Astellas Pharma Inc

Thank you very much for joining with our FY2023 earnings call, despite of your busy schedule. I'm Chief Communications and I am Officer Ikeda. I would like to serve as a moderator for today. Today, I will make a presentation that is followed by a Q&A session. The material is available on our website. In line with that, we are going to give you the presentation, including the Q&A. The simultaneous translation of Japanese and English is provided. The accuracy of the translation is not going to be guaranteed by us. As for the language, from the Zoom webinar screen on the menu, you can find the language. When you select the original language, in that case, you can listen to it without using the translation service. And for the material or presentation and answers and statement by the representatives for the company in the Q&A includes word-looking statements based on assumptions and beliefs in light, Thank you very much. The participants for here today is CEO, excuse me, President, Director, President and CEO Naoki Okamura, CSCO, Chief Scientific Officer Yoshitsugu Shidaka, Chief Medical Officer CMO Otadaki Taniguchi, the Chief Commercial Officer CCO Klaus Zeller, Chief Financial Officer CFO Atsushi Kitamura, We have five here as representatives from the company. Now, Okamura-san, please start your presentation.

Hello, everyone. I'm Naoki Okamura from Astellas Pharma Inc. Thank you very much for joining our FY2023 financial results announcement meeting. I have to be very busy scheduled today. This is a cautionary statement regarding forward-looking information. As this was explained by Keda earlier, I'm not going to read this page. Page 3 is the agenda for today. Starting from the next page, I will explain these topics in this order. On page 4, I will give you an overview of FI 2023 financial results. Revenue increased year-on-year and exceeded a full-year forecast revised in the third quarter. Externally, sales increased by about 90 billion yen year-on-year, contributing to the achievement of a full-year forecast. Sales of PADSEF, Zospata, Vioza, and Izaway combined increased by about 70 billion yen year-on-year, contributing greatly to sales expansion as growth drivers. SG&A costs increased year-on-year, mainly due to the impact of iveric bioacquisition and investments in growth drivers. We achieved efficient cost management through timely assessment of resources. Earned the expenditure was on track. Core operating profit decreased year-on-year, mainly due to the impact of ivory bioacquisition. On the other hand, core operating profit exceeded the full-year forecast revised in the third quarter. On page 5, I will explain FI 2023 financial results. Revenue increased to 1,603,700,000 yen, up 5.6% year-on-year. We achieved 102.7% of a full-year forecast. Core operating profit was 184.6 billion yen, down by 35.6% year-on-year. We achieved 112.6% of our full-year forecast. You can see the Forex impact on the right-hand side of the table. There was a positive impact on revenue by 96.3 billion yen and on core operating profit by 19.1 billion yen. The bottom half of this page shows the full basis results. In the right bottom of the table, we included other expenses booked in the fourth quarter. We booked 56.3 billion yen in payment loss for intangible assets of 8808 and Evrenzo. In addition, we booked 8 billion yen due to fair value increase of contingent consideration for Zolbetaximab. As a result, operating profit was 25.5 billion yen, down by 80.8% year-on-year. Profit decreased to 17 billion yen, down 82.7% year-on-year. On page 6, I will explain FY2023 financial results of our main products. First, about Xtandi. Sales expanded in all regions despite more than 10 years on the market. global sales increased to 750.5 billion yen, up by about 90 billion yen, or 14% year-on-year. Even excluding forex impact, Xtendi achieved about 6% growth year-on-year. In the United States, which is the biggest market, based on Embark study results, M0 CSBC additional indication was approved in November last year. We have been able to confirm the penetration of this additional indication and the ripple effect on other indications as well. Volume, excluding the so-called PAP, patient assistance program, grew steadily by 4% year-on-year. Pat says global sales increased to 85.4 billion yen, up by 92% year-on-year, realizing nearly two-fold growth. Performance was in line with our full-year forecast, which was revised significantly upward by nearly 20 billion yen in the second quarter. In the United States, the market penetration of the first-line indication was a major driver. Demand more than doubled year on year. Also, NCCN guidelines, which many physicians are referring to when they decide prescription, were updated last month. The level of recommendation for PADSEF as a first-line treatment of MUC was upgraded from Category 2 to the highest recommendation level, Category 1. Globally, as a whole, the number of launched countries is increasing steadily. In FY2023, PADSEV was launched in additional 14 countries. The number of launched countries has expanded to 36 in total by now. Regarding Zospata, global sales increased to 55.1 billion yen, up 18% year-on-year. Sales expanded in all regions, in line with the full-year forecast revised upward in the second quarter. Sales