Peptidream Inc Stock

[Interpreted] Good afternoon, everyone. This is Okimoto from IR PR department. Thank you very much for joining PeptiDream's Financial Results briefing for the fiscal year ending December 2025.

We are very sorry that the starting was delayed. Now we will begin the meeting. Today's attendees are President and CEO, Patrick Reid; Director and the CFO, Kiyofumi Kaneshiro; Chief Medical Officer and President of PDRadiopharma, Masato Murakami; and Chief Scientific Officer, Christian Cunningham.

Please note that simultaneous interpretation is provided for today's briefing by selecting your language at the bottom of the screen, you can listen to the audio in your chosen language, including the interpreted audio for either the Japanese or English lines. If you do not select a language, you will hear the original. Please also note that simultaneous interpretation is not available for access via telephone lines.

Today's briefing will begin with Patrick Reid presenting FY '25 summary, key topics and future outlook, followed by Mr. Kaneshiro discussing FY '25 consolidated financial results and FY '26 forecast. This will be followed by a Q&A session. Presentation materials are available on our company website.

Before beginning the presentation, we would like to make a disclaimer. The explanations provided may include forward-looking statements based on current expectations. All such statements involve risks and uncertainties. Please be aware that actual results may differ from these projections. We will now begin the presentation.

Good afternoon, everyone, and good evening or good morning to those overseas that are in attendance today. Today, I'm going to provide an overview of where we are as a company, how we performed in fiscal year 2025, provide some guidance on what fiscal year 2026 and beyond will look like for PeptiDream. After this, Kiyo will provide an overview of our financial results for the 2025 fiscal year, along with guidance for the fiscal year 2026 before we move on to take questions from those in attendance.

PeptiDream was founded with the dream of creating a revolutionary peptide library generation and hit finding platform that could enable us to unlock the exceptional promise and power of macrocyclic peptides to create the next generation of life-changing therapeutics for patients in need worldwide. What was only a dream 20 years ago has now become a reality.

PeptiDream started as a university spin-out focused on creating our revolutionary PDPS platform and getting some of the world's largest pharmaceutical companies excited about the power of macrocyclic peptides.

We spent the next 10 years focused on our discovery and development partnerships, narrowing our own focus to our 5 core therapeutic areas across RI and non-RI, creating our own internal wholly owned discovery pipeline and acquiring the exceptional Radiopharmaceutical business now known as PDRadiopharma to further accelerate all of these efforts.

Today, PeptiDream on the back of an exceptional 2025 embarks on a new chapter in our history, with our first wholly owned CAXI program moving into a U.S. Phase I study in the coming weeks. This event marks the start of our evolution from a global discovery company into a truly global discovery and development company and represents the next phase toward our goal of ultimately becoming a global pharmaceutical company.

Over the coming years, investors should expect to see us continue to focus on our discovery partnerships as we see the fruits of those efforts produce clinical compounds and clinical candidates that move into clinical development. In parallel to these efforts across our 5 core therapeutic areas, we will continue to grow a robust preclinical pipeline, both in-house and partnered, while in parallel moving some of the highest value programs into clinical development to both unlock further value and operational flexibility with the ultimate goal of creating exceptional value for shareholders and delivering life-changing therapeutics and diagnostics to patients.

Our focus has been and will continue to be on creating a pipeline of high-value preclinical and clinical programs, both in partnerships and as in-house wholly owned programs across our 5 core therapeutic areas. The 5 core therapeutic areas represent initially in the RI side of our business, RI-PDCs. We have the goal to continue to position PDRadiopharma as the leading Radiopharmaceutical company in Japan by supplying a robust set of exciting programs for PDRadiopharma to bring to patients in need in Japan.

PeptiDream also has a validated platform and track record of discovering best-in-class and first-in-class macrocyclic peptide ligands for use as targeted RI conjugates across the broad spectrum of targets and tumor types. And this is highlighted, as I'll highlight, by our Glypican-3 program and our FAP program moving into the clinic in 2025.

Our second core area of focus is around oral and injectable peptide therapeutics. We have a long collaboration history in the field of injectable peptide and oral peptide therapeutics, and we've been leveraging this extensive experience and expertise to in parallel, develop a robust internal pipeline of programs.

The third core area is around oligo PDCs. PeptiDream has been researching utilizing macrocyclic peptides as targeted delivery vectors for CNS delivery back since 2017 and also ex-liver oligo delivery since 2021 across a wide range of partnerships. We have extensive experience in conjugating various partners, oligo therapeutic payloads to our peptides and showing robust delivery, and I'll touch on that today.

Our fourth area -- core area of focus is around cytotoxic PDCs. From our RI business, we have a growing track record of discovering and developing tumor-targeting macrocytic peptides, utilizing RI payloads for cell killing. In this area, we extend beyond RI to also cytotoxic payloads and other small molecule payloads capable of killing cells, similar to ADCs. In most of this business, the cytotoxic payloads are provided by the partner, but we have an extensive growing pipeline in this area.

And lastly, is around our area of multifunctional peptide conjugates. PeptiDream has been combining our macrocytic peptide discovery capabilities with our next-generation proprietary linker architectures to allow us to create an entire new spectrum of multi-specific biologics that are capable of doing some exceptional things as both therapeutics and potentially as next-generation diagnostics.

We made exceptional progress across these efforts in 2025. We had 6 programs enter clinical development in total last year, allowing us to close 2025 with a total of 13 programs in clinical development. This is an exceptional year for us, almost doubling the number of clinical programs that we have for this company.

In addition to that, beyond just the 6 programs that moved into clinical development, we saw 13 programs stage advance across the entirety of our development pipeline and portfolio in 2025. We saw our ALXN2420, our GhR antagonist program partnered with Alexion and AstraZeneca moving into a global Phase II. We also saw a number of new programs in our cadherin-3 program and our IL-17 oral program also being announced. So 2025 represented a significant and exciting new phase driven by the creation of significant pipeline value, both with preclinical programs and the successful movement of clinical programs for us.

More specifically, on Slide 9, we highlight some of the late-stage development pipeline that is progressing forward at PDRadiopharma. We're on target to bring these 3 late-stage exciting programs to the market between 2027 and 2029. We've announced previously on the right, the LinqMed collaboration for the Copper-64-ATSM. This continues to progress in an exciting Phase III study in malignant brain tumor patients, on path for the submission of an NDA in 2027.

The 2 PSMA programs partnered with Curium, our diagnostic copper-64-PSMA-I&T entered first patients last year and is on path to progress forward for NDA submission in 2027 for the diagnostic of prostate cancer. Fast followed by the 177-lutetium-PSMA I&T therapeutic program, which has now kicked off its registrational bridging study, utilizing the data from Curium's global Phase III and are now on path toward potential submission in 2029. So these are 3 late-stage exciting programs that should contribute significantly to growing revenue at PDRadiopharma.

In addition to those assets, in 2025, we saw our in-house or partnered discovery assets also moving forward into the clinic. With RayzeBio, our diagnostic and therapeutic pair of gallium-68 Glypican 3 and actinium-225 Glypican 3 as a therapeutic, moving into a Phase I, Phase B study for the treatment of hepatocellular carcinoma, liver cancer, excitingly. That was also followed by the lutetium-177 therapeutic and diagnostic gallium-68 FAP program, partnering with Novartis, that Novartis took into a Phase I study against 4 different types of cancers of solid tumors. We're looking forward to the future Phase I results to arise from those programs.

In addition to excitement around the late-stage assets and our partnered programs that have been discovered at PeptiDream, as I mentioned, we're also developing a robust internally wholly owned pipeline, centered around initially our internal CAXI program. At the end of 2025, we had filed INDs for both the diagnostic Copper-64 CAXI program and the therapeutic actinium-225 program, both of which were accepted. And now we are on path to initiate a Phase I study of both of these programs here in 2026.

As a second program that we had announced 2 years ago, 18.2 for gastric cancer and pancreatic cancer with a diagnostic Copper-64 agent in partnership with the actinium-225 therapeutic, we are on now path in 2026 to initiate a Phase 0 study to get an initial early look at human feasibility data in patients. In addition, we are rapidly planning a Phase I study that hopefully, we will have more news on soon, looking forward possibly to start the initiation of the Phase I in the second half of 2026.

The third program, which we had announced at our R&D Day, December of 2025 was targeting cadherin-3 for potential use in head and neck squamous cell carcinoma and triple-negative breast and a few other types of solid tumors are possible. We think this is an exciting program. We currently have moved this into IND-enabling studies, and we are also now rapidly investing in the possibility of conducting a Phase I human validation study as soon as possible for this program. We look forward, of course, over the course of 2026 to update on the progress of all 3 of these exceptional programs here at PeptiDream.

From the previous 3 slides, you can see we're developing a compelling targeted Radiopharmaceutical pipeline, both of exciting therapeutics and next-generation diagnostics. And we couldn't do any of this without PDRadiopharma. PDRadiopharma is Japan's leader in radiopharmaceuticals. It has a 50-year history from 1968. It is -- represents the clinical and commercial arm for PeptiDream in Japan. It has a fully integrated R&D, manufacturing and commercialized operations and a nationwide distribution and sales network. And the 450-plus people at PDRadiopharma represent a trusted partner for global companies to access the Japan market.

The ongoing transformation of PDRadiopharma, that was initiated when we acquired the company in 2022, continues today under the exceptional leadership of Murakami Masato. We are very much focused on strengthening our teams across the entirety of the organization, focused on our people. We are focused on driving capacity, as we had mentioned previously, and I will touch on in a later slide, expanding our manufacturing capability and capacity and related infrastructure is a key to the growth of this business. And lastly, diversifying the product portfolio, not just across SPECT and PET and targeted therapeutics, but also from a partnering perspective, from retaining rights to the Japan rights to certain PeptiDream collaboration programs such as Glypican 3 and also PeptiDream's own wholly owned compelling programs to take forward.

We believe PDRadiopharma is well positioned to see exceptional revenue growth in the many years to come, and we look forward to seeing these unfold. Beyond our Radiopharmaceutical business, the other 5 core areas of focus are, of course, spread across our non-Radiopharmaceutical business. Second core area of focus that I'll mention today, of course, is around our oral injectable peptide therapeutics.

PeptiDream has numerous collaboration programs in the field of injectable and oral peptide therapeutics, and we have been leveraging this extensive experience and expertise gained over the past 10 years. At the close of 2025, PeptiDream currently has 5 programs in clinical development, but we have a robust pipeline of preclinical collaboration programs complemented by a growing number of high-value in-house programs that are setting up us for future success and future growth.

In 2025, we saw significant progress across these efforts. Highlighted in part by the ALXN2420 program. As I mentioned, this moving into Phase II -- a global Phase II study is a big step forward in seeing our pipeline in our discovered macrocyclic peptide programs progressing toward the market.

In addition to that, we had 2 other programs, one partnered with Asahi Kasei Pharma and one partnered with Johnson & Johnson that also reached development candidate nomination in 2025. Both of those programs, which have certain information yet to be disclosed, are progressing toward the next steps of the Phase I initiation. Dramatically -- we look forward to seeing these programs advance in that respect.

Complementing our clinical pipeline, of course, has been our in-house preclinical discovery efforts, highlighted in part by our oral myostatin inhibitor program, which we have reached development candidate nomination of, and we continue to progress with IND-enabling efforts as we continue partnering activities around this program.

As everyone is aware, we did not find the right partner or have yet to consummate a deal for this program, but we've had a number of exciting discussions and look forward to those continuing here in 2026 to find the ideal partner for this exciting program.

