdrop of these medical advances, society's understanding of dementia also evolved. And in 2004, the term was changed from senility to dementia.

At the same time, the challenge of addressing the underlying pathology of AD was extremely difficult. In 1992, the amyloid beta hypothesis was proposed, and the drug discovery for AD disease-modifying therapies began. However, since then, 117 development projects have failed worldwide with a cumulative total of $42.5 billion invested in research and development.

Despite this, Eisai did not give up on the challenge. And in 2023, LEQEMBI was approved. This marks a major step towards an era where we can address the underlying pathology of dementia. Also in 2023, the basic act on dementia was enacted, advancing efforts to realize an inclusive society where people with dementia can live with hope. From Aricept to LEQEMBI, through the evolution of drug discovery, Eisai has pioneered an era of addressing dementia through medicine, and has further advanced toward an era where AD is understood, not merely as a set of symptoms, but as a pathophysiology defined by biomarkers. We will continue to contribute to the evolution of medical care for dementia.

Next, please. Now our next goal is to achieve the -- I have mentioned that AD is now regarded as a set of biomarkers to define the disease and ATN, now this ATN is regarded as a very important in viewing the disease dementia as a set of biomarkers describing it. Now in AD, we believe that it is a pathological condition that progress continuously even before symptoms manifests. And it is crucial to view AD not as a disease that is recognized only after symptoms appear.

In amyloid AD, amyloid beta first accumulates abnormally in the brain forming senile plaques. This appears quite early in the pathological progression of AD and it's considered an upstream event up from a downstream tau pathology and neurotoxicity. Biomarkers such as amyloid beta 42/40 and p-tau 217 are crucial for detecting this amyloid beta pathology.

Next is to tau pathology. Tau is a protein that normally stabilizes microtubules. But in AD, it undergoes abnormal phosphorylation within neurons and accumulates as neurofibrillary tangles. It is believed that the spread of tau pathology correlates more strongly with cognitive decline and symptom progression than amyloid beta itself. Here, biomarkers such as p-tau 205 and eMTBR-tau243 serve as clues for assessing tau pathology.

Further downstream, neurodegeneration progresses, leading to synaptic dysfunction, neuronal injury and brain atrophy. This is the pathological process most directly linked to cognitive decline. NfL and neurogranin are biomarkers used to assess such neurodegeneration and synaptic dysfunction. Thus, our treatment strategy is based on the premise of viewing AD as a continuum of amyloid beta pathology, tau pathology and neurodegeneration and monitoring each of these stages using biomarkers.

Next, please. The brain health panel, the data bank. Based upon the data captured through trials and relationship with the patient so far, and by utilizing BHP, we aim to capture the pathophysiology of dementia earlier and more objectively through liquid biomarkers. As I said, we assess amyloid beta pathology using Abeta 42/40 and p-tau217, tau pathology using p-tau205 and eMTBR-tau243 and neurodegeneration and synaptic dysfunction using NfL and neurogranin. Building on this, we are advancing ATN, amyloid beta tau and neurodegeneration as a treatment strategy targeting these. At the core of this strategy is LEQEMBI, an anti-amyloid beta antibody in a preclinical study stage of AD before symptoms appear. It aims to prevent the accumulation of amyloid beta and ultimately prevent the onset of AD. Furthermore, even in stages where amyloid beta has already accumulated, it aims to slow disease progression by removing the pathology.

Next is Etalanetug, an anti-tau antibody. It seeks to halt the progression of the AD by inhibiting the propagation of tau pathology.

Furthermore, E2511, a synaptic regeneron, aims to restore cognitive function by promoting the regeneration of synaptic function through TrkA stimulation. In this way, BHP visualizes the pathological mechanisms of AD and through LEQEMBI, Etalanetug and E2511, we intervene in stages targeting Abeta, tau and neurodegeneration. Under this treatment strategy, we will continue to strive to realize make AD a curable disease.

Next, please. This challenge to address the AD continuum is at the core of our long-term vision. Eisai will integrate biomarkers, data, technology and ecosystem centered on the drug discovery technologies we have cultivated to date. Through this, we aim to detect the diseases earlier and control them more precisely.

In AD, starting with LEQEMBI, we will strive to detect the disease before symptoms appear, slow its progression and ultimately move towards making it a treatable condition. In oncology, we are committed to reducing patients' anxiety and recurrence and expanding the possibilities of a cure because anxiety about recurrence has continued to be concern for anxiety for patients for many years. Furthermore, through the control of neurological conditions that end up being brain health, we will contribute not only to treating the disease itself, but also to improving the quality of life and the time people can spend living as their true selves. Our goal is to reduce the time taken away by illness and expand the time each individual can spend living their own lives. This is our long-term vision and the underlying philosophy for the 3-year plan we will explain now.

Next, please. So in order to realize this long-term vision of how we are going to spend fiscal years 2026 through 2028. You can see the simple summarization. So as I said earlier, long-term vision. For example, make AD a curable disease. E2511 will be developed to take time and costs.

So with this, now sustainable growth of the company is going to be very crucial for us over the coming 3 years. Building on the growth of LEQEMBI, we will continue to invest in our priority pipeline while strengthening our management base under new financial policy. Specifically, first, business growth, product development, and third, strengthening our management base. These are the main pillars of our plan under this 3-year plan, creating a base for sustainable growth.

On the business front, we will focus on organic growth centered on our 3L products, LEQEMBI, LENVIMA and DAYVIGO. In product development, we will work to strengthen our pipelines in the neurology and oncology field in drug discovery as well as expand our nondrug discovery efforts.

Regarding our management base, we will improve profitability and capital efficiency by enhancing cost competitiveness, strengthening headquarters functions and introducing new financial policy.

For fiscal year 2028, we are targeting revenue of JPY 1 trillion and a core operating profit of JPY 90 billion. Starting in fiscal year 2029 and onward, we will drive growth through the next-generation products following LEQEMBI and LENVIMA as well as the expansion of our pipeline. Next, please.

So it is very important for us to review what was last year's performance. FY 2025, if you look at the top left, this is what we presented at the 2004 information meeting. Here, there are various milestones as an assumption for the business milestones and how these milestones have progressed are shown here. This is a very busy slide, so let me summarize.

Overall, the strengthening the -- we made a significant progress in strengthening our growth foundation and advancing structural transformation. The 3 products, led by LEQEMBI, drove growth, and accelerate the shift to an organic revenue model that does not rely on onetime income. At the same time, we implemented structural reforms focused on SG&A expenses, internalized and standardized core IT operations through the establishment of GCC, Global Capability Center, and pursued a disciplined balance sheet management.

We also achieved several key milestones in our business. LEQEMBI grew steadily across all regions, achieving full year revenue approximately double that of the previous fiscal year. Additionally, we announced efficacy and safety data up to 48 months, obtained U.S. approval of and launched IQLIK for maintenance treatment, filed applications for initiation treatment in the U.S., Japan and China, and there was advancement in the diagnostic environment using blood-based biomarkers.

Regarding LENVIMA, we grew and maintained sales across all regions, exceeding our full year forecast for fiscal 2025. In the U.S., we achieved revenue growth while absorbing the impact of the IRA. Looking ahead, we anticipate adding a new indication of second-line treatment for renal cell carcinoma based on the LITESPARK-011 study.

In our pipeline, Phase III trials for lecanimab and Etalanetug are progressing smoothly, and we achieved LPI in the Phase II study of Etalanetug for sporadic Alzheimer's disease. We also have -- we have also initiated a Phase II study for Ledasorexton. In oncology, we have strengthened our pipeline through the in-licensing of 2 products.

Next. Here, we will discuss our long-term vision, as I have already explained. But regarding the 3-year plan, that is positioned or designed to put this long-term vision into action. We will prioritize enhancing our execution capabilities to achieve the long-term vision, managing the businesses flexibly based on multiple scenarios and ensuring highly transparent financial management and progress monitoring. Furthermore, given the significant changes in the business environment, we will not view the plan as fixed, but we'll update and roll forward annually in an optimal flexible manner, taking into account changes in the external environment.

The main point that I'd like to share with you is for the 3-year plan covering 2026 through FY 2028, how we are going to spend 3 years. And regarding this plan, this is expected to be rolled forward and we update it every year.

Next, please. As I mentioned earlier, out of the 3 main pillars, I would like to explain one after another. Regarding the business growth. We will position the 3-year progress, LEQEMBI, LENVIMA, and DAYVIGO as the core of our growth and achieve a steady revenue expansion from our existing businesses.

In FY '25, revenue was JPY 825.4 billion, and core operating profit was JPY 50.1 billion. We aim for JPY 1 trillion level in revenue and JPY 90 billion in core operating profit in FY 2028 through the growth of the 3L products. What we believe is important is the quality of profit growth. We aim to increase our core operating profit significantly. This organic growth not relating -- depending on the onetime growth or income. And furthermore, the share of 3L products in total revenue is expected to rise from about 60% in FY '25 to approximately 70% in FY 2028. By maximizing the value of these 3L products, we will achieve both top line growth and improve the profitability, thereby strengthening the foundation for sustainable growth.

From now on, I would explain the growth outlook for each of the 3L products and the business milestones that support them. First, I will discuss LEQEMBI, which serves as the starting point for growth. LEQEMBI is an anti-amyloid beta antibody eligible for long-term treatment. It shows the progression of AD -- slows the progression of AD by removing amyloid beta protofibrils and amyloid plaques, which have been reported to be neurotoxic and slows the decline in cognitive and daily functioning.

Revenue for fiscal year 2025 was JPY 88 billion. By fiscal year 2028, we expect that the prescribing physician base is expected to expand through the broader use of SC-AI, BBM for confirmatory diagnosis and the accumulation of real-world evidence.

As a result, we expect to establish a position as the standard of care in the AAT, anti-amyloid therapy, market and project sales of JPY 300 billion level.

As a business milestone for SC-AI, we expect it will be used for initiation treatment in at-home and care facility settings across many regions, advancing the home administration environment. Additionally, we aim for it to be listed in the formularies with the majority of insurance companies on the Medicare Part B in the U.S.

In terms of diagnosis and treatment pathways, we will promote the adoption of confirmatory diagnosis using BBM for amyloid beta testing with insurance reimbursement in major countries. Through DTC awareness activities, advancement in digital cognitive assessment and a confirmatory diagnosis using BBM, diagnosis in primary care setting will be expanded. And by standardizing MCI treatment, earlier consultation and referral will be facilitated. Furthermore, we expect to obtain top line results from AHEAD 3-45 study targeting preclinical AD to confirm the value of earlier treatment intervention.

Next, DAYVIGO. DAYVIGO is an orexin receptor antagonist developed from our in-house drug discovery platform targeting the orexin pathway, which is involved in regulating sleep and wakefulness. Revenue for fiscal year 2025 was JPY 64.3 billion. We aim to establish it as a blockbuster product, generating JPY 100 billion level revenue by fiscal year 2028.

To achieve this, we will maintain our position as the leading brand in the insomnia treatment market in Japan. In the Americas, including Canada, we will drive growth through commercial strategy centered on digital initiatives. In China, we anticipate a significant expansion in sales volume, following the inclusion in the NRDL, National Reimbursement Drug List. In addition, we will expand into new markets such as Europe, South Korea and Brazil, broadening our growth drivers overseas in addition to Japan.

Finally, LENVIMA. LENVIMA is an in-house developed oral multi-kinase inhibitor with 7 indications in 5 cancer types. We have expanded patient contribution with monotherapy and combination therapies with KEYTRUDA.

Revenue in Fiscal 2025 was JPY 342.5 billion. In fiscal 2028, even after taking into account LOE in various countries and impact from health care policies, we aim to achieve JPY 250 billion level of revenue.

There are 2 factors behind maintaining growth. The first is potential additional indications in aRCC based on LITESPARK-011 study. And secondly, favorable court decisions and settlement agreements related to high purity compound patent in the U.S.

Generic versions of LENVIMA are not expected to launch in the U.S. until at least July 1, 2030, unless certain other conditions occur. On the other hand, in the U.S., the impact of IRA price reduction in the U.S. is factored in. In multiple countries across Europe and Asia, sales share is expected to decline due to LOE. After taking these impacts into account, we will continue to maximize the value of LENVIMA.

Next, the second pillar, product development, in particular, strengthening of R&D pipeline, leveraging human biology, integrating data and AI, we have developed a common platform. Using that advantage, we will achieve both increased success probability in drug discovery and faster development speed. With that, we will strengthen R&D platform supporting sustainable growth. We will steadily build regulatory approval, submission, clinical introduction by fiscal 2028 by redeveloping pipeline to strengthen growth foundation.

In particular, neurology and oncology are strategic areas and we will leverage the strength of both advance development. Especially in neurology, we will develop a next generation -- we will pursue a next-generation drug discovery, in additional indication of LEQEMBI and -- by utilizing abnormal protein and orexin knowledge.

In oncology, LENVIMA value will be maximized and in-licensing development will be promoted to enhance pipeline. We will also strengthen external collaboration and exploratory work. We will also achieve improved success probability and drug discovery and enhance pipeline by utilizing AI and data foundation. It is also important to achieve growth investment and improved efficiency through partnering and by optimizing development capability and resource allocation. Necessary investment will be made and cost will be appropriately controlled to improve productivity in R&D.

In the nonpharmacological R&D, nondrug R&D, in each area, there are different anxieties. In cognitive area, in each stage of health -- in healthy state at high risk after incidents treatment, nursing care and prognosis, we are focused on these anxieties that cannot be eliminated simply with pharmacology. And these anxieties that cannot be eliminated with the drug will be confronted in our 3-year plan. And across health care, nursing care and daily living, ecosystem will be built as a platform. And we wil also promote elderly welfare domain to expand value in nursing care and home care. In ecosystem platform, cognitive function check, treatment support, data cooperation will be utilized to assist early noticing of changes, consultation, access of care and treatment. And in doing so, we will develop environment where there will be timely, easy access to medical care for people who need such care.

In elderly welfare domain, we will increase touch points with care facilities in home and accumulate daily living information to improve quality of care and improve operational efficiency due to changes in the daily life early on. To facilitate access to medical care, we will utilize these data and touch points to visualize a quantitive disease and achieve the tailored care and drug discovery insights.

In the future, it will not be limited to a cognitive dementia area, but including a sleep area, personalized medicine, boosting of pharmacological businesses and a new creation of revenue will be aimed at.

Next, to strengthen management of business, we will enhance our profitability through cost structure reform, namely under MQT, Manufacturing, Quality and Technology. CMC integrated strategy will be promoted to reform production structure and enhanced supply strategy. In doing so, production efficiency will be improved and structural cost reduction will be achieved, especially focusing on LEQEMBI, manufacturing process will be improved and production efficiency will be enhanced to improve cost competitiveness of antibody medicine. High-quality, stable supply cost competitiveness will be achieved at the same time to support higher earnings power and sustainable growth.

Next, we will optimize our management foundation. A 3L further maximization of value will be promoted through global portfolio management structure. In the past years, in 2024, 2025, global structural reform was implemented, and leveraging that impact, we will further optimize regional organization and operational structure. Eisai Knowledge Center India has GCC IT core operation in-housing and standardization will be used, leveraging GCC to advanced company-wide operations.

Financial policy is also revamped to advance capital allocation and investment decisions. Company-wide decision-making capabilities and capital efficiency will be improved.

This is a busy slide, but this is the summary of overall.

As I've mentioned at the outset, we consider in the next 3 years to be the period of solidifying foundation for long-term growth. Starting from LEQEMBI growth, we are investing in strategic pipeline and we will also pursue new financial policy. Through this, we will strengthen our management foundation to achieve sustainable growth as drug discovery company. This is the period for solidifying foundation.

The uniqueness of -- and strength of Eisai includes our past development in the area of AD. And such distinctive challenges have been taken on by Eisai, and we will continue to do so by further strengthening our competitive edge over the long term. And that will be what we will be pursuing in the next 3 years.

As for numerical targets in 2028, fiscal 2028, on a consolidated basis, JPY 1 trillion in revenue, JPY 90 billion in core operating profit are the targets. In organic business, for LEQEMBI, by utilizing SC formulation and BBM for confirmatory diagnosis, we aim to solidify the position as standard of care in AAT market and aim to achieve JPY 300 billion in sales.

DAYVIGO aims to achieve its position as blockbuster product to achieve JPY 100 billion revenue. Through continuous patient contribution, we aim to maintain JPY 250 billion level for LENVIMA. In next-generation pipeline LEQEMBI preclinical AD indication, Etalanetug, strong development will be accelerated so that we can aim to file submission in fiscal 2028.

In E2511, brain function recovery will be aimed at and orexin platform will be utilized to normalize brain function and utilizing in-licensed assets in oncology and also MRD focused in-house assets, we will enhance pipeline to support a sustainable corporate value enhancement. We will also diversify financing networks and strengthen our balance sheet management and refresh the financial policy, including revamped indicators for financial management.

Next, CSO.

This is Ido, CSO. I am Ido, and from here on, we will explain how we plan to build our next growth pipeline in the neurology and oncology area based on Eisai's deep understanding of human biology cultivated over many years.

Our R&D team will aim at continuously generating submissions, approvals and critical launches through fiscal 2028, thereby evolving and expanding our pipeline. In the neurology field, our goal is to control brain pathology and function to support brain health in the era of 100-year life span. At the core of this is, make AD a curable disease.

With LEQEMBI, we aim to prevent the disease onset by developing SC-AI and initiating treatment -- initial treatment at an earlier stage in preclinical AD.

Furthermore, we will tackle the challenge of controlling tau. One of the 2 major pathologies alongside amyloid beta to halt disease progression. Furthermore, we will expand our drug discovery efforts to include the restoration of neurological function and accumulation of abnormal proteins such as alpha-synuclein. We're also working on the control of neurological function based on sleep and wakefulness.

Building on the orexin platform established with Lemborexant, we have Ledasorexton. Ledasorexton, an orexin-2 receptor agonist. Leveraging this foundation, we will advance the creation of next-generation novel drugs.

In the oncology field, we view cancer as a continuum and aim for medical care that encompasses everything, from prevention to treatment. In addition to the indications for LENVIMA, we are advancing drug discovery centered on minimal residual disease, MRD, microscopic residual region that remained at levels undetectable by imaging after treatment.

To achieve these goals, we will concentrate resources on priority areas and combine in-house drug discovery with product in-licensing and strategic partnerships.

We will explain how we view AD and where we plan to intervene in order to realize, make AD curable disease. The figure below illustrates the progression of AD, from left to right, amyloid beta protofibrils which form due to amyloid aggregation, trigger a tau cascade involving downstream tau aggregation. Subsequently, tau aggregates mature and MTBR tau seeds propagate throughout the brain, causing neurodegeneration and resulting in cognitive decline.

We have been working to visualize this continuum. Using the brain health panel, which combines blood-based biomarkers, we aim to determine which stage of AD a patient is in and which pathological processes are active so that we can deliver the appropriate treatment at the right timing.

We're intervening this AD continuum in 4 ways that you see above.

Approach one involves early administration of lecanemab in preclinical AD to prevent the onset of the disease. Approach two uses lecanemab, which is currently approved, to slow disease progression. And after the onset of the disease, approach two through four come. And then number three is an approach that uses the anti TBR tau antibody, Etalanetug, to suppress tau propagation and halt disease progression. And the fourth approach is focuses on restoring a neural function and enhancing brain resilience.

One of the assets that will realize this concept is E2511, a small molecule designed to enhance signaling through the neurotrophic factor receptor, TrkA, and reactivate damaged neural function. We view AD as a pathological cascade involving amyloid and tau visualized pathology, including neurodegeneration, and intervene based on the patient's condition. This is the path towards make AD a curable disease, transforming AD into a more treatable disease.

Next, I will explain Etalanetug, the compound on which we are focusing our efforts in tau targeting drug discovery. In AD, the spread of tau pathology within the brain is strongly correlated with cognitive decline and the progression of clinical symptoms. As shown in the figure on the left, the key processes, the propagation in which tau aggregates forms neurofibrillary tangles and spreads to surrounding neurons. The key to this process is MTBR tau. The regions labeled R1 through R4 in the figure on the right represents the microtubule binding region, MTBR, which serves as the core of tau aggregates and plays a critical role in the propagation of the pathology.

Etalanetug is an antibody that targets pathologic -- pathogenic tau species containing this MTBR. While tau's fragments of various lengths exist outside of nerve cells, only a limited number of tau species contributed to the spread of pathology. For example, fragments from the N terminal end on the far left to the middle region are not believed to play a major role in propagation activity, and targeting them alone may not be sufficient to suppress Propagation.

Etalanetug, on the other hand, aims to directly suppress propagation between neurons by targeting the core that is released extracellularly and spreads tau pathology. Its key feature is that it targets the specific steps of pathological propagation without reducing total intracellular tau, thereby leaving physiologically necessary tau unaffected.

As we reported last year, in a Phase Ib trial involving patients with DIAD, Dominantly Inherited AD, we confirm the reductions in multiple tau pathology-related biomarkers, including MTBR-tau243, which is included in Alzheimer's Association's revised criteria as well as a decrease in tau levels, thereby achieving proof of mechanism. A Phase II trial targeting sporadic AD is currently underway, and we expect to obtain top line data during fiscal year 2027.

Next, I would like to turn to orexin drug discovery which focuses on wakefulness and sleep. Orexin is an important neurotransmitter that supports wakeful state. Narcolepsy has strong drowsiness because of the insufficient function of this. Ledasorexton E2086 is an agonist stimulating orexin-2 receptor. Lemborexant suppresses orexin signal to induce sleep, whereas Ledasorexton enhances -- aims to enhance wakeful signal during the day.

The graph on the right shows type 1 narcolepsy patient to see how long patients were able to stay awake in a sleep conducive environment. Vertical white bar is placebo, black bar is modafinil. But against placebo and modafinil, significantly sleep latency was extended, especially in 10-milligram and 25-milligram, more than 30 minutes of wakefulness was maintained, showing strong arousal promotion effect.

In once-daily administration, we aim to develop this as a drug that can support wakefulness during the day. So far, hepatic function disorder or visual disorder have not been observed.

For over 20 years, Eisai has developed orexin biology, achieving clinical POM for insomnia with Lemborexant and narcolepsy with Ledasorexton. We will link this knowledge with brain function regulation, supporting daytime activities and neurodegeneration to lead to the next discovery of new drugs.

I will now turn to modalities and technologies supporting Eisai's R&D. In this slide, I will introduce in-house developed brain penetrant shuttle that will expand the possibilities of antibody drug discovery in CNS area.

Through LEQEMBI, we have shown that we can intervene in the AD pathology with antibody. Going forward, we will further advance antibody drug discovery so that with smaller dose, effect will be delivered to targets in the brain more efficiently. Hence, proceeding with brain penetrant shuttle technology development and project development.

The shuttle antibody utilizes biological mechanism of RMT or receptor-mediated transcytosis of the living body. As shown on right in the blood vessel and at the top is blood vessel. Inside the blood vessel, they will be binding with receptor and then will be taken up in the cells and will be dissociated within endosome rapidly before released to the brain side. So efficiently antibody is shuttled.

As a delivery platform of antibody drug targeting CNS, we aim to create projects. Another is a small molecule drug. Small molecule drug discovery is increasing in value once again as a result of technological innovations in recent years. Proximity inducing molecules and RNA targeted small molecules are examples of areas where new drug discovery potential is increasing.

In CNS area, a long-term administration is necessary to reduce burdens on the patient's small molecule, which can be available orally is quite important. And we believe that small molecule will continue to be at the core of drug discovery. Eisai has strength in small molecule drug discovery and was the first company to discover the function of molecular adhesive in Indisulam and has accumulated expertise in this area. After Aricept we also have experienced launching 8 in-house small molecule drugs. In addition, in CNS, we have data accumulated over many years, which led to proprietary AI and exploration of new mechanism of action to become able to target heretofore difficult to target areas. For AD orally available small molecule disease modifier, the ultimate modality realization is aimed in our research -- ongoing research. Leveraging such strengths, we aim to create new treatment value through small molecule drug discovery.

The strength supporting Eisai's drug discovery includes clinical development capabilities in reverse translation capability, which uses human data obtained in clinical research to the next drug discovery. At the core of this is molecular profiling. Eisai has the world's highest analytical technology that can detect trace biomarkers that reflects amyloid and tau pathology in the brain.

With this technology, we are able to develop eMTBR-tau243, which is plasma biomarker, reflecting tau pathology in the brain, which before, was able to be measured only with tau-PET. And this marker is now used in clinical research.

We are also analyzing human biospecimen with mass spectrometry proteomics. The data obtained from large clinical studies are analyzed in this way to understand a molecular level effect of drugs on pathology. We are comprehensively analyzing in-house clinical study samples to realize a pharmacological value and identify targets and pathway that lead to pharmacological effect to improve success probability of next-generation drug discovery.

Another is AI usage supported by in-house clinical trial to support clinical development capabilities and algorithm that is clinically applied to predict blood biomarker in AD pathology. Etalanetug targets tau. And in the clinical trials, positive tau pathology patients have to be enrolled. Tau PET was necessary, which was time consuming and costly. So LEQEMBI clinical trial data was utilized to predict in-brain amyloid PET based on blood biomarker p-tau 217. And tau PET positive, tau propagating stage patients are screened with our proprietary algorithm, which is now used in Etalanetug study. molecular profiling and AI are used for high-precision patient selection dose setting and progression prediction to eliminate waste and conduct design of the study in efficient way, which is our strength.

Turning to oncology. In oncology, as next-generation drug discovery, we are targeting MRD or minimal residual disease. We decided to focus our efforts on this area. So I would like to introduce that. As shown in the diagram at the bottom, at the time of the diagnosis, detectable volume of cancer cells exist in the body. After surgery and pharmacological therapy, cancer cells will be diminished greatly, but the complete elimination is not achieved. In a level not detectable in imaging testing, minuscule volume of cancer cells remain, which is MRD. This proliferates and will become clinically detectable recurrence and metastasis.

MRD will inhibit cure in early-stage cancer. And after metastasis, it will lead to faster progression of the disease, hence, very important biology. Eisai is looking at this MRD biology, which became understandable through long-term treatment data of LENVIMA. And we would like to elucidate why MRD survives and how it acquires treatment resistance to identify target and hypothesis. ctDNA and other biomarker analysis, in-house clinical data, human biology will be utilized to develop treatment hypothesis targeting MRD.

In addition to in-house research, in licensing core research -- joint research will be utilized to enhance next-generation MRD pipeline.

This slide shows the progression of stage of major pipeline projects from fiscal '26 to fiscal '28. White box shows the current status and colored boxes are status that we aim to achieve in fiscal '28. In neurology, towards make AD curable, at the -- at each stage of AD continuum, there will be interventions in this multi-layered pipeline. In amyloid, we aim to achieve top line in LEQEMBI preclinical AD and new amyloid projects should be in Phase I for small molecule and brain penetrant antibody.

In tau, Etalanetug, DIAD 2 Phase II/III study on DIAD, top line results are aimed to be obtained in Sporadic AD. We also aim to steadily progress Phase III in neurodegeneration. E2511 is to be advanced to Phase II to make concrete development in the approach of neural function recovery.

In orexin targeting regulatory submission of Ledasorexton through a new and also through new projects, we would like to expand our efforts to neural state regulation, not only sleep and wakefulness, but daytime functions.

In oncology, Taletrectinib and Serplulimab approval are included in our targets. In addition to clinical team promotion, focusing on MRD biology, we would like to start in-house project in the clinical stage and through structural partnering, develop next-generation pipeline.

This is my final slide. In the next 3 years, starting with Eisai human biology, we will develop next-generation pipeline and grow them to sustainable growth drivers. For that in-house clinical data, molecular profiling and drug discovery, clinical development capabilities, modality creation capabilities cultivated in oncology and neurology area will be brought to bear. And we will thoroughly achieve regulatory submission approval and clinical introduction to lead to growth beyond 2028 -- fiscal 2028.

New financial policies will be presented by Mr. Oyama.

Myself, I, as a CFO, Oyama, is going to explain the financial section. First, on this page, I will explain our consolidated profit and loss targets for fiscal year 2028.

In fiscal year 2028, driven by the growth of the 3L products centered on LEQEMBI, we aim to achieve record high revenue of JPY 1 trillion. We project the cost of sales at JPY 300 billion and cost of sales ratio to revenue of 30%, although the cost ratio is expected to rise due to changes in the product mix, we will mitigate the increase through cost reduction measures centered on LEQEMBI.

We project R&D expenses at JPY 170 billion. While actively investing in next-generation priority development products, we will control overall expenses in the high teen percentage range through cost optimization.

We expect SG&A expenses to be JPY 440 billion. Although these expenses will fluctuate due to the profit sharing for LENVIMA and LEQEMBI, we will control them at a level comparable to fiscal 2026 by transitioning to a more efficient cost structure through structural reforms carried out primarily in Europe and the U.S. in fiscal '24 and '25.

Our FY 2028 targets do not include onetime gains. We aim for both operating profit and core operating profit to reach JPY 90 billion, targeting sustainable growth through our organic business and the establishment of profit base for the future.

As for capital efficiency metrics, we estimate an adjusted ROIC of 9% based on net debt of JPY 100 billion. While we will utilize debt for growth investments, we will control it within the target range.

Next. From now on, I will explain our new financial policy, which was partially introduced at our recent earnings call. The diagram illustrates the concept behind the new financial policy. As a general principle, we will use operating cash flow to fund our own R&D, cash, capital expenditures and shareholder returns, while allocating financial cash flow to investments in product in-licensing and M&A. We will use financing to support our growth strategy and enhance corporate value.

Next. On this page, I will first explain how we are diversifying financing sources. While the company has historically relied primarily on bank loans for funding, we are now promoting the diversification of funding sources to finance investments in in-licensed products and other initiatives aimed at further business growth. As part of this effort, we plan to issue domestic straight bonds. In preparation for our first bond issuance in 18 years since 2008, we have filed a shelf registration and made an announcement regarding the bond offering. We plan to offer bonds with maturities of 5, 7 and 10 years for a total issuance amount of JPY 50 billion, with pricing expected to be finalized early June at earliest. We are also considering multiple options, including senior and subordinated bonds denominated in yen and foreign currencies.

Going forward, we will continue to secure investment funds in a stable and flexible manner through diverse financing methods in response to market conditions and investment opportunities.

This page explains the redesign of our performance indicators. Regarding core operating profit. While we have previously referred to profit from organic business as representing ordinary profitability, we have not clearly defined this term or disclosed the specific figures. Therefore, we have decided to define core operating profit as an indicator of ordinary profitability and to disclose it. We will exclude 5 temporary income under expense items, not directly attributable to future earnings from operating profit.

In addition, with the introduction of core operating profit, we are also reviewing our capital efficiency metrics. While we have previously disclosed the target ROE, we are introducing adjusted ROIC as a metric more closely linked to medium- to long-term corporate value, and we'll use alongside ROE to monitor medium- to long-term capital efficiency. Adjusted ROIC is calculated using after-tax operating profit, excluding the impact of foreign currency translation adjustments, which are not directly linked to operating activities and adding net interest-bearing debt since the translation adjustments account for about 30% of our equity, which was impairing the comparability of ROE, we excluded from the calculation of adjusted ROIC. For fiscal 2028, we aim for core operating profit of JPY 90 billion and target an adjusted ROIC of 9%, assuming net debt of JPY 100 billion.

Turning to strengthening of balance sheet management. While utilizing debt, financial soundness will be maintained. Through 3 measures and actions, we aim to enhance capital efficiency. First, global cash management system will be made use of even more to improve efficiency of the funds and eliminate the concentration of funds via dividends and others. Second is improvement in cash conversion cycle of Eisai. This has become prolonged, mainly due to LEQEMBI. Inventory level optimization will be promoted to shorten the cycle. Third is compression of translation adjustment. Foreign currency translation adjustment has become large, and accounts for more than 30% of equity capital. Using measures such as net investment hedges, we will curb increase and promote reductions. Financial soundness KPI targets are within 0.3 net DER and within 3x net debt to EBITDA based on the assumption that debt will be used for growth investments.

Regarding capital efficiency, through the measures and actions I mentioned earlier, we target 8% ROE and adjusted ROIC of 8% to 10% in the mid- to long term to optimize capital efficiency.

This slide describes capital allocation for 3 years from fiscal 2026. In terms of capital allocation funds, our plan is JPY 800 billion level of operating cash flow before R&D expenses, JPY 80 billion level of net cash and JPY 300 billion plus level of debt capacity, assuming the issuance of senior bonds.

As for debt capacity, in addition to straight bonds, we are planning to issue in Japan, hybrid bonds are considered for the use in case of large-scale M&A.

Based on this funding, JPY 500 billion in in-house R&D and JPY 500 billion in pipeline enhancement or a total of JPY 1 trillion investment is planned. No specific project is allocated for M&A. But if there are high-quality deals that will contribute to the growth of Eisai, we will proactively consider executing M&A.

In regard to shareholder return, consolidated performance, payout ratio and free cash flow will be taken into account comprehensively to pay out dividends sustainably and stably.

This is the summary of my part. To drive sustainable corporate value enhancement, we will strongly support the R&D and business growth strategies with the new financial policy.

At the end, Mr. Naito, COO, will summarize the presentation.

This is the final summary. Eisai positions for 3 years starting from fiscal 2026 as a phase to accelerate its transformation into a sustainable growing company. As noted in the articles of incorporation, supporting the lives of the people, that long-term vision remains unchanged.

In order to realize this over a long term, sustainable growth must be achieved. And as a major part of that, we have to ensure business growth. SC-AI, BBM, RWE will be leveraged.