of Vioza reached 7.3 billion, progressing in line with the forecast revised in the third quarter. Commercial lives covered, payer coverage, and important KPI for market access expanded to 50% as planned as of the end of March. On the other hand, HCP's perception of Vioza access and affordability remains low, which is a barrier to prescription. I will talk about our future initiatives and outlook when I explain FI 2024 forecast. ISAV is growing at a speed faster than our expectations. Sales reached 12.1 billion yen, exceeding the full-year forecast we announced after the launch in September last year. Accelerated momentum continues, and vial demand doubled from the third quarter to the fourth quarter. We estimate market share in the fourth quarter period to be about 25%. This is calculated based on the reported shipment volume data, as well as multiple market research. Given the fact that the competitive product was launched about six months earlier, we think this is a great achievement. More than 50,000 vials have been shipped since launch, and Isavay is now available in about 1,000 retina accounts. Post-marketing safety profile is reported to be consistent with the results of the clinical studies so far. The number of physicians highly evaluating the safety profile of Isovay is increasing steadily. Sales of Partsev, Zosparta, Bioza and Isovay are smitten to long-term growth drivers, increased by about 70 billion yen in total year-on-year. We are expecting further growth into the future as well. On page 7, I will explain cost items. Cost of sales ratio was 18.2%, improving by 0.7 percentage point year-on-year, mainly due to changes in product mix, and was on track. SG&A cost, excluding U.S. extended co-promotion fees, increased by 19.9% year-on-year, When Forex Impact was excluded, the year-on-year increase was 12.8% to about 58 billion yen. As main factors behind, SG&A cost increased by about 31 billion yen year-on-year. Due to the impact of Iverick Bio acquisition, Vioza-related sales promotion costs rose by about 40 billion yen year-on-year. On the other hand, sales promotion costs related to mature products such as Mirbegron decreased by about 8 billion yen year-on-year. We achieved efficient cost management through timely assessment of resources. The expenditure increased by 6.5% year-on-year, mainly due to Forex impact and iVertBio acquisition. We were on track in our spending. From here on, I will explain our initiatives for sustainable growth. On page 9, you can find an overview of major quarterly updates related to R&D. I will explain the details of extended strategic products and focus area approach on the following slides. In RxPLUS program, we initiated pivotal study for regulatory submission in Japan for Blue Star digital therapeutics for diabetes. On page 10, I will explain key events achieved in FI 2023 for Xtandi and strategic products. As an achievement in April, Xtandi was approved in Europe for the additional indication of M0 CSPC with biochemical recurrence at high risk of metastasis based on Embark study. As for PADSEV, a submission in China was accepted in March for the additional indication of first-line locally advanced or metastatic urothelial cancer based on EV302 study. VALOI was approved in Japan in March for clothing 18.2 positive unresectable advanced or recurrent gastric cancer. As for ISAVE, a submission for a label update was accepted in the United States based on 24-month data from Gather2 study. As other updates, we achieved first-subject, first-treatment in Phase 3 studies of VIOZA, Starlight-2 pivotal study for JNDA in Japan, and Starlight-3 long-term safety study in the fourth quarter. Also, towards a new additional indication, we decided to perform a Phase III study for induced VMS in breast cancer patients on adjuvant endocrine therapy. We will give you an update after the specifics of the study are decided. In FY2023, we achieved many important milestones such as approval of VILOI, VIOZA, and ISAVE, as well as approval of additional indications for Xtandi based on Embark study and PASIF based on EV302 study. We have made a lot of progress towards growth in FY2024 onwards. On page 11, I will explain the update for the past three months with regards to the progress of focus area approach projects in clinical trial. Primary focus project ASP2016 in genetic regulation, ASP2802 in immuno-oncology, and ASP4396 in targeted protein degradation newly entered the clinical trial stage. I will explain the details of these projects on the following page. As for ASP1570, the first project described here for primary focus immunooncology and ASP3082 in targeted protein degradation phase 1 dose escalation monotherapy cohort is ongoing. For both, no major issue including safety has been observed by now. The study of recommended dose is ongoing. The initiation of dose expansion cohort as the next step is expected in the first half of FY2024. As for ASP2138, the second from the top in immuno-oncology, dose expansion cohort has been initiated based on the data obtained from the Phase I dose escalation monotherapy cohort. We have not made any decision about data presentation plan at Congress and other forums for any of these yet. Once we make a decision, we will share that with you. As for ASP2074, the third from the top in immuno-oncology, we