At the end of 2025, we also announced our oral IL-17 dual A/F inhibitor program. This exciting program has now progressed to development candidate nomination and will be progressing into IND-enabling studies while we consider partnering activities. There's exceptional interest around this program. We continue to field such interest, and we will continue to listen and consider best partnering possibilities for this program, while we continue to drive this toward clinical development.

In addition to both the oral myostatin inhibitor program and the oral IL-17 A/F inhibitor program, we have a number of other exciting preclinical oral peptide therapeutic programs ongoing, that we look forward to taking forward toward development candidate nomination in 2026. And once we do, we will, of course, make that news publicly available.

From our third core area of focus is our peptide oligo conjugate efforts. We have a strong roster of peptide-oligonucleotide conjugate discovery collaboration partners from Alnylam to Takeda to Shionogi and so forth. Extensive experience in conjugating partner therapeutic oligo payloads to our peptide delivery vectors has gone exceptionally well. We're going after not only targeting CNS, but also the ex-liver organs of skeletal muscle, cardiac muscle, kidney and adipocytes.

As a highlight of 2025 in December, we announced a pivotal breakthrough in our collaboration with Alnylam, demonstrating extrahepatic tissue-specific delivery of a peptide-oligo conjugate in large animals. This breakthrough paves the path for us to see multiple programs, both nominated as development candidates, and we expect to see these programs progress into the clinical development in the years to come. This represents an exceptional and transformative time for our peptide-oligo conjugate efforts.

Our fourth area -- core area of focus is around peptide-cytotoxic conjugates. As I had mentioned, we have a track record of discovery and development of tumor targeting macrocyclic peptides capable of delivering both RI and cell-killing payloads, yielding similar potencies to comparable ADCs. Such exceptional efforts have gone and continued extremely well in 2025, and we are now progressing toward the nomination here in '26, potentially of the first development candidates to take forward into clinical development. This fourth area, for us, we believe is going to continue to grow in the future and yield many development candidates in clinical programs in the years to come.

Lastly is around our multifunctional peptide conjugate programs, largely focused around next-generation immune engagers. We have been combining PeptiDream's macrocyclic peptide discovery capabilities with our next-generation proprietary linker architectures to create an entire new spectrum of multi-specific biologics that demonstrate all of the best qualities and best properties of their more complex protein brothers, but with the simplicity of the ease of chemistry of peptide-based therapeutics.

In 2025, we had successful in vivo proof of concept of our first in-house immune engagers, which is supporting expansive -- expansion of our efforts and expansion of the programs. And at the same time, we are both considering strategic partnering of these programs and a variety of different collaboration opportunities in the MPC space. Everyone should look forward to more news to come around this area for us in 2026.

As we look to our guidance of 2026 and around our clinical pipeline, I am very excited to announce that we expect to see anywhere from 6 to 12 programs enter clinical development in 2026. While we haven't broken down whether these are RI or non-RI at the moment, we expect to see these programs as they advance into clinical development, allow us to close the 2026 year with anywhere from 19 to 25 clinical programs. These 6 programs in this ratio that may not -- that may enter the clinic in 2026. If they don't, they will be on Q4 and then they will progress in the clinic in 2027. So we see very good line of sight to these 12 programs advancing and we're extremely excited about both 2026 and also 2027 and seeing our clinical pipeline, continue the trend we saw in 2025 and expand further.

These amazing efforts underlie our transformation into a discovery development company. To enable this next phase of growth, the next 10 years of this company, we felt it's extremely important to create a new organizational structure and management system to enable this to occur. As announced in part last year, we have now created both an executive leadership team and also a research leadership team and a development leadership team to coordinate our research-related functions and our development-related functions and for the ELT to oversee the entire strategy of the company and all aspects thereof.

To support this organizational change, we also feel it's extremely important to increase the management team. PeptiDream has relied on a very skilled but lean management team until now. To recognize the future of this company, we believe it's important to expand that team further. This is in part why we are introducing an EVP, SVP and VP system. We expect going forward to add additional EVPs, SVPs and VPs in the future. This, as is depicted on Slide 20, is not going to happen tomorrow. This is over the next 5, 10 years of our company to build out this management structure so that we can take on the future of developing a robust clinical pipeline and also advancing the many, many preclinical programs we have here at PeptiDream.

To support this further, of course, is our continued investment in growing the company from a capital perspective. As we have touched on in the past, what is shown here on Slide 21, is our efforts to build and expand PeptiDream's current headquarters and R&D center at the Tonomachi site. We believe that this program is moving very well through the design phases. We had hoped that this would start construction in late '26, but that has now moved into early 2027. We're very excited about the capabilities that this new building will bring to us going forward.

In addition to that, on the right side is the Kazusa manufacturing site, a further extension of PDR's current manufacturing capabilities by adding exceptional new lines to support our next-generation programs and products, both across partners and in-house, supporting lutetium-177, actinium-225 and Copper-64-related programs. This is on track to initiate construction in late 2026 and become operational sometime in 2028. So we very much look forward to providing additional news on these -- both of these exciting capital projects as they advance here in 2026.

And with that, I would like to pass this over to Kiyo Kaneshiro to continue the financial presentation.

[Interpreted] This is Kaneshiro speaking. In the interest of time, I'd like to highlight some of the key points to give you an overview of the consolidated performance of FY 2025 as well as the full year forecast for FY 2026.

Please turn to Page 23. And this is the consolidated results for the FY 2025. For the Drug and Discovery Development (sic) [ Drug Discovery and Development ] business, oral myostatin inhibitor out-licensing was not able to conclude a deal during FY 2025 and versus the initial forecast that it was -- the business was significantly below the forecast. However, on the Radiopharmaceutical side, it is now growing into the growth stage, the PET business. And it drove this entire Radiopharmaceutical business for -- therefore, after the merger in 2022, for the 4 consecutive years, we were able to maintain the profitability and also for the clinical pipeline, which made a significant progress. So it is growing steadily.

Please turn to Page 24. This is the difference from the initial forecast. Let's start with in-house programs, which is the oral myostatin inhibitor. Regarding the out-licensing, we are to maximize the value, and we are exploring a more optimum partner. That is essential. Under this strategy, we wanted to prioritize choosing the best partner. Therefore, we -- the conclusion of the deal wasn't achieved in 2025. We, however, continue the negotiation towards 2026. And we initially planned to reach an R&D milestone for the existing programs as well as new partnership agreement. Part of them were delayed and postponed to 2026.

Following page describes the consolidated balance sheet for FY 2025. As you can see, in the last few years, financial soundness has been our objective, and we are making steady progress. Equity ratio is improving steadily. In addition, net cash positive was maintained. So towards FY '26 and onwards, for future growth, we'd like to continue our active investment. However, financial soundness is also very important for us. And this is -- we have a very sound finance, and therefore, equity finance is not scheduled.

Please turn to 26, Page 26. This is the consolidated cash flow. As you can see in the bar chart on the right-hand side, as of the end of December 2025, the cash amounting to JPY 28.6 billion, and the operating cash flow and the investment cash flow as well as financial cash flow. As of last year, the net debt, apart from that, the income tax payment as well as the repayment of the borrowing are the main contributor here. And regarding the PeptiDream and PDR pharma, R&D as well as manufacturing-related equipments and also future CapEx are the major consumption or factors plunging the cash.

Please move on to Page 27. This shows the full year forecast for 2026. In revenue, JPY 32 billion plus outsourcing upfront payment. That is our announcement. We would like to make sure that we won't repeat the same incident which took place last year. Therefore, large-scale products -- projects are taken separately, and we are planting seeds for multiple programs and accumulating to stabilize our revenue. And we'd like to maximize our asset value. Those are the basic assumptions. And based on that, we'd like to actually achieve both of these in order to actually create an upside potential strategically.

Please move on to Page 28. This shows our new growth drivers as well as the midterm and long-term management goals. As I mentioned earlier and Reid-san mentioned earlier, we'd like to become a global discovery leader, focusing on 5 core therapeutic areas, whereby we'd like to accumulate our asset values. That is the most paramount growth driver that is going to be. And also, needless to say, first, the platform is going to generate a stable cash flow. Second, under these core areas, we'd like to accumulate a strategic asset value. And number three, we'd like to utilize the strength of our infrastructure so that we can solidify the competitive edge. There are many companies which may have one of them. However, but combining, it's unparalleled that it's only PeptiDream that has all 3. Therefore, we will be able to serve as a growth model that can leverage this proprietary strength. And this is my key message here.

And lastly, I'd like to introduce our sustainability-related initiatives. As you can see in the diagram or slide, we'd like to ultimately pursue ESG-related initiatives, and we have been accumulating results. As a result, on the right-hand side, each rating agency rate us quite highly, and it is rising and improving. This is the propensity we'd like to maintain. And within the industry, we have reached a high level considering the industry average.

We have been closely working with the old stakeholders. And once again, we'd like to express our gratitude for those of you who have supported us throughout this.

That concludes my presentation. Now we'd like to entertain questions from the floor and participants.

[Interpreted] Thank you very much. Now, we'd like to entertain questions from those in attendance. [Operator Instructions] Now we'd like to open the floor. Yamaguchi-san, would you like to start your question.

[Interpreted] Citigroup, Yamaguchi is my name. For this year, you explained the forecast for 2026, and -- but you expect the lump sum payment -- upfront payment of JPY 14 billion. And then for the close to the JPY 30 billion that you were expecting, but didn't receive last year that is to be added on that. Is that a correct understanding?

[Interpreted] Thank you for your question. First, yes, your understanding is correct.

[Interpreted] I see. And then for all the myostatin, I believe that it will be difficult for you to make a comment. But for the past 1 year, you made efforts to maximize the value, but didn't achieve that. But this year, you didn't include this in your forecast. So it seems that you can just out-license at any time. But what is the reason of the delay? And then about the expected timing of the license out this year, if you can discuss?

Thank you for the question. So you're asking in regards to whether or not we will be able to partner the myostatin program this year. And what is the current status of those efforts? As you mentioned, we started this in 2025. We continue to discuss with a number of different companies. What is a key difference for the myostatin program compared to any of our other programs is that will be combined with someone else's oral weight loss drug.

As we've mentioned previously, that makes picking the right partner extremely important. With the exception of Lilly and maybe Novo, the rest of the large pharma companies are still very much working on their oral weight loss directions. And therefore, without having a strong sense of where they intend to take or say, exceptional maybe Phase II or early Phase III data, it's hard to expect them to want to combine an oral muscle preservation piece to those studies.

So we think the value of this program is exceptional. One of the challenges then is that we were probably a little too early, right? The other muscle preservation agents that are in development are being developed for SMA or just early stages in combination in obesity, but being developed as injectables. There is no current oral muscle preservation agent in clinical development. So our goal, of course, is to partner this in 2026. I would really like us to be able to find the right partner. But I don't think we have -- we know exactly when that will happen or we can't comment on this time exactly who that will be with or when that will happen or what the deal economics will look like.

In part, that's very similar for IL-17 program or our CAIX program. There's exceptional interest in these programs for us. But I think it would be difficult for us to disclose what we expect for upfront fees or what type of deal structures would be the best for those programs. Yes.

[Interpreted] Just one thing to clarify that you talk about -- you wanted to combine with the oral to oral rather than oral to injectable, right?

That's correct. From the large pharmaceutical big pharma perspective, that would be their development goal. They don't -- they -- or at least the discussions that we have to date, none of them have been around combining with their injectable. So it has been an oral-oral. Yes, that's correct.