Starting with LEQEMBI, we will establish its position as the standard treatment in the AAT market and drive organic growth together with DAYVIGO and LENVIMA. By fiscal 2028, we aim to achieve consolidated revenue of JPY 1 trillion and core operating profit of JPY 90 billion. In drug discovery R&D, we will focus on key pillars, including the AD continuum, Abeta tau, restoration of brain function, orexin and MRD continuously generating regulatory filings, approvals and clinical implementations and nurturing the next-generation pipeline into future growth drivers.

Together with nondrug discovery R&D, we will alleviate people's anxiety and maximize the corporate value, which is a very important area of the -- of our efforts.

Under the new financial policy, we will balance growth investments and capital efficiency through diversification of funding methods, balance sheet management and the redesign of management control indicators. Over this 3-year period, Eisai will further evolve as a drug discovery company with distinctive strength transforming into an organization that captures diseases earlier, controls them more effectively and reduces the time people may lose due to illness.

That concludes our presentation. Thank you very much for your kind attention.

[Operator Instructions] Those in the venue, could you please raise your hand if you have any questions?

My name is Hashiguchi, I'm from Daiwa Securities.

Regarding cash allocation to enhance, strengthen pipeline, JPY 500 billion level will be spent over the coming 3 years. In specific area or field, are you going to put focus on in order to explore the opportunities for investment, could you please elaborate on this?

Neurology and oncology, respectively, what is going to be the split between the 2 areas? From early to late stages or what can be immediately sold? And maybe different opportunities are sought after in neurology and oncology, but could you please give us your broad take on how the investment is going to be split?

Thank you very much for your question. How are we going to invest? We have focus priority areas, as I said earlier, the neurology and oncology. This remains unchanged.

On the other hand, as you said, how are we going to allocate investments is going to be changed a little bit, particularly in AD area, which is the area where we have specialty. From Dr. Ido who explained, we have a very robust technology capabilities in-house.

On the other hand, as regards to oncology, we needed to take on the challenge to prevent the metastasis and the recurrence utilizing the capabilities. But however, as you can see, the opportunities in the later stage and development pipeline, we would like to also continue to invest. We continue to make a significant contribution in the oncology area, which we believe is very important. Therefore, we needed to continue investment in order to make it sustainable.

On the other hand, for enhancing the pipeline and M&A, these are separated advocacy. As you see in the above, the investment to enhance the pipeline, what can be sold now or close to be launched? What is available now for sale or the things in the phase close to the business realization, I think that this is the type of investment we can consider when it comes to enhancing the pipeline.

But as we mentioned earlier, orexin platform, we have drug discovery platform, which needs to be enhanced through the approaches, including the opportunities of M&A. So we would like to be -- stay alert on exploring those.

Are there any comments from Dr. Ido or Mr. Oyama?

Thank you very much for your question. As has been mentioned, we are focusing on the neurology and oncology areas. And regarding this first for oncology, which will continue to be our focus area. And later-stage development or assets close to be approved, yes, these are the focus areas. And R&D before POC asset also included in consideration in order to enhance the solid pipeline.

We will follow-up on those assets as well. And M&A is also clearly one of the options, particularly the exploratory research platform is also considered to be very important going forward.

Next question, please.

This is Wakao from JPMorgan. Fiscal '28 plan revenue, JPY 1 trillion, and JPY 90 billion of core operating profit. I have a question on this. In this just described 3-year plan, is that you will be reviewing the current business -- current state of the business and you have built a plan, which is very realistic and achievable. And the point of my question is that in the past, you had certain assumptions. In comparison to the past assumptions, how do these numbers compare? You did not indicate numbers for fiscal 2028. But according to presentation last year, in fiscal 2027, OP margin of 10% or above is to be achieved without onetime revenue.

So looking at that, based on that, it seems that you have revised numbers downward. That is my impression. Could you address this? If there were modifications, specifically, what did you revise?

Thank you for your question. Our policy is to strengthen organic business but to improve profitability. That policy remains unchanged. We discussed in reviewing fiscal 2025 that we have, including core operating profit or own capabilities or organic business in terms of organic business, we believe that we are achieving solid growth. On the other hand, as for medium- to long-term growth, we would like to enhance pipeline further. And it's not that we will be licensing out without any careful plan. And based on both of these concepts, rather than pursuing just a short-term profitability, based on onetime revenues, the -- will be strengthening organic business.

And I would like to ask Mr. Oyama, if there are any additional comments.

Thank you for your question. JPY 1 trillion and JPY 90 billion target were determined based on recent conditions, including progress in LEQEMBI and reimbursement status in Europe. As we discussed in earnings presentation session in Europe, we are -- we have developed more conservative plan for the next fiscal year. And based on that, we have reviewed the plans.

In the past, in comparison to what you have seen. In the past, when we look at the numerical values, there may have been some that might have appeared inferior. But given the current situation, we have developed these plans, which are more feasible in terms of achievement.

As a follow-up, I believe that towards best scenario, you have the next 3 years, LEQEMBI SC approval may be delayed than expected. I believe there were a number of factors. Additionally, I would like to ask you regarding your views on peak sales of LEQEMBI. Has it not changed?

We would like to limit the number of questions to one per person.

Then I will withdraw my question.

Next question, please.

This is Sakai speaking from UBS Securities. Regarding your projection of profits for medium to long term for the growth in the future, you are going to build the management base and you need -- you are going to make steadily investment over the 3 years and after the 3 years and then LENVIMA will come, it will come in 2026 and Etalanetug may be launched. At the time, as you may be working through the partnership, but therefore, you may suffer from a lower profitability. In the first and second year, the profitability may be compromised. You mentioned the dramatic growth. Of course, the top line should be growing? And what is the expectation level should we have regarding the profitability level?

Thank you very much for your question. Well, increased generation of the profit, what is most important is what is the -- one of the most important points is the reduction of costs. This antibody drug is -- will continue to be the important treatment.

E2511 is a small molecule though. So we needed to increase our skills when it comes to the manufacturing to antibody drugs. So that is where we have expectation. And in relation to this, if you have any supplementary comments, Mr. Oyama, please.

Let me make a supplementary comment. I believe that LEQEMBI is going to make contribution to profitability going forward. As we said last month, in FY '26, R&D -- excluding R&D expenses, we said that we are going to turn it around into the profitable business in FY 2026.

So going forward, blood-based biomarkers and SC-AI are coming from now on and showing the cost over sales ratio will be shown, and LEQEMBI itself is expected to grow dramatically. And in addition, we have tau and narcolepsy treatment will contribute. And oncology, I'm sure that LENVIMA sales are going to decline. So this will be made up for by the management efforts. But LEQEMBI's contribution itself is expected very much for -- when it comes to the contribution to the future profitable -- profit level.

Moving on to the next question, please.

I'm Ueda from Goldman Sachs. Regarding fiscal '28 and KPIs, I also have questions. I especially would like to ask about cost of goods and cost of manufacturing related to cost. Cost will be increased, and I believe the assumption is a rapid increase in cost of production. For LEQEMBI, is fiscal 2028 going to be the peak? As for R&D spending, in comparison to when LEQEMBI was in development, I believe it is at a lower level, but there will be more late-stage products, and there may be in-licensed products, including upfront investment, should we expect some upward adjustment possibilities? How will it cost -- how will it control cost?

Regarding R&D spending, CSO, Dr. Ido will explain; and our Chief Business Officer, Mr. Iike, who is also responsible for production, will address question regarding cost of production.

Thank you for your question. Regarding R&D spending, recently, lecanemab, LEQEMBI-related R&D expenditure is now picking out. And that is a very large factor. And next-generation Etalanetug and for Ledasorexton, there will be reallocation to these products.

In the 3-year plan that was just presented, within the amounts that were indicated, we expect the R&D investment to remain. And further, there will be further peaking out of LEQEMBI. So in the next 5 years or so, we will continue with this plan.

Next, about cost I would like to respond. This is Iike speaking. Product mix will be shifting from that centering around LENVIMA to that centering around LEQEMBI in the next 3 years.

We will see a transition of top product -- or shift of top product.

In terms of cost of goods, small molecule LENVIMA and antibody drug LEQEMBI are different. This change in the product mix is the biggest factor.

Cost of goods ratio? Cost ratio, however, can be changed with improved efficiency in antibody production and through control of production cost and volume will also increase. So there can be cost ratio -- is to be controlled. That is the assumption. But because of the product mix change, that is why we have these numbers, as I indicated before.

Are there any questions? Then we'd like to invite online participants.

Muraoka Shin from Morgan Stanley Securities, please unmute yourself and start asking your questions.

This is Muraoka of Morgan Stanley Securities. I also would like to ask a question about costs, because up to 30%, the cost ratio is going to increase to 30%. So the cost ratio of LEQEMBI be should be above 35% royalty in a single digit though. Maybe this is the other side of the same coin. Efforts to reduce costs, but this is to be manufactured, produced by Biogen. So I think there is a limit to what you can do.

And also the U.S. government's policy and the manufacturing ratio in the United States must be increased, and that may affect the cost ratio as well.

Sorry, digressed a little bit. My question is about this cost ratio to improve margin of LEQEMBI. So working on the reduction of the cost of LEQEMBI, what specifically Eisai can do? What is going to be asked to Biogen for their cooperation? Could you please elaborate more specifically?

Yes. Thank you very much. At Eisai, the production efficiency and packaging, we are considering utilizing our own in-house plants, increasing the utilization ratio of our plants in order to improve the manufacturing costs. Through collaboration between Eisai and Biogen, we would like to realize that.

Mr. Iike, do you have anything to add?

Yes. Thank you very much for your question, Muraoka-san. .

As you said, regarding the antibody part of LEQEMBI is made by Biogen now. But the culture and purification or improvements or processes are based upon our discussion, of course, led by Biogen, but these will be implemented as an improvement.

When it comes to the formulation and packaging, these will be outsourced to other companies or we are utilizing our in-house capabilities. So which will be further improved. And SC or IQLIK, we are working with Terumo. We ask Terumo to manufacture this device. And this will be scaled up through investment by Terumo. And this will contribute to the better control of the costs.

Understood. So any visible improvements? Do we have to wait until 5 years? Or do you think this can be realized within 5 years?

No, not so long. We have already seen and we have been already conducting these activities, and we will continue to do so.

Next, Mr. Yamaguchi from Citigroup Securities.

This is Yamaguchi from Citi. Can you hear me?

Yes, we can.

I have one question. About LEQEMBI , you have given an update. Last fiscal year, JPY [8 80] billion and now JPY 143.5 billion. And [JPY 250 billion to JPY 280 billion] and now JPY 300 billion in '27, it looks like this trajectory is understandable if we exclude the fiscal '27 number, but should we look at only '26, '27, '28? Fiscal '27 number, it seems that this number is off in terms of assumptions from the other numbers. It's a 3-year plan, so it shouldn't -- we paid -- should we not pay too much attention to the middle year fiscal '27 and look at the 3-year as a whole?

Thank you for your question. On a rolling basis, we will be reviewing the plan, as I have mentioned earlier. For example, amyloid therapy AAT market development will be taking into account. European reimbursement situation in terms of LEQEMBI will also be taken into consideration in describing the outlook in this trajectory. So that is the background of the change, as I have explained.

So I see that you will be revisiting the plan on a rolling basis every year?

Yes.

From Macquarie Capital Securities, Mr. Tony Ren, could you please unmute and ask your question, please?

Hello. Tony Ren from Macquarie, can you hear me?

I can hear you very well.

Okay. Perfect. Yes, thank you for taking my question. So on Slide 28, you guys mentioned -- this is probably a question for Ido-san. You mentioned using MRD, minimal residual disease for solid tumors based on experience with LEQEMBI. MRD is usually used in slow progressing indolent blood cancers. In most solid tumors, right, we would usually look at overall survival and sometimes together with progression-free survival.

So could you -- could you explain to us which cancer types do you have in mind with your MRD or ctDNA approach? So for example, would it be in colorectal cancer? Would it be in bladder cancer? And how do you think this will be used as an endpoint? Would it be added to overall survival or progression-free survival as an endpoint using clinical trials? Yes.

Thank you very much for your question. As you pointed out, this MRD is particularly used for hematological cancer. So this is discussed a lot in hematology. But we are not sticking to that. Actually, we have been utilizing the knowledge accumulated in the solid tumor so that we can focus on the same MRD in solid tumors as well.

As we explained, MRD, perioperative adjuvant before or after adjuvant, not only with that, but there are 2 significance. First one is resectable cancer. The surgery and after the local treatment, MRD will still remain and that will be removed in order to prevent the recurrence and also another advanced progressing cancer, the drug-resistant, treatment resistant residual -- drug-resistant -- drug whole persistent cancer cells. MRD remains and then this will deteriorate the prognosis, looking at our data that has been shown.

Therefore, particularly regarding LENVIMA, RCC or HCC, looking at the data and including the biomarkers of the ctDNA, that such data have been analyzed together with other companies. And utilizing such knowledge, we have been able to identify the targets, and therefore, we have decided to run the project, and we'd like to enter into the clinical stage over the 3 years to come.

Next. From Bernstein Securities, Ms. Sogi, please.

About LEQEMBI IQLIK gross margin. I have a question. IQLIK and IV, if you compare the 2, antibody volume per patient will be much larger after August, beyond August, when IQLIK. After approval, I think it will become -- RAC will become identifiable. But according to the current pricing strategy, gross margin may be much lower. After fiscal 2028, do you expect gross margin to improve?

Mr. Iike, CBO, will answer.

Ms. Sogi, thank you very much for that question. Regarding gross margin, not today, but in the near future, we would like to discuss gross margin. Prices are different. Distribution channels are also different. Therefore, it is difficult to make an apple-to-apple comparison. Gross margin that is not too inferior is what we are targeting at. But we hope to be able to discuss this at future timing.

After fiscal 2028, on a continuous basis, how do you envision? Do you think that gross margin will continue to improve even beyond fiscal 2028?

Between IV and SC formulation, the volume and how it is distributed in a country, it all depends on these. So I would like to respond at a later date.

From SMBC Nikko Securities, Wada-san, please unmute and ask your questions.

Yes, this is Wada of SMBC Nikko Securities. Can you hear me?

Yes, we can.

I have a question about R&D, next-generation small molecule drugs. Molecular glue was mentioned in your explanation, is there any pipeline project, which is in the clinical stage? It's a simple question. And is there something molecular glue can be made into a platform.

I don't think that there are many players globally who are able to roll out horizontally, the platform of molecular glue. Have you established such a molecular glue platform?

Thank you very much. Regarding the clinical pipeline, this is to be utilized for the next-generation development. Over the coming 3 years, it's included in the pipeline for the 3 year. Indisulam, which has been developed in oncology, this was found to be molecular glue. Starting from that, we have continued to accumulate our knowledge. And this is not something that we are trying to do in-house through collaboration with the University of Dundee and utilizing the synthesis capabilities and know-hows combined together with them. And also, we have a collaborative research project with start-ups and -- to make it into a platform and for running the studies. And not only the chemistry but including the biology, the compounds will be synthesized in large volume on the plates and then the biological activity will be studied and SAR will be taken in short term and our chemistry capabilities of Eisai will be combined with it so that we can make it into a platform or pipeline, more visible assets in pipelines. I hope that we can share with you more updates going forward.

Next, from the members of the media who are attending in person, we would like to take questions. If you have a question, please raise your hand. Yes, please.

I'm [Itaka] from [indiscernible]. Innovative clinical trial. I have a question on this.

I think this question is addressed to Dr. Ido. AD continuum treatment strategy mentions synapse E2511 synapse regeneration. Synapse regeneration, it's not limited to AD continuum, but wide-ranging diseases may be applicable that seems to be the case for amateur. A lay person earlier as a security analyst discussed MRD question was raised. I understand that this is still not in the clinical development stage, but what kind of drug is this going to be? What do you have in mind?

Thank you for your question. E2511, for the first time, we have presented in detail at this time. So let me introduce the background. This is TrkA NGF-receptor activation. Synapse -- similar to snaps, this is axon, which is a pathway for electricity and protein. And this axon may be weak in cells, but cholinergic neuron expressing receptor, including that there will be revitalization. And the concept is to revitalize that cholinergic activation part, including synapse and axon. AD, I think, will be the most suitable disease as an initial target.

But the underlying philosophy is that biology is common. With the same biology, we can apply same biomarkers and the final disease. What is near is DLB? What is near to AD is the DLB, lewy body dementia, included other dementia may be potential targets. And beyond that, as you've mentioned, based on biology, we would like to expand the target diseases where this can be effective.

As for the second part of the question, MRD, in in-house drug discovery, we believe we can utilize our strength in development in MRD. Small molecule, of course, will be targeted.

Is this going to be an injectable MRD drug? What is going to be the formulation?

Perhaps at a later date, we hope to be able to provide more detailed information. Orally administered drug will be more convenient for patients. So we will target that. But based on mechanism, it may differ, so we would like to discuss more in future timing.

Any other questions?

My name is Horiguchi. I'm from Nikkan Yakugyo. If possible, I would like to ask Mr. Naito, COO. The succession of COO. Earlier, COO Naito suggested that they would like to see the dramatic generation change to younger -- much younger generation. So currently, including the succession plan, what kind of discussion are -- do you have internally now? If you have anything that you were able to share with me, please?

Thank you very much. We are the company with outside independent directors. So this is not the kind of discussion which can be concluded only within -- among the people inside the organization. I hope you can understand that first.

And the representative Director and Senior Executive Officer as well as Mr. Iike, who is also -- shares the similar title, and it used to be called the information meeting, and now it is called IR Day on corporate strategy. And usually, the CEO has been leading the sessions. But today, we are representing the company, 3 of us are speaking on the company. So we are trying on different styles. I hope that you get the signs of such next-generation management style, which the whole management team is trying to explore. That is what I believe can be shared today. Thank you very much.

We'd like to take the next question, please.

I'm [indiscernible] [Tomioka] from Yakuji Nippo. It -- was not discussed during the presentation today, but if I may, I have a question, since I believe this is related to management strategy.

10% of domestic pharmaceutical business is accounted for by generic OTC drug. What is the positioning of OTC business in the next years?

Daiichi Sankyo in April, said that they will focus on new drug development and this announced sales divestiture of OTC business. In addition to pursuing new drug development, you are also engaged in OTC business. And what is the benefit? Any recent challenges that you see in OTC business as well?

Thank you for your question. This is an event that was formally called information meeting. And as much as possible, we would like to focus on what was presented in the presentation. On the other hand, I'm also -- I believe that a nondrug R&D is also very important. And if I may share my view with you, first, the -- this is the business that Eisai started with in the beginning and OTC is very important as a contact point for consumers. E2511 was discussed earlier, but in a way, Alzheimer's disease or most diseases are abnormalities, roughly speaking. And -- but more broadly, antiaging is a theme that we can pursue. From that perspective, OTC business is a very important theme. It will continue to be important for Eisai. Thank you.

Any other questions? Then we'd like to invite a person, Watazaki-san from Mix who is participating online. Could you please unmute yourself and ask questions? Because of the closing time, we would like to make it the last question.

Can you hear me?

Yes.

Regarding the management base, I have a question. MQT under the new institutional system, what is the aim of making it a new system? And the efficiency improvement? And what is going to be the integrated strategy? By improving the manufacturing efficiency, which is expected to contribute to the profitability of the company, could you please give us your view on the strategy?

Thank you very much for your question. Our -- my response may be overlapping with what we responded. So -- but again, I'd like to ask Iike-san, Chief Business Officer, to respond to your question.

Thank you for your question. So far, at Eisai, well, we say CMC, the API and formulation, R&D division and the commercial production division were separate. The corporate officer in charge was also different. Currently, Ms. Akiko Nakahama is leading both manufacturing, API formulation, starting from R&D phase to -- through getting approval until the commercial production, all managed under one umbrella. And particularly regarding biologics or antibodies, including LEQEMBI and Etalanetug is going also -- antibody drug. We needed to have a continuum, otherwise, there may be inconsistency, which may lead to inefficiency. Organizationally, that's what we would like to avoid. And Q meaning quality is also under the same organization so that we can take integrated manner to eliminate waste and establishment of supply chain from R&D through commercial production, we can adopt the consistent approach.

Do you have any specific numbers as target? When it comes to improvement of manufacturing efficiency, for example, some percentage points and so forth.

It will also depend on the product mix -- mix of -- mixture of cost ratio have been presented by Mr. Oyama today. Of course, we have more -- much more detailed analysis internally. But what we are able to present to you today is based upon the mixture of different cost ratios of different products.

With this, we would like to conclude today's Investor Day. If you have any follow-up questions, additional questions, please contact PR or IR departments of the company.

We would like to conclude today's Investor Day on corporate strategy. Thank you very much for taking time out of your busy schedule to participate today. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

It is now time. We would like to now begin the briefing session on the financial results and business update of Eisai Co., Ltd. Today, we will be conducting the briefing session in hybrid format, including in-person attendance and online live streaming. For those of you who are attending in person, we have distributed consolidated financial report, reference data and financial results presentation. If you are attending online, please refer to these materials on our website.

Let me now introduce the speakers today, Mr. Haruo Naito, Representative Corporate Officer and CEO; and Mr. Takuya Oyama, Vice President, CFO and Chief IR Officer. First, Mr. Oyama, CFO, will present the financial results. After which, Mr. Naito, CEO, will report on the overall business. Mr. Oyama, CFO, please.

Thank you very much for taking time out of your busy schedule to participate in this earnings call. Let me first share with you the financial highlights for fiscal year 2025.

Next page. Revenue for fiscal year 2025 reached JPY 825.4 billion, up 4.6% year-on-year. Pharmaceutical business, which is our organic business delivered strong growth, driving consolidated revenue to a record high. Operating profit was JPY 44.1 billion, down 18.8% year-on-year. Although there was a significant increase in the contribution of the pharmaceutical business to operating profit [indiscernible] declined due to factors such as decisions to forego product out-licensing or divestiture and the recognition of expenses related to structural reforms in Europe.

For fiscal year 2026, we are projecting increased revenue and profit with revenue of JPY 883.5 billion and operating profit of JPY 70 billion. Regarding investments for growth, we have made 2 product in-licensing investments to support further growth. Furthermore, we plan to diversify our funding sources for future investments, including issuance of corporate bonds.

Next page, please. This page provides details about our consolidated statement of income for fiscal year 2025. Revenue from the pharmaceutical business contributed significantly to the record high consolidated revenue of JPY 825.4 billion. Cost of sales was JPY 191.2 billion, and the cost of sales revenue ratio was 23.2%, up 1.8 points from the previous year. This increase was due to the changes in the product mix and the absence of out-licensing and divestitures that did not involve the cost of sales in the previous year, but it was largely controlled within the planned range. As a result, gross profit JPY 634.2 billion, a 2.2% increase year-on-year.

R&D expenses decreased by 7.6% from a year earlier to JPY 158.7 billion as the cost for clinical trials for [ Lakemba ] passed their peak. SG&A expenses totaled JPY 435.3 billion, up 6.7% year-on-year. This increase was due to factors such as proactive investment in [indiscernible] and the recognition of expenses related to structural reforms in Europe. As a result, operating profit was JPY 44.1 billion, down 18.8% from a year-on-year, and the profit for the year was JPY 38.6 billion, down 17% year-on-year, both showing a decline in profits.

As I will explain in a later slide, we are now disclosing core operating profit. Core operating profit has expanded significantly due to the contribution of our organic business to operating profit.

Next page. This page shows the revenue increase or decrease factors. As shown by the light blue bar, second from the left, our main product, 3Ls, LENVIMA, [indiscernible] and LEQEMBI grew by JPY 68.3 billion from the previous year, absorbing JPY 6. 6 Billion decrease in revenue due to factors such as [indiscernible], LOE and others, resulting in a significant expansion of revenue in our Pharmaceutical business.

In other businesses, revenue decreased by JPY 25.8 billion due to the absence of the upfront payment and others related to the transfer of rights for period in China, which took place in fiscal 2024. As a result, revenue reached a record high of JPY 825.4 billion, an increase of JPY 36 billion year-on-year.

Next page, please. This page shows the breakdown of operating profit transition. Due to strategic decisions to forgo product out-licensing or divestitures as well as inventory valuation losses resulting from the discontinuation of [ tasveric ] sales also which partially offset the effect of the growth of 3L products. Gross profit increased by no more than 13 R&D expenses decreased by JPY 13.6 billion due to the fact that LEQEMBI clinical study expenses have peaked and are now declining as well as the cost optimization resulting from structural reforms in the U.S. implemented in fiscal year 2024.

SG&A expenses increased by JPY 27.3 billion due to a proactive investment in LEQEMBI and onetime expenses related to structural reforms, mainly in Europe. Other income resulted in a decrease of JPY 9.5 billion, mainly due to the absence temporary profit following the end of a global strategic collaboration with BMS, which was recorded in fiscal year 2024. As a result, operating profit amounted to JPY 44.1 billion.

In the third quarter of fiscal year 2025, we reported operating profit of JPY 54.5 billion. At the time, we had anticipated a profit for the fourth quarter expecting that income from product out-licensing or divestiture would offset the onetime expenses related to structural reforms in Europe. However, following the third quarter -- after the third quarter earnings call, we decided to forego product out-licensing and divestitures in light of changes in the domestic and international business environment, additional restructuring costs, primarily in Europe, exceeded expectations, and we incurred an inventory valuation losses following the discontinuation of Tazverik sales.

Consequently, for the fourth quarter resulted in a loss of JPY 10.3 billion. As will be explained in the later slide, core operating profit for fiscal year 2025, excluding temporary income and expense items was JPY 50.1 billion, more than doubling compared to the previous year. In the fourth quarter of fiscal year '25 alone, it improved by JPY 5 billion year-on-year.

Next page shows the background and details regarding the introduction of core operating profit. In our third quarter financial results, we refer to the profit from our organic business as a measure of normal or ordinary earnings power. However, we did not clearly define how to treat temporary income and expenses nor did we disclose specific figures.

We have now decided to disclose core operating profit as an indicator of our fundamental earnings. In preparing this disclosure, we have refined the practices of our industry peers and clarified a definition from the perspective of objectivity and comparability. We exclude 5d items of temporary income and the expense items, not directly linked to future earnings from operating profit.

For fiscal year 2024 and '25, we have identified 3 items subject to exclusion, product [indiscernible] sensing or divestiture, disposal of tangible fixed assets and the termination benefit costs and have calculated a figure after excluding them. As a result of these adjustments, core operating profit was calculated at JPY 23.8 billion for fiscal 2024 and JPY 50.1 billion for fiscal 2025, representing more than a twofold increase in establishing a solid earnings base for fiscal year '26 onwards.

Next page. In conjunction with the introduction of core operating profit, we are also reviewing our capital efficiency indicators. While the company has previously disclosed ROE targets, we are introducing adjusted R-O-I-C, ROIC, as a metric that is more closely linked to medium- to long-term corporate value.

Adjusted ROIC is calculated using after-tax core operating profit. Excluding the impact of foreign currency translation adjustments, which are not directly linked to operating activities and adding net interest bearing debt. Since foreign currency translation adjustments account for approximately 30% of the company's equity, which had been undermining the comparability of ROE, we have excluded them from the calculation of adjusted ROIC. We estimated this figure to be 6.8% for fiscal 2025, and we aim for a range of 8% to 10% over the medium to long term, which we will monitor alongside ROE.

Next page, please. This page represents -- presents our consolidated financial forecast for fiscal 2026. We continue to pursue organic business growth centered on the 3L products, and we plan for a revenue to reach a record high of JPY 883.5 billion. While R&D expenses will increase due to forecast allocation of resources to our next-generation pipeline, we will control overall expenses at a rate in the high teens percent. Although we anticipate an efficiency improvement from structural reforms implemented in previous fiscal years, SG&A expenses are expected to increase slightly due to higher expenses regarding shared profit associated with the enhanced profitability of LEQEMBI.

Our FY '26 plan does not include onetime revenue. As a result, we are targeting operating profit and core operating profit of JPY 70 billion each. Furthermore, we target -- our target for capital efficiency is the adjusted ROIC of 8.7%.

Next page. To support further business growth, we executed 2 in-licensing investments in the oncology area during FY 2025. Preparations for the submission and the market launch are proceeding smoothly for both projects. Furthermore, to diversify our funding sources for future strategic investments, we are proceeding with preparations to issue corporate bonds. We completed the shelf registration for bond issuance in March of this year and plan to issue bonds at an appropriate time and scale, timing taking into account market conditions. This concludes my part. CEO Naito, will now provide you a business update.

Regarding the overall business, we would like to report to you. As we have heard 3L several times, what does this mean? This means LEQEMBI, [indiscernible] generic name of this is lemborexant, taking from this, and LENVIMA. These are the products which are supporting our business overall globally, taking acronym from these 3 product names. We are calling this as 3L.

For your information, logo names since [ Aricept ], we always started the 7 English alphabets constituting brand names since [ Arcep ]. So what kind of products are we talking about? For LEQEMBI, it is expected to be global #1 anti-amyloid treatment. Actually, this is the global #1 [ AAG ]. [indiscernible] is global #1 in [indiscernible] category, [indiscernible] stands for [indiscernible] receptor antagonist. And LENVIMA is now approved in the 5 cancer types. In these 5 types of cancer, this is the #1 tyrosine kinase inhibitor.

For all these 3 products, these are all global or world leaders currently and all of these have been in-house developed, which we take as we take a pride in this fact that these have been in-house developed. Now recapping LENVIMA, this is an in-house developed oral multikinase inhibitor with 7 indications in 5 cancer types, expanding with monotherapy and combination therapies with KEYTRUDA trade et cetera. And it has been 10 years since its launch and it has contributed to approximately 620,000 patients in 81 countries and territories in the world.

Please look at the left-hand side chart. JPY 342.5 billion was recorded as revenue, up 4% year-on-year from the previous year in fiscal year 2025. It has become a top brand for Eisai. The key markets are the U.S. On the right-hand side, in all regions. However, for FY 2025, it has been able to grow, particularly in the RCC advanced renal cell carcinoma has driven the growth in the United States. It was the -- including the DTC, which was launched for the first -- as the first indication in all the cancer types in the United States, LENVIMA could expand.

[ Light Spark 11 ], starting on the combination therapy for of [indiscernible] LENVIMA for RCC. In this study, we have obtained a favorable results for the improvement in the PSS and ORR. And it has shown to reduce the risk of disease progression or [indiscernible] by 30%. And on or after treatment with an anti-PD-1 or PD-L1 therapy, it is expected as a treatment for patients with ARCC, whose disease has progressed after the prior treatment.

In the -- for U.S. FDA, PDUFA action date is set for October 4, 2026. For Japan, we have also submitted and this year, JPY 345 billion about 1% year-on-year growth is as expected for this fiscal year.

Next year, [indiscernible]. This is also to recap. The natural biological regulation of sleep and wakefulness is done by orexin. Substance called orexin was found by Dr. [ Yanagisawa ] of [ Scooba ] University in Japan. As a target, the orexin receptor once it is inhibited, it will induce sleep. Orexin receptor is once organized, then wakefulness will be naturally induced. So that is the nature of this target.

[indiscernible], is the antagonist for orexin receptor. Of course, from [ Scooba ] laboratories, we developed this in-house, and this treatment has been approved in 27 countries worldwide. If you look at the graph on the left-hand side, for FY 2025, revenue was JPY 64.3 billion globally, which was up 20% year-on-year, in key markets, in Japan, our country. For this fiscal year, we expect to see continue to have -- we expect to have the continued double-digit growth.

What is happening in Japan? The number -- we have been #1 in share in terms of both the sales as well as the number of patients who are receiving this treatment. And we have generic agents available in the market, however, including that for the insomnia treatment, including those generics. [Indiscernible] is #1 in share of the market. And now the disease awareness campaign is being launched with -- in collaboration with Pokemon [ sleep ]. As you can see for all generations of population, it is said that the Japanese people are not sleeping very well.

Therefore, if we can invite more patients with insomnia to seek the medical consultation, we are currently collaborating with Pokemon Sleep and it has expanded steadily in Canada, China, Thailand as well. In the United States, this is not relaunching, However, we are going to initiate new initiatives. This is called [ TeleHealth ], utilizing so-called IT technologies to replace real in-person face-to-face services in order to provide medical consultation and treatment and diagnosis in more than 30 states in the United States. Utilizing this, we are constrained on conducting relaunching of the product.

In Europe as well in the U.K. and EMA, we plan to submit for approval. Turning to LEQEMBI. Needless to say, it is a treatment for Alzheimer's disease. It is an anti-amyloid beta antibody for long-term treatment for early AD. The polymer of amyloid bema neurotoxic amyloid beta [ protofibrils ] as well as plaque both of which are targeted by this treatment. And these are continued to be removed by these drugs. This is the only anti-amyloid treatment for suppressing both of these.

For early AD, it has been approved in 53 countries and territories in the world. The track record, please look at the bar in the middle, global revenue was JPY 88 billion, achieving almost a double growth, JPY 44.6 billion in the U.S., JPY 24.4 billion in Japan and JPY 12.4 billion in China and JPY 6.6 billion in the rest of the world. For this fiscal year, we plan to have achieve JPY 143.5 billion in revenue with 63% growth year-on-year, including the U.S. and other regions, we believe that there will be continued robust growth.

Now regarding LEQEMBI. LEQEMBI is the #1 AAT anti-amyloid treatment. It is the top brand. In comparison to this second brand, more than double sales is achieved in Japan. In the United States, approximately 1.5x as much sales is achieved. It is the major AAT. Once again, I would like to reiterate this in July 2023, in the United States, it was fully launched it was a little less than 3 years ago. It has been a long time, and it has been a short time over the past 3 years, but it has only been 3 years after the full launch.