decided to terminate the project based on the clinical study data obtained by now. Regarding ASP0367 in primary focus mitochondria, we decided to terminate this program based on the clinical study data obtained by now. Multiple programs have been generated, but unfortunately, in any of these programs, we have not been able to demonstrate benefit in clinical study results. Based on these circumstances, we decided to dissolve primary focus mitochondria. So far, we have obtained knowledge and experiences through drug discovery in mitochondrial-related areas and new drug development for rare diseases. We will leverage this as important learnings and insights for evaluating disease areas where we will perform R&D in the future. On page 12, I will explain new clinical programs. ASP2016 is a recombinant AAV8 encoding human frataxin gene. This drug was created for cardiomyopathy as a target disease within 80808 gene therapy R&D program for various symptoms of free triataxia patients. Free triataxia is a hereditary disease caused by frataxin gene mutation. Currently, there is no curative treatment. More than 60% of the patients develop cardiomyopathy, which is a leading cause of death. ASP2016 was granted fast-track designation by USFDA in March 2024. We are hoping that single dose will result in the long-term expression of frataxin in the heart to improve the disease conditions. ASP2802 was created with Zyphos technology. This convertible CAR-T therapy has entered the clinical trial stage for the first time. It is comprised of autologous T cells and mica body directed to CD20. Mica body is a fusion protein which fuses a tumor antigen-recognizing antibody and an immune cell-binding antibody. According to the convertible CAR system, activity can be controlled with a meca-body dose, so benefits such as less long-term toxicity and prolonged response are expected. ASP2802, the first convertible CAR program, uses autologous cells harvested from patients. We are hoping that these clinical studies will also inform the development of future allogenic off-the-shelf programs. ASP4396 is a protein degrader targeting KRAS G12 demutant like ASP3082. The target protein is the same with ASP3082, but E3 ligase binder is different. With ASP4396, we achieved first-subject, first-treatment in Phase 1 study in April 2024, just 50 days after the acceptance of IND by FDA. Generally speaking, it takes about three months, so we achieved a much earlier timeline. By proceeding with the clinical study and accumulating data in parallel with ASP30H2, we are hoping that the development of targeted protein degradation platforms will be enhanced. On page 13, I'd like to review the progress of Corporate Strategic Plan CSP 2021 so far in line with the three performance goals. As for performance goal 1, we achieved extremely promising results in EV302 study for PATSEF above our expectations, and we feel more confident about the significant growth in the first-line settings. On the other hand, Bioza uptake is below our original assumptions. In addition, as an external environment factor, Medicare Part D redesign will start from January 2025 as one of the measures by the so-called IRA, Inflation Reduction Act, in the United States, which was not included in our original assumptions. This is expected to impact extended sales in the United States in the future. As a measure to secure revenue, we acquired Ivory Bio and a new growth driver, Isovay, which is growing at a speed higher than our expectations. Also, we are working on product value maximization through active life cycle management with indication expansion, including MIBC, muscle invasive bladder cancer for POTSF, and pancreatic adenocarcinoma for Viroi. Regarding performance goal 2, pipeline value, we started targeted protein degradation as a new primary focus, and multiple promising projects have been generated. On the other hand, POC has not been obtained yet in focus area projects so far. We are hoping that programs such as Potenza, A, AVC, and FX-322 would be launched early and contributed to revenue in 2030 as they were relatively advanced projects as of 2021, but we decided to terminate these programs as we could not obtain clinical study results showing benefit. In R&D, we are implementing a major reform of the organizational structure and operation, further strengthening the focused resource allocation to prioritize projects, and working on the acceleration of POC judgment. Also, through the acquisition of Propeller Therapeutics, we added to our pipeline PRL02, a next-generation androgen biosynthesis inhibitor, in order to be able to make up for the termination and the delay of early-stage development projects. As for performance goal 3, cooperating profit margin, we are able to control cost to a certain extent, but we recognize it was not enough to offset investments in new launch products. LexiScan generics have been launched earlier than expected, and we cannot rule out the possibility of mere background generic launches at risk. This is resulting in a major impact on our cooperating profit. From now on, we will review the allocation of our management resources. in a timely fashion and implement more stringent cost control while securing investment for future growth. We will focus on optimized operations through digital as well.