[Interpreted] Next question from Wada-san, please.

[Interpreted] SMBC, Wada speaking. Am I clear?

[Interpreted] Yes, we hear you clearly.

[Interpreted] I'd like to actually confirm several things about the business forecast. On Page 27, that is regarding the discovery business amounting JPY 15 billion, what is included here? And what is the assumption? For R&D progress in 2026, 6 or 12 programs are anticipated, which are making -- will make a stage advance to the clinical stage. So are they included? So -- at least 6 programs, which will enter the clinical stage. Is it the assumption for the R&D piece here, which is included in the full year forecast scheduled for JPY 15 billion?

[Interpreted] Thank you very much for the question. So out of -- in terms of the breakdown of JPY 15 billion, I understand that you are actually asking the breakdown. So the revenue is comprised by milestone payment as well as R&D funding. And amounting to [ JPY 500 million ], they come. And outside that, JPY 1 billion will come from new deal or existing programs expansion. So that is the breakdown.

[Interpreted] I'd like to ask you one more thing regarding costs. Last year, the entire cost, including the COGS as well as SG&A amounting to JPY 23.5 billion. And this year, it was expanded, right, if I understand it correctly. But the significant surge will come from R&D costs. Is that -- am I right in thinking that? So cost-wise, what is the main driver? Or what is the major factor contributing to the significant increase in cost for 2026?

[Interpreted] Thank you very much for the question. So basically, you had the right understanding. Regarding R&D expenses last year in FY 2025, which amounted to JPY 5 billion. But this year, in 2026, FY is going to increase to JPY 6.4 billion. So it's an increase of about JPY 1.4 billion year-on-year.

[Interpreted] Mr. Hashiguchi, please.

[Interpreted] This is Hashiguchi from Daiwa. Regarding the forecast, the assumption, what Kaneshiro-san just mentioned, the remaining [ JPY 10 billion ], the new deal and also myostatin, IL-17 that is included in the plus alpha, what are the differences between those? Regarding the new deal -- so you have a good probability, including the actual value. And so those in the plus alpha like myostatin, am I correct to assume that it's possible that you will not out-license that in 2026?

[Interpreted] Thank you for your question. The first -- regarding the first point, yes, your understanding is correct. So the JPY 15 billion, there are quite certain probable ones that includes those proper ones. And so our activities of this year will not actually lead to the actual revenue this year, but there will be some delay. The activities in the past may lead to the activity -- the actual revenue of this year. And also, we have a rather high certainty or the probability of receiving that amount from the activities of the last year or 2 years ago.

And regarding the upfront payment, your question is what is different. And so one thing is that we have some potentially large project. So the impact on our revenue or the profit is quite large. And of course, it depends on our partner. And so it's not only the timing that is important for us, but it's important for us to maximize the value of our asset. And so the partner as well as the future development should be optimal. So including everything, we want to maximize the value of the asset.

So it's possible maybe we may be able to conclude the deal within 2026, but it may be possible that our optimal solution may be to postpone it to 2026. Thus, we are separating this JPY 15 billion in the lump sum payment.

[Interpreted] So myostatin, IL-17, these ones, you have 4 projects here. So you will continue the clinical development in-house like myostatin and IL-17, your option is to continue the development through the registration. Is that possible?

[Interpreted] Thank you for your question. And our answer is yes, especially like the CAIX and Claudin, we do have the capability to work end-to-end. But for the myostatin and IL-17, for the actual manufacturing, we will need a partner and that's our assumption. And so within that framework, we would like to consider what is the optimal time point to transfer or change the hands.

[Interpreted] We'd like to take next question from Ueda-san.

[Interpreted] This is Goldman Sachs, Ueda speaking. I'd like to raise questions pertaining to your full year forecast. Currently, your basic revenue-generating ability and also what is the future outlook for mid- to long term? What is your perception here? Previously, in 2024 performance and 2024 initial forecast that about JPY 50 billion that was achievable, that was achieved. And you were to actually reach the JPY 100 billion mark in mid- to long term. That was your long-term view. However, this year, profit-wise, you are to reach JPY 5 billion level as a basic assumption, is that true? And also, if you are to reach JPY 100 billion level, do you have a concrete picture to reach that far? What is your perception right now?

[Interpreted] Thank you very much for the question. On Page 28, you are asking questions. Regarding the revenue mid- to long-term goal of achieving JPY 100 billion, we are on track of reaching this JPY 100 billion level in revenue in the long term. Of course, there will be some fluctuations and ups and downs down the road. However, broadly speaking, for us to attain this JPY 100 billion, the biggest driver here, which is described on [ Slide 28 ] are the core therapeutic areas. We are to maximize the values and accumulate values in these 5 core areas. That is most important.

And to be more specific, in the first half of our presentation, in 2025, it was an exceptional year for us. It was the best in the past. And also in 2026, we'd like to surpass the 2025 results in order to maximize value in these 5 core areas, and that is our -- on our horizon. So in terms of mid- to long-term goals, we are making a steady progress and everything is on track.

And to raise your -- to address your numbers -- second question, which is the profit level, profitability, JPY 32 billion plus upfront as a result of out-licensing. And if the upfront payment is on top, that will be added on top of the profitability. So there is a significant potential of upside in terms of profitability and the bottom line.

[Interpreted] And I'd like to raise the second question. Regarding the management structure, what was the background that prompted you to change the management structure? And what was the purpose of the change in management structure? In terms of the growth that -- well, in anticipation of the growth in the size of your business. But in the last few years, in terms of revenue, the top line hasn't grown that much in the last few years. So what prompted you to actually decide in this management change? What are the factors behind this change? And also this time, in terms of the management organization, the Executive Vice President ought to be introduced and what the benefits or what is the advantages of deploying this executive...

Of course, our plans to revise management moving to the EVP, SVP and VP system. And of course, what type of individuals or what type of capabilities are we looking to expand and have covered. I think at this stage, as we want to grow into a global pharmaceutical company, we could use, I think, certain talented executives around overall operations and operational management, decision-making at PeptiDream. We are looking for individuals to focus or with strategic or expertise around strategic planning. We have many, many programs, of course, so which programs should be a priority and which programs maybe should be less of a priority. And also certain executives with portfolio management background and skill sets.

Moving from a company that is just discovering drugs and passing those on to partners to develop them into a company that is going to take forward our own or certain of our own assets requires a very different operational skill set than we currently have. So I'm very much looking over the next couple of years to see us expand kind of our talent around those core areas around operations, around strategy and around the portfolio management, as we look to continue this trend of taking more of our high-value preclinical programs into clinical development to at least gain human POC before kind of out-licensing them.

So I think this is a natural evolution for a company like PeptiDream I don't think this is surprising. And this is, as almost all U.S. biotech companies do, is the best path forward to maximize value for shareholders, which is, of course, the core focus of everything we're doing here at PeptiDream. And it's also the best way to see these programs drive forward toward patients in need. So with those 2 focuses in mind, those are the type of individuals we look to bring in for the next 10 years of growth here at PeptiDream.

[Interpreted] Next question, Kawamura-san.

[Interpreted] Kawamura from SBI. I have two questions. First, some overlap of the previous question is that this year's forecast and your target last year was quite high. And so you said that it's a mind setting that needs to work. You have plan B, but you needed to do the downward revise. And so JPY 15 billion is the important point. And so you have a quite strong commitment. And for the management, it's really a must or do you rather consider the maximization of the pipeline value more important than achieving this number, particular number?

[Interpreted] Thank you for your question. This is about the '26 forecast and the positioning of the JPY 15 billion. And as you mentioned, it's rather conservative. Yes, this is a very rather conservative expectation, and so probability is quite high. And -- but not only that, naturally, of course, we want to have additional one. We want to maximize the pipeline values and/or the assets. And so we will positively work on the further upside. And so we wanted to separate these 2 gears.

And so we will target a high level, but with quite a high probability projects and also some projects that where we have to think about the different options. They are separate.

[Interpreted] And the second question is regarding the myostatin. So I want you to do some expectation control. And so this obesity area is quite a hot area and the expectation is very high. And the player is -- there are 2 leading companies for the oral and other companies are working on the different mechanism of actions such as long-acting. And so with this trend, you want to combine the oral on the oral combination. Do you have a lot of inquiries or on the potential deal partner companies? And so can we have a very high expectation? Or could you discuss as much as possible?

Yes, Kawamura-san. I understand you're asking about, of course, our myostatin program and what is the likelihood of a deal soon, what is the size of a potential deal soon and with who. I think it's hard for us to give concrete guidance at this stage. As you mentioned, I think we have the only orally bioavailable muscle preservation agent against a very exciting pathway, the myostatin pathway, that has already shown clinical success in humans with the injectables. So that places us in a very, very strong position.

As you mentioned, besides the 2 top players in the space, the rest of the companies are navigating their strategies. And I think as you well know, their strategies changed quite quickly sometimes, right? We saw some large acquisitions by Pfizer and Roche over the last couple of years. There's a number of deals coming up, of course, licensing deals coming out of China still. So it is a very fluid market space still today. Because of that, I think that's what is -- makes it difficult to give you guidance exactly when a deal will happen. But as I mentioned, I think we have an extremely valuable program. I think we will find an exceptional deal for this program. What I don't know or what we don't know is the exact timing of that yet. But we do believe it's in the future. I think just lessons learned is to not put it as a part of guidance. That's a very good lesson learned from 2025 for us.

And I would echo to your earlier question, I would echo kind of Kaneshiro-san's guidance, which is, yes, we're returning to more of a conservative guidance for the company. The goal over the next 3 or 4 years is to continue to grow our clinical programs and clinical pipeline. That's how we reach the goal of the -- I don't know what it is, [ thousand-billion ] yen kind of goal that we have. We get there on the strength of the clinical pipeline. And so that's going to be our focus in -- for these next couple of years. We will, of course, intend to return to the black this year. We -- and the JPY 150 million or the [Foreign Language] gets us, of course, back into the black so that we can continue to take the proceeds or the profits from that and reinvest into the clinical pipeline.

I think that is what we've been doing in the last couple of years, and that will continue to be the goal over the next 2 or 3. And we will manage our clinical programs as best we can. It was previously asked also, do we think R&D spending is going to go up every year. And yes, we budgeted for almost a -- I guess, [Foreign Language] an increase in our R&D costs for this fiscal year. That could potentially increase every year by around [Foreign Language] depending on whether we take 1 program in there into the clinic or whether we take 2 programs into the clinic.

And we believe part of that is going to be guided by the revenue that we can continue to bring in. So as long as we can continue to maintain good revenue streams, good cash flow, instead operating in the black, we continue to use those proceeds to invest into taking more of our exciting preclinical programs into the clinic. And I think long term, that's how we best generate value for shareholders over the next 10 years.

[Interpreted] Next, we take questions from Yamakita-san.

This is Yamakita speaking from Jefferies Securities. I'd like to ask you a cost-related questions. Regarding the number of headcounts, which was reported in the summary of the financial results, a slight increase to 810 from 761. Why at this timing did you increase the number of headcounts? And is it inflating your R&D, most of the R&D cost increase?

[Interpreted] Thank you very much for the question. So for the entire group, you are asking the entire headcount, PeptiDream as well as PDRadiopharma, both increased our headcount. And nearly 50 personnel was added new for this year. And mostly, the growth came from PDRadiopharma because listed products -- or excuse me, launched products are nearing the clinical late stage, and we are to make full preparation for the manufacturing and sales. So we are making preparations for the market launch. And then starting from 2026, we'd like to make necessary preparations. And in 2027 and onwards, on a gradual basis, the approval or the application will be filed, and we are to make a solid preparation that is reflected in the increase of the headcount in the PDRadiopharma.