In the meantime, we have pursued a mission, which is shown in this these 2 lines, early initiation and long-term continuation of treatment. These are considered essential for slowing disease progression in the current AD treatment framework. It is considered to be the only way. And we would like to improve awareness of this amongst specialists and HCPs and others. We have spent all our efforts in the past 3 years on improving such awareness. And I asked, I believe that there is a strong agreement to this.

I have covered this a number of times, but -- this thinking is supported by important information, which I would like to cover once again. First, [ Clarity AD ] open-label extension or 48 months active drug is given for extended period of time for 48 months, and we have data. The top line is LEQEMBI Group. The bottom 2 lines are natural progression groups, if you will, these are data from [ DME ] in the U.S. and [ biofinder ] in Europe.

As you can see here, after 48 months, slowing of decline effect is sustained and the gap between the natural progression or effect size is expanding. Steadily, the target toxic substance is being removed from the brain. As shown by this data, we are arguing for long-term continuation of treatment, and this is an important supporting information in the middle shows that earlier initiation is better.

The center left graphs are from the same [ Clarity AD ] or [indiscernible] showing the results for low [indiscernible] population with smaller accumulation of [indiscernible] MCI early stage, if you will. Looking at this, [ CDRSP], no decline. Cognitive function deterioration is not seen in 69%. In the lower graph, [ CDRSB ] improvement. There are patients of 56% -- of the patients showed improvement in cognitive function. Early initiation of treatment will bring about important treatment effect as shown by these data. On the right side, prespecified biomarker endpoint is shown. [ Amyloid PET ] data, the [indiscernible] -- how much block was removed is shown.

The point I would like to convey here is that there can be efficacy onset is quite early. The [ rail ] left side, the red bar, this is after 3 months. After 3 months, in 24% of the patients receiving the can they have turned a beta negative state. The toxic substance has already been removed. They have reached that stage. Placebo group is shown in gray in comparison to placebo group, this is a significant improvement.

LEQEMBI has early onset of efficacy, as shown by this data. On the right side, on the far right, long-term continuation of the study. But in real world, how long are patients staying with LEQEMBI Lakemba treatment? The top is the data from the U.S. after 18 months, close to 80% of the patients are continuing with LEQEMBI treatment. At 20 months, more than 70% are continuing with LEQEMBI after 2 years. As much as 67% of the patients are staying with LEQEMBI treatment.

Long-term continuation of treatment is realized in the real world as well. At the bottom, the data of Tokyo Metropolitan Geriatric Hospital and Institute of Gerontology shows that in Japan, 84% of the patients are continuing LEQEMBI treatment at 18 months. Now the topic today, the major topic today is the initiation of fundamental transformation in AD diagnosis and treatment started by LEQEMBI.

There are 2 types of technological innovations, [ BBand-based ] biomarker confirmatory usage, a beta confirmatory testing using BBM. Such technological innovation is 1 and the other is LEQEMBI [ iClick ] rather than infusion, which was a conventional method, auto-injector self-administration, that can be [indiscernible].

Technological innovation. These 2 technological innovations will be implemented in the society almost at the same time, and that is the fundamental transformation. In the past on several occasions, as I have stated on those occasions, within the AD treatment pathway, there are 2 rate limiting factors or 2 bottlenecks. One is a beta confirmatory diagnosis, how to give confirmatory diagnosis. And once treatment starts, infusion uses lot of health care resources.

So these 2 were bottlenecks. How do we remove these bottlenecks? On several occasions, I have discussed this with the 2 technological innovations, these 2 key bottlenecks are removed. The pathway has been improved fundamentally in both speed and capacity, enabling more patients to receive treatment through simpler procedure with greater convenience. This, I believe, is revolutionary.

A beta confirmatory diagnosis using BBM. This is now available with that, what kind of value is created? Simplicity. Conventional methods, PET and CSF and new BBM confirmatory diagnosis. These 3 are compared in terms of economic burden, invasiveness and ease of access. PET is not invasive, but it is quite expensive as a diagnostic method.

Medical institutions that have PET are also limited in number, which limits access. There will be a waitlist or PET is also used in oncology diagnosis. So it will have to be allocated. CSF, lumber puncture is used to collect CSF. So this is invasive. Economically, it is moderately burdensome. This medical technology technique can be used in by health care professionals or in medical institutions that are limited in number, limiting access whereas [ BBM ] is low in terms of economic burden, and it is now covered by insurance reimbursement in the United States. And only [indiscernible] sample is strong, so invasiveness is quite low.

Access is available in large sized diagnostic companies. They are adding BBM in the list of their confirmatory test. So there is a good access clinical diagnosis has become very simple and there will be a greater flow of patients seeking that can be treatment. That is how we see this. I would like to show some actual data on the left side, a [ beta 40 to 40 ][indiscernible].

How many tests of these were conducted are shown, prescreening, triage and confirmatory both are included in the number of BBM tests shown in this graph from January '24 to January '26. In just 2-year period, the number of tests increased by twofold. In half year interval from '24 -- January '24, every 6 months, it is doubling. So at a very rapid pace, BBM is increasing its penetration.

In the second bullet, a beta confirmatory test. [ CMS the 3G ] for insurance reimbursement formerly included BBM in the anti-amyloid therapy registry and reimbursement has already started. And [ AAIC ] guideline also recommends confirmatory BBM testing. If you could refer to the right side, out of all [ abeta ] confirmatory diagnosis, how much is done with BBM? That is shown in orange color.

According to our estimate, about 50% was already BBM in fiscal 2025. In this fiscal year, we believe that more BBMs for confirmatory diagnosis will be approved by the DA. So we believe there will be acceleration. And by fiscal 2028 or there around, we believe that more than half of all Abeta diagnosis will be done with BBM.

At the right bottom, for 1 year, the number of patients receiving AAT in 1 year has increased by 1.8-fold. There are numerous factors is carried out and in effectiveness evidence is also playing a role. But without doubt, BBM, age and confirmatory diagnosis usage has provided tailwind. And we believe that full scale growth of the AAT market has started. The simplicity is the value that is acquired from BBM. And to recap, a beta confirmatory diagnosis using PBM can significantly expand accessibility and its cost effectiveness would greatly simplify AD diagnosis.

Next, as for the treatment innovation or transformation, we have [indiscernible]. With [indiscernible], the value that will be brought about is convenience. Conventional administration is IV infusion and the [ fall ] is shown above. Patients will have to visit medical institutions. Currently, around 1.5 hours to 2 hours of driving is required to visit medical institutions in the United States. Oftentimes, caregivers are driving the car to take patients to the medical institution. And infusion takes about 1 hour, and this is followed by 30 minutes of follow-up.

In the meantime, nurses are allocated to monitor infusion-related reaction. And to go home the same amount of time driving car is required. And this is every 2 weeks for initiation stage and every 4 weeks during the maintenance period.

Now what is the convenience that will be brought about by [indiscernible]? Throughout the whole duration of treatment at home, self-administration is possible, be it by patients themselves or by caregivers safely comfortably at home or at nursing homes, et cetera, it will be possible to receive administration, self-administration. And the 360-milligram auto-injector, on auto-injector once a week is used for maintenance and approximately 15 seconds is the average injection time per injection.

In initiation treatment, when this starts will require 250 milligrams of 2 auto injectors, auto indexers of 250 milligrams, but it will also be 15 seconds per injection, improving convenience by a wide margin. [ I click ] maintenance therapy. This was approved in August of 2025. And what has been the effect of that approval that is shown in the 2 graphs. The point I would like to emphasize here is that IV and [indiscernible] can complement each other. Patients who are receiving IV may be switched to [indiscernible] or [indiscernible] patients maybe switched to IV treatment with a great degree of flexibility. Flexible treatment options are offered.

At left top, the orange part is [ iClick ] maintenance treatment, incremental portion because of at the convenience, this is increasing, but the IV part, the blue part is not disintegrating. It continues to grow. IV, I click. They are comparable. It is possible to switch between the 2 such flexible treatment options I believe, are welcomed. That is what is shown here. IV or [indiscernible], for both maintenance treatment, we are seeing increasing number of patients who are receiving IV or click maintenance treatment.

On the right side, with the [indiscernible] increase in maintenance treatment options, the graph shows that this has led to increase in patients receiving initial treatment using LEQEMBI. After 18 months, of initial treatment, there is a greater degree of freedom regarding the treatment modalities, lowering the hurdle to see [indiscernible] treatment. Currently, with initiation treatment, IV infusion is still used. However, [indiscernible] had the effect of increasing the number of patients receiving initial treatment of LEQEMBI. This is the projected impact of LEQEMBI [indiscernible] initiation treatment in the first year of launch. This is the estimated number of new patients.

Between the competitive product, regarding new patient, the share is around 50-50, according to our estimates, with LEQEMBI [indiscernible] initiation treatment after its approval. First, as shown historical #1, we can expect market expansion with [ iClick ] and Circle 2, we can expect increased share with LEQEMBI [indiscernible]. The reason for seeing this is that [ iClick ] by far, is very convenient in comparison to infusion.

For initial treatment patients, even lower the hurdle of seeking the B treatment, and it will also offer us a very important competitive edge. Clearly, so this is the expected impact. Currently, LEQEMBI SCAI regulatory status is shown here. For maintenance treatment, as I stated earlier, it was approved by FDA in August 2025. Initiation treatment is [indiscernible] for priority review and we recently received notification that PDUFA date was extended by 3 months as we have informed you. The approval expectation is not of all affected by this, in our view, already, data had already been submitted. And we are not requested to submit additional data.

IV and SC switching surrounding the switching between IV and SC, data has already been submitted and labeling words regarding the IVSC, which are being finalized as we understand. And what kind of interpretation is necessary in fixing that language -- those are the inquiries, the types of inquiries that we are receiving, and we are providing information accordingly.

This is not about the essence of the -- what is being reviewed. Labeling language adjustment is requiring some time. That is our understanding of the situation. And therefore, we have no concern whatsoever about the approvability of LEQEMBI [indiscernible] for that can be SCAI for initiation treatment. And 3 months is the extension time, but the full duration may not be required.

In the second quarter of this fiscal year, we expect approval in Japan and also in China, we anticipate approval in Q4 of this fiscal year. Convenience is the value acquired. And once again, to summarize, [ I click ] for maintenance treatment received FDA approval in August 2025 and has been successfully launched on the market. Currently, the insurance coverage through MAP is about 85% and introduced approximately 600 facilities and PDUFA date action date is extended, but we have no concerns about approvability.

Whilst it is approved, all medical institutions are able to provide iClick initiation treatment, lowering the barrier to initiate to with and patients who may have hesitated to receive LEQEMBI treatment -- may seek to receive initial treatment with LEQEMBI. Enhanced convenience is expected to provide a competitive advantage.

As for China and EMEA in China, commercial insurance innovative drug list was newly created, which includes LEQEMBI. Based on this, with various commercial insurers, regarding coverage for LEQEMBI, discussions are underway. And these types of insurance are called [indiscernible], under the guidance and support of the local governments commercial insurance, sell insurance and including in Beijing City, in 13 cities, the [indiscernible] on the list of insurance reimbursement.

Alipay insurance platform called [ Hao Bao]. LEQEMBI is also included here. This is a commercial insurance covering high-cost medical cost and is available nationwide. As for [indiscernible] covering advanced medical treatments. This also includes LEQEMBI. Then in commercial insurance, mainly through commercial insurance, improvement in access to treatment is achieved in China.

As for EMEA, in Germany, the U.K., Spain and Italy, negotiations with authorities for reimbursement is ongoing. This is the overview of the pipeline. Alzheimer's disease is positioned within the new degenerated ATN continuum by Eisai, amyloid tau neurodegeneration, these are 3 [indiscernible]. In all of these pathologies, we have promising pipeline. That is true of only Eisai in the world. LEQEMBI, I have discussed at length and I had preclinical AD ahead of [ 345 ] is underway, and we expect top line data in fiscal 2028, [indiscernible].

This is an excellent anti-antiboantibody in RIs, and we have 2 studies genetic Alzheimer's, hereditary Alzheimer's disease cohort Phase II/III study and sporadic AD Phase II study, both are underway smoothly. And we expect top line data in the years, as indicated here, as for neurodegenerative stage treatment, [ E2511 TRKA], integrated [ Synapsys Regeneron ] study will start. As for Orexin platform, in addition to lemborexant, [indiscernible], the agonist side of orexin for narcolepsy study is underway smoothly. We expect top line data this fiscal year in oncology, LENVIMA [ Light park 11 RCC ] and licensed in [ Talaratinib ] for Europe and for Japan, [indiscernible]. Another licensing product, we expect to file submission in fiscal 2026, respectively, and also expect results for Phase II study this fiscal year.

I would like to summarize before I end. In fiscal 2025, driven by growth in the organic business centered on the 3L products, revenue reached a record high and core operating profit increased significantly year-on-year. On the other hand, operating profit decreased due to factors such as decisions to forego product out-licensing and divestitures. In consideration of mid- to long-term corporate value growth as well as recognition of expense related to structural reforms in Europe, et cetera.

In fiscal '26, we aim to achieve record high revenue, driven by continued sales growth primarily in the 3 products or LEQEMBI with SCAI and BBM in place. We expect it is entering a true expansion phase, and we aim to enhance business profitability through continued cost control and prioritize SG&A investment in key markets. In addition, we expect improved management efficacy efficiency as a result of structural reforms implemented in prior years, mainly in the U.S. and Europe in R&D, while controlling overall expenses, we will allocate resources to priority pipeline assets including the can be in preclinical AD talent and [indiscernible] and aim to achieve operating profit of JPY 70 billion.

In parallel, we will execute proactive financing and promote investments for growth, including product in-licensing mainly in oncology to accelerate pipeline enhancement through [indiscernible] engine of in-house R&D and product in-licensing. Through these initiatives, we aim to achieve revenue expansion driven by organic business and sustainability and have sustainably enhance our corporate value. Now we would like to entertain questions.

We would like to take questions from analysts and investors who are attending in person and then from analysts and investors attending virtually and then those who are attending in person from the media. [Operator Instructions].

This is Wakao from JPMorgan. What I would like to ask you is for the year under review did not achieve the plan. Therefore, could you please why you were not able to achieve the plan? ROE was targeted at 8% level. But in the third quarter results earnings, you mentioned that the level was above the consensus and OP is estimated to be JPY 70 billion. Compared to the third quarter earnings call, it seems to be lower. ROE 8% to be achieved this year or next year. But you said that this is going to be the target for medium to long term. So I think that the projection of the company for the profit growth may have been changed. Could you please explain?

For that question, Mr. Oyama is going to explain.

Thank you very much for your question. Regarding the results below plan for fiscal year 2025. I believe you're asking about that previous fiscal year. And regarding this, it depends on the original plan. Could you please show the Page 2? So if I may, let me explain using this slide. Other income and expenses for the full year forecast, JPY 35.5 billion was planned. In addition, other income and expenses, JPY 9.5 billion was included.

At the beginning of the year, the plan was to consider -- take into account the onetime income to some extent. Up until the third quarter, these were not incurred. And the full year results included the other business results, but API sales or sales from subsidiaries are included. So almost 0 excluding those in this line. When we made the announcement of the results for the third quarter, actually, we were in the process of negotiating with the candidates.

There were several of them. But due to the changes in the environment, as assumption, we thought that it's better rather than divesting these, but rather, we should continue to keep this. for supporting the business growth from next fiscal year onwards. So onetime income was discontinued, and that is what we decided.

And these are the numbers that we have disclosed JPY 8.7 billion related to the structural reforms. -- which was also disclosed in the financial reports. And the plan at the beginning of the year was less than half of this. On the other hand, because of the changes in the situation, actually, the situation in Europe changed significantly. Compared to the original plan, the expense is related to the structural reform or rather the scale of the structural reform there was much larger. So excluding the onetime income as well as the increased more structure reform cost than expectation were the major factors.

Regarding your question about ROE. As for this target of 8%, we thought that this should have included the impact of onetime income. When we explained this 8% level target for ROE for FY '25, that's what we explained. And through thorough discussion internally, so secure the onetime. There are some projects that are under the negotiation and there are some potential candidates, but we would like to prioritize what we are able to see visibility in there are some onetime or maybe no onetime rather than explaining it as such to investors, we believe that it is more important for us to go through the more visible plan and going through that process.

As a result, ultimately, we had to present this number, not reaching the ROE 8%, but please understand that this commitment to ROA stays unchanged. In addition, compared to the time they actually -- the foreign currency translation gain has increased JPY 310 billion of FX gain was recorded this year. this may have hampered the improvement in ROE. The changes in the ForEx rate cannot be controlled by us. within our plan, but it may have contributed to the target of the companies, which is not reasonable. Therefore, I would like to say that we do not believe that we have changed our message to the market, but organic growth in that business will continue to be achieved in order to support the numbers.

If I may [indiscernible] with you. The gains on the sale, which were in negotiation last year, the probability of realization of those negotiations is decreasing? Or do you think there is any change to the projection of the profit growth, including the onetime impact? So we think you were talking about whether you're able to achieve the 8% ROE. But from next year onward, I believe that you are going to achieve the profit growth inclusive to that?

Regarding the plan for next year onward, there will be another conference to be held on the 25th of this month to explain management strategy, but organic business, we believe that we have secure base for growth, conventionally should -- in order for us to achieve the short-term boats, onetime sale may have been considered for the future growth but rather, we would like to seek the actions which will be surely contribute to the medium- to long-term growth. And please, I'm sorry to say this, but please wait until the explanation on that -- the 25th of May.

That means that there has been a change to the policy of the company, right?

Please wait until the conference. CEO Naito, please.

When it comes to the so-called individual pipeline assets, there are a divestiture or others or existing brand sale or divestiture, we decided to forgo these. But for our growth model, which includes partnering like -- with partnering with [ milk ] for LENVIMA and partnering for LEQEMBI with [indiscernible]. I believe that these are reasonable and good business models that should be adopted by the company for the future growth and reducing the -- having the costs and having the profits. Such model for a pharma company like midsized mid-pharma company like us is a reasonable growth model, in my opinion. We would like to continue to pursue such opportunities proactively. Any revenue or income from these activities will be including some onetime revenue.

These are considered to be organic income. So there are 2 separate understandings on these incomes. I am very much looking forward to hearing the management strategy conference, which seems to be very important. Within our pipeline, existing pipeline, there are promising potential items, I would say that there are several of them within the existing pipeline. So we are duly considering these potentials.

Next question. Attendee sitting on the right side, please.

I am [ Hashiguchi ] from [indiscernible]. I can see that you have high expectations regarding [indiscernible]. What is your view regarding the pricing? To the extent that you're able to please comment on the pricing.

In maintenance therapy, it is expected that there may be a switch between IV and not all patients may select IQ. And I believe there are several reasons for this. Depending on the insurance plans of the patients, [indiscernible] may lead to higher economic burdens. In some cases, I understand that, that is one of the reasons with the conventional IV in initiation and maintenance treatment, the dose is the same.

So on the whole, pricing does not change. But with [ iClick ] in initiation treatment, dosage is larger between IV and SCA foreseeing units of those, if the price is the same, then the economic burden may be felt strongly -- more strongly by switching to [ iClick]. This dosage is complex. And what is your view regarding the pricing?

Mr. Haruna will respond to your question.

Thank you for your question. I'm Haruna, responsible for the U.S. I believe your question was regarding the United States. The concept is price parity. What we have in mind is a concept is price parity, which means that the out-of-pocket payment for patients should be no different between [ iClick ] and IV infusion. You've mentioned drug pricing therapy patients have to pay for infusion procedure. So it is not limited to the cost of the drug itself. We have to take into account total medical cost and keep the economic burden the same for patients. And as CEO, Mr. Naito mentioned earlier, even if there are repeated switches between IV and SC, there should not be any change in the patient's burden. That is what we are keeping in mind.

Any other question? The person in the second row from the front.

This is [ Seki ] from UBS. More promising news Biogen, how Phase II results were announced by Biogen yesterday, [indiscernible] has been demonstrated to improve the cognitive function, [indiscernible] where it's now. What is your view of this? And [ Atlanta 202 ] study compared and except for a small number of patients, what is the possibility of the dose response?

Dr. Ido is going to respond.

I am in charge of R&D. My name is Ido, I'm going to respond to your question. As has been commented by [indiscernible] results are understood positively by us as well, which was a good data. According to the release, primary endpoint, CDR-SB, the dose response was not achieved. But [indiscernible] included that these biomarkers were shown to be significantly reduced and the suppression of [indiscernible] did decline were observed across all those groups.

This is going to be announced at the AIC. But including the Atlanta [ anti-tau ] drug development direction of such drug development, including Atlanta, it supported strongly. Our [ Atlantica ] of Eisai has been already explained several times considered to be very important for to aggregation, MTBR core region is the reason to be bounded by this. And so the propagation [indiscernible] will propagate. And that is the most important part of the [indiscernible] pathology hypothesis and also [ Atalanta ] over the high dose and also the safety has been secured, including the high-dose patients and the [indiscernible] to the [indiscernible] is considered to be affecting the cognitive function. But we have deepened our confidence in showing this mechanism to achieve this.

And our IV infusion of [indiscernible] biomarker dynamics have been already shared. Based upon the dose response manner, we have been able to see this effect is sold at the diet or the familial Alzheimer's disease patients, severe Alzheimer's disease patients. Last year, the [indiscernible] stabilization or decrease of [indiscernible] were also observed in these patients. Therefore, we have deepened our confidence in this drug. Thank you very much.

Except for the smaller number of patients, are there any dose response effect?

So separate from the biomarker response, yes. Inclusive of the cognitive function as well, we are going to monitor together with the biomarker. He is asking a question about -- so are you asking about the [indiscernible]?

Next, analyst investors who are attending virtually, we will be taking questions. First, Muraoka from Morgan Stanley and please proceed with your question.

This is Muraoka from Morgan Stanley. I have one question about the guidance for this fiscal year. [indiscernible] was extended by 3 months. Does mean that guidance is now JPY 70 billion, slightly lower than your original expectation because of this extension of PDUFA date? That is how I see this favorably. It's not true. And after approval, successfully on August 24, if that is achieved, then do you see a ramp-up from September or from January, what do you currently anticipate?

Mr. Haruna will respond to your question.

Thank you for your question. PDUFA extension by 3 months or within 3 months, but this means that we are able to make for preparations. So we positively consider this. After the actual launch, we believe that we can immediately see the effect. [ iClick ] is already on the market widely with the maintenance therapy. And once [ I click ] initiation therapy becomes available, I believe there can be growth will be accelerated. Regarding the plan, we consider a slight modification possibility, but will be limited.

Do you think that acceleration from January will be bigger than from September?

Regarding iClick, it is already receiving insurance reimbursement. In initial therapy, after launch, through MEP medical exception, we expect the insurance coverage to continue. So irrespective of the timing, we believe that there can be [indiscernible] growth will pick up.

From Citigroup Securities, Mr. Yamaguchi. Please unmute.

This is Yamaguchi of Citi. I have one question regarding [ iClick ] maintenance treatment, accelerating the expansion of [indiscernible] on Page 19. Regarding this government, I would like to ask you a question. As a result, the SC sales -- how much is it now? And for this fiscal year, the initiation of treatment is delayed a little bit as a result sales are going to be increased by that. So could you please disclose the mix between the B and C sales?

For your question, Mr. Haruna is going to respond.

Thank you for your question. If I may, could you please show the next slide? Yes. Thank you very much. Regarding the maintenance treatment for the LEQEMBI [indiscernible] maintenance treatment, exceeding the original plan, it has been strongly performing. And week by week, it is picking up. Therefore, securely the penetration or growth of the sales of [indiscernible] has been growing steadily. And once the initiation treatment is approved and launched, as CEO Naito mentioned earlier, the [indiscernible] will contribute to the expansion of market and also share of the market as well. These are the 2 points. And regarding the mix gradually, ICC ratio will exceed IV. That is what we envision. That is my response. Thank you.

Next, from [ Sanford C. ] Bernstein, Ms. Sogi, please unmute and please start.

Thank you very much. About Alzheimer's market in the future, regarding the expansion of the market, BBM confirmatory usage is important according to the presentation earlier. When we discussed with U.S. neurologists, BBM positioning is screening and often times, they say that it will be difficult to use [ PBM ] for confirmatory testing. 100% -- it's 100% reproducibility in terms of results. There may be overtreatment or under treatment for 5% to 10%. Will there be new data to reduce the gap between PET and [ B ] to lead to greater usage of BBM for confirmatory testing.

Mr. Haruna will respond.

On blood-based biomarker, BBM confirmatory testing, right now around 15% of the patients are using ABM for confirmatory testing. In comparison to last fiscal year, this is an increase of about 5%. And in a beta confirmatory testing, the proportion of PBM is increasing. That is the reality that I would like to emphasize.

Going forward, why do we expect BBM proportion to increase? First of all, CMS has officially added BBM in the registry for [ PBM ] as a confirmatory testing is added in the registry. Social implementation will advance and CMS has acknowledged or accepted the BBM confirmatory testing. There is a slight difference between PET and BBM in any of the tests about CMS or AAIC guideline as well BBM as a confirmatory testing is endorsed. In terms of market penetration, there will be newer BBM tests that are expected to be launched for confirmatory testing this year or to be approved this year. So we believe that a confirmatory testing with BBM will surely increase and it will continue to increase.

Next from Macquarie Capital Securities, Tony Ren.

Tony Ren from Macquarie. I would like to also say on the previous page on based of our markets. Slide #16. Yes, this is a very informative slide of Slide #16. When I look at this slide, what struck me on the left-hand side was the very fast uptake of [indiscernible] and basically not [ pTau-181 ] not growing much. Could you explain to us why the [indiscernible] experienced so much rapid growth and also who are -- which companies are the vendors of this test?

For your question, Mr. Haruna is going to respond.

Thank you very much for your question. On the left-hand side, BBM tests and [indiscernible] is growing so rapidly. Yes, this is partly because of the [indiscernible] was launched. So that has peaked. That has contributed to the peak. That is one reason.

And when it comes to penetration into the market, [indiscernible], single test, it's simple, and therefore, it is increasing. And that requested as is a [indiscernible] and a quest, but for Mayo and other institutions are not included in this data. So actual uptake should have been more than what is shown here in terms of the uptake in the market. So we have a high expectation to this. And going forward, BBM confirmatory test [indiscernible] related tests will become available. Therefore, we think that the penetration in this part will be accelerated further.

Next from SMBC Nikko Securities, Mr. Wada, please.

This is Wada from SMBC Nikko Securities. My question is on LEQEMBI in fiscal '26, whether it will be profitable in fiscal '26. Fiscal '26 guidance was given, and there can be, I believe, will be making the biggest contribution in the increase in revenue and then cost of sales growth are contained and that will lead to growth and profitability, as I see it. What I'm concerned about is last year, in fiscal '25, in comparison to plan SG&A has grown more. This may be partly due to proactive investment in LEQEMBI. If it is similar this year. It may offset the increase in profit. Is that a possibility?

Mr. Oyama will respond.

Thank you for your question. First, LEQEMBI fiscal '26, whether it can be turn profitable. The original plan was that excluding R&D to achieve profitability. So including R&D, we -- our plan does foresee profitability in taken. But regarding your question of increase in SG&A, please turn to Page 4, once again.

As shown on this page, proactive investment in LEQEMBI expense is JPY 20 billion, and there is also structural reform cost that has accounted for a large portion, I would like to stress that, once again, in fiscal 2026, excluding R&D, we expect LEQEMBI to become profitable and we believe that there will be substantial improvement LEQEMBI profitability in fiscal 2026. I cannot give the exact numbers at this juncture.

Next, Tokai Tokyo intelligence lab, Yoshida-san, please unmute.

Tokai Tokyo, Yoshida speaking. Thank you for this opportunity for me to ask questions. Please open page 16. I have a question about the same page. On the right-hand side, amyloid beta confirmatory tests performed and PET and the CSF for FY 2025, we will account for about half of the total number of tests performed in the U.S. What is the reason for this?

BBM diagnosis will increase in number and it is going to be add-on increase on that -- that is the perception I see. So what I would like to say is on Page 15. BBM favorable aspects of BBM are conveyed from this table. But then if that is the case, I believe that the ratio of BBM tests will be getting larger, replacing the [ CSF ] tests more optimistically. And physicians actually unexpectedly large number of offices still prefer PET imaging-based diagnosis or setting aside those physicians, the Triage will be the main usage of PBM. And then for the confirmatory testing, patency will still remain.

For your question, Mr. Haruna is going to respond.

Thank you very much for your question. Current status regarding CSF is declining slightly. Regarding PET, it stays almost flat since last fiscal year for BBM, as we explained today, and going forward, what we assume as the company is PET will stay -- continue to stay flat. And [ BPM ] will increase will be accelerated. As you pointed out, BBM is less expensive and less inventive and good access is provided.

So going forward, we believe that PBM is going to the mainstream base method. But on the other hand, the hospitals utilizing pets, they will be able to see and confirm the effects of the treatment through imaging by conducting CSF tests they will be able to have an access to the more detailed biomarkers, particularly at the teaching hospitals and academic hospitals, not only BBM and TCS demand will still remain to some extent.

Therefore, [ PCP ] or home doctors or neurologists, clinic BPM is expected to expand. But the teaching hospitals CSF and BPM will continue to be utilized in combination while we see increase in all of them.

Next, those of you who are in person from the media. If you have a question, please raise your hand. Attendee seated in the front row.

I'm [indiscernible]. Thank you for the presentation. About [ lacalumab ] treatment, [ Cognity ] function improvement, I think, is the ultimate objective. [indiscernible] report the other day said that -- and this is not limited to lecanemab, but regarding amyloid antibody, amyloid antibody reduces amyloid, but quality function improvement is not sufficient according to this coking report. In the future, what is your strategy? Will you try to see more improvement in cognitive function? Does that mean the preclinical intervention or power modality used in combination? What is your outlook? So could you share with us how you see the current situation and what your future outlook is?

I'm not aware of the report that you've mentioned. [ Lecanemab ], currently, I've shown 48-month data earlier, as shown in the data, progression is suppressed, and that is seen pathologically. [ Plug ] is removed, but [ taprotofibril ] is still toxic and therefore, new generation will advance in the presence of that a beta reduction and [ Abeta ] pathology regarding these -- we believe that lecanumab is almost the ultimate drug.

As far as modalities are concerned, in the future if small molecule oral drug becomes available, we are also considering such [indiscernible] and preclinical usefulness it may also offer preclinical usefulness. So switching to such oral modality may be required in the future. But as you are aware of, the disease is a complex disease.

And another major pathological factors, too. [ taupathology ] [indiscernible] is also examined with Atalanta in our case, and we believe that this is important in the propagation and [indiscernible] pathology trigger is a beta protofibril [ Abeta ] polymers may be also triggering til pathology. In that case, lacanumab and Atalanta in combination, we turn out to be useful. So going forward, we would like to pursue these in our consideration.

I would like to also ask Dr. Ido to offer additional response.

Thank you. If I may, I would like to offer one additional comment. Regarding the [indiscernible] review that you've mentioned, not only successful antibodies, but in the initial stage, [ solanezumab ] included those targeting monomer, all of the antibodies were included in the analysis. As CEO, Mr. Naito explained, our lecanemab, has shown significant efficacy in Phase III. Based on human biology, and we would also like to consider translating these results in small molecules in the future.

Are there any questions? A person in the second row, the [indiscernible] from the front, please.

This is [ Suzuki ] from [ Nihon Keizai Nikkei ]. [ Presenter MFN ] program. Regarding this, what kind of impact would you see on your business? What kind of scenario are you envisioning regarding this model?

For your question, Mr. Yasuno is going to respond.

Thank you very much for your question. I am in charge of our U.S. business. This is Yasuno speaking. Regarding MF and pricing, right? Yes. So far, Trump administration in the United States has announced plans, including Medicare Part B so-called, growth, for Part D, Guard, and for Medicaid, they have come up with some program.

And for Medicaid, it's a voluntary participation basis. for Globe and -- [ GERD], they just announced the plan or ideas. Therefore, currently, they are setting -- they have ended the public comment period and we do not know whether they are going to put forward the final plan. Even in the case they are going to announce the final plan, what is going to be the contents. We are waiting for further information and collecting information on this.

Anyway, once we see more visibility on the U.S. government's plan, we are preparing for such potential initiatives. Therefore, we do not believe that there will be an immediate impact from those plans. We are preparing in order to avoid any immediate impact. So for Medicaid, do you think that you are going to participate in that? Under Medicaid, we do not have many products which are utilized heavily under Medicaid. Therefore, we do not think that we are going to participate into Medicaid voluntarily.

Our next question, please.

I am [indiscernible]. The term ending March 2026 operating profit decline. I would like to ask a question for clarification as to the reason why structural reform costs in Europe was larger than expected. What are the reasons that the structural reform cost increased -- as for foregoing the strategic decision to divest our product could -- if you could, could you specify what product?

Mr. Oyama will respond.

Thank you for your question. As for structural reform costs in Europe in the beginning of the fiscal year and then -- since then, there were many changes, including reimbursement, and there were also uncertainties. And what size to implement there are differences in labor environment and legal system in each country. So it was very difficult to estimate this very accurately.

There was difficulty and also because of the difficult differences in situations that led to a bigger-than-expected structural reform cost. As for outlicensing in divestiture because these involve potential partners, it's difficult to specify not possible to mention names, but we were considering both in Japan and outside of Japan. And if these are materialized would have been significant impact. Some were postponed, some were foregoing completely.

It's close to the ending time, so we are going to take that one last question. Those of you who are raising hand now will be addressed. So the person, please at the floor.

[indiscernible] is speaking. If I may go into details in the reference material. On Page 3 and Page 9 of the reference slides, for FY '25, actual results for pharmaceutical business, main products revenue in Japan, relatively speaking and looking at the top ranking, [indiscernible] are listed here. [indiscernible] compared to a year earlier, it seems to be growing very significantly. It has been included in the top 3. But if you look at Page 9, I cannot find [indiscernible] here. So why is it [indiscernible], for FY 2025 actual results was ranked number 6 but forecast for FY '26 is increase -- improved to top 3, a 13.3% increase in profitability. So could you please explain why these are the case?

Mr. Yusa is going to explain. Excuse me, Mr. Iike is going to answer your question.

Regarding the [ Zeneca], let me answer your question about Jyseleca. In Japan, we have a partner, [indiscernible]. We are co-promoting this drug with them. So far, we have been reporting track record actual results. But regarding forecast because of the partner, we refrain from making any forecast from us. I'm sorry, my understanding is not clear.

I'm sorry, I haven't been covering a pharmaceutical company for long. So could you please teach me?

When we disclosed the forecast, for some products, which can be determined by [indiscernible], but the others by Eisai alone not. So we are able to disclose actual results. However, we are not able to show any disclosing forecast because of the partnering.

Understood. And another question is about [indiscernible]. Based on the forecast, it has been increased to the top ranking products. So how do you analyze? And what is the reason for this?

Mr. Yusa is going to respond.

Sales of mobile is increasing. And are you asking about the reason why we see such increase. Yes, I am in charge of our Japanese business [indiscernible] saying. Regarding constipation market, [ glofitamab], both grew for fiscal year 2025. The market self grew significantly and both of the trucks compared to competitors' drugs were very efficacious and the safety profile was more favorable. So that is highly evaluated. [indiscernible] at the time of testing molecule is utilized together with the testing agent. Therefore, the market is increasing and compared to other companies' products, [indiscernible] is increasing.

I'm sorry, again, for -- it is utilized in combination with tests. Could you please explain?

The lower digestive tract mobile colorectal colonoscopy patients have to [indiscernible]. So in such case, [indiscernible] is utilized for removing the thesis. So that's why we are seeing the increase in the sales.

Question for the main body of the slide deck. Could you please open Page 8, [indiscernible]. The future development in Japan. By the end of fiscal year 2026, [indiscernible] also lung cancer. The submission is planned for FY '26 in Japan. Could you please give us time line for this, if possible? When do you expect to launch this product?

For your question, Dr. Ido is going to answer. Sorry, Mr. Yusa is going to respond.

Thank you very much for your question. In Japan, regarding [indiscernible], schedule for getting approval is not disclosed yet. Having said that, for the first part of your question about lung cell cancer, [indiscernible]. We have obtained favorable data already. So in early course, we believe we will be able to proceed with the development for this indication.

I'm [indiscernible]. There was an earlier question -- a follow-up question about price in the U.S. What is the impact? Is there going to be an impact of drug class where there will be fewer new drugs launched in Japan as a result of [indiscernible] in the U.S. Most favored nation price, we do not know the final outcome yet, but for Eisai in launching new products in Japan, do you expect any impact from an price policy in the U.S. What is your outlook, please?

I'm not sure if I understood your question. If you could speak up, I would appreciate it.

I am [indiscernible] from [ Asahi Shimbun ]. I have a question regarding MF and price in the U.S., we do not know the final outcome yet, but if [ MFN ] is introduced, does that lead to fewer drugs launched in Japan that is a concern of some -- regarding the introduction of new products in Japan, what effect do you think there will be from MFN in the U.S.? Do you have any policies to address this?

Basically, as shown in our philosophy, so long as there are patients who need drugs, we deliver drugs, that is the mission of pharmaceutical company. And to fulfill that mission, we make all efforts. That is our basic stance. Having said so, regarding life science innovation, the consideration for life science innovation is appropriate consideration being paid.

Depending on the government of each country, the consideration paid oftentimes in the form of price setting, whether that is appropriate or not, there is a huge debate right now in Japan as well, similar debate should take place. That is what I believe between the United States and the U.K. as a result of bilateral negotiations, the view of the U.K. about the consideration for innovation has undergone a major change in Japan, including drug price, the consideration for innovation, should be discussed in many ways in my view. Does this address your question?

We are conscious of time. So I would like to take this offline later. It is now time to end the briefing session. If you have additional questions, please contact IR or PR section. With that, we would like to end today's presentation session. Thank you once again for your time today.

It is now time. We would like to begin fiscal results and business update session by Eisai for Q3 fiscal 2025. Today, the briefing is held in virtual format. Please find presentation materials on Eisai website.

I would now like to introduce the presenters. Today, Mr. Keisuke Naito, Representative Corporate Officer, COO and Chief Growth Officer; and Mr. Takuya Oyama, CFO and Chief IR Officer. Mr. Oyama, CFO, please.

Hello, everyone. Thank you very much for your participation today. I am Oyama, and I assumed the role of CFO and CIRO this January.

Now let me begin with the highlights of the third quarter of fiscal year 2025. Please turn to Slide 2. Revenue for the third quarter of fiscal year 2025 reached JPY 619.9 billion, a 3.1% increase year-on-year, driven by steady growth in our organic pharmaceutical business. Operating profit was JPY 54.5 billion. While this represents a decrease compared to the same period last year due to the decline of temporary profit from product out-licensing this fiscal year, the contribution to operating profit from our organic business has significantly expanded this year, showing a steady progress.

Next, regarding our pipeline. As already announced in the news release and as we will detail this later, we invested in 2 in-licensing deals that will help maintain and leverage our oncology franchise. We are progressing steadily toward achieving our full year forecast of JPY 790 billion in revenue and JPY 54.5 billion in operating profit for fiscal year 2025.

Next, I will explain the details of our consolidated results for the third quarter of FY 2025. Driven primarily by strong growth in our core products referred to as 3L's, the anticancer drug Lenvima, the insomnia treatment, DAYVIGO and the Alzheimer's disease treatment, lecanemab, which resulted in a 7% year-on-year increase of our organic pharmaceutical business, revenue reached JPY 619.9 billion, up 3.1% year-on-year. This represents the record high third quarter revenue, and we consider it highly significant that this growth was achieved almost entirely through organic business expansion.

Cost of sales was JPY 139.2 billion, with the cost of sales ratio at 22.5%, slightly higher than the same period last year, but they have been controlled within our plan. The increase was due to factors, including the decline of onetime gains recognized in the prior fiscal year from product out-licensing, which were not associated with significant cost of sales, the impact of drug price revisions in Japan this fiscal year and the changes in the product mix, such as the decline in sales of HALAVEN, which has a relatively low cost ratio. As a result, gross profit was JPY 480.7 billion, up 1.6% year-on-year.

R&D expenses were JPY 114.4 billion, a decrease of 8.5% compared to the same period last year. The R&D expense to revenue ratio was 18.5%, down 2.3 percentage points from the previous year's 20.8%. This decrease was due to the peaking out in trial costs for LEQEMBI, combined with cost optimization from structural reforms implemented in the U.S. last fiscal year, such as workforce reductions.

SG&A expenses increased by 4.7% year-on-year to JPY 315.7 billion, reflecting proactive investment of resources to LEQEMBI. As a result, OP was JPY 54.5 billion, and the profit for the period was JPY 41.8 billion. While both figures decreased year-on-year due to the absence of onetime P&L items, the profit contribution from organic business continues to expand steadily.

Regarding the full year forecast, while progress has been steady through the third quarter, we plan to actively allocate resources in the fourth quarter to next-generation key pipeline programs such as the anti-Tau antibody, etalanetug and the narcolepsy treatment, E2086. Additionally, we anticipate recording structural reform costs in EMEA.

On the revenue side, however, due to uncertainties regarding onetime revenues from partnership and out-licensing, we are maintaining our forecast of JPY 790 billion in revenue and JPY 54.5 billion in operating profit. This slide shows the factors driving the change in revenue from last year. The key point, as indicated by the light blue box, the second from the left, is that the Pharmaceutical business saw significant revenue growth driven by the JPY 49.5 billion increase from what we call the 3Ls: Lenvima, DAYVIGO and LEQEMBI, which offset the JPY 8.4 billion revenue decline due to factors like HALAVEN reaching LOE.

Meanwhile, in other businesses, which include sales from nondrug discovery subsidiaries, primarily due to the absence of upfront payment for divestiture of rights for Pariet in China, which occurred in the previous fiscal year, revenue decreased by JPY 22.3 billion. As a result, revenue increased by JPY 18.8 billion year-on-year to JPY 619.9 billion.

This slide provides the factors contributing to the change in operating profit. The second item from the left, the contribution of gross profit of JPY 7.8 billion reflects strong growth in 3Ls, which offset impacts such as a decrease in temporary profit from out-licensing and lower sales of HALAVEN. R&D expenses and SG&A expenses were explained earlier. Expenses related to LEQEMBI have largely shifted from R&D expenses to SG&A expenses. The JPY 5.1 billion decrease in other income and expenses includes the absence of temporary profit following the end of global strategic collaboration with BMS for MORAb-202, which was recorded in the previous fiscal year.

The key point here is that while last year's operating profit included significant onetime gains, including out-licensing income, this year's operating profit is almost entirely comprised of profits derived from organic business. Although detailed figures have not been disclosed, the operating profit contributing -- contribution from organic business has grown significantly, approximately doubling compared to the same period last year.

This slide introduces the 2 in-licensing deals in oncology pipeline announced recently. As a foundation for maintaining and expanding our oncology franchise, the first is the acquisition of exclusive development, registration and commercialization rights for Taletrectinib in Europe, the Middle East, Canada, Asia and Oceania from Nuviation Bio in the U.S. The second is the acquisition of exclusive commercialization rights for Serplulimab in Japan from Henlius Biotech in China. Taletrectinib is a next-generation oral tyrosine kinase inhibitor for the treatment of ROS1-positive non-small cell lung cancer. This compound demonstrated very favorable efficacy and safety in a Phase II trial showed efficacy for brain metastases where unmet needs are high and received full approval in the United States.

It has also already been approved in China and Japan in addition to the U.S., and we will now lead the submission for approval in Europe. The upfront payment is EUR 50 million with regulatory and commercial milestones totaling up to EUR 145 million. The marketing authorization application in Europe is expected to be filed by the end of the first half of 2026.

Serplulimab is an anti-PD-1 antibody already approved in over 40 markets, including China, Europe, Asia and South America for the treatment of extensive stage small cell lung cancer or ESSCLC. It is the world's first anti-PD-1 antibody approved for small cell lung cancer. It is currently under development in Japan for ESSCLC and metastatic colorectal cancer with development planned for perioperative gastric cancer. Henlius will continue to lead development for these 3 cancer types.

The upfront payment is USD 75 million with regulatory and commercialization milestones totaling up to USD 313 million. The first regulatory submission in Japan is planned for extensive stage small cell lung cancer within fiscal year 2026, followed by submissions for colorectal cancer and perioperative gastric cancer in or after fiscal year 2027. These compounds will maximize the oncology business platform we have built with HALAVEN and Lenvima while also serving as a foundation to enter the new area of lung cancer. Strengthening our oncology pipeline is a top management priority, and we plan to continue making strategic investments proactively.

While there is no change anticipated in our consolidated full year forecast for the current fiscal year due to these 2 in-licensing deals, we expect their revenue contribution starting in fiscal 2028.

This concludes my part. Next, COO, Keisuke Naito, will provide updates on our business and pipeline.

Yes. Good evening, everyone. From now on, I Naito will update on our business and pipeline. As Mr. Oyama mentioned, our Pharmaceutical business achieved strong growth through the third quarter. I will first explain the sales performance of our 3 main products or so-called 3Ls, Lenvima, DAYVIGO and LEQEMBI, which supported this growth.

Next, I will discuss our largest growth driver, LEQEMBI, covering initiatives aimed at maximizing its value, pathway optimization from diagnosis, treatment and long-term follow-up, the global expansion of the subcutaneous formulation with anti auto-injector, positive changes in the environment surrounding blood-based biomarkers and the progress made in various countries. And finally, I will provide an update on our pipeline and key events going forward.

First, Lenvima, the foundation of our business. Lenvima is an in-house developed orally administered anticancer drug approved for 7 indications across 5 cancer types. In each indication has been expanded with monotherapy or combination therapies with KEYTRUDA and et cetera. Now over 10 years since its launch, it has contributed to over 580,000 patients in 81 countries and territories. Its clinical value in indications, including its key indication, renal cell carcinoma remained solid. Third quarter revenue was JPY 258.1 billion, up 4% year-on-year. All regions showed year-over-year growth or maintained sales.

By region, Americas continued to lead with JPY 178.6 billion. In the U.S. while the Inflation Reduction Act or IRA impacted sales revenue, strong demand absorbed this impact, resulting in a 2 plus -- 2% increase year-on-year. Retaining top market share in indications such as renal cell carcinoma and endometrial carcinoma, it continues to maintain strong cash generation ability as a core portfolio asset. We remain focused on achieving our full year plan securely.

Meanwhile, Lenvima was included in the selection of drugs for the third cycle Medicare Drug Price Negotiation Program published last month in the U.S. Negotiation with the U.S. authorities will start, and we anticipate the price revision based on these negotiations will take effect approximately 2 years later in January 2028. Furthermore, based on the favorable court decision and settlement agreements regarding the high-purity patent, we believe generic versions of Lenvima will not be launched until July 1, 2030, unless certain defined contingencies occur.

Next is DAYVIGO, an insomnia treatment. We have our in-house orexin drug discovery platform, which is involved in regulation of sleep and wakefulness. DAYVIGO is an orexin receptor antagonist developed from this platform. Global revenue through the third quarter reached JPY 47.7 billion, showing robust growth of 18% year-on-year. It has also received approval in as many as 27 countries and territories. By region, Japan recorded JPY 35.2 billion, absorbing the impact of 14% drug price reduction and achieving 4% year-on-year growth. It holds a top market share of approximately 60% by sales in insomnia treatment market, further solidifying its leading position.

The Americas region recorded JPY 7.1 billion, mainly driven by expansion in Canada. Other regions, including China, reached JPY 5.3 billion, growing steadily as the number of countries where it is launched increases. With growth across all regions, we are increasingly confident in achieving full year forecast of JPY 58 billion.

Next slide, please. Next, turning to LEQEMBI. LEQEMBI is the only anti-beta antibody indicated for early Alzheimer's that can be administered over long term. Its key characteristic is that it removes both amyloid beta protofibrils and amyloid plaque, which have been reported to be potentially neurotoxic. Through this dual action, LEQEMBI is expected to prevent the decline in cognitive and daily functioning by slowing AD progression. Currently, it is approved in 53 countries and territories for the treatment of early AD.

Additionally, regarding subcutaneous formulation, it is approved for maintenance treatment in the U.S. and progress is being made to expand globally. LEQEMBI global revenue in the first 3 quarters was JPY 61.8 billion, more than doubling to 109% year-on-year. By region, the revenue was JPY 31.2 billion, in the Americas, JPY 17.9 billion, in Japan, JPY 8.3 billion, in China, JPY 4.4 billion, in EMEA, East Asia and Global South, with all regions achieving steady growth. In the U.S., maintenance dose approval laid a solid foundation for high treatment continuation rate after 18 months.

Furthermore, subcutaneous formulation with auto-injector or SC-AI for maintenance treatment was launched last October. The revenue in the Americas is growing steadily at 71% year-on-year. In Japan, there was an impact from 15% drug price reduction in November last year, but continues to grow steadily and achieved revenue growth of 115%, more than doubling from the previous year. In China, access is widening, particularly in the private market, achieving approximately threefold increase in revenue or 201% year-on-year. LEQEMBI is also included in the commercial insurance innovative drug list. Increased access in China starting from the second half of 2026 is expected.

I would like to report to you that smooth progress is being made to achieve the full year forecast of JPY 76.5 billion in global revenue. This slide shows the overview of our initiatives for value maximization for LEQEMBI. One of the main characteristics of LEQEMBI is that early start of administration and long-term administration extend clinical benefits. Leveraging these characteristics to maximize the value of LEQEMBI, we believe it is crucial to optimize the entire pathway from diagnosis to treatment all the way up to long-term follow-up. The top part of the slide shows the current diagnosis and treatment pathway, and we aim to shift from here and establish a new more efficient pathway as shown below.

Specifically, qualified referral flow from PCPs to neurologists, enhanced mutual coordination between the 2 prompt A-beta testing with wider penetration of BBM administration at home enabled by the introduction of the SC-AI simplification of administration with SC-AI introduction and more options, including at-home administration. Through all these measures, we will promote patient-centric treatments. With such transformation of pathway, we see greater potential to shift to new pathway. By reducing the time before introduction of LEQEMBI treatment and expanding the capacity of medical institutions, we aim to make AD pharmacological treatment established as a common option from early stage to realize patient-centered highly convenient treatment.

Subcutaneous injection with auto-injector SC-AI is an administrative option that patients can choose in addition to IV infusion. This is an important driver that will improve patient convenience as well as expand capacity of care providers. In the U.S., IQLIK 360 milligram, for maintenance treatment, which can be used after 18 months of IV infusion treatment was launched in October last year. Among anti-amyloid beta antibody, only LEQEMBI has this treatment option. This enables self-administration or administration by care at home, reducing the burden of hospital visits while increasing the options of administration for patients.

SC-AI made by Terumo is designed to be easy and safe to use. Human factor test confirmed that it can be used safely and effectively. The time it takes to administer with one SC-AI is on average 15 seconds, making it very practical. Dr. David Watson, who has the largest number of patient entry in Clarity AD study conducted the patient survey of those who participated in SC substudy and supported our CTAD presentation last year. The results showed that subcutaneous administration achieved a very high degree of satisfaction and convenience. Almost all patients chose subcutaneous formulation over IV infusion. There were many voices about feeling comfortable regarding self-administration and convenience in daily life, confirming that the treatment is less burdensome, less time-consuming and easier to accept.

As for SC-AI regulatory filing status, submission is already filed for IQLIK 500 milligram that can be used in initial administration, initial treatment. Priority review was granted, PDUFA date is set for May 24, 2026. We have also submitted filing for SC-AI 500 milligrams in Japan and China as issued in the news release today, priority review designation was granted in China. In the filing, one of the strengths of Eisai, which is modeling simulation was used to show PK/PD equivalence with IV infusion to achieve expeditious submission.

As we announced or we will continue to work in collaboration with regulatory agencies and medical institutions in various countries as we continue this development. A confirmation of A-beta accumulation in the brain using blood-based biomarkers or BBM is a use of technology that can transform the front end of AD diagnosis and is a major driver that supports the expansion of demand for LEQEMBI. By using BBM in screening, it is known to increase the A-beta positive rate in PET CSF test to follow. We also believe that wider use of BBM as a stand-alone A-beta confirmatory testing will streamline diagnosis process considerably.

In the U.S., FDA clearance of IVD opens the way for clinical use, development of guidelines, including from AA, Alzheimer's Association and CMS application of national payment rate are expected to lead to greater use of BBM as confirmatory testing not only for screening. This makes it possible to potentially substitute PET CSF shortening diagnosis lead time.

In Japan, China and in Europe, we also see progress in regulatory reimbursement and operation activities. Based on the medical care system in each region, we are strengthening criteria clarification, initiation protocol standardization and collaboration with clinical laboratory companies. With implementation of BBM, there will be progress in streamlining of A-beta diagnosis, opening further opportunities for LEQEMBI treatment and greater demand.

Let me now give you an update on LEQEMBI in the U.S. In the U.S., key evidence concerning long-term administration and safety is more widely understood. Accordingly, more physicians are prescribing LEQEMBI, the indication of maintenance therapy that the only LEQEMBI has. As a result, around 80% of patients wish to continue treatment after 18 months, achieving high continuation rate. The new diagnosis approach with BBM and introduction of treatment option of IQLIK have begun to contribute to stable increase in demand. BBM diagnosis increased 17% on average in the last 3 months. We also have clinical data showing that 10% of total patients received A-beta confirmatory diagnosis using BBM.

In January this year, national payment rate was applied by CMS which we think will be another tailwind for higher penetration of BBM. IQLIK Medicare Part D formulary listing is expected in January 2027. Until then, it is possible to seek insurance reimbursement using medical exception process, which so far has approval rate of over 80% currently. The use of IQLIK from the start of LEQEMBI treatment or IQLIK for initial treatment was granted priority review status by FDA. PDUFA action date is set for May 24 this year. We are making ample preparation for the launch. If approved as scheduled, we expect the listing in the formulary to occur at the same time as that for maintenance treatment. These various initiatives are mutually creating positive spiral, resulting in steadfast growth of LEQEMBI in the U.S.

In fiscal 2025, we are making good progress to achieve full year plan of JPY 40 billion, and we expect acceleration in pathway streamlining from the second half of fiscal 2026 with IQLIK initial treatment. In Japan, primary specialty care coordination that supports continuity of treatment is being established, namely good progress is made in enhancement of the referral network from primary care physicians increasing the number of initial introduction facilities and development of follow-up capacity. Consequently, from the visit to PCP, diagnosis and treatment initiation at introduction facilities up to the transitioning to follow-up facilities, the care coordination structure is steadily being established. Treatment continuation rate after 18 months is high at approximately 80%. We believe this is the result of broader understanding of the benefits of long-term administration of LEQEMBI by the health care professionals.

To realize patient-centered treatment, we have completed SC-AI submission in November last year, aiming for launch before the end of 2026. In Japan, drug price reduction of 15% took place last November, but this was absorbed, and we are making steady progress toward achieving full year forecast of JPY 24 billion. In China, in the first quarter to respond to tariff risks, there was a temporary inventory adjustments, but on a real basis, demand kept increasing. Revenue in the first 3 quarters was JPY 8.3 billion, showing good progress in achieving full year forecast of JPY 9.5 billion. In addition, last December, LEQEMBI was included in the Commercial Insurance Innovative Drug List, which is a new policy by the Chinese government to support development of innovative drugs and access.

In the second half of fiscal 2026 and beyond, commercial insurance covering LEQEMBI treatment is scheduled to be introduced one after another. SC-AI filing was also submitted in China and priority review was granted with launch expected in fiscal 2027.

With respect to our pipeline, in-house discovered orexin 2 receptor agonist, E2086 clinical development is well underway. In type 1 and type 2 narcolepsy patients, once-daily administration Phase II trial will be starting before the end of Q4. As it was introduced in the slide on DAYVIGO, Eisai has an in-house orexin pathway platform related to sleep and wakefulness. E2086 is an orexin 2 receptor agonist discovered based on this platform. E2086, single-dose proof of mechanism study in narcolepsy type 1 patients has already been completed.

In this study, once-daily administration of E2086 significantly reduced excessive daytime sleepiness compared to placebo and the comparator. At the dose that demonstrated efficacy, E2086 was well tolerated and have favorable safety profile. This was confirmed. There was no observation of liver dysfunction and visual abnormality. Orexin agonist is a very competitive area, but Eisai expects that E2086 can be a best-in-class compound. That expectation was supported by the proof of mechanism study. Please stay tuned to hear the results from the Phase II study in the future.

These are the key events in the pipeline, I would like to start from neurology area. On the slide, 18 continuum is shown. This means that Alzheimer is understood as a continuum of various disease stages. At each stage, amyloid tau or neuro-degeneration is targeted in drug discovery in a multifaceted approach to AD. As for LEQEMBI, 360-milligram SC-AI maintenance treatment is already approved in the U.S., 500-milligram initial treatment is under review by regulatory authorities in Japan, U.S. and China. AHEAD 3-45 Study in preclinical AD patients who do not have symptoms is progressing smoothly and top line results are expected before the end of fiscal 2028 according to the schedule.

anti-Tau antibody, etalanetug is in Phase II in sporadic AD or common form of AD. And in Phase II/III in familial AD patients, we expect to obtain a number of important data beyond fiscal 2027. E2511, a small molecule aiming to regenerate neural function is scheduled to start Phase Ib in patients in E2086 orexin 2 receptor agonist Phase II study is also expected to start before the end of Q4 this fiscal year.

In oncology, we will be discussing with authorities of various countries regarding Lenvima in combination with HIF-2 alpha inhibitor in RCC to prepare for submission. As for -- as our CFO, Mr. Oyama introduced, we expect to file submission in Europe for licensing taletrectinib in the first half of 2026. The second licensing product, Serplulimab filing is expected in Japan in fiscal 2026. E7386 CBP beta-catenin inhibitor Phase Ib/II results are also expected within fiscal 2026.

This is the summary slide. Q3 performance remained solid, driven by organic business growth. We are progressing steadily toward achieving the business plan target. But in view of spending in Q4, full year scale remains unchanged. Two oncology assets were in-licensed to enhance oncology area pipeline, laying a solid foundation to maintain and expand oncology franchise. The growth of 3L is contributing to steady enhancement of corporate value. pharmaceutical business as a whole achieved revenue growth. LEQEMBI steadily expanded across all regions. Through BBM and SC-AI and other efforts, we have a ready environment for further growth. Pipeline is advancing on multiple fronts and is being expanded through both in-licensing and in-house R&D to achieve sustainable corporate value enhancement.

With that, I would like to conclude the report on the Q3 business and pipeline. Thank you very much for your kind patience.

Now we would like to move on to the Q&A session. We'd like to receive questions from analysts or investors, and then we'd like to open the floor for those participating from the media. [Operator Instructions] From Citigroup Securities, Mr. Yamaguchi.

Can you hear me?

Yes, we can.

This is Yamaguchi of Citigroup Securities. I have 2 questions. First one is -- as CFO, Oyama explained, the performance up until the third quarter this fiscal year, it seems to be quite strong. But at the time of the earnings call for Q2, there was Q&A about this and JPY 35.5 billion, which was incorporated in the business development profit. How would you take on that? Do you think that there will be a further upside? If you include that, then there will be upside. And without that, I think that you are able to achieve the company's guidance. Could you please explain on that point?

Mr. Oyama is going to respond to your question.

Yes. In other income and expenses, we had a forecast of the onetime temporary profit, which was related to it a partner. So for this fiscal year, it is still uncertain. Through to the third quarter, there hasn't been much of such, but there is a potential that there will be such profit incurred in the fourth quarter. Regarding this, we would like to say that considering the fact that organic business is steadily growing, but without such temporary profit, we are working toward achieving our forecast. But for the fourth quarter, we have some points to mention.

As we said at the time of the earnings calls in the second half -- second quarter, we are conducting the structural reform for EMEA, therefore, costs will be incurred in the fourth quarter. And on top of that, R&D expenses, which will be allocated to the development and research of the key pipeline assets. So based upon these assumptions, organic business will be absorbing those negative impacts from those factors.

One point to supplement. As you mentioned regarding the cost to be incurred in EMEA and R&D expenses, do you think the cost will be exceeding the current guidance of the company? But do you think that in Q4, do you think that the revenue or profit will offset such negative impact of the structural reform or other R&D expenses cost in the fourth quarter?

Mr. Oyama is going to respond.

And we have seen the strong performance until the third quarter. And because of the impact of the structural reform, there has been the optimization of the R&D activities. Therefore, if you just look at the R&D expense line, there will be a potential downside. However, regarding the structural reforms for EMEA, we believe that these costs will be contained within the current expectation. because we have already incorporated factored in a significant amount for the structural cost in EMEA. Therefore, you can stay with the estimate of JPY 54.5 billion.

My second question is about LEQEMBI. Well, the growth has been on track and performance has been within your expectation. That is good. And first one is related to the initiation of maintenance treatment utilizing SC. And then the patients who are going to switch to SC, how -- what percentage of patients who are switching to SC-AI? But I think that Kisunla is catching up with LEQEMBI in terms of revenue. So do you think there has been any impact by such competitors' drug in the field?

Thank you. For your first question about the SCC maintenance treatment -- SC maintenance and what percentage of patients are switching to SC for maintenance treatment? Mr. Haruna is going to respond.

Thank you very much for your question. My name is Haruna. I am responsible for LEQEMBI in the United States. First, IQLIK for maintenance treatment, what percentage of patients are using this? Currently, it is only -- just has been launched and a short time has passed since the launch. Therefore, we do not have any numbers to be disclosed now. But after 18 months administration and then about 80% or over 80% of patients who have completed 18 months treatment wish to switch to the maintenance treatment. Therefore, there has been quite a high number of patients who want to continue on the treatment.

And IQLIK maintenance treatment impact on the revenue or plan of the sales it is performing well, exceeding the original plan. And week by week, the number of patients as well as the sales are increasing. Therefore, they are continuing to expand.

Regarding the insurance coverage procedures, medical exception process procedures are not constituting a bottlenecks. Therefore, actually, over 80% of patients are getting the approval for their reimbursement. The overall performance has been quite strong, and we are making steady progress. Thank you very much.

Regarding the second question about the competitors' situation, Mr. Naito is going to respond first. And regarding the U.S. situation, Mr. Haruna and for Japan, Mr. Yusa is going to respond.

Thank you very much for your question. Considering this market, first of all, we have to think about the fact that Alzheimer's disease is a progressive and fatal disease. I think that is very important to consider. From that perspective, LEQEMBI is showing -- demonstrating the effect of the early initiation of treatment and also benefit for the patients as well as for their lifestyles. These benefits can be considered overall. And that is the characteristics of LEQEMBI.

When we consider this area, not simply removing the amyloid beta, but also long-term control of amyloid beta is considered to be very important. Therefore, the long-term administration can bring about the benefit by this drug. So the early initiation of the treatment as well as the long-term administration are the characteristics of this drug. And in Japan and U.S. and China, SC-AI is being developed, and we have completed submissions in FY 2026, this will be approved in major markets. And from the initial treatment, it is possible for patients to start using the SC-AI. So these are the characters, as I mentioned earlier, considering the lifestyles of the patients, and there will be increased options available for patients. That means that in terms of convenience, this is going to be a significant benefit.

Considering all of this, LEQEMBI as a treatment for AD is expected to become a gold standard. We are confident in this. Furthermore, in DMT market, over the past 12 months, that has been doubled and the number of new patients as well as the number of prescriptions of LEQEMBI have also increased as such. Considering these, in each region, I would like to ask Haruna-san and Yusa-san to reported to you.

First, Mr. Haruna, could you please take the floor?

Thank you very much. This is Haruna. I would like to respond to your question about the status in the United States. As you pointed out, a competitor's drug, Kisunla. In terms of sales share in the third quarter, it was 50-50, evenly split. On the other hand, in the value terms, LEQEMBI and Kisunla compared. The wholesale acquisition costs are different. And for LEQEMBI, the patients are switching to maintenance treatment with half the dose. So that may have been impacting. In order for us to understand the situation of the competitor drugs, we are utilizing different sources, including internal source. And we are looking at the share and LEQEMBI is expected to have about 65% to 70% of the share in terms of the number of patients. Therefore, the new patient -- new prescriptions are increasing and the market itself is expanding. Therefore, LEQEMBI is expected to make -- to grow steadily.

Continuously, we needed to differentiate us from other companies' drugs, particularly removal of amyloid and also long-term control of amyloid are not exactly the same. This is a major -- for major chronic neurology disease. Once biomarker turns negative, the treatment is discontinued, but it's not the way for the treatment of the chronic neurologic disease. And the value of the long-term administration of LEQEMBI and differentiating the clinical profile and also expanding the number of options available for administration. These are considered to be the differentiating features. And LEQEMBI has the clinical data over 4 years, and this is the only drug of this and also focusing on the disease control in a continuous manner, these are the value proposition we would like to focus on.

During the third quarter at the CTAD, a new presentation was made on the data to enhance the brand power, particularly LEQEMBI's maintenance treatment and also discontinuation treatment by nivolumab, a comparison was made in the presentation, we believe that we have been able to demonstrate the significance of continuous treatment with LEQEMBI. As such, the continuous treatment is only available with this drug alone. And therefore, we -- and we have the 4-year data, which shows the strength of this treatment. And IQLIK -- in 2026, IQLIK initiation therapy will be added, and there will be increased best-in-class convenience and also the benefits will further differentiate us from other companies' drugs. And LEQEMBI is expected to continue to grow steadily from next fiscal year onward. So this is all about U.S.

So I'm sorry, we -- I have made a lot of time, so you can skip your response to question about Japan.

Next, Mr. Wakao from JPMorgan.

This is Wakao from JPMorgan. First is about LEQEMBI initial treatment. After the approval, how will it change the penetration in the market? The other day, according to Biogen's briefing session, they expect linear growth. Not approval, but in January 2027, after coverage, they expect the growth in sales. Medical exception process that was explained by Eisai before using that medical exception process and if approval is obtained after May '24, sales immediately is likely to start according to Eisai's explanation. And it seems that there are differences. Could you address this?

Mr. Haruna will respond.

Thank you for that question. Medical exception process, I've mentioned medical exception process earlier. Currently, in more than 80% of the cases, insurance is reimbursed. In January 2027, after listing in the formulary, smoother reimbursement is expected. That is for certain. But at the moment, insurance reimbursement is not posing as a barrier. That is also confirmed. Initial treatment, once it is approved, we believe that with IQLIK there will be acceleration of growth. Even before waiting for January 2027, we expect the pickup in pace of sales expansion.

Then -- and of course, it depends on how to interpret Biogen's comments. But would it be correct to understand that Biogen's explanation was rather conservative. Whether conservative or not, I would rather not comment. But in January 2027, we expect even further expansion. That I would say -- and so we can consider that there is a 2-stage growth in IQLIK.

And based on that explanation, and recently, organic growth is very strong. Next fiscal year, ROE of 8% was the target. But it is -- it appears that a high probability this can be achieved. So next fiscal year, ROE of 8%, what do you think is the prospect of achieving this? What is the current view?

Mr. Oyama will respond.

Regarding the next fiscal year, fiscal 2026, we are currently developing the business plan. LEQEMBI business will be supported by subcutaneous formulation. We expect approval in Japan and the U.S. and excluding R&D expense, we expect to turn profitable and organic business profitability improvement is also expected. As a result, in the medium to long term, more than 10% of operating margin and ROE, capital efficiency of 8% and further improvement, that direction remains unchanged.