[Interpreted] Thank you very much for the detailed explanation. Second question relates to a quick confirmation. Last year, during the first half, in your presentation, you had a deal pipeline or the timing of your potential deals. In 2026, first half, the partnerships awards to be concluded for about 2 to 3 programs. There was a time line describing -- the chart describing a time line, but is it a thing of the past? Regarding the timing of each expected pipeline or deal?

[Interpreted] Thank you very much for the question. The answer is yes and no. So 6 months ago, we showed you a diagram describing the time line, and there are some ongoing items. So for those, you had the right understanding as we announced previously. And on top of that, towards the year-end as well as the beginning of this year, there are new deals that are making -- that are underway.

So in terms of the revenue and the forecast of those KPIs and numerical targets, and regarding the timing and the order as well as the price -- unit price and how much time line is expected. We are actually talking with our counterparts. So at the best possible way, we'd like to actually attain our numerical targets for the revenue and both the top line and the bottom line. That is our mindset.

[Interpreted] Next is Matsubara-san, please.

[Interpreted] This is Matsubara from Nomura. Just one question from me. Again, it's about the myostatin inhibitor. Last year, the end of last year for the [ P1 ] study, so siRNA data was obtained that reduces the body weight while maintaining the muscle and the deal -- was your deal affected by that? Or because you have the combination of the -- so probably [ it ] wouldn't affect that...

With regards to recent disclosure around an siRNA to knock down myostatin or other players in the myostatin Activin signaling pathway as potential new therapeutics for muscle preservation. As you are probably well aware, manipulating the myostatin pathway is useful in a number of potential therapeutic diseases beyond just muscle preservation. It also has a key role in many of the muscular dystrophies such as DMD. As you know, there's a couple of inhibitors for myostatin that are about to be approved for SMA and again, a number of other muscular-related disorders to which inhibiting this pathway could be very effective -- clearly very effective since you have some myostatin inhibitors about to be approved for SMA and other disorders.

So I think that's largely the science behind various companies moving to an siRNA-based approach to go after myostatin, of course, inhibitors. Whether this will affect our oral myostatin program, I would say, at current, no. And I think just looking at siRNA in general, I might point to one very obvious comparison, which is in the high cholesterolemia space of PCSK9. So PCSK9, of course, there is an approved siRNA drug for high cholesterolemia targeting PCSK9. But as you know, Merck is -- or may know, Merck is about to seek approval for an oral macrocyclic peptide inhibitor of PCSK9, which shows significant value to our patients different than the siRNA.

So the siRNA, while can be wonderful in some cases, multiple injections over long periods of time renders them less effective. You have certain injection site issues. You can have other kind of compelling reasons why someone is not able to take an siRNA drug that actually exists for those type of therapeutics. So that's a specific example where there's an approved siRNA therapeutic against PCSK9, but now also an oral macrocyclic inhibitor, PCSK9, that will be approved, and there's actually a small molecule inhibitor PCSK9 underway, too. So I think it's a very interesting space, but we don't see siRNA, at least at this stage, causing any type of, say, loss of value for this program for us.

[Interpreted] Let me add a few things here. For the myostatin, we received several questions. And I'd like to add one thing. From last year, we made various presentation and the clinical -- regarding the research and clinical. But as a market is getting warmer. I think you can understand it that way the myostatin including siRNA, there are many different approaches, and it's getting a lot of attention in the industry, and there are many players. And when the data are becoming available, then we are -- we can expect the competitive advantage of a compound as it becomes clear and clearer. And also various companies have different clinical plans. And so our compound, the positioning of clinical -- the positioning is getting clearer. And so the market is getting warmer and warmer right now. That's what we understand.

On the other hand, the market potential for this compound is quite large. And so in our asset, the net present value is very large for this. And so we want to maximize the net present value for this compound. And so we are looking at the timing. And also, we are taking a little -- more time from last year to this year. And so with that, we want to really maximize the high net present value.

[Interpreted] We will take questions from Mizuho Securities.

[Interpreted] This is Ishida speaking. Regarding the full year forecast, I'd like to confirm one thing. Regarding the upfront plus alpha additional CAIX and Claudin are listed on your slide. Previously, under RI, maximization of value, you mentioned P1 data or partnership after the P1 data has become available. But regarding the [ PI ] domain, the partnership out-licensing or in-house, the decision, what is the threshold? Is it changing whether you are to out-license or conduct an in-house development?

[Interpreted] Thank you very much for the question. Regarding Page 27, myostatin, IL-17, CAIX, Claudin, all of these at this point in time have inquiries in this -- so in that sense, without being selective, they can be out-licensed by tomorrow, but that is not the case. Of course, we need to ascertain when the data will become available so that we can maximize the value. In that sense, CAIX, IL-17 and Claudin, we'd like to wait until Phase I results come out. That will be the maximize sweet spot for us to initiate the out-licensing.

We are actually advancing in the clinical development phase. And of course, multiple companies are interested in these products. So finally, when we reach the final decision, our ultimate goal is not to actually reach the out-license agreement. We are to commercialize so that we can keep winning in the market once these products are launched in the market. So at the best earliest timing, out-licensing at an early timing is necessary. So in that sense, for this year as well as next year, we'd like to maximize value. And that is our policy in terms of making the right decision.

[Interpreted] Now we'd like to entertain one more question from [ Yamada-san ].

[Interpreted] [ Yamada from Nikkei Biotech ]. In 2026 for the clinical, the pipeline, the compounds are getting into clinical in 2026. And you mentioned that between 5 to 12 projects will go into the clinical phase. And for those -- excuse me, it's 6. And for those 6, could you discuss which area, which of these...

Thank you, [ Yamada-san ] for the question. The 6 to 12, I think we'll just comment that it's a good -- it's roughly a 50-50 mix between RI and non-RI. Again, at this stage, we're not sure exactly of the 6 that will enter the clinic. Those already, at least the 6 that we know will enter the clinic for sure in 2026 are also a mixture of both RI and non-RI programs.

So last year, we had 6 programs moving into the clinic, and those were all RI related. So this year will be more of a balanced mix between our RI and non-RI programs. And of course, as far as the -- I guess you're asking if any of those are also either peptide-oligo or peptide cytotox or maybe an MPC. None of those are MPCs, we can say at this stage. But we think that could be a representative of an oligo peptide and potentially a cytotox peptide. But Again, I think it's just a better -- it's a better mix than it was in 2025 of both RI and non-RI. And we are expecting over the next 12 to 24 months to see potential clinical programs across all of our core therapeutic spaces.

[Interpreted] This come to conclude the session. Now we'd like to adjourn this financial results briefing for FY 2025. Additional questions, please contact IR department. Thank you very much for taking the time out of the busy schedule to attend our briefing. Thank you. The meeting is adjourned.

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

Good afternoon, and thank you for joining PeptiDream's 2025 R&D Day Conference Call. This is Yen Ting Chen, Head of Business Development at PeptiDream. With me today on this call are Patrick Reid, Chief Executive Officer of PeptiDream; Masato Murakami, Chief Medical Officer of PeptiDream and President of PDRadiopharma; and Christian Cunningham, Chief Scientific Officer of PeptiDream.

During today's call, Patrick, Masato and Christian will provide some recent updates and perspectives regarding our research and development programs. [Operator Instructions] I'd like to remind you that this call will contain remarks concerning PeptiDream's future expectations, plans and prospects. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors. In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. Today's call is recorded and will be disclosed on the PeptiDream website.

And with that, I'd like to turn the call over to Patrick.

Good afternoon, good morning and good evening to everybody. Greatly appreciate everyone taking the time to attend our 2025 R&D Day presentation. At PeptiDream, our R&D efforts are focused on 5 core therapeutic areas, radiopharmaceuticals, oral peptide therapeutics, peptide oligo-conjugates, peptide cytotoxic conjugates and multifunctional peptide conjugates. . And across these 5 core areas, we're focused on creating a robust clinical pipeline of innovative programs. In today's presentation, we will touch on the current status of these efforts and the exceptional progress we've made across these areas in fiscal year 2025.

On Slide 4, is an overview of our current radiopharmaceutical clinical pipeline. In 2025, we had an exceptional year with our Curium PSMA partner program entering registrational trials in Japan and the first wave of PeptiDream discovered peptide RI conjugates for both collaboration efforts and the in-house efforts progressing forward with our Glypican-3 program partnered with BMS and our FAP programs partnered with Novartis. We have 4 programs entering Phase I studies. We also recently filed INDs for our wholly owned in-house CA9 programs. Additionally, our second in-house Claudin 18.2 program, that was last year is progressing through IND-enabling studies. While we in parallel are planning a Phase 0 imaging study. On today, we are very happy to announce our third in-house program, targeting Cadherin3. These results are the product of the last 5 years of discovery efforts, and these programs represent just the first wave of programs into the clinical trials.

We have a robust preclinical pipeline of Peptide RI program following, and we're on course to move more programs into clinic in 2026 and beyond. So it really represents a very, very exciting time for us in the radiopharmaceutical field. Today, we'll start off providing more detail on our efforts in the radiopharmaceutical space with our CMO and also President of PDRadiopharma, Masato Murakami, highlighting exciting progress and efforts happening at PDRadiopharma. Murakami-san?

Thank you, Patrick. Hello, everyone. And I'm Masato Murakami. So I will briefly introduce our company, PDRadiopharma. We have in Japan radiopharmaceutical readouts since 1968 and advancing nuclear medicine for society and delivering the new area of the radiopharmaceuticals to the patients fast our position. We are Japan's only domestically owned pure-play radiopharmaceutical company with more than 50 years of the continuous experience in the nuclear medicine. Over that time, we have been nationwide manufacturing, logistics and the technical support that are difficult to replicate. And this gives us a unique role in Japanese ecosystem.

Second, our commercial foundations. We already have a profitable cash-generating portfolio of approved nuclear medicine product. This stable base allow us to invest in new growth areas. Finally, our future growth drivers. Our midterm strategy is centered on radiopharmaceutical with some runs to the product and late-stage assets, that I will walk you through today. In particular, AMYViD is now entering a multi-year high-visibility growth phase and will be one of the key contributor to our next stage.

Next slide, please. Today, I will walk you through 5 key highlights of fiscal year 2025. First, AMYViD, our amyloid PET tracer; second, Raiatt MIBG or PPGL and neuroblastoma. Third, the 64Cu-ATSM program in malignant glioma. Fourth, our 64Cu and 177Lu-PSMA I&T program in prostate cancer. And finally, our total nuclear medicine solutions. I will touch on each of these.

Next please. Let me start with highlight number one, AMYViD. The key message here is AMYViD is putting amyloid PET at the center of Alzheimer's care. And we are driving adoption of amyloid PET as a standard tool of the treatment decision and follow-up. In other words, AMYViD is evolving from the diagnose tracer into a critical piece of modern Alzheimer's treatment pathways.

Next please. Over the past few years, Alzheimer's disease has changed dramatically. Antibody therapy such as lecanemab and donanemab have made disease-modified treatment a clinical reality, but they require accurate patient selection and response assessment. In diagnosis, [indiscernible] imaging with AMYViD is now in routine practice, allowing physician to visualize amyloid beta product directly and to evaluate how patient respond over time. Together, these advances are [indiscernible] from simply seeing the disease to active treatment and monitoring A-beta.