As for medium- to long-term growth of this company, we have discussed 2 in-licensed products, but enhancement of pipeline is considered the utmost priority. So the direction remains unchanged. But with the short-term capital efficiency, we don't want that to be a constraint in strategic investment. And that is how we plan to manage our business. Organic business is steadily growing, and we are also implementing strategic investments. With that in mind, we hope that you will wait for future disclosure of results for next fiscal year.

So not in fiscal 2026, but in '27 -- fiscal '27 or beyond, you believe that it is more likely to achieve ROE of 8%, meaning you don't believe you can achieve 8% ROE in fiscal 2026? Sorry for this complex question.

The target and direction that we are aiming at, remains unchanged, but business plan is currently being developed. Please understand that we are currently developing the business plan.

From Macquarie Securities, Mr. Tony Ren.

Can you hear me?

Yes, I can hear you.

Okay. Perfect. So I have a couple of questions on LEQEMBI. The German government agency, IQWiG, they concluded that LEQEMBI offers no additional benefit over basically Aricept, based on previously undisclosed information that you provided to the agency. Could you explain to us what data did you provide IQWiG? How does this opinion affect LEQEMBI's prospect in Germany, in particular, and Europe in general? So that's my first question.

The second one is also on LEQEMBI in the China's Commercial Insurance Innovative Drugs List has been in the list for about 5 weeks now. I wanted to see what kind of impact have you seen on the ground in China?

For your first question, Mr. Iike is going to respond.

Thank you very much for your question. In Germany, the negotiations are going to be starting from now on. The clinical benefits data was submitted to reach their conclusion, as you mentioned. But going forward, there will be additional data information will be submitted, and we will continue to have negotiation with the authorities. So please wait until we see the conclusion.

Regarding your second question about China, Sasaki-san is going to respond.

Yes. Thank you very much. My name is Sasaki. I'm responsible for China business. Let me respond. For advanced innovativeness and also the benefits value and for the new -- the commercial insurance innovative drug risk that has been established in China, LEQEMBI has been included in this list. And going forward, together with the insurers, we are going to have negotiations. And in the second half of 20 -- fiscal year 2026 onwards, there will be an expanded coverage of the treatment by LEQEMBI under this commercial health insurance, and we aim at expansion further. By this expansion of the commercial coverage, and there will be a reduction of the burden of the patients and also treatment continuation rate is expected to improve as well on top of the increase in the number of new patients.

By having this list, including LEQEMBI, we expect that there will be further acceleration of adoption by hospitals, and we are starting to see such expansion gradually now. So that was my response to your question.

Next, we have Mr. Muraoka from Morgan Stanley.

This is Muraoka from Morgan Stanley speaking. ROE of 8% was the earlier question. And I have a related question. Next fiscal year, how much substantial improvement in financial performance can we expect? What level can we expect from May guidance? It's rather ambiguous. We can see that you have strong determination. But when it comes to actual numbers, it is not as clear. So could you elaborate on this further? What expectations can we have for next fiscal year as we wait your announcement in May?

Mr. Iike will address that question.

Until about a month or 2 months ago, I was responsible for this area. Therefore, allow me to answer your question. Organic business growth in comparison to last year was very strong this year, as Mr. Oyama just reported earlier. On the other hand, in fiscal 2025, LEQEMBI business commercial investment still is being made, and it is still in the loss-making situation. But in fiscal 2026, we intend to turn profitable. Therefore, organic business next fiscal year in fiscal 2026 is expected to continue strong growth.

Furthermore, onetime items in nonorganic area, how much can we achieve? It depends on that as well. I believe what is likely to be your consensus view for Eisai's fiscal '26 operating profit. In comparison to that consensus, we would like to aim at a higher level.

For our information, you've mentioned that because you have to also acquire new assets, cost is expected to be incurred according to Mr. Oyama, but it is not included in core profits. I don't think costs will be incurred based on IFRS. I was not able to understand fully.

Mr. Oyama will respond.

As you rightly mentioned, acquisition cost is going to be capitalized as asset. But because of acquired assets, R&D expenses may occur as larger the size of such deals, potential for increased R&D cost is higher. So we should not put restraint on such potential deal. That was what I meant to say. Basically, the initial upfront payment will be capitalized as asset. That is correct. Your understanding is correct.

From UBS Securities, Sakai-san, please.

This is Sakai speaking of UBS Securities. Slide deck was very easy to understand and clearly described. And my question is about the in-licensed assets in oncology. What about the U.S. oncology? And I think it is going to be costly. I don't think that you have a leeway available on your current balance sheet.

Mr. like going to answer your question.

Mr. Sakai, thank you very much for your question. So far, 2 deals were made. One is mainly in Europe and Canada, another is in Japan. And what about Americas? Lenvima will continue to be valid until 2030. And in the United States, we have been also considering these deals as well. Regarding your question whether we have such allowance or leeway on your assets, yes, we would like to say we have. And we have had a disciplined policy in the financial structure. But together with CFO, Mr. Oyamao, we'd like to make a shift a little bit towards these growth investments. So -- and we believe that we have available assets on that.

And I have a second question regarding Orexin. I may have heard a statement that there is potential licensing out. But so far, have you considered this? Or are you going to continue developing this project on your own?

Mr. Ido is going to respond to your question.

I am in charge of R&D. As you have pointed out, as you said, E2086, in principle, we are developing this product on our own, and we are about to start a Phase II study.

Next, Ms. Sogi from Bernstein.

About oncology, about the licensed products. This is related to Mr. Sakai's earlier question, in order to maintain oncology business inorganic deals will be pursued proactively. Does that mean that you will be actively pursuing inorganic deals? As for licensing products, how will R&D expenses be shared? That was not touched upon. If you could provide information.

Mr. Naito will respond.

About the direction of oncology, as Ms. Sogi, you've rightly mentioned, that is the policy. CBP-beta catenin, E732886 (Sic) [ E7386 ] was also mentioned. We will also develop our in-house oncology assets in our pipeline. But currently, we need to enrich our pipeline with in-licensed products, which is an important priority issue. That is our recognition.

Going forward, how to split the expenses? I would like to ask Mr. Oyama to respond. The second question will be addressed by Mr. Iike.

Thank you for your question, Ms. Sogi. First, about the first question, Taletrectinib for Europe. This is soon to be filed for submission. So research and development costs will not be incurred so much. It will be sales and marketing expenses.

As for anti-PD-1 antibody for Japan, Serplulimab, we cannot give you the details of the agreement, but our research development cost burden is considered to be small.

I have a question regarding LEQEMBI in China. Innovative commercial insurance, innovative product listing was achieved. I understand that this is a private insurance. And NRDL this year, you may not have said this year, but regarding NRDL, I understand that you will be preparing to file so that they can be included in the list. Are these 2 lists taking place in parallel? Or are they separate?

Mr. Sasaki will respond.

Thank you for your question. This is Sasaki speaking. NRDL, this is a national reimbursement drug list reimbursed with national fiscal resources. But rather than being listed here, LEQEMBI is listed on commercial insurance innovative drug list, which is an innovative -- list of innovative product for high clinical benefit. And because of the intention of Chinese government to increase private insurance coverage for such innovative product, this list is published by Chinese government. So commercial insurance listed product, will it be listed in NRDL at the same time? That is not the case.

From Goldman Sachs Ueda-san.

This is Ueda of Goldman Sachs speaking. My first question is about Lenvima. In Americas, during the third quarter under review, the performance was strong. Going forward, IRA, the access is improved. And do you think there has been such a contribution? Or are there any temporary factors which are making the performance of Lenvima strong?

Mr. Haruna is going to respond.

Thank you very much for your question. I am responsible for Lenvima in the Americas. My name is Haruna. First, Lenvima in the United States, Americas is performing quite strongly because of the redesign of IRA, access is being improved, not only with that, but for RCC and thyroid cancer, since launch 10 years ago, regarding these existing indications, we are seeing increased shares for RCC.

So far, clear cell data was available, but non-clear cell data is also being expanded and NCC and also the package insert for both indications, there has been a strong recommendation under the guideline for this particular drug. Therefore, with these Lenvima is growing for RCC, which I believe will continue next year as well -- next fiscal year as well. Over the past fiscal years, utilizing AI for omnichannel approach is being expanded for all indications, particularly in the 10 year DTC has contributed to the expansion of sales. For all indications, we expect to see growth. For fiscal year 2026, this trend will continue. IRA redesign has been impacting. But exceeding that, I believe that Lenvima will continue to grow. And also the submission for the LITESPARK-011 will be conducted. Therefore, we believe that there will be further growth with Lenvima.

Second question is related to the strategic investment. Over the past several years, Eisai has been licensing out to receive short-term onetime income in order to generate short-term revenue as well. But recently, there has been several deals as has been explained in the presentation, you said that you would like to be proactive in making such strategic investment going forward. Could you please give us your background for why you think in that way? Currently, Lenvima will be valid until 2030 or LEQEMBI is ramping up and -- or R&D expenses peaking out with LEQEMBI. So with these in mind, could you please give us your guidance or how you forecast into the future?

Mr. Iike is going to respond.

Thank you very much. As Ueda-san mentioned, exactly what you have mentioned is what we assume. Lenvima in the United States, last year, our high-purity patent was granted and protected. And above all, the profits from LEQEMBI business are turning into the black ink. As we have been telling you, JPY 370 billion level of proactive investment has been made into this program for about 5 years in the past, and that has supported our profits and by being supported by onetime items. But from now on, we believe that we have switched the gear towards the return generation period. So that's why we have turned a policy to more focusing on the proactive investment for the growth.

Next, Yoshida-san from Tokyo Tokai please. Excuse me Mr. Hashiguchi from Daiwa Securities.

This is Hashiguchi from Daiwa Securities. ROE of 8% was discussed several times. I would like to clarify the way of thinking. At information meeting in last year, according to what I understood, the onetime exists in fiscal '26, but there will be no onetime in fiscal '27 and yet ROE of 8% will be the target. You have added various provisos today, but excluding those provisos, basic policy remains unchanged. Is that correct?

Mr. Iike will address that question.

Mr. Hashiguchi, thank you for your question. Basic policy remains unchanged. And what you've described, Mr. Hashiguchi is also correct. In fiscal 2026, including onetime ROE of 8% will be the target. And in fiscal '27, excluding onetime factors in organic basis, we aim at a 10% level of ROE. That was what Mr. Keisuke Naito announced in March last year in information meeting. That remains unchanged. But regarding these onetime items, including sales of assets, is that going to be utilized? Or rather, are we going to make growth investments and continue to hold on to assets? That is what we are trying to determine right now, and we hope you understand.

I myself thought that including onetime in fiscal '26 to achieve 8% ROE rather than persisting on this, I believe that in '26, efforts should be focused to ensure medium- to long-term growth. Inclusive of that, regarding medium- to long-term strategy, we hope that there will be an information meeting to discuss such a strategy. Do you plan to have such a meeting in March this year again? Or is it going to take more time before you put together such strategy?

Mr. Hashiguchi, thank you very much. Regarding information meeting, every year, we held an information meeting in March, but we plan to hold information meeting in -- at the end of May this year. So details will be announced later.

And the background of that and my question regarding medium- to long-term strategy, I hope that in a comprehensive way, there will be a presentation. And does that mean that internal discussions still are required before presentation can be provided for medium- to long-term strategy?

That will be addressed by Mr. Naito.

Internal discussions, we are trying to thoroughly complete internal discussion. And before discussing these before the annual earnings results, we felt that it would be better and more realistic to discuss those after we have annual results as well. Thank you.

Now we would like to receive questions from the media. From [ Nikkei BP ].

Can you hear me?

Yes.

Two in-licensed deals were recorded this for lung cancer and GI cancer. In these areas, you have never attacked these areas of therapies. So in these new therapeutic areas, how do you plan to develop your market? Could you please share with us your strategy?

Mr. Iike is going to respond.

Thank you very much for your question. First, as you see on the left-hand side, this is about the lung cancer indication for this product. For NSCLC, not all the NSCLC, but this is indicated for the patients with the mutation of specific genes accounted for about 2% of the entire NSCLC. Therefore, prescribers, physicians and hospitals which can provide such treatment are limited. Therefore, field people reps of Eisai who are available in Europe can cover such accounts. In some cases, lecanemab is dealt with field personnel can also deal with these accounts.

So in terms of the efficiency, we believe we can maintain high efficiency. So here, you see ROS1-positive, the lung cancer. This drug has been demonstrated to be very efficacious in clinical trials. On the right-hand side, you see in Japan, PD-L1 antibody like Opdivo or KEYTRUDA. However, indications aimed at those diseases, which are not captured by other competitors. So that is the policy of the partner. So the binding mode of PD-1 is also different from others, and it is a quite potent PD-1 antibody.

For GI tract cancers, which is more common in Asia, including Japan. So what we are aiming at getting approval first is not the non-small cell, but small cell lung cancer. So compared to the non-small cell lung cancer, we do not have a large number of patients. However, there is still a very high unmet needs. And Opdivo and KEYTRUDA is not indicated for this disease. Therefore, we will be able to cover this market as well.

And also together, Lenvima, we are working with Merck. And I believe that there will be no cannibalization potential with that. So we have high expectation. Regarding the extensive stage NSCLC, this is going to be the first for the PD-L1 antibody and with the 2 companies, OS hazard was about 0.7. And serplulimab has a little better than that. But comparing head-to-head, I think that the probability of having advantage over competitors' drugs is still slim. So I thought that you have a clear strategy to compete against those, but you don't have one.

For the first indication, that has been already approved in 40 markets. Therefore, we believe that the probability is high. And this is different from PD-L1 antibody. This is because this is PD-1 antibody. Therefore, we believe that we can be competitive enough. And colorectal cancer as the next target indication, particularly MSI high is indicated with KEYTRUDA. However, non-MSI high, this is going to be the first indication to be granted to any drugs. Therefore, we can have a differentiating factor with this highly expected new drug. In colorectal cancer, Atezo and [ IKA ] combination was demonstrated to be efficacious in asthma last year. But do you think that this drug can be used and efficacious with monotherapy? Yes, that is correct.

Since time has come, we would like to conclude today's briefing session. Thank you very much for your kind attendance.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Thank you for taking your time to attend fiscal 2025 Eisai Opinion Exchange Meeting on Value Creation Report and ESG. I will be serving as your moderator today. My name is Tokunaga and I serve as the Head of IR. This meeting is held online. Please check our website as the presentation materials are available through the website. In the Opinion Exchange meeting today, we would like to exchange views with you regarding Eisai's initiatives of value creation. The purpose is to make the most of the opinions we receive today in the management going forward and to reflect the feedback in the planning and production of the value creation report next year and beyond.

Today, we would like to convey to you how LEQEMBI's social impact is visualized and how our initiatives are affecting the society, what contributions are being made from the dementia area initiatives, which is the source of the competitiveness of Eisai as featured in Value Creation Report 2025 and how Eisai's nonfinancial capital, in particular, R&D promotion, brand strengthening and employee engagement are contributing to and linked to the corporate value enhancement.

As for the agenda today, Mr. Terushige Iike, Chief Business Officer and Chief IR Officer, will present advancing our materiality and nonfinancial capital initiatives in a presentation format before panel discussion on initiatives and medium- to long-term vision in the dementia area by Mr. Keisuke Naito, COO and Chief Growth Officer; Mr. Teruyuki Masaka, Chief HR Officer, also in-charge of Sustainability; and Dr. Katsutoshi Ido, Chief Scientific Officer. At the end, we plan to have a session for Q&A and exchange of views. We also have Ms. Minamida, Head of Sustainability Department. In the final part, we also welcome questions on sustainability.

Now we would like to begin our presentation. Iike-san, please start.

Thank you very much for taking time to participate in this session. Now could you please show the next page. I would like to spend about 10 minutes to give you the overview. What you see here, this page show our core concept of Eisai. We have corporate concept, which has been incorporated in the articles of incorporation as the first company to do so, perhaps. And as you see on the left-hand side, the corporate concept is shown and a business model in the middle. And before that, on the left, you said that in order to be sustainable with the society, we have formulated a new Eisai's future creation strategy. As the input to promote SDGs, we have the intellectual capital and human capital, which are very important for our industry and business.

As you know, dementia and oncology, global health in these areas, we are inputting our management resources. And this is also described in the articles of incorporation. We put importance on the sequence of mission and results. As a result of our business, the capital obtained through the business activity will be larger than what we invested and the PBR improvement will be aimed at utilizing the capital. And as a result of the business regarding the value we provided to the society, which is not represented in the sales and value and also social impact index are continuing to be utilized. Through the business activities, the capital which is generated will be reinvested into the next business. And this is the Eisai's social -- the value creation model. Eisai's social impact creation model.

And next page, I would like to talk about our materiality. About 10 years ago, since 2016, Eisai's materiality has been disclosed. In June 2022, we amended our articles of incorporation. And what has been newly added, the social good in the forms of relieving anxiety over health and reducing health disparities and to enhance corporate value in the medium to long term. For these purposes, we have considered material topics. And 2 years ago, starting in 2023, we have started to disclose this new materiality. On the vertical axis, you see the stakeholders satisfaction, and we are trying to sustainably maximizing corporate value while striving to satisfy all stakeholders. And on the horizontal axis, this represents Eisai's intrinsic corporate value, social impact and financial value and improvement of PBR. And based upon whether or not there is a confirmed correlation with PBR improvement, we prioritize these items.

As you see here, material topics from 1 through 5 are positioned as particularly important material topics and towards 2030, long-term goals and KPIs and associated risks were set through deliberation and confirmation by the Board of Directors.

Next, please turn to the next page. This shows the social impact creation targeted by Eisai. There are 3. First one in dementia area. This is the social impact of LEQEMBI in the United States in the dementia area. It's not solely based upon the price of LEQEMBI, but the value that patients and their families can gain from administering LEQEMBI are the basis for calculating this value. And in the middle, global health DEC tablets, diethylcarbamazine, the social impact of the free provision of the DEC tablets in the global health care area. By providing DEC tablets free of charge and they value of avoiding chronic lymphatic filariasis or reducing the number of attacks through the provision of DEC tablets are calculated into economic value.

At the very bottom, employee impact accounting was introduced as a social impact creation method for human capital. For our employees, out of the wages paid to our employees, the percentage of the contributions to the society, that has been calculated as the value in terms of human capital investment efficiency. Next, Page 6. This is a rather busy slide, but this is about the materiality, number one. Number two, there are long-term goals and targets and KPIs. Last fiscal year in 2024, some progresses were made. These are also described here. First one, in dementia area.

Last year, during the fiscal year 2024, LEQEMBI in 5 regions -- all 5 regions of our business, we have obtained approvals and have been -- LEQEMBI has been launched in all these 5 regions. And the targets for fiscal 2025 materiality was set up in 2023 in 5 all regions, obtaining the approval and achieving the reimbursement were set as the target. However, due to the change in the reimbursement planning in each market, since the last year's value creation report, getting approval in all 5 regions and early realization of launch of LEQEMBI were set up as the new targets.

And during FY 2024, LEQEMBI were delivered to 23,000 patients all over the world in the United States and JPY 503 million was created as the social value. In fiscal 2025, we contributed to 350,000 people globally, and we plan to create about JPY 80 billion of social impact in the United States. In fiscal 2030, globally, we plan to contribute to 900,000 people and create JPY 1.8 trillion of social impact. But rather than such far out into the future, what about the near term in 3 years' time, for example, because of that request in information meeting in March, we also showed our outlook for fiscal 2027. LEQEMBI maintenance therapy, subcutaneous formulation submission status and blood-based diagnosis, we are making steady progress. And number two, at the bottom of the slide, Lenvima in fiscal 2025 -- in fiscal 2024 made contribution to around 80,000 people globally.

As for the target for fiscal 2025 for Lenvima, we target to achieve a new indication approval. LITESPARK-011 study, this is in combination with belzutifan in RCC second line, we achieved the primary endpoint, and we are consulting with the authority towards submission. When materialities were established in 2023, Lenvima global peak sales target was JPY 500 billion. However, because non-small cell lung cancer indication study primary endpoint was not achieved and target number was adjusted in value creation report last year, JPY 300 billion level target will be maintained.

Next, on Page 7, in global health area, we are focusing on lymphatic filariasis, mycetoma and malaria on these 3 diseases. In the last fiscal year in 2024, regarding LF, cumulatively around 2.5 billion tablets have been provided for free, creating approximately JPY 500 billion of social impact. In 15 countries, mass drug administration was completed. Regarding malaria, last year, in fiscal 2024, a new compound or new therapeutic drug candidate, one of the candidate entered into clinical trial. In this fiscal 2025 for lymphatic filariasis, the biggest endemic country, India and in 18 other countries and mass drug administration was completed, contributing to about 29 million people, creating approximately JPY 520 billion social impact.

Next, please turn to Page 8. Maximizing human capital. Number four, penetration of hhc concept and improving employee engagement, diversity, especially women's participation and employee impact show progress. We are also making steady progress in financial strategy, and we have realized financial soundness and optimal capital structure towards achieving fiscal '25 and fiscal '30 targets, we will continue with our efforts. Please turn to Page 9. Next page. This is a story in dementia area. For more than 40 years, we have been engaged in research and development and commercial activities in dementia area in the development of Aricept, it was mild Alzheimer's disease, but severe Alzheimer's and Lewy body dementia were added indications and [indiscernible] and other formulations were also developed.

In this process, global development, global distribution and medical activity know-how and human capital were acquired. And we were also able to build a network with the academia, investor community and other communities. Employees are also spending time with patients -- dementia patients and empathized with them. And through this sense of ownership and sense of responsibility have been fostered amongst our employees. We have failed a number of times in developing new drugs, but we succeeded in developing LEQEMBI, and we are now devoting ourselves to research and development of the drugs to follow. This shows dementia area, and this does not touch upon oncology, but financially, the value that we have gained from Aricept has been invested in oncology and in oncology area, Lenvima became our main product. And this, in turn, has been providing resource invested in development of LEQEMBI commercialization of LEQEMBI.

In this diagram, there are 3 green circles. R&D expenses, number of Phase III studies and personnel expenses, according to Yanagi model, these show positive correlation with PBR, even though with a time lag, but these are correlated with PBR. We would like to continue to build dementia ecosystem and continue development for the pipeline to follow LEQEMBI, and we would like to expand social impact. In doing so, and in dementia area, we would like to realize social needs -- satisfy social needs. As for value creation by Eisai, especially in dementia area and as for value creation, we also are working to enhance nonfinancial capital. And these efforts will be discussed in the session to follow. And thank you for your kind patience.

We will now move on to panel discussion. During this session, initiatives in dementia area and medium- to long-term vision in the dementia area will be discussed by Mr. Naito, COO; and Mr. Masaka, CHRO and also in charge of sustainability and Dr. Ido, CSO. Now we would like to move on to the first topic, topic 1, growth and operation concept. And here, in March 2025 in information meeting, medium- to long-term growth vision was presented. What thoughts and ideas underlie growth and operation concept, Keisuke-san, please.

Good afternoon, everyone. I am Naito, serving as Chief Operating Officer of Eisai, and thank you very much for attending this event. Regarding this topic, growth and operation concept, I would like to offer my commentary on this growth and operation concept. As the name suggests, growth and operation. And we are looking at these -- how these relate to corporate activities. You see circles. We separate these 2. The one circle is about growth. At Eisai, in value creation at Eisai, we have R&D, production and delivering to physicians and patients in commercial, we -- the value creation is supported by this value chain, and we are continuing this cycle of these 3 functions, R&D, production and commercial. And that is at the core of the growth function. This growth cycle should be stably supported by operational functions.

Growth and operation concept is shown here. And to strengthen this concept, we have pillars: number one, drug discovery R&D; and number two, creation of new area of R&D in nondrug discovery area. And the third is structural reform. These are 3 pillars to enhance growth and operation concept. As for drug discovery R&D, in neurology and in oncology in these key areas, we have accumulated human biology knowledge and within our company and with other companies, we are in partnership. And through that partnership, we will be creating next generation of drugs. And that will be a very important growth engine of Eisai. We will also be using AI and translational research and cross-functional research to efficiently continue drug discovery process in-house, while at the same time, we will pursue -- continue to pursue partnership so that we will continuously be launching new products and accumulating technological assets.

On the right side, nondrug discovery or creation of new area R&D is shown. There are daily health care issues that cannot be addressed by pharmaceuticals, behavioral life environment, health care evidence, such a multitude of data can be utilized to create solutions. Data can be utilized to develop solutions. The drug discovery or pharmaceutical companies are strong in this area, but the point is that we will also be using non-pharmaceutical technologies to develop solutions. In this new area, R&D includes digital and hardware sensor for robot to look after the patients. How can we utilize knowledge and how do we produce output? It may be different from drugs, in case of drugs, it will be pharmaceuticals. In new areas, it may be behavioral changing digital application or nursing care robot. But at the core, data accumulated and utilization of data are common to both areas.

Such knowledge and data can be synergistically used in R&D model. across drug discovery and nondrug discovery in translational activities. And we believe that this will create value for Eisai going forward. As for operations at the bottom, structural reform is carried out to sustain continuous value creation. As for specific efforts, global organization mechanism data are being optimized. And in growth cycle, we are concentrating resources. In this way, R&D, production and commercial will be able to dedicate themselves to fulfilling the respective roles. So regarding this basic concept, I think this is what I can say now for this part.

Yes. Regarding the concept in fiscal year 2025, this concept was formulated, and we are now currently in the ninth month of fiscal 2025. So implementing these in our work and from the management perspective, what kind of progress you have seen and what challenges are you seeing now? Keisuke-san, could you please speak about these? And after that, I would like to ask Ido-san to give us your perspectives on the progress or efforts that you have made and the challenges that are emerging from the perspective of R&D.

Yes. Thank you. So the -- in the background, you see the printing of the growth and operation concept that I mentioned earlier. And if you look at the top left, this is about the R&D in drug discovery and growth update. And the top right area is the R&D in the new areas and the growth-related updates. And at the bottom operation, light blue color portion is about the update on operation. And in the first half of 2025, in our core business, pharmaceutical business, which has made a steady progress. And centering on this, the profit structure was established in order to achieve the improvement in both the sales as well as profit. And we have secured the profit in order to reinvestment into the growth areas and growth and operations have been started to run smoothly. First of all, in order to support the core business growth, LEQEMBI in the top left, in more than 50 countries and regions, we have obtained approval for LEQEMBI towards the achievement of the fiscal year's target, I believe that we have been making steady progress.

And for IV, maintenance treatment approval to be obtained -- has been obtained and also inflection point, very important and lifestyle management for LEQEMBI, life cycle management of LEQEMBI, the submission for approval of initiation treatment of the cutaneous formulation and the subcutaneous formulation as a whole and also the initiation treatment for -- in the submission for approval, we believe that we have been making the steady progress, and we are making progress in the establishment of pathway for diagnosis and treatment. And on the other hand, there are some challenges. In order to contribute to even more patients, we must build securely the environment, and we need to enhance the market share of LEQEMBI in each market. We believe that this is one of the challenges we face.

As I mentioned earlier, the SC. I click over LEQEMBI and the blood-based biomarkers or BBM to be adopted early. And in addition, importance of long-term continuous administration should be promoted so that we are able to have patients and their family that understand the value of LEQEMBI treatment. In addition, in our new R&D area for the elderly facility, care facilities, Life Rhythm Navi + Dr., this is a monitoring solution for the facility. And we have made the EcoNaviSta as a subsidiary and data science technologies as well as the data and in the new area of R&D, we would believe that we have acquired significant capabilities. Going forward, utilizing our medical reps as well as the contracted distributors, LEQEMBI, [indiscernible] promotion channels are available. So we would like to utilize them in order to accelerate the penetration of Life Rhythm Navi + Dr. in hospitals and nursing homes.

And also monitoring robotics with Life Rhythm Navi + Dr. various source of information will be collected considering the data compliance. And we believe that we are going to make progress and utilize such data sources to develop new solutions. Lastly, regarding the operations. So globally, for the optimization, we needed to carry out the structural reforms. During 2024, we carried out reforms in the Americas and EMEA in 2025. We carried out the reforms in these regions. As I said earlier, growth and operation perspective has been discussed to give you the current status of progress and the challenges we are facing now.

So now CSO, Ido-san, could you please speak from your perspective of R&D?

Thank you, Keisuke-san. I am Ido from R&D. We at R&D had a major reorganization in spring this year. Leaders have various different backgrounds, and we had a new start in the last 9 months. The purpose of the reorganization is that at the core, we have positioned translational organization to concentrate human biology, utilizing that PK/PD modeling, simulation functions are fully utilized from exploratory phase to clinical phase. We now have organization that we are able to fully implement this using this foundation for subcutaneous formulation without a large additional study, we were able to file submission, reducing cost and time substantially. This model is not only for LEQEMBI, but for next-generation AD drug development, we are making full use of this. As shown on the left side, we are focusing on anti-MTBR tau antibody Etalanetug. In familial study in Phase I, we were able to achieve a POM suppression.

And the data collected here will be accumulated as a human biology and will be reflected in the model. And by continuing this cycle, we are accumulating core capabilities in dementia area. And below that, in neurology, orexin platform cultivated with lemborexant is our strength. And narcolepsy drug candidate, E2086 came out of this. And in the first half of this year, POC was confirmed in Phase Ib, which was a major outcome. Another important area is oncology. And as shown below, Lenvima value maximization. This is, first and foremost, our big theme. And in advanced RCC study with Merck, we achieved the primary endpoint. First-line study is also making good progress. We have high expectations.

Similar to neurology, in oncology, we have Lenvima or [indiscernible] or biology knowledge that we have gained from clinical trials. These are concentrated in translational organization and will be utilized in E7386 for which clinical trials are underway and also in MORAb-202 and in the development of the next-generation candidates. As for the challenges going forward, strategic resource allocation is necessary to ensure that we will continue to have next generation of candidates. As for clinical trial-related development for LEQEMBI, this has peaked out. So resource should be selectively allocated to high success probability projects. And we will also pursue joint development with our partner and especially, we would like to enhance the quality and breadth of oncology pipeline. And that is all.

Thank you very much. Now we would like to move on to the further topics on the discussion. We have discussed the growth and operation, and this is achieved by people, employees. How are they feeling about this? At Eisai, since 2021, globally unified engagement survey has been conducted. And during the fiscal year 2023, survey was also conducted. And based upon the results of that survey, we have identified innovation and leadership as 2 global focus areas for improvement, and we have been working on these areas continuously. And regarding this, the results of the fiscal year 2024 global engagement survey became available and the measures to be taken. These will be discussed by Masaka-san. Masaka-san, please.

Yes. Thank you very much, Tokunaga-san. Thank you very much for participation today. And I'm in charge of the sustainability and human resources. My name is Masaka. And what you are seeing now shows the results of this year's global engagement survey. As Tokunaga-san explained, since last year, we have been telling you that at Eisai, innovation and leadership have been identified as the focus areas for improvement. Today, I would like to focus on these 2 areas. First, starting with innovation. Up until the last survey, this score has shown the trend -- downward trend. And this has been pointed out. And this year, however, we have seen the recovery in the score showing the favorable result. And what has driven this improvement was in the area of use of the latest technologies. In almost all regions, the score has shown improvement since last year. And this is particularly related to the R&D.

Therefore, I would like to ask Ido-san, who is in charge of R&D, to give us your take.

Yes. Thank you very much. Looking into the movements of the scores and particularly in R&D, I have the impression that there was an improvement in AI. And in almost all entities, we are now able to utilize generative AI. And we have been making -- continuing to invest in AI areas. Therefore, we have enhanced R&D strengths. And I think that these benefits have been felt on the ground. And I talked about modeling and the biomarkers and the clinical function data, AI machine learning have been utilizing analysis and what kind of benefits can be expected for which population and exploration and clinical side, we are now able to discuss based upon the analysis of these. In the actual ground, AI usage is being progressed and particularly in medicinal chemistry, we believe that we are starting to see the benefits.

We are usually targeting proteins to the biology and AI and computational science and also that are combined together in order to find the compound which can bound to the very difficult surface as well as we are able to increase activity by 1,000 or 10,000 times in short time period. And in this experimental system, the translational organization, which is in charge of molecular profiling, they have such technology. We believe that, that is a very strong point of us. And we have the mass spectrometry and also samples and immunoassay system, and we have anti-tau target an MTBR-tau243 as well, and we have a very good recognition outside of the company. And this has led to the identification with Etalanetug and the POM [indiscernible]. So we would like to continue to invest in these areas as well.

And regarding the leadership, Keisuke-san, could you please give us your take on this?

Yes, about leadership. For 2 consecutive years, the trend is a declining trend. So the top management and myself as the Chief Operating Officer, I'm reflecting on this very seriously. As for leadership items, one, confidence in the decision by senior leadership; two, clarity of business strategies; three, clear future vision. These 3 comprise leadership items, and we see declining trend in all 3. As I mentioned earlier, growth and operation concept is adopted and updating the progress here. And as Masaka-san will later describe, we are implementing various initiatives to address this to turn around this trend. But we believe that we should communicate more and strengthen our communication. By region, there is a more pronounced decline in EMEA. Lenvima, Kisplyx and Halaven, these oncology-related products account for about 60% of the revenue in EMEA and Halaven LOE impact is becoming manifest.

Regarding this. In addition to such business conditions, there is a room for improvement in terms of communication to employees as well as a COO responsible for overseeing all of the regions and also Mr. Iike CBO, I believe these are our responsibilities, and we'll make sure to implement measures. And centering around Chief Scientific Officer, Ido-san, we are enhancing our pipeline and the successful launch of LEQEMBI in European region, these will also be very important milestones, and we will steadily make achievement -- progress in these businesses. And I would also like to ensure good communication with these 2 measures, I would like to improve engagement.