Next please. On this slide, I'd like to highlight 3 growth drivers for AMYViD. First, the launch of the lecanemab and donanemab are expanding the pool of patients who require amyloid confirmation and on treatment monitoring. Second, our AMYclz and AMYfollow. These applications provide standardized and quantitative PET assessment including Centiloid scale scoring, which support consistent treatment decision and follow-up in daily clinical practice. Third, PET imaging of direct visualization and conjugation of the brain amyloid distributions. These 3 elements together support steady structural growth in amyloid utilization.

Next please. This slide show how the demand is translating into real numbers. In 2024, AMYViD sales were roughly 7x higher than 2023, mainly driven by reimbursement and the first wave of the disease-modifying therapy use. In 2025, we expect about 2.5-fold additional growth per 2024 as both lecanemab and donanemab rollout and PET become standard for the treatment initiation and follow-up. And importantly, 2026 is positioned for continued high double-digit growth at 12 months monitoring scan after therapy initiation, this became routine. So AMYViD entering the multiyear high-visibility growth rate, generating increasing cash flow for PDR.

Next please. The highlight #2 is Raiatt MIBG. Here is the story about the transforming care in PPGL and pediatric neuroblastoma. Raiatt combined imaging and therapy and has evolved from one of the earlier nuclear medicine payer into a modern standard for rare endocrine childhood cancers. I will touch on both of the medical value and our effort to expand access in Japan.

Next please. Raiatt MIBG consist of I-123 MIBG for imaging and I-131 MIBG for treatment. This matched payer enable precise patient selection, treatment planning and then target irradiation of the tumors. Raiatt is indicated for MIBG avid unresectable pheochromocytoma and paraganglioma and more recently for MIBG avid neuroblastoma. It built on decades of the clinical experience in Europe and the U.S., but only recently became available in Japan, closing the long treatment gap for the rare but devastating disease.

Next, please. Slide 14 bring this to life with the pediatric case example. On the left, you see the child with high MIBG uptake in metastatic neuroblastoma, especially multiple bone marrow metastasis before the treatment. On the right, marked reduction in tumor uptake after the Raiatt therapy. For children with high-risk neuroblastoma in Japan, Raiatt changed what was previously a very limited treatment landscape into a real accessible therapeutic options. For family and pediatric oncologists, it means moving from hoping for MIBG to actually being able to deliver MIBG therapy in Japan.

Next, please. Of course, approved alone is not enough. Access is critical. MIBG therapy has been used overseas for many years, but Japan approved Raiatt for PPGL in 2021 and then for neuroblastoma in 2025 this year after roughly 30-year drug drag. This is a rare cancer, not a high-volume market, but it is a high-impact commitment to patients with endocrine tumor and childhood cancers. We are, therefore, working to expand the number of the certified MIBG treatment centers across Japan. The solid circle the map show current size and the open circle show planned expansion next year. Our goal is simple. No child who need Raiatt MIBG should miss the chance to be treated in time.

Next, please. Highlight number 3 is 64Cu-ATSM in malignant glioma, a program led by our partner, LinqMed. This radiopharmaceutical target hypoxia tumor microenvironment and has already advanced into the Phase III registrational trial. [ OPDR ] this program represent a disciplined way to participate in a first-in-class opportunity while respecting the clinical development driven by our partner.

Next please. Here, you can see the program overview and Phase I STAR-64 results. 64Cu-ATSM is a small molecule radiopharmaceutical that selectively activating the hypoxia tumor tissue, a key feature of the recurrent malignant glioma, where prognosis remains poor and treatment options are very limited. In the Phase I STAR-64 trial in Japan, total 18 patients were treated across multiple dose levels. The maximum tolerated dose was identified at 99 MBq/kg with no seizure treatment-related adverse events, showing the drug was generally safe and well tolerated. In glioblastoma patients, median overall survival reached 17.7 months with 1-year survival of 64.8% compared to historical expectation of around 30% to 40%. This is very encouraging data. Therefore, [indiscernible] to start STEP-64 Phase III registrational trial directly.

Next one, please. STEP-64 is a randomized Phase III study comparing 64Cu-ATSM to best physician's’ choice in different high-grade glioma. Enrollment is ongoing with overall survival as the primary endpoint and filing in Japan anticipated around late 2027. In this program, LinqMed lead clinical development and overall strategy. PDR is in charge of the regulatory strategy and filing in Japan, and we are preparing domestic manufacturing and distribution infrastructure to ensure timely supply once product is approved. This structure give PDR exposure to a potential new therapy in malignant glioma while also showing the win-win partner-oriented approach where each party focus on each strength.

Next, please. Highlight #4 is 64Cu and 177Lu-PSMA I&T. And this is for prostate cancer developed together with our global partner, Curium. Here is the story about building a scalable radiopharmaceutical platform that combine PET imaging and target radiotherapy to reach the large PSMA-positive patient population. I will first touch on the market opportunity and then on our developmental strategy.

Next, please. Prostate cancer is the second most common male cancer worldwide and the prevalence is expected to roughly double between 2022 and 2040. More than 25% prostate cancer express PSMA [indiscernible] level 100 of the times higher than normal tissue. On the left, you see global PSMA PET imaging market projected to grow from about $1.5 billion in 2024 to $3.5 billion by 2033. On right, the PSMA target the radiotherapy market is expected to grow even faster from $1.4 billion to over $6 billion in the same period. Clinically, radioligand with high sensitivity and specialty are enabling earlier detection and better disease monitoring. And PSMA PET is now incorporated into the NCCN guideline as a core imaging modality. At the same time, Lutetium-based PSMA therapy have shown strong antitumor activity in mCRPC, establishing PSMA radiotherapy as a new treatment options.

Next, please. This slide illustrates where PSMA target radiotherapy fits along the prostate cancer journey. With PSMA target radiotherapy eligible patients, the post-ARDT, pre-taxane mCRPC segment is large and fast growing group. Patients in this setting typically receive multiple cycles of PSMA radiotherapy, which translate into the substantial and durable radioligand demand. This means we can effectively serve this segment. It provides long duration, high-value opportunity for our 177Lu-PSMA I&T program.

Next, please. Finally, let me explain our development strategy in Japan with Curium. Globally, Curium is running the Phase III trial that provides a core efficacy and safety data set for both imaging and therapy. In Japan, we're pursuing a compact capital-efficient approach. For 64Cu-PSMA I&T we are conducting an open-label multicenter study in newly diagnosed prostate cancer, aiming to position in both as a stand-alone diagnostic and as a [indiscernible] imaging tool [indiscernible].

For 177Lu-PSMA I&T, a single bridging study in post-ARDT mCRPC is designed to leverage together. And Curium positive Phase III ECLIPSE results, which have already met the primary endpoint, 64Cu imaging and 177Lu therapy supported by small Japanese bridging trial and PDR nationwide infrastructure create a different PSMA platform, not just a single drug and major medium- to long-term growth engine for PDR.

Next one, please. So highlight #5, and this is our radiopharmaceutical ecosystem. Beyond individual products, we are building the defensible end-to-end platform that combine radiopharmaceutical, hardware, software and service. This strategy deepen our relationship with [indiscernible] and make it easier for [indiscernible] to adopt nuclear medicine.

Next one, please. Delivering nuclear medicine safety and at a scale required far more than innovative compounds. On this slide, you can see our total solution platform. Our portfolio of diagnostic and therapeutic, radiopharmaceutical, injection system, dispenser system that automate complex workflow and improve safety, software solutions for image assessment and radiation dose management and information system that support compliance with international standards. By combining these elements, PDR lower barrier for new sites, improve efficiency and safety for the staff and enhance the patient experience, while at the same time, building long-term strategic partnership with hospital. This ecosystem, together with the pipeline, I have just described for [indiscernible] PDRadiopharma to lead the next era of the radiopharmaceutical innovation and growth.

This is from my side. So I hand over to Patrick.

All right. Thank you, Murakami-san. Next, I will discuss our partner and in-house discovery and development efforts in the radiopharmaceutical space going on at PeptiDream.

On Slide 26, as I mentioned previously, in the last 12 months, these are both discovered programs at PeptiDream in collaborations with Novartis for FAP and Glypican-3 for BMS what was RayzeBio and has become BMS. On the left, the FAP program, which is related to a variety of different tumors. This is overexpressed on fibroblasts in a variety of different types of solid tumors. The program FXX489 with the therapeutic using lutetium and the diagnostic using gallium entered into a Phase I clinical trial earlier in the year, the end of 2024, early 2025. Novartis highlighted some of this work at an oral AACR presentation in 2025, highlighting the program as a best-in-class potential for radioligand therapy, a program we're very excited about.

On the right side is the Glypican-3 program, which also initiated a Phase Ia, Phase Ib study earlier in the year. And this product is being developed for hepatocellular carcinoma, liver cancer in a wide range of patients. Again, being run by BMS, and we're very much looking forward to future updates to come for these 4 exciting programs, 2 diagnostics and 2 therapeutics.

PD-32766 is our first in-house peptide RI program targeting CA9, Carbonic Anhydrase, which is highly expressed in the majority of clear cell renal carcinoma patients. We have previously highlighted the strong preclinical evidence for this program in selectively targeting CA9 and showing clear antitumor efficacy in animal models.

To further derisk the program, we coordinated with the National Cancer Center Japan to run a physician-led imaging study using this Copper-64 based diagnostic in patients with ccRCC referred to as a Phase 0 study. The study conducted in just a few patients demonstrated clear CA9 tumor targeting with strong tumor-to-background ratios. We saw no dose-limiting or unexpected safety signals. And these findings provided us validation in humans of the tumor targeting ability of our CA9 program, both potentially as a new diagnostic for kidney cancer, but also potentially as a powerful therapeutic. This really -- these results really gave us confidence to take this program forward into the clinic ourselves.

We conducted IND-enabling studies since last year through much of 2025, culminating in the recent filing of 2 INDs, IND for the diagnostic and an IND for the therapeutic in the U.S. And we are on course to initiate the Phase I trial in the U.S. in 2026. The Phase I trial, similar to most targeted RI compounds will consist of a Phase Ia dose escalation part where we image patients for CA9 positive tumors to enroll to receive the therapeutic agent, which we then give in escalating doses to confirm tumor targeting dosimetry and safety. And from this data, we will select the recommended best dose to take forward and expand patients at that dose in the Ib portion or the dose expansion portion of the study to better clarify therapeutic activity as well as pharmacokinetics and safety. We are very much looking to get this study underway in 2026.

On Slide 30, we announced our second in-house program at our R&D Day last December 2024, targeting Claudin 18.2. Claudin 18.2 is a member of the Claudin family of tight junction proteins. In gastric and pancreatic cancer, the growing tumor causes cell morphology changes that result in the exposure of Claudin 18.2 making it accessible for a drug to bind to and target. We leverage this biology to create PD-29875, a peptide-RI conjugate targeting 18.2. Similar to the CA9 program, we're developing a diagnostic therapeutic pair. And so we'll be able to identify patients with a diagnostic agent that would most likely benefit from receiving the therapeutic agent.

At our 2024 R&D Day, we shared the exciting preclinical data showing strong tumor killing efficacy in animal models for this program. At current, IND-enabling activities are ongoing and progressing on schedule. We are additionally, of course, planning for a Phase I study in patients with gastric and/or pancreatic cancer in the future once those studies are completed. In parallel, we are again coordinating with the National Cancer Center Japan to run a Phase 0 imaging study to generate some initial human tumor targeting validation to both derisk the program and also assist with planning the most efficient Phase I study we can do. So very excited about the next steps for our 18.2 program as we head into 2026.

This year, we are happy to announce our third in-house peptide-RI program targeting Cadherin3. Cadherin3 is a member of the Cadherin family of cell adhesion proteins. Overexpression of Cadherin3 is strongly associated with epithelial mesenchymal transition or EMT, where epithelial cells lose their structured characteristics and acquire mesenchymal traits. EMT is a major driver of cancer metastasis, allowing cells to break away from the primary tumor, colonize distant organs. Cadherin3 is highly expressed in head and neck squamous cell carcinoma as well as cervical cancer, lung cancer and a variety of other solid tumors, making an attractive target for a targeted peptide RI approach.

Our Cadherin3 targeting peptide RI conjugate shows high affinity and selectivity for Cadherin3. It shows specific accumulation in tumors expressing Cadherin3. And when chelated to either therapeutic lutetium-177 or actinium-225 shows strong tumor-killing efficacy, all of which as a preclinical package supports our decision to announce this program as our third in-house program and take this program forward into IND-enabling studies going forward.

That concludes the radiopharmaceutical portion of our presentation today, and we will next move on to our 4 non-radiopharmaceutical focus areas, of which we will provide various highlights on each of these.

On Slide 35 is an overview of our current non-radiopharmaceutical clinical pipeline. In subsequent slides, we will touch on some of the exciting advances we have made across these areas in 2025. I would just note on this slide that for the 2 Merck programs in Phase I, we remain limited in what we are actually allowed to say about these 2 exciting programs. We'll start off initially with our peptide therapeutics and oral peptide therapeutics efforts. A major clinical highlight of 2025 was seeing Alexion advance our GhR program, ALXN2420 into a global Phase II study.

The study is being run in 11 different countries across a large number of sites, testing ALXN2420 in combination with somatostatin analogs in adult patients with acromegaly. The study, of course, follows the previous Phase I study completed in 2024 by Amyloid Pharma before they were acquired by Alexion AstraZeneca that showed excellent safety and dose dependency in reducing and maintaining IGF levels in healthy volunteers, which bodes very well for the success in this ongoing Phase II study. We're very much looking for the results -- the future results around this program as it progresses forward.

We also had our sister company, PeptiAID complete a Phase I safety study of PA-001 in healthy adult and elderly volunteers. PA-001 was found to be both safe and well tolerated and exhibited excellent pharmacokinetics. And we are now considering next steps for this program to potentially address an unmet medical need around long COVID and/or elderly individuals that still have certain challenges. As we mentioned recently in our announcement earlier in the week, partnering activities remain ongoing for our oral Myostatin program. While these activities have been going -- ongoing, we have continued to build a strong preclinical data package supporting the program.

In 2025, we ran numerous additional animal studies showing that our peptide alone could actually induce lean body mass growth by itself and that when given in combination with Semaglutide, animals lost more fat and less muscle compared to Semaglutide alone. We also showed clearly that our peptide has a unique dual mechanism of action and that the peptide binds Myostatin and the peptide Myostatin complex can still bind to ActR2, but when Alk is recruited for signaling, the peptide blocks that surface on Myostatin and no downstream signaling can be sent through the Smad pathway. But because the peptide bound Myostatin is also capable of occupying the ActR2 receptor, it is possible that it is, therefore, also blocking the Activin signal itself indirectly. This unique dual mechanism of action is significantly different from the other biologics out there targeting this pathway.

Also in 2025, we conducted additional safety studies, oral absorption work, human dose prediction, synthetic route analysis and COGS assessments and optimization, further adding additional data to the already strong package. This program is progressing toward IND-enabling studies as it continues to drive this program toward the clinic while we continue in parallel our partnering efforts and activities.

Next, I'm going to hand it over to Christian to present more of our non-radiopharmaceutical program efforts.

Thank you, Patrick. This is my second year as Chief Scientific Officer at PeptiDream. And as you've seen, we've had an incredibly exciting year and significant progress across our late-stage and clinical portfolio, including the addition of our third RI-PDC development program and obviously, as Patrick just discussed, the continued progression of our Myostatin inhibitor program towards GLP tox in parallel with partnering discussions. Throughout the year, I've had the honor to work with our research and development teams to -- I've had an excellent time honoring working with our development teams across our R&D organization to really drive on an exceptional year for both our internal and collaborative preclinical portfolio.

Now I'm going to provide updates on the remaining core focus areas of PeptiDream, starting with our oral peptide therapeutic updates other than Myostatin. For us, oral peptide therapeutics represent a very strong area of future growth. As you know, peptides can achieve similar or better efficacy as compared to a biologic and their much smaller size facilitates better tissue penetration as well as target engagement, delivering much more efficacious approaches. Importantly, by delivering our compounds orally, we are able to enable combination therapy approaches in many indications where single treatment alone is not enough to see complete responses. Peptides offer synthetic manufacturing and that route of administration allows very easy access, especially in chronic disease settings where patients may be taking these daily for the rest of their lives. This is incredibly important, especially in immunology indications in terms of this field where patients live with some of these diseases for their lives.

The synthetic nature of these also offer greater shelf life stability and reduce costs associated with cold chain storage, enabling wider access for many patients. Here at PeptiDream, we've now been leveraging our rich collaborative experience as well as our strategic investments in AI/ML and next-generation PDPS technologies that I spoke about at last year's R&D Day to really unlock high-value oral macrocyclic peptide therapeutics. And with this, I'm truly excited to announce our second wholly owned oral peptide therapeutic program targeting IL-17, a clinically validated and high-value target for the treatment of psoriasis. As you may know, psoriasis affects just over 41 million patients worldwide, which accounts for 2% to 3% of the world's population. The current market is valued at about $28 billion as of last year with IL-17 biologics earning about 30% of that value. There are numerous indications in the immunology and inflammation space that inhibitors of IL-17 can be truly a radical treatment for our patients.

But importantly, the current offerings are biologics that are administered by subcutaneous injection. And therefore, oral delivery is highly desired for these chronic disease treatment and these combination approaches. Our proprietary and wholly owned macrocyclic peptide is not only an inhibitor of IL-17A as is done with Cosentyx and Taltz, but also inhibits IL-17FF, similar to the biologic BIMZELX. Clinical data has shown that inhibition of all 3 forms of IL-17 are important for the depth and durability of response in moderate to severe plaque psoriasis. Internally, in our preclinical research, we have shown equivalent efficacy to a commercially available biologic in an inflammation mouse model as compared with our peptide being orally administered in that same model. We also see greater distribution and tissue penetration into the skin as compared to antibodies, where over 24 hours, our peptides are located almost twice as high in skin as they are in plasma compared to antibodies, which show a significant reduction in that tissue accumulation as compared to plasma.

This offers us a significant differentiation over current biologics. And we are very excited about this program and are rapidly progressing this program into IND-enabling studies moving into 2026 to accelerate clinical entry, while we are also exploring the potential partnership opportunities in parallel.

Moving on to our next target focus area is peptide oligo conjugates. Oligonucleotides are a very fascinating class of drug modality as they have the potential to drug the undruggable targets through not only instead of going after the protein side, but targeting the expression and degradation of the mRNA that then enables their translation. This therapeutic area also enables the pharmaco-evolution against rapidly -- against mutations that can be rapidly adapted due to the fact that this is a genetic-based medicine. There's been a lot of success in this modality over the last several years. There are now 6 approved RNA-based drugs using siRNA or ASO technologies. However, all of these therapies are targeted to the liver.

The next frontier in this space is being able to deliver oligonucleotide therapeutics to target tissues beyond the liver. The benefits that we see by using PDPS discovered peptides is to enable this precision targeting through their ability to generate high affinity and specific peptides against tissue-specific targets, enabling also the speed of discovery to enable rapid in vivo proof of concept as well as then having the fast systemic clearance and exposure to reduce things like immune activation and off-target toxicities. Importantly, as mentioned, our peptides and this modality is enabled through chemical synthesis, allowing easy modification of the linker and payload stoichiometry. A really exciting aspect about this platform is that when we have tissue-specific peptides, each peptide can truly enable numerous therapeutic applications as we can attach a variety of different cargoes in order to tackle some of a variety of different diseases as shown here. And we have several disclosed and undisclosed tissue-specific collaborations with a variety of large pharma and biotech.

Importantly, at PeptiDream, we have our own suite of peptide-specific molecules that target specific blood-brain barrier carriers that are also available for the licensing on a specific payload basis, allowing us to get a truly unmet medical needs in the neuroscience space. And we do expect some very exciting announcements on our oligo delivery portfolio coming very soon.

Moving along, I'll touch briefly on our cytotoxic PDC platform. As you know, there has been a significant amount of investment and growth over the last several years in the antibody drug conjugate space. Currently, there are 19 ADCs approved worldwide with over 200 ADCs in clinical development, targeting over 50 different antigens. Last year alone, there were 27 R&D partnerships signed totaling $9.4 billion. However, antibodies also have significant liabilities, including long systemic circulation, on-target and off-tumor toxicities as well as complex manufacturing, which are still significant hurdles for this field. We believe that the peptide offers significant differentiators as compared to an antibody modality for delivering these cytotoxic cargoes, including enabling the high affinity and selectivity towards tissue targets of interest, that smaller size, enabling tumor penetration, but also importantly, higher payload delivery per dose and that fast PK reducing that off-target toxicity while maintaining tolerability.

Renal clearance offers us that reduction of hepatotoxicity. And again, by being synthetic, we can actually play with things like linker, payload as well as stoichiometry with ease. We also expect to have very exciting announcements on this portfolio to share with all of you in 2026. And finally, as the last focus area, I will speak to our multifunctional peptide conjugate platform. We've had some very exciting and significant preclinical data generated internally around this, making this a very exciting new -- or not new, but exciting area for growth in the future. Really, the idea behind this is to replace the next-generation multi-specific biologic area. There are currently 16 bispecifics with over 600 candidates in clinical trials right now. As you can see on the left, there's a wide variety of formats that are being used in order to try and get at this multi-specific functions, leading to what can lead to very complex manufacturing.

At PeptiDream, we have created a variety of proprietary novel linkers, allowing us to utilize peptides that we have already discovered across a variety of different platforms in order to really engage this platform in terms of conjugating these together and enabling us to generate multi-specific peptide conjugates in rapid speed. The data we have been generating this year is allowing us to form a platform so that we can actually begin to start thinking about how we are going to move these programs internally, but also for potential partnering opportunities in 2026.

And with this, I'll turn it back to Patrick.

Thank you, Christian. On Slide 51, as we wrap up our 2025 R&D Day, I just want to highlight that 2025 was simply the most exceptionally productive year for us in our history. We had 12 clinical program or 12 clinical portfolio transitions. You saw a number of programs that we've been working on for some time in the preclinical setting advance into Phase Is, programs move from Phase I into Phase IIs and also partner or in-license programs moving into registrational studies in Japan. It was simply a transformative year as far as in regards to our clinical pipeline. As we focus across all 5 of these modalities, at current we have clinical candidates for 3 of these modalities, but we expect to see the peptide oligo and peptide cytotox areas also yield clinical candidates in the near future.

These efforts are the result of years of hard work by all of the people here at PeptiDream, by all of the team at PDRadiopharma and of course, across all of our fantastic and phenomenal collaboration partners. I fully expect that this progress and the successes of 2025 are going to carry over to '26. And going forward, this robust clinical pipeline that we've been working to create will simply expand and grow further.