Now I would like to ask Masaka-san to discuss some concrete measures regarding communication.

Yes. Thank you, Ido-san, Keisuke-san. Thank you very much. As Keisuke-san mentioned, there is a point of communication, issue of communication. Please look at the left photograph. This was carried out on September 5 called Eisai Casual Connect. 6 directors attended and with employees, various communications were held. Employees have raised many questions. This is about attended by 380 employees at the same time, about 15% of employees in Eisai Japan. The biggest objective of this is to reduce the distance with the directors and to have a sense of familiarity with the top management and to understand the business strategy. So we showed a video of cooking of dishes good for cognitive functions, and we also utilized online chat interactions. In the end, we conducted anonymous questionnaire of the attendees, and we were able to achieve a high score of 8.3 out of 10.

Please look at the photographs on the right side. These are initiatives that we are contemplating at the moment. We are also planning to communicate the direction of the company very clearly so that employees can work with a sense of persuasion and conviction. First, synergy forum. This is an internal event to show all of our HR-related initiatives. We plan to hold this in February. And for about 2 hours, HR will be introducing initiatives. Employees can take part on topics of their interest. This is not limited to Eisai. We also plan to include collaboration with other companies. Left bottom, Cross Talk Caravan. This is a caravan by directors roving around all of the regions to conduct small meetings. Ideally, we would like to have such caravan 100 times in a year. We are also considering stock-based compensation as shown at the right bottom. By providing stock-based compensation to all employees, we would like to increase the sense of participation in the management by the employees.

Next, please.

I'd now like to move on to the next topic. We are discussing HR-related initiatives, employees under the hhc concept, are realizing social good, and they are able to directly engage in realizing social good, the only stakeholder who are able to do so. And we would like to leverage the strength of each individual and achieve synergy within an individual and synergy in the organization to create an impact. So energy, synergy and impact. Energy within myself, synergy amongst individuals and impact. We are often discussing these 3 terms. What human capital management is promoted by Eisai. Once again, as the final topic under theme 1, what is Eisai's human capital management and innovation creation and impact on corporate value, we would like to discuss that.

On this topic, Masaka-san, please.

Since 2023, a report called the human capital report has been issued. And we are receiving increasing number of questions from investors because we have published this report. So let me share with you briefly what it is. HCR human capital report is issued originally by the HR of Eisai. And HCR 2025 had more than 130 pages, a very voluminous report was issued only for the information related to HR of Eisai. In the interest of time, this report has been highly evaluated by many people, but I would like to focus on the external evaluation of the HCR, specifically, it candid and frank description of the 4 issues. As you see from the relevant pages of the HCR 2025, this report frankly describes the challenges faced by HR, namely a global HR system has yet to be established. There are issues with the culture that fosters innovation and DE&I promotion system still needs to be improved. And there are various challenges due to the asymmetry of information between the company and employees.

Regarding the details, please read through the report. But today, I would like to focus on information asymmetry between the company and the employees, which was the subject of a question. And regarding the awareness of the internal initiatives, we conducted the Pulse survey conducted in March 2024 and '25, and this shows the results of the survey. At the beginning of 2024, for example, only 52.8% of employees had an understanding of the integrated HR strategy, which we recognized as a major challenge. In response to this, we took various measures. If you look at the left bottom, for example, we published a 2-minute HR e-mail newsletter on every Wednesday called Learn All About HR in 2 minutes. Last week, we issued the 100th of such e-mail newsletter. And over drinks, people are able to discuss management issues that is conducted in a project called Project Aka-Chochin [indiscernible] In total, 650 employees participated.

And regarding the human capital report, it's not just publishing or issuing. We believe that the post process is very important. For example, in HR, we created T-shirts to conduct promotion activities for this report. As you see on the right-hand side, over 15,000 downloads both inside and outside of the company was achieved. As a result, understanding of the integrated HR strategy increased by approximately 20% to 70.6%, significantly increasing interest and understanding of HR initiatives. So HR will continue to promote our efforts to come across.

Next, please. In addition, Human Capital Report 2025 features the following contents. Please take a look at the various aspects of Eisai's people-related initiatives. We would be very happy if you could read through this. And due to the time constraints today, we will only introduce examples of collaborations with our other companies, which are extremely important in Eisai's human capital management.

Next. So this past April, 20 people from the HR departments of Marui and Ajinomoto visited our company and followed by 20 people from Chugai Pharmaceutical in May. And we held knowledge sharing events with those representatives from other companies. All these 3 companies are leading Japanese companies in the field of the human capital, and we had the opportunity to discuss and resolve various HR issues through consultation sessions and bragging contests. I believe that this was a very valuable time for us to discuss HR-related issues. In this way, the essence of Eisai's human capital management begins with clearly identifying the challenges and initiatives we face. We believe that the quintessence of Eisai's human capital management also lies in receiving various feedback, improving our HR strategy and using it to further disclose our information. Thank you very much.

Thank you, Masaka-san. Now moving on to theme 2. In this talk session, we will discuss value creation in the dementia area, pioneering the future through drug discovery and nondrug approaches. In the beginning, in Mr. Iike's presentation, Eisai's social impact creation model was presented. Value creation starts with hhc concept, company concept. Starting from hhc concept, what does that mean? Patients and people in daily living domain, we want to understand their feeling by spending the time together. And that is what we call socialization. What kind of socialization activities are we engaged in? And how that is reflected or incorporated in daily business operations. That is what I would now like to ask the panelists to discuss. Ido-san, Masaka-san, Naito-san in that order, please. Ido-san, could you start?

Thank you. I have been working in neurology drug discovery for many years and participated in various socialization with patients, but I always felt that not just in 1 day, but continuing socialization in the same place over the years, I'm able to understand the true feeling of patients. I was engaged in epilepsy drug discovery in the beginning. Textbook says that seizure, 70% of the seizure can be controllable. But while cooking -- while frying food because of generalized seizure, patient suffered a serious burn, and I felt strongly that we must develop a drug that can reduce seizure to zero. And there is also a strong drowsiness due to drug. So I also launched a project to develop drug that causes less sleepiness.

I also engaged in socialization when I was working in Boston, autism spectrum or development disorder patients were receiving cognitive behavioral therapy. Pharmacotherapy is important, but non-pharmacotherapy is also very important. I was able to realize that. And we also had such programs in the company at the time. In the middle, -- in the past few years, I have been socializing with MCI patients in university hospitals, engaging in brain exercise, mental exercise and various activities together. And anti-amyloid test was undergone by these patients and patients were speaking of their hopes, and they were also afraid that progression of dementia may not stop. And some of the patients were desperate because their score meant they were not eligible to receive treatment, but LEQEMBI should be a hope.

We would like to deliver LEQEMBI to as many patients as possible and importance of early treatment, I'm also discussing that. And we would also like to be able to regenerate nerves or protect nerves even in advanced stage, and we would like to launch such projects. Before becoming forgetfulness, there may be change in behavior and personality because of that understanding of the mild behavioral impairment, we are discussing across the functions, whether it is possible to develop pharmacological and non-pharmacological interventions for mild behavioral impairment. And I've also participated in Relay for Life for oncology in fall. The next CT is what patients are very afraid of. CT is like a school scorecard. But with the blood to be able to test or to alleviate anxieties for recurrence, such anxieties to be alleviated, that is very necessary. And in R&D, we also are cognizant of these needs of the patients.

Masaka-san, can you discuss your socialization activities?

Yes. At head office HR, we are also very actively practicing socialization. We will also be socializing -- engaging in socialization with patients. These are photographs from last year. On the left side, with patient advocacy groups, to understand better PMS or postmenopausal syndrome, we used game and understood that this is not limited to certain gender. And if you could look at the right side, the serious menstrual cramps leading to missing business opportunity, such experience is what we heard from patients and to realize how painful it is male employees experienced menstrual pain. And these are carried out at the same time as DE&I event. This was live streamed company-wide to increase understanding and awareness.

Keisuke-san, can you share your experience? Can you share your experience?

So Ido-san explained how socialization provided important suggestion and motivation for product development. And Masaka-san discussed how socialization is utilized in developing a good organization institution inside the company. I would like to discuss interaction with people outside of the company, especially patients, how they are facing their symptoms, how they are facing society. I would like to share with you some of my experiences. On the left side, this is a conversation with early onset dementia patient. And what I heard from him was very interesting, but there were some insights that left a strong impression. When the person was diagnosed with dementia, and I'm sure the reaction may differ from person to person, but he said that he felt a sense of relief knowing the cause.

To understand to be given diagnosis may be something that people are afraid of, but some people feel that something is wrong. And having a diagnosis makes one realize that it was a symptom of a disease. It is not a problem of the ability to remember, but it's because of disease leading to sense of relief. So in this way, this person was able to accept having dementia and now he is a frequent speaker giving lectures. And with that identity, he is leading more fulfilling life than before being diagnosed. And he was a full of insight. So even with dementia, society should allow people to be fully themselves and to accept dementia and continue to live authentic life, and I want more people to know this. And I once again realized restrengthened my determination to develop drugs for them.

Reporting directly to me is a COO office and Global Digital -- together with global digital business transformation headquarters, we have invited nursing and support facility where people are employed called BLG Hachioji, and we sold tissue paper boxes and traditional cloth bags together, BLG Hachioji support facility and facility to provide long-term care while providing employment to people with various conditions, including dementia. And BLG Hachioji said that they want to be engaged in the society and would like to contribute to the society. And he has a place for social contribution, this employment type of nursing care facility -- nursing care service is provided by BLG Hachioji. Together with BLG Hachioji employees, we sold things that were made by people who are using this facility. And through that, we understand the feeling of people with dementia, and we also are seriously considering how we can truly meet their needs.

And I believe such culture is deeply rooted in Eisai. You may think that this is only a matter, of course, it is only natural, but the environment, how you perceive environment may be different and needs may differ from one individual to another. But as for the disease, rather than it being the identity of that person, it is only one of the feature or events in the life course of that person. So rather than understanding a person uniformly, we have to look at each individual differently. And in order to make contribution, we believe that pharmaceutical solution can be a very strong solution, which can be a foundational solution. But as for personalization, since drugs have to be effective and have to be provided within a regulatory framework, so it requires intervention by a person with a knowledge of a physician, but there are some gaps in digital hardware that can be used in the daily lives may be able to fill the gaps.

So we need to look at both pharmacological and non-pharmacological approaches. And that is one of the things that I've learned from socialization. In this way, the purpose of socialization is that regarding a certain disease, we would like to come up with a new answer, new solution using our expertise. And therefore, we are able to gain insights and become motivated through socialization. And we also should understand new solutions by others. There are 2 sides to the socialization. And we have new activities, new answer to dementia, and this is a material that introduces the campaign which began in March 2025. This does not introduce a socialization per se, but people who are facing dementia, how they are each facing dementia and with our various partners, we are exploring answers and some of the answers and solutions and some of these efforts are introduced.

In addition to our efforts made together with partners, our employees' messages are also shared. And this is to introduce colleagues who are working together with us. I hope you will also take a look at this campaign.

Next, we would like to share with you the Eisai's future creation strategy linking sustainability initiatives to enhancing corporate value. So Eisai's future creation strategy. And in March 2025, sustainability strategy or Eisai's future creation strategy was formulated as new strategy. And what kind of a strategy is it? And how is it connected to enhancement of corporate value? Let us explain this. First, Masaka-san, could you please explain this?

Yes. Thank you very much. It's a little bit busy. I'm sorry about that. But what we are showing you is the Eisai's future creation strategy. And before that, in 2022, we amended the part of our articles of incorporation at Eisai. And regarding the human capital management was mentioned. In actually, sustainability was also mentioned in the articles of incorporation contributing to a sustainable society with a long-term perspective. This wording was incorporated in the articles of incorporation, a kind of a constitution for the company management. And at Eisai, based upon the hhc concept, we have formulated a sustainability strategy, which we are currently implementing. And this Eisai future creation strategy, much longer than the medium-term plan, a 30-year plan and also for the further maturation and the growth of the company as well as the society, this is how this strategy is positioned.

Next, and based upon the empathy, we have been pursuing the management driven by the empathy based upon the past experience and gaining the empathy, I believe that the stakeholders and employees have been shared the empathy with the shared vision of the future. And also the relieving the anxiety over health and reducing health disparity, such achievement of social good is included in our articles of incorporation. We believe that revenue and earnings will be generated by first fulfilling this mission, and we place great importance on this sequence. In the process of achieving social good, we will pursue consideration for the environmental and also respect for human rights, maximizing human capital and ensuring governance and integrity through empathy with stakeholders. Through these processes, as I mentioned earlier, our articles of incorporation also stipulate a contribution to a sustainable society with a long-term perspective.

Next, please.

Now dementia area in -- value creation in dementia area, we would like to discuss pioneering the future through drug discovery and nondrug approaches, Company's efforts, especially LEQEMBI, how is it impacting the society? And Eisai's nonfinancial capital, how is it affecting the enhancement of corporate value. That is what we would like to discuss. Keisuke-san, please.

As we have been discussing at Eisai, we would like to realize a society where everyone can overcome dementia in their own way and use pharmaceuticals and digital technologies to create innovative solutions and come up with new answers to dementia. And we would like to realize a society where each person can pursue a new answer to dementia. We are developing next generation of drugs in dementia market, and we would like to launch one product after another from the current pipeline to change the state of dementia in the society. For example, preclinical AD, we are approaching the preclinical AD. And to a degree, preventative approach can be achieved and combination therapy can also be adopted to maintain cognitive function more effectively.

In this way, our pipeline has an impact that can change the way people face dementia and strengthening this will directly lead to having a very strong presence, overwhelming presence. For example, in Japan, and earlier, we discussed growth cycle and presence commercially is a very important -- one important area. We have representatives, medical reps who are highly valued by neurology specialists and key opinion leaders in this area are invited as speakers in many academic meetings that we organize, including Japan Academy of Alzheimer's Disease.

And also in oncology area, we are a pioneer of pharmaceuticals, and we have good solutions. But there are also areas outside of pharmaceuticals, and we have subsidiaries that have strong capabilities in developing solutions in non-pharmaceutical areas. In that sense, we think we are very unique, and we have track record in developing drugs and expertise and capabilities. And we also have in-house digital capabilities, hardware development capabilities. Combining these we are collaborating with different industry players, municipalities and academia. We would like to continue with this.

Next slide, please. So what we have to do will change over time, but I believe that the source of innovation of Eisai is science, bravery and tenacity. These 3 words show the source of innovation of Eisai. The other day, we had AD Day Alzheimer's Disease Day and concept movie was shown on that occasion. And you see some photographs from that movie on the right side in terms of science, left top shows a team, which is Eisai team, which pioneered research and development of dementia drug for the first time, led by Dr. Sugimoto, acetylcholine hypothesis, which was quite unprecedented was utilized and it was not considered a disease -- dementia was not considered a disease, but challenges were taken on to develop a drug for that with yet to be proven hypothesis.

That is with respect to science. And this attitude is quite similar to Wright Brothers who tried an unprecedented challenge of flying an airplane and Apollo 11 after many failures, succeeded in lunar landing. And in a similar way, bravery and tenacity are exerted, and we believe that, that is the identity of Eisai. We would like to continue to base ourselves on this spirit. And in dementia area, oncology area and in new areas, we will continue to take on the challenges and create new solutions.

So about the 3 words that I described and starting with science, as I discussed just now, in neurology or Alzheimer's disease, we have new products that are being developed as we introduced on ADD. AD is understood as a continuum and the fundamental pathology, amyloid beta tau and neurodegeneration. Based on that hypothesis, we will continue to test the hypothesis in the repeated process. We deepened our understanding of the disease. And this is the scientific accumulation that will continue to be the foundation of all of our efforts.

As for bravery, for example, this shows history related to dementia and our activities and social perception in chronological chart. If you look at the very left, this is from 1960s according to publication, dementia patients who are at no fault were tied, restrained or were put in a room that was closed or drugged to be dizzy. And this is how dementia was treated back then. Care was not given. It was not considered a disease that was the problem, but the people who had dementia that were the problem. It couldn't have been helped back then. But in this way, dementia was misunderstood and was isolated. But in the 1970s, as I introduced earlier, acetylcholine hypothesis was advocated. And dementia is now approached as a disease, not as people who have dementia. And drug discovery efforts began in the 1970s and Aricept was approved in Japan in the 1990s.

So it started the era where dementia is approached with a pharmacological intervention. But 170 or 117 or so products have failed in the development to develop dementia drugs. Even mega pharma stopped development because of questions about amyloid hypothesis. But because of science -- belief in science and bravery and tenacity, we finally were able to obtain approval for LEQEMBI in 2023. And opened an era where fundamental pathology of dementia can be approached for the first time in human history, more than 40 years of journey is the history of our struggle and challenge to find answer to overcome the dementia to save people from suffering.

Lastly, tenacity. As I mentioned earlier, we will never stop moving forward until the day comes when everyone can overcome dementia in their own ways. We will continue to strive to develop various solutions. And one of the big pillars, we would like to continue to develop groundbreaking treatments. But already lecanemab for early AD to slow the cognitive decline after the onset of AD that has been confirmed through our data, and we are now able to make such contribution to the patients. Going forward, there will be new additional options. For instance, in the bottom left, the first option, as we introduced on AD Day, expansion of the indication for preclinical AD. By intervening at an earlier stage, we aim to potentially prevent the onset of AD itself.

Other new treatment option is the combination therapy of lecanemab and the anti-tau antibody, Etalanetug. It simultaneously targets 2 key pathologies, amyloid and tau with the aim of completely suppressing the deterioration of cognitive function after the onset of AD. These are the new treatment challenges, and we believe that we will be able to manage dementia and the patient with the dementia will be able to control or manage their own disease in such new era. And by realizing these new treatment options based upon the chronological order, we will be able to add another event milestone on the chronological line and the science and bravery and tenacity based upon which we will continue to work hard.

Next, on the other hand, there are solutions to health issues that cannot be resolved with pharmaceuticals. And that is the goal of the dementia ecosystem, and we will build our capabilities of development on our own. In terms of the direction of development and development of the capabilities in our development in-house, we have been building from the bottom up work. At the very bottom, we developed NOUKnow to monitor the performance of brain based upon the digital index that has been introduced and the number of installation or downloads has been continuing to expand. And Arteryex, this is the group of engineers. And this Arteryex has been developing the quick cult as if you are taking a picture of the results of the health checkup and then the result will be automatically entered into the app and the user and the data volume has expanded and expected to reach 300,000 users by the end of this fiscal year.

And Theoria Technologies, “[indiscernible] this is the spin-off from us, data science and data ID issuance is the area this company is engaged in. And also [indiscernible] this has also seen the preview page views increasing from approximately 400,000 per month to approximately 700,000. So we are seeing the steady progress in this as well. At the very top, EcoNaviSta, the Life Rhythm Navi, the core solution within the ecosystem at the very top, we have been able to acquire this -- obtain this as well. And the hardware and sensor capability, development capabilities have been obtained as well.

Next page, please. As I have introduced these 3 subsidiaries and Eisai working together. For example, at the very top, the patient journey of the dementia pathway at the very top in arrows, I will not go into too much details about this, but there are a diversity of needs and solutions other than pharmaceuticals. Of course, medicines will continue to be the central part, but we believe that we have been able to establish capabilities in order to provide such non-pharmacological solutions as well. And on the other hand, there are other industry players who are taking -- playing their own part. So we would like to continue to collaborate with those people from different industries.

So we have discussed value creation in dementia area. We will now move on to the final part, Q&A. We would like to take questions on value creation report and ESG. Ms. Minamida, Head of Sustainability Department is also in attendance. We welcome sustainability-related questions as well. [Operator Instructions]

Tony Ren-san from Macquarie.

Can you hear me clearly?

Yes, I can hear you.

Okay. Perfect. Let me just ask you a couple of quick questions. Give me just one second here. Okay. Your Slide #17 and #18, right, in your presentation, it appears that in the EMEA region, in that region, it looks like the survey score have declined a little bit. I just wanted to hear from you what might be the reason behind that. Another question is about your LEQEMBI in China over the weekend, we saw that it was included in the very first China commercial health insurance formulary for innovative drugs. From our expert calls, we also understand that the suggested price discount is somewhere between 15% to 50%, 15 to 50, with the medium probably around 30% to 40%. I wanted to see how are you thinking about this? How would this help expand patient access to LEQEMBI and reduce disparity in China?

Naito will address the first question on EMEA survey results in Japanese, please.

Thank you for your question. So once again, as we noted during the presentation, in EMEA region, about 60% of the revenue come from oncology-related products. And one of the main products, Halaven had a loss of exclusivity, LOE, and we believe that this had a major impact. And because of this business condition, we think this was a major factor. And as I also noted in the presentation, regarding our communication and the leadership, is there room for improvement? I believe so. Regarding the change in business conditions, we could have explained more. And that is the result of the engagement survey. So we would like to utilize that going forward.

On the second question, it's a little bit outside of the value creation report in ESG. It's related to news release. So after the end of this event, IR will contact you offline separately.

Next, I think the person who has been raising his hand, Hashiguchi-san from Daiwa Securities. Can you hear us?

This is Hashiguchi speaking. Thank you very much. Regarding the engagement survey that was asked earlier, I have my first question about this. Items of leadership, yes, EMEA scores seem to have been done. But regarding the Japan, the domestic network, there is a significant improvement in the innovation, there is a significant improvement in the domestic network. So how do you analyze this? And do you think that there is a possibility that this initiative can be rolled out through other regions?

Regarding this question, I would like to ask Masaka-san to respond.

Hashiguchi-san, thank you very much for your question. As you are seeing on this slide, regarding the domestic network, Japan subsidiaries, I believe that there is a significant improvement, and we broke down this and EA Pharma has shown significant improvement through the structural reforms and the EA Pharma has been reborn and they are promoting their businesses. What did they do under the top management and the management team members had a secure dialogue with employees and the strategy of EA Pharma has been communicated thoroughly to employees. And that is what they did repeatedly. And because of this background, I believe that the scores in the innovation area, particularly have seen improvement in Japan subsidiaries and the latest technologies as well as AI technologies are utilized as well.

And regarding the rolling out of the same initiatives, communication to all employees as well as the strategy -- corporate level strategy should be communicated to all employees, and that is the initiative that should be rolled out to other regions and entities. In other regions, actually, that is what they are currently doing already, but in different formats or the initiatives utilizing digital technologies using their various channels, I believe that they are going to show improvement in the scores in the leadership area. So as I mentioned earlier, this is included in one of the measures that we are currently thinking about to roll out. Thank you very much.

My another question is related to the new initiative. The future creation strategy was formulated newly this year. By formulating this strategy, how do you think the future direction is going to be changed, which was not clear to me. And you discussed that you are eyeing at the time 30 years ahead of us. So in 30 years from today, thinking about the future of the company in 30 years from today, what kind of issues or challenges are you going to face going forward? And how are you trying to change your initiatives in line with that? So how this future creation strategy of Eisai is connected to the future direction of the company?

Ms. Minamida is going to respond.

Thank you very much for your question. I am responsible for the sustainability department. So regarding -- thank you very much for having interest in our Eisai's future creation strategy. In the process of formulating this strategy, as we have explained today, we use the HCC (sic) [ hhc ] concept as the basis because this is deep rooted in our mindset. So of course, there were various opinions inside our organizations, whether this is a new strategy is necessary. And hhc concept stays unchanged. And this future creation strategy is based upon this hhc corporate concept. But what is included in the articles of incorporation, the contribution to a sustainable society over the long-term period in order to realize that rather than the medium-term plan, but we needed to have a longer perspective, thinking about the society's maturation and growth of the companies as well. These have to be redefined. That's what we thought.

So that's why we have had a discussion over the past 1 year to formulate this future creation strategy. So we are eyeing at 30 years from today. And that is the time when the current children will grow up to be adults so that they will feel like working for Eisai. In 30 years from today, Japan or people in Japan will need to collaborate with other people from around the world. Otherwise, we won't be able to sustain ourselves standing along. So we have to work together with people in Asia, and we have to better the world over in society and as well as our company. So that is the basis for our discussion. As you see, there are 4 elements of this future creation strategy: patients, global environment, society and governance.

So this strategy will be the foundation for the management, and we would like to continue to contribute to the patients and their family. And based upon this foundation, we would like to enhance our corporate governance and also the contribution to the resolution of the social issues, including global environment conservation. We would like to work on these issues in the medium- to long-term perspective. And regarding penetration of this into the employees, we would like to utilize the existing platform, and we would like to have all the employees feel like that they own this future creation strategy for -- by taking the measures in next year onward.

Due to time limitation, we would like to take one final question. Koguchi-san from Mitsui Sumitomo Trust Asset Management.

Can you hear me?

Yes.

Koguchi from Sumi Trust Asset Management. I also have a related question on future creation strategy. There is an asymmetry of information between the company and employees and efforts to address this was discussed -- were discussed by Masaka-san and Naito-san. Is there an improvement? I believe that there has been some progress. But as a challenge, looking at the remaining challenges, information regarding future is not clear, clear future vision is necessary. These are the voices from the employees. So about the future, difficulty envisioning the future might mean that difficulty increasing corporate value. That is my naive question. The current future creation process. According to this process, do you expect that this will be improved? Is that why you're emphasizing future creation strategy? So the future vision that is not clear to employees and the efforts that you're engaged in, how are these 2 related?

Mr. Naito will respond.

Thank you. And I hope that my colleagues will add to what I have to say about the future vision. Connect. Regarding Connect, we had conducted a survey and received the survey results. As Mr. Koguchi mentioned about the future and the definition of the future may differ from one person to another and also for future vision. In EMEA, it is also a question of the lack of clarity of the vision. But at a deeper level, there is also business condition that is affecting the survey results. So of course, regarding vision, including the measures that we've presented today, we would like to communicate more to our employees. And at the same time, business sustainability, the sustainability of the business, the 2 are necessary to address the anxiety fundamentally.

On the other hand, Japanese pharmaceutical companies in comparison to global mega pharma, global mega pharma, relatively speaking, are difficult to predict. It is not that we have hundreds of clinical trials underway in case of Japanese pharmaceutical companies. So it is difficult to show a complete stability in -- but one of the outcomes that we can show here is, as Ido-san mentioned, and as I also mentioned, constantly, we are launching products, including in-house developed products and licensed products. And I think constant launch is important. So vision, we will continue to make efforts to clarify vision. But what about the latest performance, the business sustainability should also be shown to our employees. I think both are very important. To achieve these 2, I'm sorry, what I'm telling you is quite boring, but I think we have to focus on these 2.

Keisuke-san, with tenacity, I hope you will work on this.

So unfortunately, we have reached the time to close this session. We would like to close the FY 2025 Opinion Exchange Meeting on value creation report and ESG. Before you leave the Zoom platform, you will see the screen asking you to cooperate on the survey. So if you have time, please cooperate in filling the survey form. Thank you very much once again for your participation.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Thank you very much for attending the briefing session by Eisai Company Limited. We will now begin financial results and business update session by Eisai Company Limited for Q2 fiscal 2025. Today, this is held in hybrid format combining in-person attendance and virtual attendance. For those attending in person, we have distributed flash report financial results and deck of slide presentation. Those of you who are participating virtually, please download these materials from the website.

The presenter today is Mr. Haruo Naito, Representative Corporate Officer and Chief Executive Officer. Mr. Naito, CEO, please.

Let me begin our presentation for the first half of FY 2025. So let me look at the results for the first half. As you see at the very first bullet point, inorganic business of us. Pharmaceutical business has shown steady growth in profits as well. Most of the profits are from the frontline business, which is Pharmaceutical business and we could achieve increase in both revenue and profits. I believe that that is the most important point that I wanted to share with you today. And regarding our forecast for the full year results, I believe that there are various opinions.

So when we see the stock price trend after announcement, I was disappointed. However, I believe that there are some requirements for the second half that is written in the second bullet point. Anti-Tau antibody and narcolepsy treatment, these are the 2 next generation neurology area promising projects of Eisai into which we are making investment of resources into this because clinical trials and studies are now reaching the peak. And on top of that, there are structural reforms in Europe and in line with such structural reforms, there will be various expenses to be incurred. Therefore, we do not intend to revise the full year forecast.

So we did not make any revisions to the full year forecast. In the red box, revenue was JPY 400 billion. Compared to the previous year given the stronger yen trend, we could achieve about 4% increase in revenue year-on-year. And as I said earlier, in the next line Pharmaceutical business revenue JPY 393.3 billion is shown here. And most of the JPY 400 billion in revenue was generated from our organic business. Cost of sales, given the impacts of domestic drug price revision and changes in the product mix, were offset and the cost of sales was managed within the planned range.

Gross profit was increased by about 3.0 percentage points from a year earlier. R&D expenses accounted for 18.9% of the revenue. Therefore, R&D expenses were managed under 20% of the revenue. We were able to manage these expenses as such. One of the reasons for this was the clinical study expenses for LEQEMBI have peaked out, which have started to show decline and in the previous year, there were some restructuring including the headcount reduction. Therefore, R&D expenses ratio to the revenue was controlled within 20%.

Now for SG&A expenses increased by 3.6%. As you see below this line, Lenvima grew very steadily. Therefore, expenses regarding shared profit of Lenvima paid to Merck increased and SG&A related to R&D. We are still in the phase of increasing the resource investment into the LEQEMBI. Therefore, operating profit was JPY 34.4 billion, which has shown the significant increase of 23.6% from the previous year. And operating profit estimated for the full year is reported to be JPY 54.5 billion and most of which is going to be generated from Pharmaceutical business.

So in other words, the profit structure of Eisai has shifted to be more dependent on the organic business in order to increase and record profits and we have started such a transformation of our profit structure during this first half in this fiscal year. The Pharmaceutical business is grown by 3 global brand products. LEQEMBI, which has grown 153% year-on-year. We believe that this was a significant growth. It's about 2.5x the size recorded last year and details of this will be explained later.

And for Lenvima, in main markets for us in the United States, there was a negative impact of Inflation Reduction Act. There were some suppression caused by this act, but this negative impact was offset and for all the cancer types we were able to grow Lenvima business. Therefore, Lenvima has been able to maintain its growth so far. And Dayvigo as well, the impact of drug price reduction in Japan was offset and 15% growth was shown.

Now looking at the breakdown of changes in operating profit, JPY 27.8 billion last year. Gross profit increased JPY 9.1 billion. R&D expenses, because of the reasons I mentioned earlier, was controlled better by JPY 6.2 billion. SG&A expenses increased JPY 7.1 billion thus reducing the operating profit. And other income and expenses include some changes from the previous year, therefore, recorded minus JPY 1.7 billion. And we recorded JPY 34.4 billion operating profit, which was 8.6% operating profit margin.

Today, I would like to focus on LEQEMBI, but I prepared just 1 sheet of the slide for Lenvima. Since its launch, 10 years have passed and it has been approved in 81 countries and marketed in those countries and already we have been able to contribute to 580,000 patients in the world and it has been indicated for 7 indications in 5 cancer types. And due to the favorable court decision and settlement agreements to resolve litigation of the high-purity patients in the U.S., generic versions of Lenvima will not be launched until July 1, 2030.

As you see, JPY 166.5 billion was the total revenue. But you can see in this pie chart, sales by cancer type is shown here and the largest revenue is generated from the indication of RCC, which has been the driver of growth. For RCC, there are 2 studies which have been conducted together with Merck, LITESPARK-011 study and LITESPARK-012. With these 2 studies, the top one is for second line of RCC, Lenvima with belzutifan, Merck's anticancer treatment combined with Lenvima and the primary endpoint was the extension of a progression-free survival.

This primary endpoint was already met. And together with regulatory authorities, including FDA, discussions for preparation of the potential submission have begun. And the bottom one is the first-line trial for RCC and this is based upon the assessment variation of the treatment pembrolizumab, KEYTRUDA was added to the above mentioned combination and with the same regimen conducted in the first-line study for RCC. And compared to that, favorable results were obtained and ESMO was the place where the results were published. And these studies are ongoing steadily in this expansion of the label based upon this base RCC indication.

So we believe that this is going to be very positive factors for further driving the revenue. LEQEMBI has been recently approved in Canada. Therefore, LEQEMBI has been approved in 51 countries and territories. So the requirements to be the truly global product have been met through building such a foundation. For us, we understand that Alzheimer's Disease is a progressive disease and may be potentially fatal disease. Therefore, removal of Abeta plaque is confirmed through amyloid beta PET, but it is not the end of a treatment and the neurodegeneration process will continue and the cognitive decline will continue. That has been shown by data.

Therefore, for this kind of disease, the early initiation of treatment and maintenance of treatment should be continued and that is the key to treat such disease. That is the key point that we have been continuing to have in our mind and I believe that this has expanded the basis for this treatment. As you see, the administration methods are shown at the bottom. During the first 18 months after initiation treatment was started, the IV once every 2 weeks are provided and after that, maintenance treatment period will be started. In the past, there was only 1 option to dose through IV once a month.

But this time, LEQEMBI IQLIK self-administration method is approved and launched with a great option of once a week dosing. Therefore, it has made maintenance treatment much easier through the launch of LEQEMBI IQLIK. Now value proposition by LEQEMBI is being enhanced. Regarding administration period and dosing, as I said earlier, in the genre of maintenance treatment that has been cultivated by LEQEMBI. And when it comes to safety, particularly incidence of ARIA, based upon the real-world data in the United States and also Japan's all case surveillance, including over 10,000 patients.