As a closing, I just want to end today's presentation with all of that excitement, of course, is the rationale for us to invest further in PeptiDream and PDRadiopharma. We have high confidence in the business, and we've undertaken 2 large capital programs here. On the left is building PeptiDream 2.0. This is at our currently existing site where we hope to double the research R&D available space, adding new state-of-the-art functions to our already existing facilities. This is progressing nicely through the design phase. You can see a nice illustration on the lower left of how this looks, and we're very hopeful that we'll have shovels in the ground in 2026 to get this underway. On the right is a new manufacturing facility for PDRadiopharma for us to house -- launch in-house radiotherapeutic programs. This is located in Chiba, strategically located between Haneda and Narita Airport to give us the best domestic coverage and allow these exciting products to be brought to hospitals and patients across Japan.

Additionally, this is actually progressing very, very nicely through the design phases, and we also hope to get shovels in the ground in the coming year. So 2 big programs for us. These are both extremely motivational for employees across both organizations to see that the successes we're having in our R&D and efforts are translating, of course, into company growth.

So with that, I'm very happy to take any questions and very much look forward to the future for us.

Thank you, Patrick. We now open for questions. [Operator Instructions]

The first question comes from Dion Büchner of Pathology Associates.

Can you hear me well?

Yes.

Fantastic. Patrick, thank you very much for a very exciting presentation. And my apologies I'm traveling, so I cannot stay too long on the call. But I wonder if I may ask 3 quick questions. The first, and you alluded to this, and I'll stick to science today. But in terms of your IL-17, can you speak a little bit about the -- a bit more about the oral bioavailability or relative to the UCB program and specifically also regarding the specific subtypes that you are targeting relative to bimekizumab? That's one question. And then I just wanted to confirm also your Claudin 18.2 regarding the IND is -- are you on track for maybe a 2026 or 2027 IND? And will that be in the U.S. or China?

And then finally, apologies for many questions, but I wonder if you can make any comments on oral peptides and oral macrocyclic peptides and the food effect, specifically with regard to your own PD-L1 program, but also other global programs, notably Icotrokinra, the J&J, IL-23 and of course, Semaglutide as well. And I'm happy to repeat those, -- sorry for many questions.

Thank you, Dion. Of course. Yes, first, additional IL-17, yes, the goal was, of course, to get BIMZELX-like activity. As I know you're aware and we've discussed, BIMZELX is becoming probably the more compelling product in the space because it hits FF instead of just hitting the AA and AF versions that the Taltz and the other competitors, Stelara in the space do. We spent additional resources, of course, on the peptide optimization to get there. We think we have best-in-class compounds, certainly from that perspective, I would say, and it's really potent. I mean basically we have efficacy equal to BIMZELX even with an oral delivery. As far as the percent oral bioavailability, I won't speak to any specific numbers, Dion, and I probably shouldn't comment on what other companies have done or not done. But as you well know, most of the other oral peptides out there are in the circa 1% or lower.

We are normally targeting something that is much closer to the 3%, 4% range is normally for our kind of goal range for taking things forward that we've seen. So I think we feel very, very comfortable with actually where we currently are and where we currently be. There are certain aspects left around our IL-17 program that we'll have to investigate, of course, final formulations always come down to potentially pushing those numbers a little bit higher. And that's something that we'll certainly be looking at, as Christian alluded to, as we get into the first half of 2026. So a very much exciting time. I do think we're the preeminent company in developing oral macrocyclic peptides.

We certainly have a wealth of experience of doing this across multiple partner programs and applying those learnings, as Christian mentioned, to our in-house efforts such as Myostatin and IL-17. So very excited about where things will be. And certainly, as we're able, we will communicate more to the outside market. At this stage, we don't want to necessarily give anything away that would help any of our competitors understand exactly where we are yet.

In regards to the 18.2 program and timing for an IND, I don't have a definitive date of IND filing. Certainly, it would be late '26, early '27 would probably be where we sit. That's going to, of course, depend on a couple of factors. IND-enabling studies will be done by then. So that's not an issue. There's a part that is -- we're considering the Phase 0 study, of course, or well, largely everything is underway to start that study. We don't know how long it will take to recruit the handful of patients that usually go into these imaging Phase 0 studies here in Japan. If that's a fast recruitment, we could get lucky and have these patients done in maybe half a year or if that's protracted and takes longer to recruit, that could extend. It's also going to be depending on the quality of the data. They'll only be in gastric cancer patients here in Japan.

We won't do pancreatic. And so we'll have to see what those data look like. But if the first 1 or 2 patients look extremely compelling and good, we potentially could speed up our efforts. That would give us more confidence, right? We're hoping to use the Phase 0 basically as human validation. I mean 18.2, there's actually already an antibody drug, as you know, from Astellas against 18.2 on the market. So it's a validated target, I would say, but certainly hasn't been drugged with a peptide approach to know yet. So fingers crossed that the Phase 0 is going to show exactly what we hope it will. And then we'll use that to accelerate the design of the Phase I study, of course.

We don't have the huge clinical team -- clinical development team in the world here. We're working on expanding that. They have their hands full with the CA9 program. And so certainly, that's also playing into it as we look to kind of grow the team to be able to handle 18.2 and accelerate that program also. But I don't think I'll see anything slow down. We'd just love to see the Phase 0 study to gain more, say, more confidence, right, before we go put the $25 million, $30 million it takes to do a Phase I in the radiopharma space.

On the last one on the oral peptides and food effect, yes, there's a food effect on oral peptides. Both the IL-23 receptor, J&J protagonist peptide, both the Merck peptide do have certain label listings on those when you can take the drug and what -- when or when you're not supposed to eat. Usually, there -- if you're taking the drug in the morning on an empty stomach and then you're not supposed to eat anything for, say, 30 minutes after you've taken the pill is the most common approach. So I think that fits very well with patients, at least from a compliance perspective.

I'm certainly not a first-line clinician to be dealing with patients. But from everything I've heard, there doesn't seem to be any necessarily concerns or challenges with that. The food effect, interestingly enough, while it varies, both J&J and Merck, I think, are taking certain steps that the dose that they're using is slightly higher to actually account in part for any food effect you could actually have, Dion. And I think this maybe speaks to the simple safety of the peptides to begin with, right, that if peptide is simply just passing through your gut or even if it is absorbed at certain different rates as long as you get enough on board to be efficacious, you really have very little safety concerns to be worried about, right? That would, of course, be a little bit on the mechanism dependent, right? And the type of drug you're creating.

Sure. Understood. Patrick, so do you think that the companies you mentioned that they added some additional dosage to compensate for the full effect? Do you think...

I shouldn't -- I can't speak for those companies, Dion, you should ask them. I shouldn't speak for them directly. But -- let's leave it at that. I do know they know that they have a good idea what that percentage is. And you can lower it with peptides. So also just so you know, this isn't -- the rate is not the same for all peptides. It's not -- this isn't just a universal phenomenon, right? So you can certainly optimize the peptide in a way to a certain extent that you can reduce the likelihood of that. But I'm not sure you can ever make that zero. So there will always be a patient compliance aspect to it. But...

I understand. Patrick. That's helpful. On the Claudin 18.2, can I just follow up? How many centers, just to speed that up, given, as you mentioned, the success that Astellas is having with [indiscernible] their 18.2 targeted product. How many centers are you planning for the Phase I?

Yes. So we don't know for the Phase I yet, Dion, right? That's early days. So again, I didn't get to that part of your question, you asked if we're going to do the U.S. or someplace else. We are investigating right. And right now, I think the U.S. is plan 1 or plan A, but we're very much investigating other countries to potentially run the Phase I study in also in evaluating the pros and cons of those routes, right? So as I know you well know, we've discussed before, China, Australia, certain European countries, there are certain steps of the process that can be sometimes truncated. And so we really have to kind of review the pros and cons of those aspects. I think we have a good 6-month window here to kind of really do that type of evaluation that really won't slow down anything around the program per se. So I would say by summer, we'll have a good idea of where we're going to take the 18.2 as far as the Phase I and what country.

[Operator Instructions]

This is Miyabi Yamakita from Jefferies. Can you hear me?

Yes.

I know this is an R&D meeting, but if I may, I'd like to ask about the impact of recent U.S. government action on your Myostatin inhibitor value. Some large pharma companies decided to reduce obesity drug price in the U.S. as a result of discussion with President Trump. On the other hand, this improves patient access. So there are both positive and negative impact. And do you believe -- my question is, do you believe these changes in the U.S. market could impact the out-licensing value of your Myostatin inhibitor?

Yes. Thank you. I mean, I guess you can never say no, right? I mean I don't know to what extent they would. But my guess, my feeling is largely there's very little impact at this stage, right? Most of the companies in obesity are chasing the top 2, chasing the Lilly and Novo and are largely looking for what is going to be their competitive strategy. What is their differentiating strategy versus the 2 kind of main market players, right? You've seen that play out over the last 24 months with the various acquisitions and various licensing deals that has happened in the obesity space as everyone kind of positions themselves for what this future is going to look like. From where we sit, we have high confidence that the future goes toward healthy weight loss, right? And healthy weight loss means managing the lean muscle mass losses that happen with the current generation of weight loss agents right? Because as long as -- as far as we still know, we're the only oral Myostatin pathway inhibitor.

We have a unique dual mechanism of action. And as you're aware, over the summer from the competitive biologics out there for this pathway, they showed really human validation for those drugs or Myostatin Activin pathway inhibitors being used in combination with the weight loss drugs and showing significant benefit to patients, right? So we think we're actually ideally positioned to find a partner for this program to be a part of someone's next-generation healthy weight loss strategy.

And then again, that's what we're really going for. I think this is so far away from being on the market yet. that I don't necessarily see, say, the pricing considerations coming into play, right? If we were maybe later stage Phase II or Phase III at this stage, I'm sure that's very relevant possibly to their financial calculations for any type of deal. But given that this is still a preclinical asset, I don't think that's probably overall too factored into the equation at this time. But again, I can't speak to the big pharma companies specifically, and I'm sure some of them are more concerned than others potentially about the most favorable country pricing aspects that are being suggested globally.

I am looking forward to the announce the licensing deal.

Our next question is from Hidemaru Yamaguchi of Citi.

Can you hear me?

Yes, we can hear you.

So this is Yamaguchi from Citi. Sorry to bring up this question, but I have to ask because I missed the other days, the earnings revision call. So the only thing I just ask on the Myostatin itself is like I got a lot of questions from the investors that timing is fine, but the probability of success itself are not changing. That's my understanding. But can you confirm from your current perspective, timing has been delayed for various reasons, but the deal itself is coming anyway. Do I say that is correct?

We have high confidence that we're going to be able to do a partnering deal. I'm not sure I would -- I could use the phrase a deal is coming. I think that one -- of course, I don't know -- we don't know when a deal will be signed. It is -- so I don't think we can comment on any specific guidance for time lines as far as, say, quarters, et cetera. We're hopeful that a deal is going to be in place by '26. But I think as everyone knows, right, until it's actually signed, there's no guarantees, right? Our partner [ Qinlock ], even the discussions we have ongoing over the last 8 months, some of those companies have increased in interest and then also dropped in interest, right? And so it is -- I think unlike our IL-17 or some other programs, I think the Myostatin is a very fluid situation. And largely, as I described at the meeting earlier in the week [indiscernible].