Based upon such a large scale data, the incidence of ARIA and the severity or seriousness of ARIA are all within expectation described in label. So we did not belittle the importance of ARIA. However, based upon this safety data, we believe that ARIA can be manageable. That has been confirmed. And now if you turn to efficacy aspect. Above all, Clarity AD has been conducted during the open-label extension study for 4 years and CDRSB difference against placebo over 48 months and this is the difference from the reference of ADNI and CDR difference has been expanded to 3x or 4x.

So toxic substance is shown to being removed through disease-modifying effect of this drug in your brain. That has been shown by this data and AIC was the place the U.S. real data, 2-year real-world data was shown and 8.8 out of 10 was shown in terms of satisfaction score and 87% of the patients were continuing LEQEMBI treatment and 84% of patients had not progressed to the next stage of the disease. Such very quite robust data results were obtained from this real-world evidence. And in the daily lives, how cognitive function has been maintained or improved. Humanized message was utilized in order to show that in an easy-to-understand manner in explanation to patients.

Now you can see here the first half results in revenue of LEQEMBI. Please look at the very bottom line. JPY 41.1 billion was recorded as the global revenue, which was 153% of the result recorded in the previous year. As we have been reporting to you, in China due to the geopolitical risk, the stockpiling for the period until the end of this calendar year. By the end of December, distributors have purchased to secure the inventory up until the end of calendar year. Therefore, JPY 7.7 billion was recorded in Q1.

And in parenthesis, you can see the actual demand excluding such stockpiling by distributors in China are recorded and JPY 2.7 billion was recorded in the Q2 and the JPY 5.1 billion in the total first half. So considering all this, JPY 38.3 billion was recorded based upon the China's actual demand basis. Even with this 135%, very high growth ratio was recorded from a year earlier. In all regions, high growth were recorded exceeding plans for all regions. And JPY 76.5 billion has been shown here as the forecast for full year and our progress to date against this forecast exceeded 50%. Therefore, we are deepening our confidence in achieving this full year forecast.

Now turning to LEQEMBI IQLIK. I have brought this with me here. This was the first ever commercial unit produced. This is the real thing, real product, very valuable products. I would like to decorate this in frame or box in my office. So this is the memorable and commemorative first-ever products and this was launched on October 6 this year. And what are the benefits for patients? First, the patients or care partners are able to administer at their home within approximately 15 seconds or so on the average and they don't have to drive or visit the infusion centers in person. We believe that this will be a great benefit for them.

For medical institutions, on the other hand, they don't have to do a lot of monitoring or preparation for IV infusion, securing [ chairs ] or monitoring by nurses or health care providers involved in the administration. These medical resources can be reduced. This will be a significant saving and they will be able to expand the capacity to accept new patients. At the time of launch, we started the LEQEMBI Companion program. LEQEMBI IQLIK is to be covered under Medicare Part D. The reimbursement shall be conducted by private insurer.

Although they are still under the supervision of CMS, but private insurers will be in charge of reimbursement and private insurers have set the cycle of formulary introduction at 15 months. Therefore, in January 2027, the formal formulary will be putting this LEQEMBI IQLIK on their list and there is a program called the Medical Exception Process in the meantime until the IQLIK will be put on the formulary. So under this Medical Exception Process, the reimbursement can be allowed and this has been used widely in the United States and this process will be applied to LEQEMBI IQLIK as well.

Information and support related to this process are provided by our area reimbursement managers and nurse educators are providing in-person or online support to patients for dosing and providing demo kits for dosing training. This is the demo kits. And 4 weeks have passed since launch and IQLIK initial delivery has been conducted at 34 facilities in the U.S. and demo kits for administration training were provided to 341 facilities and they have started preparations for use. And Medical Exception Process, under which I believe that most of the patients have applied for this and we anticipate a smooth reimbursement process to be conducted under this process.

So as regards to the reimbursement for LEQEMBI IQLIK, we do not have any concerns and we believe that the reimbursement process will be smoothly conducted. Regarding initiation treatment for IQLIK: during the first 18 months and submission for this initiation treatment has been started in the United States and a rolling submission process has been utilized. And the last such submission will be conducted in December this year. And we were expecting to receive priority review status if that is approved and then in 6 months approval may be provided in first quarter of FY 2026 for both for initiation treatment and maintenance treatment.

For both periods of treatment, LEQEMBI IQLIK may be utilized before dosing. So that is approaching. And in Japan, we are prioritizing the submission for the initiation treatment for SC-AI. This will be conducted by the end of this December. On the right hand side, you can see that this IQLIK has been selected by TIME Magazine as one of the best inventions of 2025. Now another topic I would like to talk about is the confirmatory tests using BBM in the United States. There has been a significant advancement during the past 6 months.

In July, AIC was held in Toronto, Canada. Alzheimer's Association of the U.S. put forth BBM Clinical Practice Guideline. And BBM tests with 90% or higher sensitivity and specificity can be recommended for confirmatory amyloid beta diagnosis. That has been proposed and published through this guideline. And Fujirebio's BBM was approved before this. Based upon the composite score, this BBM was granted the IVD clearance and this achieved the above criteria of 90% or higher sensitivity and specificity. Under this practice guideline, Fujirebio's BBM is now allowed to be used as confirmatory diagnosis.

LabCorp and Quest Diagnostics or other leading clinical laboratory companies in the U.S. have introduced this as a test item. Therefore, confirmatory testing has been started utilizing this BBM. C2N as well, based upon different methodology, submitted FDA regulatory filing for BBM. And CMS for Medicare, a new national payment rate of $128 per test for BBM has been decided and it will be applied as effective from January 2026. That has been already announced. We believe that this will drive the use of BBM further as a tailwind. Currently, already for amyloid beta confirmatory tests, about 10% of such tests are estimated to be conducted utilizing BBM.

Outside of the box, triage test. Roche BBM using pTau-181 was granted IVD clearance. This is particularly for PCP, primary care physicians, who may use this for triage. Now I am showing rather complicated diagram I'm afraid, but I would like to use this for explanation. What I would like to say is by introduction of BBM test, amyloid beta test particularly confirmatory test, and how the number of such tests and the number of positive cases will change up until FY 2027. Rather based upon the robust data, we would like to present our estimates.

First of all, please look at the bottom blue line, solid line. This shows the number of amyloid beta confirmatory tests based on BBM. This shows the trend of increase in the number of such tests. If you look at FY 2025, as I said earlier, about 10% of the confirmatory tests is being conducted using BBM. And then over '26 and particularly after 2026 with higher likelihood, the BBM-based confirmatory tests are expected to increase. And next, please look at the orange solid line. This shows the number of amyloid beta confirmatory tests using PET and CSF only. So during FY 2024, PET and CSF were the only approaches for the amyloid beta confirmatory test.

So this shows the trend of number of such tests based upon the conventional methods. And once the BBM confirmatory tests are launched and then orange line, the curve will be less steep. And the purple solid line shows the number of amyloid beta confirmatory tests of all 3 methods: PET, CSF and BBM. The total number of confirmatory tests are shown. And above that, if you look at the red solid line, preclinical triage utilizing the ones like Roche's BBM. And the total number of BBM tests is shown here for both triage and confirmatory tests and this has shown an exponential increase.

Based upon this, if you look at the pink bar first, the pale pink bar shows the amyloid beta the confirmatory test. The total number shows for 2024 only PET and CSF were used and in 2025, the BBM is added and going forward, the number will increase. And the pink arrow shows the number of amyloid beta positive cases, which is expected to be increasing. And the number of confirmatory test as well as the positivity rate are also considered to be increasing. And the positivity rate was 50% in 2024. But in 2027, it's expected to be reaching 80% as positivity rate. Why?

In triage or prescreening, BBM will be used and the PET CSF positivity rate will be between 50% to 70%. And then that is the 1 step to increase the positivity rate. And BBM confirmatory test becomes available and then for example PCPs will be able to utilize this for diagnosing and ordering the test and the results of the test will return it to them and their proficiency will be enhanced. Before ordering the confirmatory test for BBM, the confirmatory test precision for the cognitive function test will be increased. So their proficiency level will be enhanced based upon this and the positivity rate is expected to reach 80% or so.

So amyloid beta cases will increase significantly and actually, there has been quite a high correlationship between this numbers and growth rate of LEQEMBI. I believe that this is another evidence to show that LEQEMBI is expected to grow further towards FY '27. The other day we've presented that there are 3 options for modified AD continuum that only Eisai can deliver. I would just like to share with you once again the gist of this. First, with the current LEQEMBI, suppression of cognitive decline after AD onset. The biggest characteristic here is long-term administration.

We have 48-month long-term data. Efficacy was demonstrated and expansion of efficacy was demonstrated. Why is that possible? It is shown in the third bullet point. There is low immunogenicity neutralizing antibody incidence of lecanemab. This allows for long-term administration. Because of this advantage due to property, it is possible to suppress cognitive decline after AD onset. And before MCI, the earliest stage, preclinical AD or stage is tested in the trial. As shown in the middle, the biggest characteristic of our trial is shown in the second bullet point. Pure preclinical AD patients are selected.

Global CDR is 0 not 0.5, but 0. Abeta accumulation is measured with Abeta PET, it is greater than 40 centiloid. This is preclinical AD as determined under the guidelines. These patients are selected in this trial. That is showing the precision and accuracy of a preclinical AD trial. This duration of a preclinical AD stage is very long. So low immunogenicity and neutralizing antibody incidence can be utilized for long-term administration. And the final bullet point, data endpoint is PACC5. Preclinical AD clinical conditions or symptoms are most precisely reflected in PACC5. Such endpoint is used. And this is also based on the guidelines determined by FDA and EMA.

And therefore, this is very legitimate. For regulatory purposes, we have conducted a Phase III study. That is the characteristic of AHEAD 3-45 Study. And finally, combination with etalanetug. This goes without saying that there are 2 major pathologies of Abeta and Tau. We are able to approach both. This is a treatment that is epoch making in that sense. We are aiming to maintain cognitive function after AD onset. This cannot be done by anyone in the world. No one can come near us. This is the unique option that is available from Eisai.

Etalanetug has obtained clinical proof of mechanism with DIAD population. 202 Study with sporadic AD is enrolling patients steadily. Biomarker is used mainly for optimal dose and target population, biomarker evaluation is used mainly. This is a study design, which is quite epoch making in that sense and first data readout is expected in fiscal 2027. As for preclinical, data readout from Phase III is scheduled for fiscal 2028. Preclinical AD, what is preclinical AD? This shows the summary concept. Early AD is shown on the left, prevalence is 240 million people. That is the estimated prevalence.

A large number of people are estimated to have early AD. Preclinical AD and in order to calculate people who are eligible for AD-DMT, we use a Phase III study criteria and number of patients eligible for AD-DMT is estimated to be 2.3 million people. What I'm trying to say is that we also have a very large potential market in preclinical AD. It is quite near us. In addition to early AD, there is a huge market potential of preclinical AD, which is right in front of us. Now nationwide in the United States, National Education Program is being held, 1,000 people participated.

Shown on this photograph, the left 2 are patient and family, they are smiling; and 3 people on the right side are U.S. leading AD experts. We have a very large volume of data and they were confirmed once again. We also have IQLIK, a breakthrough administration method. These were discussed in this program with many people responding actively. On the right side, this is a medical program. This is on the concept of smoldering Alzheimer's disease. AD continues to smolder. Plaque removal is not the end of the story. Toxic species continue to increase. Continuous treatment, therefore, is necessary and such campaign is continued.

Another major initiative is targeting PCPs, primary care physicians. Primary care physicians are very important. Many MCI patients first visit PCPs and there should be correct diagnosis and speedy referral to the specialists in order for treatment to start. So in the second half, PCP specializing representatives are assigned. 3,500 targeted PCPs are the primary targets. The key message is shown as an example on the right side. This is the cover of the brochure. Early referral can mean early intervention with LEQEMBI. Early referral to specialists and that would mean early intervention with LEQEMBI. That is the message.

And therefore, PCPs will have to be able to quite accurately diagnose MCIs and refer patients to nearby IDNs, which is a group of clinics with a number of specialists. There should be quick referral to such institutions. We would like to help PCPs by establishing a standard procedure for referral and IQLIK and BBM developments will also be a strong tailwind. For similar purpose to promote treatment, we have a targeted DTC TV campaign. This is not a normal TV campaign, but it's targeted. Who are the targets? Early AD diagnosed patients.

These patients are not taking the next steps such as the tests or informed consent. That is understood to be the case. So targeted DTC TV campaigns were conducted. We were able to see good results in the first half. We will double the effort so that there will be next steps taken by the patients to move on to informed consent and actual infusion. This campaign has already started. In other markets, we are also seeing good progress. In Japan initial introduction, there are 800 initial treatment facilities and there are 1,600 follow-up facilities. 800 initial treatment facilities will be treating for the initial 6 months.

And as shown in the middle of this, we have done TV campaigns to increase awareness of the disease. About 1 in 3 of Japanese population is aware of MCI now, what MCI is as a disease. Such disease awareness initiative campaigns effects are shown. This is wonderful. And 330,000 have visited specialists and close to 30,000 have received Abeta tests. The speed of referral from PCPs to specialists has also increased by about fourfold. On the right side, LEQEMBI in China. Yin Fa Tong through collaboration with JD Health is a digital platform for promoting visits to clinicians and diagnosis and follow-up.

Yin Fa Tong is now used by 620,000 people and cumulative consultation number is 26,000. Digital means it is used to build the pathway and much progress is seen. And next bullet point is extremely important. In China, currently we are focusing on self-pay market. Towards the market with self-pay patients, we are promoting. But for true expansion, it is important to be listed on the NRDL. The Chinese government recently decided to leverage private commercial insurance for innovative drugs. Such a new scheme is being introduced or proposed by Chinese government.

We would like to respond to this and in China, we would like to improve our access to very huge market in China. As for Europe: LEQEMBI in Europe. In Germany and in Austria, we were able to launch very smoothly. In Germany, the drug is reimbursed at discretionary price. In Europe, commercial and medical activities. The first bullet point it mentions CAP, controlled access program, is obligated in all European countries by the authority. And what needs to be done here is that prescribing doctors and prescribing facilities have to satisfy certain conditions as prescribed under CAP.

So satisfying doctors and facilities need to be registered and LEQEMBI can be prescribed in these registered facilities. That is the scheme. 350 facilities, 420 doctors are registered in case of Germany. Number of facilities registered and number of doctors registered, there is no limit for LEQEMBI. There has to be prior registration for certain products. In that sense, large clinics and specialists are starting to prescribe smoothly.

And I have 3 more slides before I end. Eisai's mission in AD is to make AD diagnosis and treatment familiar for patients and encouraging them their standardization and widespread adoption. IQLIK and BBM are the potential 2 innovations to achieve this. This example was seen in rheumatoid arthritis. BBMs appeared, major disease-modifying drugs instead of IVs were made available, SC-AI formulation emerged leading to a major transformation. So this could be repeated. We see great potential in both early AD and preclinical AD.

With that, I would like to conclude and thank you very much for your kind attention.

We will now move on to Q&A session. We will be entertaining questions from analysts and investors before entertaining questions from the members of the media. If you have question, please give us your name and affiliation before your question. If you have a question, please raise your hand.

My name is Yamaguchi. I'm Citi. I have a question about the performance and the actual results as you explained at the outset, but there are still others. And if you include that number in the revenue generated from other businesses than Pharmaceutical business and I believe that if you add that number, then there will be further upside to the second half. But inclusive of that considering the restructuring in Europe and also R&D so the upside will be used for those expenditures. But inclusive of that potential upside, there are still uncertainties. That's why you have kept your full year forecast unchanged.

The first one, the onetime is going to be offset by onetime factors. So actual revenue from organic business or profits, JPY 54.5 billion. That is the number that we believe that we are going to approach.

So JPY 54.5 billion is the number that you are going to keep as it is.

But under this number, the most will be brought about by the organic business. I see. Then the shortage not depending on the onetime factors.

Understood. On Page 11, I was interested in this diagram. I have 1 question. The total number of tests increased and hitting rate or positivity rate. So these are the 2 functions and how these 2 are going to play out? Could you please give us the dynamics?

For your question, Mr. Toyosaki is going to respond.

I am in charge of medical affairs in the United States. My name is Toyosaki. In FY 2024, we have taken this data from the claims data. And for FY 2025 this year, similarly based upon the claims data, amyloid beta tests and number of BBM tests and the positivity rates that has been already confirmed to be increasing. This trend of increase is one thing and on top of that, as has been explained in presentation with the spread of BBM, there are several positive events. First of all, clinical practice guideline was published and based upon certain criteria, there has been a recommendation to use BBM as the confirmatory test.

Fujirebio's BBM has been granted the clearance. Therefore, there are requirements that have been met by the BBM. And LabCorp and Quest and leading laboratory companies have added this in their menu of the testing. And in January next year, the CMS national payment rate will be applied and about $130 per test will be applied throughout the country and BBM reimbursement will be consistently applied. These events are being conducted and happening in the United States one after another. So considering this, first of all, the use of BBM as confirmatory test will significantly increase.

And for PCP, the triage BBM tests have been granted from Roche. Therefore, not only for neurologists, but also for PCP, the test of BBM as a triage will be increasing. And in 2027, we believe that there will be such an increase in the number of BBM-based tests.

I'm Wakao from JPMorgan. First question is about returning to ROE of 8% for next year. That is the target and could you elaborate on this? Up to second quarter, the actual business is performing very well. So ROE of 8% level to be achieved, I believe you are making positive progress. So how do you see the situation currently? Having said so, in the next fiscal year, would you require sales from other businesses? Pharmaceutical business is performing very strongly. So with major products, do you expect to be able to achieve 8% return on equity?

That question will be addressed by Mr. Iike.

Thank you very much for your question. This is Iike speaking. Last fiscal year and the fiscal year before that in the so-called other businesses, operating profit was about JPY 40 billion. And we wanted to wean ourselves from relying on that and so that is what we are seeing in this fiscal year. In this fiscal year, as CEO mentioned, especially in the second half we are planning to make expenditure in structural reform mainly in Europe. There were more reliance on onetime factors in the past 2 fiscal years. But without relying on these onetime factors, we want to achieve the figure as we informed in guidance.

LEQEMBI in the past and up to this fiscal year is still incurring loss as a single product, but the margin of loss has been reduced substantially since last fiscal year and there will be a continuation of positive trend. And therefore, in terms of operating margin, we expect a significant increase and we would like to be able to meet the expectations of shareholders for ROE. And beyond that, we would like to return to double-digit figure and we are on the way to achieving. We are in the process of achieving this as we see the situation.

Another point, this was not discussed much, but China. In China, we have LEQEMBI and Dayvigo and Urece, this is the gout treatment drug. We have these 3 products in China, NRDL listing or stage before that, coverage by commercial insurance. If this can be achieved, there is a potential for rapid expansion. In the past in China, Lenvima was the driving force pushing up the company-wide performance. So we would also like to continue to make much efforts in China market so that it can be a factor for growth.

I have 1 more question. On Page 9, SC coverage is shown quite extensively. Based on the presentation today, LEQEMBI IQLIK; in terms of sales increase, it may be after January 2027 that sales increase will be observed from LEQEMBI IQLIK. Is that correct? And initial dosing indication may be approved in the first quarter next year? And from January 2027, do you expect to book sales for that indication as well?

Medical Exception Process we believe will be applied to about 80% to 90% of the patients. In January 2027, listing of official formulary is expected. But before waiting until then, high probability we believe that patients will be able to be reimbursed for the insurance. Between Eisai and insurer, we will have to agree on this or negotiate. So Medical Exception Process, it says exception, but it's not exceptional. Regularly this scheme is utilized. I believe your concern is that we may have to wait until then to see large sales, but that is not the case. Please follow up, Mr. Haruna.

Thank you very much for your question. I'm Haruna responsible for U.S. business. I would like to add to what CEO said. Commercial insurers, patients and HCPs are giving us very positive feedback. As for insurance reimbursements, earlier CEO Naito mentioned, in January 2027 it may be listed in formulary. But before waiting until then, through this process we believe that it can be made more widely available. Easy example to understand is IV reimbursement rate and the current SC level is similar. Therefore, we do not see this as a bottleneck at all. The initial treatment in next year, if that is achieved, I believe that will be a major game changer. With the launch of IQLIK, long-term treatment will become easier and that is also a major benefit. For patients, it is a huge benefit.

My name is Hashiguchi from Daiwa Securities. Regarding your forecast for the results. At the beginning of the fiscal year, onetime expenses were not included, but onetime revenue was included. But regarding the progress for first half, the cost of sales ratio was lower than planned. In my reading and R&D expenses compared to full year forecast, the progress seems to be slower. These trends are expected to continue into the second half. And even without onetime revenue, you will be able to get closer to JPY 54.5 billion in operating profit excluding onetime factors.

R&D expenses, whether these expenses will be contained with this level, we are not sure yet. But as I said earlier, we are going to put resources into the forecast projects and we are sure that we needed to continue to invest resources into these main themes. The more efficient expenditure of R&D expenses should be secured. As Mr. Hashiguchi mentioned, that is almost the same scenario we have in our mind.

Another question is about etalanetug Study 202. Data readout is expected in fiscal year 2027 and clinicaltrial.gov shows the primary completion date is December 2026. And so this shows that the progress has been slower than expectation. But do you think this is different from what you say here from the primary completion date and what kind of events do you foresee for fiscal year '26 and '27?

Mr. [ Horea ] is going to respond to your question.

I am in charge of translational science. My name is Horea. Let me respond to your question. Regarding Study 202, the completion of the study as described in clinical.gov is scheduled to be at the end of December 2026. But after that, the samples will be analyzed and the results of the biomarkers will be summarized and inclusive of the statistical analysis and readout from the trial is expected in the first half of fiscal year 2027. Thank you for your question.

Are there any other questions? Yes.

I am Sakai from UBS. About Medical Exception Process. In the past, SC formulation when it was near launch, Medicare Part D to Medical Part B switch was mentioned. By cutting our process, sales can be booked earlier. More clinics will be using SC, more institutions will be using SC. Is that what you are saying? And as for Medical Exception Process, is this introduced in practice? Can you cite some actual example?

IQLIK was to be applied to Medicare Part D. It will be applied to Medicare Part D. Did I mention switch from Medical Part B to Part D? From Part D to Part B, did I really mention that? I trust Mr. Sakai so I may have mentioned that. But Medicare Part D will be applied. That is the category of the product. So please understand that Part D will be applied. And as for Medical Exception Process, details will be given.

This is Haruna speaking. First, about maintenance treatment of IQLIK, IV LEQEMBI will be Part B and from Part B IV, they will be switched to IQLIK which is applied Part D and that switch is actually occurring. When you are switching to Part D, Medical Exception Process is used for insurance reimbursement. And to add a little more, LEQEMBI IQLIK is already being prescribed and patients are receiving IQLIK treatment already. Is this common practice?

MAP is very common for MS or diabetes Medicare Part D drugs, anticancer drug is not included. But in most drugs when new drugs are launched, this process takes place and many use this process. Neurologists, we conducted a market research of neurologists before the launch of IQLIK and more than 80% of neurologists have used MAP process before. We are also providing information, but physicians are already familiar with this process. And by providing ample information, reimbursement is taking place very smoothly.

I also have a question on reimbursement in China listing on NRDL. What is the timing that you expect to be listed and how will you apply? I understand that there is stockpiling of inventory, but what is the timing for NRDL listing?

Ms. Sasaki will respond.

Thank you, Mr. Sakai, for that question. I am Sasaki responsible for China business listing on NRDL. And as I introduced on the slide for innovative drug, Chinese government is introducing a way to increase access by leveraging commercial insurance usage. We are considering the market environment, including competitive landscape and expansion of the use of BBM. And when we decide that we are able to use this, we would like to make use. In self-pay market, we will achieve growth and by utilizing such program, we believe we can accelerate the growth. NRDL and related initiatives, these are announced by the authorities in China. We cannot say the timing on our part. So I hope Mr. Sakai will also pay close attention to announcements by Chinese authorities.

Understood. But price will be lowered so how should we understand the offsetting impact?

This is preaching to the converted, but sales equal price multiplied by number of units sold. So naturally that will have to be taken into consideration. Otherwise, we will be scolded by investors.

We would like to receive questions from participants online.

Mr. Tony Ren from Macquarie Securities.

Tony from Macquarie. Can you guys hear me clearly?

Yes, we can hear you.

Perfect. So first one, a simple one. So it appears that your gross profit margin declined a little bit. On Slide #1, that is attributed to product mix and the drug price revision. Just wanted to see if you could provide a little bit more color on the extent of the price revision and the degree of product mix change.

For your question, Mr. Iike is going to respond.

Thank you very much for your question. This is Iike speaking. I would like to respond to your question. As you commented, there was a drug price revision in Japan and due to this in terms of ratio, that was the biggest factor in terms of percentage of contribution to the decline in the gross profit. And the biggest product for us, Lenvima, there was a Medicare Part D redesign in the United States. The gross to net has been lower to what it was in the past. And it is also related to the growth of LEQEMBI. But in terms of ratio, these 2 had the larger portions in the contribution to the lowering of the gross profit. So that's why I mentioned the product mix.

Okay. How should we think about gross profit margin going forward in the second half of this year and possibly into next fiscal year?

Mr. Iike is going to respond to your question.

For this fiscal year, as we have already reported to you, we believe that the gross profit margin is going to be controlled within the guidance. Towards next fiscal year, it will depend on the product mix, but we do not believe that there will be significant change and we will be able to control as we do.

Okay. And if I may, also just want to go back to ask about the Medicare Part D Medical Exception Process here because if we have to wait until January 2027, that does appear to be quite far away. So out of the -- we understand the current approval rate is pretty high. Just want to quantify that. So out of 100 patients or doctors applying for the Medical Exception Process, what percentage of them will be successful today? Would that be something like 50% or more like 70% or even higher?

For your question, Mr. Haruna is going to respond.

Thank you very much for your question. First, generally speaking about -- well, it may depend on what data you refer to, but 70% or 80% is the current success rate. But it's only 4 weeks since it was launched. Therefore, there will be some fluctuations in data, but we have observed already over 90% success rate. So we have seen steady progress. And going forward, we expect to see increased number of patients over longer term and then the data may be fluctuating. But as an early signal now, we believe that we are very confident in providing this products or drug to patients.

Okay. 90% is a very good number. Thank you very much.

Ms. Sogi, Sanford Bernstein, please.

First question, I believe you have heard from the people in the field. The other day we were able to speak with early adopter doctors. And clearly amongst the patients, early stage patients when they are given LEQEMBI or Kisunla, stronger efficacy, higher efficacy is observed. And the doctor said that the doctor is treating more MCI patients. So clearly efficacious or clear responding patient segment is becoming clear. I think this is very important for the adoption of the drug. Real-world evidence indicating such data, is Eisai collecting such data? Regarding early treatments, do you plan to run campaigns?

Mr. Toyosaki will respond. And regarding Japan, Mr. Yusa will respond.

Thank you very much for your question. I would like to mention 2 things. The first is, as you rightly mentioned, early treatment. Early start of the treatment and early diagnosis and early treatment and maintaining through maintenance treatment. Such treatment will offer the optimal outcome to our patients. That is our belief. As for clinical studies in CLARITY AD trial, irrespective of Tau level, pathologically very early stage patients, low Tau patients or Tau level negative patients are included in the study. In this population when we look at Tau substudy results over 4 years, more than half of the patients were able to maintain their stage or have shown improvement.

I believe that is one of the uniqueness of lecanemab. And therefore, early treatment and patients who received early treatment can expect to maintain the disease condition over long term. So long-term continuation of the treatment is the focus. Currently, in the United States in 9 institutions and we will increase the number of institutions, but we are in the process of collecting real-world evidence. Interim analysis will be presented in summer this year at AAIC and we will continue to collect the data and we plan to present the final analysis data next year. So I hope you will look forward to that data. That is the situation in the United States.

Thank you for your question regarding Japan. I'm Yusa responsible for Japan business responding. As for data creation in Japan, as you know, all patient study and registry survey are underway. And as you pointed out MMS score, what level of patients are responding in what way. Such data is collected and Phase IV is also planned in Japan. Earlier stage patients in campaign, whether campaign was planned was also a question. We are conducting TV commercials focusing on MCI in DTC. This was explained by CEO Naito earlier in November last year and May this year. And in August this year, we have run these 3 campaigns. So this has led to increased awareness of MCI.

Ms. Sogi, you've also mentioned that when LEQEMBI is started early and MMSE, the higher the score of MMSE, the greater the efficacy is and ability to maintain MMSE and CDR scores. That is what we are also told from the physicians. And as for LEQEMBI, 29 to 30 score of MMSE, only LEQEMBI is indicated for this segment of patients. So in particular, we are looking at this very early stage MCI patients and we would like to lead to early diagnosis and early treatment of this segment of patients.

Another question. On the other hand, in the United States, Kisunla and LEQEMBI are included in formulary in some of the clinics. Both are available. Patients are increasing. There is an infusion capacity issue. With the same capacity, double the number of patients can be treated with Kisunla. I hear that oftentimes institutions are using Kisunla for that purpose. The number of accounts, there can be only accounts – Kisunla only accounts and accounts with both LEQEMBI and Kisunla and it may be due to the balance of these numbers. But until spreading dose starts in the accounts with both LEQEMBI and Kisunla, one may be preferred over the other. But as far as the trajectory is concerned, before IQLIK is used more widely, is there a potential for slowdown for LEQEMBI? But of course market overall may be growing so I hope that there will be no slowdown. What is your expectation?

That question will be addressed by Mr. Haruna.

Thank you for your question. This is Haruna responding. First, about the U.S. market overall. Regarding market share, LEQEMBI has the majority of the market share in particular amongst IDNs where there are neurology specialists, we have received very high marks. LEQEMBI's value and positioning are not affected we believe. And as you rightly pointed out, on the other hand, the competitor, Kisunla is once monthly treatment. Treatment may be discontinued after 12 months to 18 months and some medical institutions may prefer this. We are fully aware of that.

What is important is that LEQEMBI has a solid position in the market and it's growing and Kisunla is used by those who prefer once-monthly dosing and that is also growing as a new market. So overall, AD market is growing. AD market on a quarter-by-quarter basis continues to grow at double-digit pace. So we have seen this substantial growth. If I may focus more on LEQEMBI. LEQEMBI growth has not stopped and we do not believe it will stop. It will accelerate. Looking more closely, LEQEMBI prescribing physicians, more than 50% of AD treating doctors are prescribing only LEQEMBI.

Majority of prescribers are prescribing LEQEMBI only according to the data. So we believe LEQEMBI has established a very solid position. When I visit health care providers, certainly there are some who say that they prefer once monthly dosing and some patients and health care professionals prefer discontinuation after 12 to 18 months, but treatment effect was observed through the course of LEQEMBI treatment. And there are patients who are given Kisunla who are struggling to decide whether it is truly good to discontinue treatment and we have seen increased number of inquiries into Eisai because of that.

IQLIK launch: without IQLIK launch, it's not that the position of LEQEMBI will change. We have a very strong potential and we expect continuous growth. We are confident that growth will continue, and we hope to be able to demonstrate that with actual fact going forward.

If I may add to that. As Mr. Haruna mentioned, donanemab is it eroding rock solid market of LEQEMBI? We do not think so. Very solidly established, LEQEMBI market is not affected. There are patients who may wish to discontinue treatment after 12 to 18 months and there may be such health care providers as well. And initial treatment can be given with a monthly dosing, that may be preferred by some patients and health care providers. That is a market that is newly created as donanemab market. So donanemab is achieving growth by creating that donanemab market. But we have a very solidly established market.

This market includes IDNs who are the core health care providers in the United States. I will not mention the names, but universities with well-established medical schools have their group and they apply the same standard and provide the same treatment. Such integrated IDN network provider treatment and AD treatment is conducted in these core IDNs. We believe that our share is about 80 versus 20. We have a very solid share with LEQEMBI in IDNs. As for AIC, ambulatory infusion centers and group practices, these are also important health care providers in the market in the United States.

Here Kisunla advantage may be seen relatively more so in comparison to IDN. But it is not at all the case that we have less than 50% share versus the competitor. That is not occurring looking at the data. What I am trying to say is that with Kisunla, will our core market be eroded? That is not at all the case. And Kisunla is creating its own market. That is occurring naturally. As we have presented today, initial treatment indication for IQLIK may be approved as early as in the first quarter of 2026. So once monthly IV infusion or weekly auto-injection at home will be the options.

And when that becomes a reality, which will be chosen by patients and health care providers. And looking at that, we have to make utmost efforts. As for the possibility to end treatment after 12 to 18 months and we are taking the opposite approach. Our antibody has property that allows for long-term administration because immunogenicity is low and neutralizing antibody incidence is low and because of that, long-term administration is possible. As for the 48-month data that I've mentioned before, toxic Abeta oligomer continues to be removed with long-term administration and CDRSB effect size becomes larger as a result. That is demonstrated and the reference is Adoni data.

These are predefined patients. Before the start of Phase III, Adoni patients are selected in baseline. So the study is not biased. It is quite transparent and we have selected a reference, which allows for high quality comparison. This disease is a progressive disease. It continues to progress. Under Abeta PET after confirmation of plaque removal, can treatment be ended? Is that the right concept? Our position is that for AD, the right option is continuous treatment, which is the right option. I believe sooner or later patients and health care providers will make a decision.

We would like to receive questions from the media. If you have any question, please raise your hand.

My name is Banno. I am from Nikkei Newspaper. Regarding the situation in United States, I have a question about tariffs. I don't think there have been any recent movements for tariffs. But based upon the currently available conditions, what impact do you foresee for your business? And I believe that in China, you are stockpiling or increasing the inventory level. But to what extent or by when do you think you have secured the inventory level?

For your question, Mr. Iike is going to respond.

Thank you very much for your question. In terms of systems, we have not seen any secure or certain things. Given this situation, as we have indicated, the inventory -- I'm sorry, Mr. Yasuno, please. Could you please respond to the question? Because you are here traveling all the way from the U.S.

I am in charge of the United States. My name is Yasuno. As you know, the tariffs for the pharmaceutical products are out of the scope of reciprocal tariffs according to the Section 232 of the U.S. Trade Expansion Act. And there has been an investigation being conducted in order to make decision whether there are any impacts on the national security. Based upon this, the Executive Order from President Trump has not been issued yet. And using the SNS, President Trump mentioned that he intends to impose 100% tariff rate on to the pharmaceutical products.

Other than that, there has been no announcement. So there are lots of uncertainties. Therefore, for us, we have not been able to calculate what impact we foresee because of this on our business yet. But on the other hand, as Mr. Ike mentioned, going forward the pharmaceutical products to be imported into the United States to prepare for the potential tariff, we are conducting various measures such as inventory management and supply chain measures. Regarding the pharmaceutical products, which are necessary for the U.S. market, up until far into the next fiscal year, we have secured inventory. Therefore, for the time being, we do not think that we will be impacted by tariffs.

I have another question. This is a question I'd like to ask CEO. Regarding MFN Pfizer and AstraZeneca, other leading companies have reached agreement with the U.S. government. How this rule is going to be implemented is not known yet. For you, how big this can be a threat for you? How serious threat do you think this can be for your business?

I think in countries of OECD whose GDP per capita is at 60% or higher than that of the U.S. is going to be the criteria. I mean the minimum price should be in those countries to be applied to the U.S. market. But it will depend on whether this is going to be the listed price. And this will be based upon -- reimbursement will be based upon the cost effectiveness and this will be forced by the government agencies. Therefore, there is no room for discretion by companies. Unless you accept that price reimbursement, you are not allowed to deliver your products to patients in need.

The mission for pharmaceutical companies is to deliver stably their pharmaceutical products to patients who need them. That is the fundamental mission for us. We have to deliver that mission. If it's going to be listed price and then the price level set by ourselves will be -- has been deployed throughout the EU and LEQEMBI is priced as that in the U.S. price. In Asia as well, the price of LEQEMBI is at the same level or even higher than that in the United States. So which price level will be referred to, it's going to be very important. For that, very severe decision-making may be necessary. That caused our concern. Mr. Yasuno, do you have anything to add?

Yes, I am in charge of U.S. business. My name is Yasuno. As our CEO mentioned, that is the stance of the company. What is happening in the U.S. now? I believe you know the situation there. President Trump have sent the direct letters to 17 companies, out of which 3 companies have reached some kind of agreement that has been announced. According to the speculation, by the end of this week, 2 other companies may be announcing their agreements with the government. That is the information we received from our DC team in Washington, D.C.

So those 17 companies which received the letters from the President Trump or U.S. government have started discussion with the U.S. government. But on the other hand, U.S. Association of Pharma Companies, PhRMA, before adopting this middleman or PDN or 340B reform. These are considered to be challenges. That is what PhRMA is explaining in its advocacy activities. We of course are closely watching what is happening day by day. Through such monitoring, we would like to prepare ourselves.

It is now time. We would like to end the earnings call by Eisai. Thank you very much for your time. Thank you for your kind attendance.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Thank you very much for taking your time. We would now like to begin oral presentation of highlight of E2086 from World Sleep 2025 oral presentation. This is a virtual session. Please check our website for presentation material.

In Singapore this week, World Sleep 2025 was held. E2086 Phase I study results were presented in oral presentation. The highlight of the presentation will be given today, and questions will also be taken to deepen understanding of the audience of E2086. Presentation will be given by Dr. Katsutoshi Ido, Chief Scientific Officer. Dr. Ido, please.

Good morning, everyone. I am Ido. I assume the role of the Chief Scientific Officer in April. Thank you very much for joining us today.

Since I joined the company in 2003, I have worked as a biologist in the research institute in Tsukuba and Cambridge in Massachusetts, focusing on neurology drug discovery. While in Cambridge, I was also served as that's the Head of the Biotech Investment division for [ 2 ] years, and I was appointed as CSO this spring.

E2086, I will introduce today, is a compound we developed to -- while I was serving as a group head at Tsukuba Research Laboratories, and I am deeply attached to this compound. We recently presented findings on its wakefulness-promoting effects in patients with narcolepsy type 1 at World Sleep 2025, and I will now explain those results.

Next, please. Before introducing the clinical trial results, I would like to explain our company's approach to orexin drug discovery. The compound E2086 introduced today acts on the orexin system in the brain. This peptide, orexin, is a neurotransmitter that activates the arousal center. It serves as a key regulator of wakefulness and sleep with high levels during the day and low levels at night during sleep.

The relationship between sleep and wakefulness is sometimes compared to a seesaw as shown in the diagram below. In the brain, there is the sleep center, which is shown as a blue circle, that maintain sleep; and the arousal center, shown as the yellow circle on the right, that maintains wakefulness. During sleep, the sleep center becomes more active, while the arousal centers activity weakens. And the opposite occurs went awake to bring about the wakefulness by tilting the seesaw. Thus, the arousal and the sleep centers mutually inhibit each other, tilting the seesaw towards one state or the other.

Orexin plays a role in tilting this seesaw towards the arousal side. Therefore, if orexin becomes too strong when we are about to sleep, it tilts the balance toward wakefulness, leading to insomnia. Conversely, if orexin levels are deficient during the day, the seesaw tails towards sleep causing daytime sleepiness.

Our company has conducted over 20 years of research on this orexin system. Our first successful development was a receptor antagonist, DAYVIGO, as you see in the middle, it's a generic name lemborexant, which weakens the orexin tone at night to induce sleep, and it was launched in 2020. It currently holds the largest share in the market in Japan with the understanding by Japanese physicians of this mechanism of DAYVIGO, and it continues to expand further.

Through the development of DAYVIGO, we established the platforms, including EEG recording system, orexineuron, deficient animal models and cell-based assay, et cetera. Now we initiated the E2086 project exploring the flip side of the coin, developing an agonist that stimulates orexin receptors. Unlike DAYVIGO, this compound directly acts on the underlying cause of narcolepsy, where reduced daytime orexin 2 leads to sudden intense sleepiness. It is a concept where highly potent effect can be expected.

However, searching for this agonist is far more difficult than searching for an inhibitor or antagonist. There was a major question of whether we could mimic orexin, a large molecular weight peptide. We began searching using multiple approaches, including high throughput screening from a library we constructed specifically for this project using our own compounds. After screening at the time 250,000 compounds, only 1 compound reached the final stage. Moreover -- well, usually, we have several compounds reaching the final stage. But at that time, there was only 1 compound that hit the final stage in this project. Moreover, this hit compound -- I was engaged in another project to create compounds that created. And I thought that it was a serendipity type encounter of such a compound we discovered in the past. But this hit compound poses a complex structure, a case like framework with stereochemically reach the carbon reached rings. So it was a very complex synthesis.

So featuring 3 or 4 chiro carbons, it's stero-specific recognition requirements demanded an exceptionally intricate synthetic approach, we questioned whether it was truly feasible [indiscernible] yet this structure ignited our passion of Eisai's medicinal chemist. Within a year, they achieved over 10,000 fold increase in activity, and the biology team also developed an AI-based automatic EEG analysis system, enabling highly efficient screening of compounds, exhibiting the ideal profile for agonist with the potent efficacy and sufficient safety.

As a result, we identified a development candidate with Eisai's unique chemical structure that demonstrated strong efficacy and sufficient safety in preclinical studies. As a unique company, developing both agonist and antagonist, we aim to contribute broadly to patients with sleep disorders. I believe that there is no such companies which are developing both.

Next slide, please. Now I will introduce the trial results for the selective orexin receptor 2 agonist or E2086 in patients with narcolepsy type 1, which we presented at the World Sleep 2025 on Monday this week.

Next, here is that introduction. There are several approved compounds to treat patients with narcolepsy type 1, but all of them are symptomatic treatments and do not directly address orexin deficiency, which is the underlying cause of NT1. E2086 that we discovered is a highly selective orexin 2 receptor agonist in preclinical in vivo studies. It demonstrated a dose-dependent promotion of wakefulness. Additionally, patients will with narcolepsy type 1 experience cataplexy, where sudden temporary loss of muscle tone occur following intense excitement of emotions. So it damages the patient's [ QOL ] a lot. Preclinical models confirmed that E2086 also mitigate cataplexy symptoms in a dose-dependent manner. Based upon these results, E2086 is expected to improve symptoms caused by orexin deficiency in patients with NT1 by promoting wakefulness via the orexin neuronal pathway.

Next, please. The objective of this study, 101, was to evaluate the efficacy, safety and the tolerability of E2086 compared placebo and the existing drug modafinil in adult patients with narcolepsy type 1. This was the first clinical trial in patients or participants with NT1 for E2086, looking at the efficacy based upon a single dosing.

And next, study design. This was a multicenter, randomized double-blind 5-period crossover Phase Ib clinical trial. The group competition consisted of 5 groups: placebo, 3 doses of E2086 this time, 5, 10, 25 milligrams were tested; and modafinil.

As you see in the diagram below, which specifically shows how participants in the study received the investigation of drugs. For example, for patient 1, at the first visit in period 1, a single dose of placebo will be conducted. And then MWT will be conducted. After a 3-day washout period from the following day, a single dose of E2086 5-milligram will be administered in period 2. Another washout, followed by modafinil in period 3. After MWT and E2086 10-milligram in period 4 and E2086 25-milligram in period 5 to complete the study. Thus, the study is designed to evaluate the effects of a single dose of all 5 investigational drugs for each patient separated by washout periods.

Ten different treatment sequences were prepared, and each patient was randomly assigned to one of those sequences. In each period, after undergoing overnight polysomnogram for comprehensive sleep assessment, the investigational drug was administered within 45 minutes after lights on the following morning, followed by a maintenance of wakefulness test.

Next methods. Adult males and females above the age of 18 with NT1 diagnosis are the subjects. As for other inclusion criteria, please refer to the left side of the slide. On the right side, assessment of efficacy is shown, most frequently used method in narcolepsy study, MWT 40-minute test is used. MWT is short for Maintenance of Wakefulness Test. This test -- Maintenance of Wakefulness. In this test, patients will be sitting on the bed in sleepiness-inducing environment, which is dark and quiet. Patients are instructed to remain awake and be seated quietly on the bed. But with narcolepsy patients, because of strong sleeplessness, in 5 to 10 minutes, they fall asleep. But how long wakefulness is maintained will be observed for up to 40 minutes. It starts from 2 hours after wake up in the morning in 40-minute session will be conducted 4 times at 2-hour interval. Polysomnography and EEG will be used comprehensively to make assessment of wakefulness. So this is an objective test of wakefulness.

Another criteria is KSS, Karolinska Sleepiness Scale. This is a subjective scoring of sleepiness of patients. This is measured at the end of MWT at each time. Statistics used the mixed model, E2086 at each dose placebo or each dose of E2086 and modafinil were compared. Modafinil was used this time, and the purpose is to compare modafinil and placebo to confirm the sensitivity of the assay.

Adverse events data were collected throughout the whole period.

This is the demography. This is the demographic statistical characteristics and baseline characteristics of groups subject to safety analysis. 22 were randomized, and 19 completed the tests. 21 undergone safety assessments, 42.9% were female, 47.6% were [indiscernible].

Next, turning to the results of the study. This is a very busy chart, but next page will show easier-to-understand graphical presentation. The lower part of the chart in pink box shows individual sleep latency measured 4 times in a day. Sleep latency is the time it takes before patient falls asleep. And the top pale blue box is the average from 4 trials.

This is a busy chart, and please look at the next slide. But regarding this slide, one point about modafinil. In modafinil sleep patency is significantly longer in comparison to placebo confirming the sensitivity of this test.

Next, this is a graphical representation of the previous chart. And this is the most important slide in the oral presentation this time. There are 4 measurements of MWT. As I've described in the methods, after administration of the drug, MWT tests were measured 4 times. The vertical axis is sleep latency, the time until a patient falls asleep. In a sleep-conducive environment, participants are trying not to fall asleep. And efficacy is measured by how long sleep latency can be extended. So the taller the bars, the better the results that we expect to see. And in placebo, often times, in 5 to 6 minutes, patients fall asleep. In comparison to that, the black bar showing -- a white bar showing placebo and pale blue, pink and green are E2086 5, 10 and 25 milligrams in all 3 doses in comparison to placebo. And in comparison to even modafinil, we were able to confirm that sleep latency is significantly longer. And in all 4 trials in E2086 stating from 5 milligrams showed significant extension of MWT in comparison to placebo. At the [ fourth ] trial, it means that even after 7 hours after administration, efficacy is maintained. At 10 and 25-milligram, the MWT is extended more significantly than modafinil.

Vertical axis is sleep latency. As I mentioned earlier, competitors graphs often have minds at 20 minutes. When healthy subjects go through this study, the 10th percentile have a lower limit of about 20 minutes. So 20 minute is considered a lower limit of normal range. Oftentimes, in the lowest dose, 5 milligram, in the last trial, the trial 4, normal range was maintained. And at 10 to 25 milligrams, the average level of 30 minutes in healthy subjects is exceeded. Even after trial 4, looking at individual tests 5, 10, 25 milligrams in all of the arms and especially in comparison to a lower dose in the mid-dose and in comparison to mid dose. In higher dose, patients stay awake even beyond 40 minutes. Strong arousal effect is observed. Patients who fall asleep in 5 minutes without the drug can be -- can stay awake up to the normal range of sleep latency as seen in healthy subjects.

This is a similar type of chart showing KSS score, Karolinska Sleepiness Scale. Earlier, MWT showed objective assessment of wakefulness using polysomnography. In case of KSS, this is a subjective assessment of sleepiness by patients themselves. The top blue boxes, the average of 4 trials, the bottom pink box shows results from each trial. Looking at modafinil, in comparison to placebo, KSS is significantly lower. In this scale, assay sensitivity once again is confirmed.

This is the graphical representation of KSS scores. The vertical axis, well, in this study, the current sleepiness intensity is scored from 1 to 10 by participants. One is extremely awake, and 10 is extremely sleepy or falling asleep all the time. In between 1 to 10, the patients are asked to score, and the lower the number, the more wakeful the patient is, meaning the drug is more effective.

In the red boxes, E2086 at 5, 10 and 25 milligrams are increasing daytime wakefulness significantly in comparison to placebo. And 10 to 25 -- and 10 and 25 milligrams also are showing statistical significance over modafinil. And looking at Trial 4, similar to earlier chart, at the very last trial, sustained effect is shown from subjective feeling of sleepiness of patients.

This is the safety summary. E2086 was generally well tolerated. Most TEAEs, or treatment emergent adverse events, were mild to moderate in severity. There was a dose-related trend, but there were no discontinuations due to TEAEs and no serious TEAEs reported. Most frequent TEAEs were increased urinary frequency, nausea, dizziness and urinary urgency.

In terms of clinical chemistries, including liver function tests, there were no items of concerns, and there were no clinical trends of concern, including in blood pressure and heart rates, and no visual abnormalities were reported. So will -- it was confirmed that E2086 was well tolerated.

This is the conclusion. These data demonstrate that once daily dosing of E2086 has the potential to improve daytime wakefulness in NT1 patients. All dose is tested of E2086, 5, 10, 20 milligrams, significantly reduced EDS versus placebo and modafinil as objectively measured by the MWT. All doses of E2086 significantly reduced EDS versus placebo as subjectively measured by KSS. At 10 and 25 milligrams, KSS scores were significantly more reduced than modafinil. Dose-dependent trend was observed in TEAE incidents, but E2086 was generally well tolerated.

This is the final slide, and this is the final conclusion. E2086 is an orexin receptor agonist that was discovered and is being developed by leveraging the strength of Eisai's orexin platform, particularly the experience and knowledge gained from the discovery research of the orexin receptor inhibitor, DAYVIGO. This compound, E2086, was shown to significantly reduce excessive daytime sweetness compared to placebo and existing medication modafinil when administered once daily in patients with narcolepsy type 1. In particular, as shown earlier, strong potency of sleep latency of more than 40 minutes were observed in many patients, and effect was shown to be sustained. And we believe that this is a very promising profile. And at the same time, the doses are showing efficacy. Good tolerability and safety were demonstrated. And no liver function disorder or visual abnormalities were observed.

As for development plan going forward, not only in narcolepsy type 1, but including narcolepsy type 2, we plan to start Phase II study within the fiscal year.

As for submission filing, we are targeting to file submission in fiscal 2028. We would like to apply good ideas to the protocol to accelerate this time scale -- time schedule.

Thank you very much.

Now we would like to open the floor for Q&A session. We'd like to receive questions from analysts and investors, and then that will be followed the Q&A session from the media. [Operator Instructions]

First, from Citi Securities, Ms. Yamaguchi, please.

Can you hear me?

Yes, we can.

This is Yamaguchi of Citigroup Securities. My first question is 21 participants were included. And with that, I believe the data demonstrated very high efficiency -- effectiveness. And you said that the 5, 10, 25 milligrams doses were utilized, and there were no side effects, serious ones. So do you think that there will be further doses to be utilized in Phase II onwards? But do you think that 1 of these 3 will be selected?

Currently, the plan for Phase II trial is now being finalized, but we are not able to give you any details. But [indiscernible] the simulation will be utilized inclusive of higher doses for this particular compound. So we would like to provide appropriate dose setting for type 1 and type 2 patients. We would like to design study as such.

My brief question. Regarding the adverse events, I thought that the incidence of insomnia was low. So it's the flip side of the coin. So I saw that after listening to your explanation and other company's compounds, I believe that there will be a higher incidence of insomnia. So could you please explain why it was the case in this results?

Thank you for your question. We evaluate efficacy until the 7 hours after the start of administration. So for about 7 hours, efficacy continued. Whether or not insomnia occurred or not should be evaluated looking at the test results from -- during the night. And then according to PK, the efficacy will discontinue or the binding may be considered, and we assume that there is the discontinuation of the efficacy.

And lemborexant, we were very careful about the PK. When we conduct a development of the sleeping drug, and I think that this is the most important point. And these results, I believe, is leading to the ideal profile what we are trying to achieve.

Well, I think that the drug was taken in the morning. And then the efficacy will continue. And then when they go bad at night, the efficacy discontinues.

Next, Mr. Wakao from JPMorgan Securities.

This is Wakao from JPMorgan. Can you hear me?

Yes, we can.

First question is about key adverse events. Increased urinary frequency and urinary urgency in orexin agonist, these are on-target adverse events. I understand that very well. These are characteristic adverse events of orexin agonist. But unique to this compound, dizziness and nausea are adverse events not seen in other drugs. And what are your views? Do you think that these are manageable? And if these are not on target, is this due to this specific compound?

Thank you, Mr. Wakao for your question. As for adverse events observed in this study and as shown here, these are mild to moderate in severity in majority of the cases and these are not at all severe. That is one point.

On target or not, in the Phase II study, we would like to closely look at that. As for the studies of competitors' drugs, there are some signs such as lack of balance. In developing CNS drugs, lack of balance and nausea, depending on how patients feel, these are signs that are often exhibited. Inclusive of these, we would like to closely examine in Phase II study. But in any case, these are transient and disappear. So we do not believe that these are serious.

I see, I understand. Looking at dizziness and nausea, it is lower in incidence in 10, but higher incidence in 25. And it looks like 10 milligrams is the optimal dose, but there were earlier answer that you might consider increasing the dose. So these adverse events are not so serious.

That is our view.

And one more. And the second question. Takeda is ahead in development. Their dosing is twice daily, and they say that the benefit of twice dosing -- twice daily dosing is that they can mimic the circadian rhythm of orexin. And regarding this concept, what do you think? And if that is ideal, then your once-daily dosing potential, can that mimic the circadian change?

Thank you for your question. As for once-daily potential of our compound, in order to improve patients' QOL, we believe that this is a more suitable profile in our view. As you rightly pointed out, orexin has a circadian change or diurnal change, and it will be higher in daytime. If we cannot mimic this diurnal rhythm, is there any QOL that cannot be achieved? To the extent that I know, there's not much during the sleep. If sleep is forced, sleep rhythm may be out of sync. But in questionnaire, we do not detect any discomfort. So once a patient becomes fully awake in the morning and engaged in activities during the day and the effect wears off at night, this means that a patient will have a good drug adherence or compliance. So I believe our benefit is strong.

You will be the third or fourth to introduce a drug in this indication. How much differentiation you can make from the existing drugs will be quite important. What are the points of differentiation? As far as I've listened today, it seems that safety and efficacy. So I think you will simply be pursuing best-in-class.

Thank you for your question. As you pointed out, I believe there are mainly 3 things. First is, as you mentioned in your question, once daily dosing. Narcolepsy patients, in terms of attentiveness, attention, oftentimes their scores tend to be lower, and they may forget to take a drug. So once daily to keep wakefulness can be a huge benefit.

And another point you've also mentioned, which is safety. Many patients are able to stay awake beyond 40 minutes, and this is a single dosing study. So we cannot make a simple comparison. But what we have come to understand is that in comparison to competitors, we can be hopeful that adverse events are fewer. So in a broad range of doses, we hope that the drug can be used by both type 1 and type 2 patients.

And the third is efficacy. At 5 milligram, even at 5 milligram, beyond 20 minutes, patients stay awake. So wakefulness of healthy subjects can be achieved, and we believe that this can become a best-in-class compound.

Next, from UBS Securities, Mr. Sakai.

This is Sakai speaking from UBS Securities. This is a very basic question. There may be some data shown in the slide, but serum concentration TMAX or half-life. Could you please comment on this? How much they are?

Thank you for your question. I think at the previous last Sleep conference, I think data were presented, but I think that the active compound will disappear in half a day. I mean, half a day during the day. So that is the profile of PK.

Half a day during the daytime. So that means 6 hours?

Roughly speaking, yes, that is the ballpark.

And then once daily dosing and efficacy can be maintained. Is this the message you would like to deliver?

Yes.

Understood. Then so it's a basic question. Well, for patients with narcolepsy, orexin-based drug will continue to be taken. And then do you think that the activity of orexin will be enhanced? I mean, withdrawal can be possible in the future? Are you going to -- how are you going to verify and examine that?

Well, thank you very much. It's a very interesting question. Going forward, inclusive of the long term, the multiple dosing studies in narcolepsy disease, the neurons, which are emitting the orexin are disappearing. Therefore, in this disease, there is no sites for emitting the orexin anymore. So in principle, the patients have to continue to take this drug.

Understood. Right. Long-term study will be done from the time Phase II study will be studied. The long-term study will be also initiated at the same time?

Well, at the same time with the Phase II study.

So after completion of Phase II. And then if patients are going to enrolling into the long-term stability study?

It's inclusive of that point. We like -- we are now working on the protocol and a plan for the future studies so that we will be able to file as soon as possible for approval. So we would like to disclose such information as soon as that gets available. Thank you very much.

Next, Mr. Muraoka from Morgan Stanley.

This is Muraoka from Morgan Stanley. I'm not able to digest fully various data, this drug E2086. As for drug-drug interaction or SIP with other drugs in combination use, is there anything that we should be concerned about?

No. No such concerns.

I see. In today's presentation and recently, Takeda also gave a presentation. Looking at these overall my impression is that Takeda is able to launch the first. So it will be able to lead even though it's twice daily. Your company's compound is well balanced in terms of safety and efficacy. So even though it did come out it looks very good, and Alkermes has a blurred vision, and it seems that it is least promising. That is my impression. Is it a similar perception that you have in terms of positioning of the 3 drugs?

Thank you for your question. I'm not able to offer detailed comments on competitors' drugs, but in terms of benefits, we believe that our compounds have the benefits that I've described earlier. The main efficacy includes efficacy on cataplexy. If this is confirmed in Phase II, we believe that this drug will become the most used drug in patients, and we do not have a blurred vision problem as observed today.

NT2 will be included in Phase II, as I understand. As for those in Phase I, it was up to 25 milligram. In your gut feeling, how high do you think you can go in dose?

Thank you for your question. It may sound repetitive, but we have a modeling simulation team, which is quite strong and capable. Based on the results from this study and also publicly available study, and we have already confirmed that we can go higher in dose. So we believe that we can go to hire dose that can be effective in NT2, but I would like to refrain from commenting on specific dose in numerical terms.

I can understand that. But in order to make it effective in NT2, do you have to go to as high as 50 milligram to quite high dose?

On that point, we will be conducting simulation. The point that you've raised, meaning for NT2, those may be higher. Looking at the past situation, dose at twice or 3x as high starts to be effective. And in preclinical data of ours, that is what is suggested. And we believe that we can go to that level with our compound. Thank you very much.

Next from Goldman Sachs. Ueda-san, please.

This is Ueda speaking. I'm from Goldman Sachs Securities. I would like to ask about the MWT profile that you are aiming at. What is the need for that?

This time, 5-milligram arm, there was an extension of over 19 minutes, as you spoke. So for over 20 minutes for a healthy range, do you think that it is enough target? Or as you said earlier, 10, 25 milligrams for extension of over 30 minutes, which will be necessary or would you like to see the efficaciousness lasting until 40 minutes?

And according to other companies' explanation, if you reach the 40 minutes and then it is too efficacious, but there is no incidence of insomnia, so then 30 minutes or 40 minutes, stronger efficacy compared to other companies. Is this something that you are aiming at? Could you please give us your take?

Thank you very much for your question. As you summarized right now, for healthy volunteers, mean value was 30 minutes. So according to the compound profile, although we have just tested the single-dose studies, but I believe that we would like to first -- verify that first.

As you commented, if the time extension reached the 40 minutes and then we believe that we are able to reduce the dose for this compound, so then we will be able to make adjustments by reducing the dose of the compound.

And in terms of the durability or sustainability. For example, when away back from the office home and then during the driving 20 or 30 minutes have to be maintained. And one, this should be the profile that we'd like to achieve by once-daily administration.

Second question is about strategy for developing this compound going forward. In this area, there are several competitors which are ahead of you and your company. You have a strong share for DAYVIGO in Japan. And thinking about the franchise, thinking about players outside of Japan. Are you going to think about the standalone development? Or are you also considering the partnership with other companies in development?

Thank you very much for your question. Our goal is to deliver this therapy for as many patients as possible as early as possible. So if there are any partners who can empathize with this goal, so we like to be very open and flexible in considering the potential collaboration.

Next, Ms. Suki from Bernstein Securities, please.

I have 3 questions. About -- first about MWT. In Phase I study up to 7 hours, you are assessing efficacy. Based on the results of our and considering half-life, how many hours per day can the drug stay effective? Dr. Ido, you've said that a patient should be able to stay awake even when they are driving home. So with once daily dosing, how long will efficacy last? How many hours?

Thank you for your question. This time, 7.5 hours. After that, assessments were made, and we would like to confirm details in the future studies. The trial 4 on this page, scores are similar to the start of the administration. And looking at the half life, we believe that the scores or wakefulness can be maintained through to the evening.

Second question is on modeling simulation. Between narcolepsy type 1 and type 2, I think you are looking at different pharmacodynamics. In narcolepsy type 1, clearly, orexin level is lower. In narcolepsy type 2, orexin level, it may not be completely normal, but profile may be quite different from narcolepsy type 1. In modeling simulation in particular, how do you plan to simulate looking at the differences between NT1 and 2?

That is a very good question. We also consider that to be a very important point. First, as objective data, in narcolepsy type 2, we have reported values of efficaciousness, and we are able to utilize that data. Another point is what we are doing on our own called QSP. Looking at pharmacological study from preclinical studies, based on preclinical model, we will be applying in the simulation so we can take these approaches at the same time in the simulation.

I see. I understand. Basically, this drug and orexin receptor interaction will be studied. And so you will be looking at that for both NT1 and NT2.

Once again, thank you for a very sharp question. Sensitivity cannot be fully explained only by bonding. And I think our strength is that we are able to incorporate that aspect as well.

This time, idiopathic hypersomnia, IH, development plans were not mentioned today, but what is the view of the company? This IH is different disease from NT1, NT2, but what is the view of Eisai on IH?

Thank you for that question. First, we would like to focus and concentrate on narcolepsy. So currently, we are looking at type 1 and type 2. But as you pointed out, given the mechanism, we believe that there is potential, including IH.

In addition, with the orexin platform, going forward, we would like to better understand how orexin is involved in a wide range of diseases, including neurodegenerative study, and we are conducting detailed analysis of this. Once narcolepsy -- in narcolepsy, efficacy is demonstrated in Phase II, we would like to once again consider the widening of indication.

From Daiwa Securities, Mr. Hashiguchi.

This is Hashiguchi from Daiwa Securities. First is the basic question. As you explained on Page 6, crossover design was adopted. What's the objective of adopting this design?

And by having this design and compared it to the studies without crossover design, in terms of interpretation of the data, what is the point? What are the points that you have to take into account?

Thank you very much for your question. This time, crossover study design was adopted. The reason why we chose it is each patient that will be able to experience all 5 drugs or investigational drugs. So there will be an effect of controlling the variation fluctuations. The profile of the patients may vary. Therefore, within 1 single person, we are able to see the results. And we have 5 arms with 20 patients, and it used -- there should have been 100 patients. But with this study design, it could be contained to 20 patients. Within this group, we were able to show and demonstrate the significant difference. And I think it was a good way to have the significant difference in an efficient manner.

Regarding your concern, yes, we are looking at that. And the washout [ very ] was determined as 3 days. Based upon the earlier simulation and also the PK data in advance, we confirm that when the efficacy or the [indiscernible] can go back to the original baseline level. And after collecting analysis on the results of the administration, there was no carryover effect from the previous dosing. And generally speaking, clinical trial, this is not something that we have done on the [indiscernible] ourselves. I believe that this is one of the study designs which are widely adopted.

Based upon this study, I believe that there may be potentially obtaining additional data from this same study. For example, the longer follow-up period of data and also data on the other evaluation items end points, I think that, that data to be presented for now is limited to what you have presented today.

Thank you for your question. This is Study 101. Broadly speaking, the data sets that we are able to present are limited to what presented today, but we have taken the blood samples as well. So there may be, as necessary, additional studies on that. But in principle, there will be no further long-term data from this design.

Based upon that, regarding the partnership, what do you think will be the timing for you to consider a partnership? Could you please give us your input?

According to the information meeting held in March, CEO, Mr. Naito, mentioned that the data necessary for a partnership will become available in 1 or 2 years. So that is what the company wants to do, he said.

In 1 or 2 years, that timing has not come, but rather than based upon this particular data sets, but the data which will be derived from the next trial, Phase II, will be the foundation for considering the partnership. Is this something that we should think?

Thank you for your question. The data is something that we are able to call POC, proof of concept. So utilizing even this data, we will be able to consider such a negotiation for potential partnership as an option.

Next, Mr. Wada from SMBC Nikko Securities, please.

This is Wada from SMBC Nikko Securities. Can you hear me?

Yes. Yes, we can.

Regarding compound, I have 2 questions. First, this is a unique compound including its stereo structure. Is there going to be any issue in manufacturing? For example, mass production may be difficult or cost could be higher. Is there any negative issues?

As for positive point, such compound, in what way, were you able to come up with such a unique compound? And with such unique compound, can it be used for other targets?

Thank you for your question. So first question, we have no concerns. Looking at the past history, we have dealt with a naturally derived compounds with many asymmetries. And so based on that track record, we believe that we will be able to manufacture this compound without any problems.

And the second question, we believe that there is a possibility. I have explained the history of this compound in the beginning of my presentation. This was not a compound brought from outside. This was found as we were exploring other themes. And from the hit compounds on the orexin platform, we were able to consider other compounds in addition to what initially developed. So in that sense, I think there is a potential for broad application.

In the interest of time, we would like to start receiving questions from the media. Participants from the media, if you have any questions, please raise your hand.

If not -- [indiscernible], I think you were raising your hand earlier. [indiscernible], if you're still with us, please start asking your question now.

Congratulations on fantastic data. This is really exciting. I just have 2 quick questions. And the first being, I wonder if perhaps Dr. Ido can say a bit more about tolerance of the compound over time given that its long-term therapy?

And then secondly, if you could speak a little bit about [indiscernible], I know it's very early but access globally has become access to payers has become an increasing issue -- and especially at IH. I wonder what is the issues overseas, but also in Japan for limits to prescribing.

As you know, [indiscernible] in Japan is not prescribable by GPs, for example. And I wonder if there will be any reauthorization requirement or perhaps scheduling of the drug? In other words, DEA schedule in the United States to be observed. Congratulations again.

Thank you very much for your question. Regarding the tolerance. Going forward, we will conduct the long-term studies and in which we would like to observe closely. And in the preclinical data, we have observed that data demonstrating the efficacy and the dosing where the efficacy is confirmed, there hasn't been any issues with the tolerance. So I don't think that there will be an issue with the tolerance. But once again, if I may repeat, I would like to closely observe what will be the situation in the long-term studies going forward.

And regarding the schedule, your second question. Based upon the mechanism of this drug, orexin [indiscernible] we do not believe that there are any big concerns about the scheduling. But of course, this is about the CNS compound. So regarding the concern, it's going to be one of the core batteries in the study design. So we would like to demonstrate that there is no such concern in our studies going forward.

So you do not consider any kind of addictive potential or any studies to assess that?

Well, currently, if there are no concerns, and then we do not believe that there is a necessary new studies to be conducted. But based upon the results from the core battery, we will start the consultation with the regulatory authorities.

Congratulations again.

Thank you very much for your active participation with many questions. We would now like to close the briefing session on highlights of E2086 oral presentation at World Sleep 2025.

When you close the Zoom window, there will be a questionnaire. It will take only a couple of minutes. We appreciate your feedback, and thank you very much for participating.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]