Our drug hat is going to be combined with somebody else's drug. And so because of that, right, then there's a lot of -- there's a lot more layers of factors to consider than if we were just licensing our asset, right, if there's a monotherapy, right? The fact that it is going to be combined means we have to be worried about what the partner has for their own oral strategy, right? If they have no oral weight loss strategy, that's probably not a good partner for us to combine an oral Myostatin agent with, right? So as you know, it's still relatively early days for oral weight loss agents, right? Even Rybelsus, which is actually on the market, but that's for diabetes, not for weight loss yet, right?

And that has very low bioavailability to begin with, right? But regardless, I think the oral strategy, the next-gen strategy for healthy weight loss is very much an evolving strategy at this stage globally. That, I would say, had the biggest impact on slowing down deal signing, not anything related specifically to the program, right? It's -- all the companies, I think, are still very much navigating how they're going to compete with Lilly and Novo and then how they're going to -- with what strategy are they going to do that.

Okay. The second one is very quick, more general question, but yes, I see many, many programs because it is expanding every year on the non-peptide and peptide area and the radiopharmaceutical as well. So it's hard to cover all those programs, but it's good things. One thing I would like to say -- I would like to ask is that [indiscernible] strategy is trying to be more peptide or radiopharmaceutical best-in-class sort of strategy rather than first-in-class. But like 18.2, which is kind of a popular target itself because a lot of companies are doing it. So in a sense that it's kind of red ocean target, it looks like. So do you have a strategy to go for, I would say, more of a first-in-class target, not necessarily a crowded best-in-class target because you are peptide that modality is different. So you have an advantage. But at the same time, it is highly crowded. It might be difficult to run a clinical trial in the future. So do you have any sort of strategy changing or not necessarily the case?

Yes. So I think -- I mean it's a fair question, Yamaguchi-san, but I think you'd have to go -- we have to go through each program to look at the positives and negatives of that. For example, in 18.2, yes, there is an antibody drug to 18.2, it is far from perfect, right? There's being ADCs being developed in the clinic, right? There is no RI conjugate against 18.2. Because 18.2 is in solid tumors and it becomes exposed as the morphology changes, we actually think that a smaller molecule like a peptide might diffuse much better or more rapidly into these solid tumors. So kind of that differentiation of going from a peptide, right, that we're using a peptide and the competition is largely losing biologics, we think has significant favorability. When we talk about like our 18.2 for an RI drug, one, if we're successful, which I -- which we, of course, believe we're going to be, an RI drug could be combined with Astellas' antibody drug and probably give you more efficacy. Our peptide RI drug could be combined with anybody else's ADC and probably show greater efficacy.

So we actually believe there's approach there, specifically in the RI side, right, where we actually have combination -- RI makes almost every drug better. And so we do think there's still an avenue there that isn't necessarily the red ocean you're kind of suggesting. Yes, we think it's very much navigatable. I'd also layer on that because at least in the RI side, we're developing a therapeutic and a diagnostic, right? So we actually have 2 shots on goal at the same time, right? So there is not an 18.2 diagnostic agent. There is not. They're still using IHC, right, to judge these. So there's even that avenue. As a worst-case scenario, we have the chance to have a compelling diagnostic agent against 18.2 if for some reason, the therapeutic didn't give us the results we wanted to. I would also layer on one other aspect of this risk hedge that we approached, which is for like 18.2, what you see right now is the 18.2 peptide targeting peptide attached to an RI.

We have the ability to also attach this to a cytotox compound or we have the ability to take this 18.2 peptide and attach it to another, say, immune recruiting peptide like we have, say, under the MPCs, right, or some type of additional functionality you could add under our MPC umbrella, right? So with a very high-class good tumor binding peptide, we actually have 3 different approaches here in the wheelhouse that we can actually go after that with. RI is the ultimate way to start that because we can visualize the tumor, we can visualize that our peptide accumulates and goes to the right places in these patients. So that's really kind of the first step of validating any of these peptides like our 18.2. And then for some reason, if RI doesn't give us the efficacy we're hoping for as a payload, we could expand to the cytotox and/or to other types of conjugates.

So I think we have a multi kind of risk hedge development strategy, which is very unique to peptides, right? This is not something to do with the pathologic by any stretch of the imagination, which is why we have such high confidence for our CA9 program, our 18.2 program and our Cadherin3 program that we announced today. On, I guess, some of the other sides on the oral peptides; oral peptides, it still -- it's a huge field, as you know, right, with Merck's PCSK9, there was a lot of doubts around that product ever being -- ever getting to market, #1 and then two, actually being efficacious. And there's a lot of drugs against PCSK9, as you know, and at least if you listen to Merck, of course, they have -- this is going to become a $1 billion blockbuster for them.

They think this is significant. It's extremely safe. It's extremely well tolerated and patients respond extremely well to it. The same for the Johnson & Johnson protagonist IL-23 receptor, right? That has doubt along the way. And now it looks like that's also going to be a major. So I think sometimes, again, if we were developing a biologic, I 100% agree with you that one we bring that's differentiated. But I think because we're in the macrocyclic peptide space, we're playing a very smart strategy here that I know we can be successful with. Yes.

Our next question is from Kazuaki Hashiguchi from Daiwa.

I am Kazuaki Hashiguchi from Daiwa. My question is about the IL-17 inhibitor. I believe Eli Lilly is also conducting a Phase II study globally, including Japan on the oral inhibitor of the [indiscernible] with DICE acquisition. What differentiators do you expect to see in your product? Also, what do you think is the best timing for license this product? What do you think about the possibility of conducting the clinical trial in-house for a vial?

Yes. So the DICE compound, of course, are interesting, right? There's a set of small molecule compounds that are now with Lilly. Those do not have FF cross is one of the, I'd say, differentiating factors of those small molecule compounds. While they're running a trial, there hasn't been that much news from Lilly around this compound class. So I do think some potential questions remain, right? But regardless, I think if we just believe the BIMZELX data that hitting AA, AF and FF is so much more effective for these patients, then that's the profile that you really need for any next-gen compound, right? And I think because they don't have that, while they might be further advanced than us, while they don't have that, that could be a significant challenge for them in the future as far as getting any type of regulatory approval or any kind of actually adoption even if it did get regulatory approval by the physicians.

So -- but what Lilly is doing is what Lilly is doing. So we -- I don't think we can necessarily worry too much about that. We know from all of our big pharma collaborations and discussions, there is very much a high level of interest in an oral IL-17 peptide that hits all 3 isoforms of AA, AF, and FF. So we're very comfortable, I think, in what the market really is looking for. Even if that's not Lilly doesn't want one, we know there's enough hands up that would certainly take it from us. As far as partnering goes, yes, that's always the question for us. We've made it -- we've already informed some of our partners that we have an oral IL-17 program. So they're very much already aware of that. With today's announcement, of course, for those who didn't know who our collaboration partners, they'll also slowly figure this out. We'll probably be talking about it at JPN to some extent. I think our partnering strategy for something like IL-17 is we're always willing to listen to somebody.

And if someone is going to give us some ridiculous amount of money to license it, I think we'd have to say yes. But it's something that I think internally, we'll have to discuss. I think I really -- I do think we have a blockbuster on our hands. From all of the data that we're yielding internally, there's nothing to suggest otherwise at this stage. So I think from a personal standpoint, I'd love to take this all the way to the clinic myself. I think our job at PeptiDream should just be continuing -- the scientific teams continue to push us to the clinic as fast as possible with best efforts. And then we'll allow the BD side of the business will allow us to entertain offers for the program. And if we find somebody that actually fits and can accelerate that development, again, in a way that's best for stakeholders of PeptiDream, then yes, of course, we'll consider that. But -- so yes, I think partnering activities from JPN, we're going to start listening to what people have to say. I don't know if that will mean that translates into a deal in the short term or not, but we certainly will be listening to others.

Our next question is from Fumiyoshi Sakai of UBS.

Patrick, this is Sakai from UBS. Two questions. One is kind of general high level related to [ Yan-san's ] question, first class or best-in-class argument. The thing is, I mean, your PDL pharma business is fine as far as I'm concerned. However, peptide side, you don't have a product yet, and we are still eagerly waiting for commercialization from this technology. Now how do you respond to this -- if it's not pushback, but observation from investment community? That's my first question.

You mean -- I mean that peptide doesn't have an oral -- doesn't have a macrocyclic peptide on the market yet. And so for somehow that suggests that we can't make a macrocyclic peptide drug.

Yes, that's right.

Yes. I mean, yes, I've heard that for 20 years, Sakai-san. So in fact, actually, I think it's -- it sometimes gets asked, I mean, not every biotech on the planet who ever generated any new modality, right? They said the same thing about siRNA. They say the same thing about ADCs in the early days and now look where these fields are. So I don't think there's -- yes, just because we don't have a macrocytic peptide yet on the market that originated from dream per se, there are still many macrocytic peptides already on the market. And there are many in late-stage development, and we have many in clinical development now, too. So I don't -- yes. I don't -- that's not something that I would really concern myself with macrocyclic peptides are clearly a very viable drug. They might be wonder drugs in some cases here for -- especially for all the modalities that we have highlighted, right, the 5 modalities that we're -- or 5 core areas we're focused on.

As far as best class versus first class, right? I mean, you're first class until you're not. So I'm not sure that that's a winning strategy in the global market anymore either, right? So I mean, you'd love to be first, but I would certainly want to be best is something that we should always be shooting for. I do think -- at least if you're going after best-in-class like an IL-17, it's a very well-validated target. And we actually -- as you're developing this program, you know what's wrong with the existing therapies, right? And you know what solution or what challenge you're actually trying to solve for. And so I do think that, in fact, gives you some advantage as you're developing your strategy because you actually know what the players are actually already doing.

You know where the gaps in the therapy are, you know that you can guess what the future is going to look like and you can approach that, I think, from a very smart process. I think it's hard to always consider yourself first-in-class. But I guess I'd also say the argument, I don't know every time what first-in-class means. If we're the first oral macrocyclic peptide in the clinic, does that still make it first-in-class if it's against the same target that other people have done. For 18.2, we're the first peptide RI -- if that goes into the clinic, right, we'd be the first, right, for that modality, but just not the first drug against that target. So I think I might look at what I call first-in-class maybe from a modality standpoint as well instead of just saying broadly anything that targets any specific -- right that specific target, I guess.

Yes. Okay. That's fine. Second question, just maybe brief. I'm really interested in this oligo project. So what do you have in your mind to go beyond liver target?

Yes. So we've been -- as you know, we've been collaborating with a number of players in the space for some time now, right? We have partnerships with Alnylam, with Takeda, with Lilly, with Novartis, with Shionogi in this kind of BBB oligo delivery kind of space. It's a very exciting space, of course, to move beyond liver. We've now -- those coverage started in 2020 onwards, right? And so as Christian alluded to today, we're expecting some exciting announcements soon as the product of those efforts over the last 4 or 5 years here. We know -- just to say generally, though, we know that macrocyclic peptides now are extremely effective at delivering an siRNA or oligo drug payload to target cell.

We've already seen this across a couple of different organs here. Some of these organs are easier than others, I would say. But it certainly is yielding effective knockdown and effective cell organ delivery of therapeutic oligo payload. So we think we're going to see multiple clinical programs come out of these efforts. I can guarantee you're going to see multiple clinical programs shots on goal coming out of our collaboration efforts. Maybe -- yes, it's something to look forward to.

Okay. That's probably next year.

Yes.

[Operator Instructions] I guess that's the last question. Ladies and gentlemen, this concludes today's conference call. You may now disconnect, and have a wonderful rest of the day.