From here, I would like to explain about the FI 2024 forecast and CSP 2021 outlook. Slide 15. Before the FY24 forecast, I will explain the background of making the plan. Looking back at FY2023, because of the entry of generic of Lurexcan, the increase of expenses due to the acquisition of Ivercabio, the lower than expected progress of Biosa, as well as the booking of impairment losses and others, we have made multiple downward revisions on both a core and a full basis, and the management takes very seriously the fact that we were unable to meet the expectations of the investors as a result. Therefore, we have analyzed various scenarios for our FY24 forecast and formulated a more balanced plan that is both ambitious and achievable, taking into account risks and opportunities. For the FY24 forecast, we've done a lot of different scenario analysis, and taking into account risk and opportunities, we formulated a more balanced plan that is both ambitious and achievable. First, we updated our sales outlook for Vioza. As a result, we have been revising our peak sales forecast. The next, we factored in the impact of generic entry of Mira Begulun in the U.S. as we were aware that generic companies were already moving toward a market launch. As we believe that the formulation pattern for Mira Begulun is still valid, and we will continue to focus on the dispute. On the other hand, we expect the impact of the entry of generic Mira Begulun in the U.S. on revenue to be offset by the full-fledged growth trend. of strategic products. In addition, we announced in a press release today that the definition of core basis has been changed to more adequately reflect the profitability from core business. On a full basis, we factored in other expenses such as impairment loss in our initial focus to reduce the impact of unexpected downward revisions during the period. There are no specific indications of impairment at this time, and the estimate is based on the actual other expenses recorded in the past and the balance of intangible assets. I will explain the detail from the following slides. Page 16. I will explain our outlook for oncology products in FY24. First of all, we cast extended sales for FY24 to be 757 billion yen, an increase of 6.6 billion yen year-on-year. Global sales are expected to be at the same level as FY23 with XCUS offsetting the impact of the US IRA. While we expect growth in M0 CSPC prescriptions in the U.S., we anticipate a decline in the sales due to the three-month negative impact of IRA Medicare Part A redesign scheduled to be effective in January 2025. That is around $50 to $70 million impact. Outside the U.S., we expect sales to continue to grow mainly due to the growth of M1 CSPC, metastatic castration-sensitive prostate cancer. Parts set for FY24 is projected to be 151.2 billion yen, a significant increase of 65.9 billion yen year-on-year, and we expect progressive strong quarterly growth throughout the fiscal year. In the U.S., we expect that first-line indications will make a full contribution from the beginning to the end of the fiscal year. We also expect synergistic effects from the NSCC and guidelines updated in March, as I mentioned earlier, and aim to position it as a new standard of care in first-line treatment. Outside of the U.S., we anticipate the potential approval of an additional indication for first-line therapy based on the EB302 trial in Japan. The established markets and international markets by the end of the year and sales are expected to accelerate in each region once approved. Also, continued launch and reimbursement of the second line and afterwards around the world is expected. The spider's focus for FY24 is 60 billion yen, an increase of 4.9 billion yen year-on-year. We expect continued growth in existing markets centered on growth in the established markets. In the international market, We expect an increase in launch countries and a reimbursement which we expect will contribute to sales. Thank you very much. In Japan, we expect to launch in June. In the U.S. established markets and international markets in China, the approvals are assumed to be in the second quarter and onward, and we expect a contribution to global sales. In addition, pages 24 through 27 of the appendix provide a summary of the FY23 results and FY24 forecasts for each major product so you can easily compare them. Slide 17 is our focus for Vioza and ISAVE for FY24 and beyond. We expect a linear demand growth of Vioza throughout the year with a focus of 28.3 billion yen in FY24 and increase of 21 billion yen only. We aim for over 80% of commercial lives are key at KPI by the end of FY24. Physician perception of market access is related to both the quantity and quality of access, and once negative perceptions are formed, it takes time to improve. While progress on access has steadily improved since the third quarter of 2023, perceptions have yet to improve, and it remains a barrier to prescribe the drug. Market perception analysis indicates that a significant increase in coverage will improve perception, so we will continue to make maximum efforts to expand coverage throughout the fiscal year. We'll also work to improve patient and HCP activation through necessary investments, including DTC. On the other hand, we'll continue to optimize the GNA as needed while keeping ROI in mind. In addition to our FI24 forecast, we have updated our PIXELS forecast. Based on the learnings and data obtained since the launch in May last year, as well as the latest market research, we have revised our initial assumptions and lowered our peak sales forecast from the previous range of 300 to 500 billion to the range of 150 to 250 billion yen. The original assumptions are based on pre-launch market research. The original assumptions were based on pre-launch market research, but we updated assumptions based on the findings and data obtained after the launch. The water revision is mainly due to changes in assumptions for access and price sensitivity, treatment rate, and class share. For access and price sensitivity, we have made more stringent assumptions to reflect the rate reality of plant type and patient sensitivity to price. The treatment rate focus has been revised downward to reflect the actual treatment rate in the BMS market as a whole, not just for Vioza. We have also changed our outlook for the share of the NK class in the BMS market that we expect to gain. Although we have lowered our peak sales forecast, we still expect a potential of more than 150 billion yuan, and we continue to see this as an important growth driver. We will take necessary actions to achieve new peak sales. ISFA's focus for FY24 is 46.4 billion yen, an increase of 34.3 billion yen year-on-year, and we expect full-scale sales expansion. The J-code coverage started on schedule on April 1st, and we expect to update the label by the end of the fiscal year. We are confident in our ability to grow as we are already seeing signs of an increasing prescribing trend, not only from existing prescribers but also from physicians who began prescribing after waiting for J-code coverage to become available. In addition to our regular sales promotion activities, we will continue to conduct disease awareness campaigns aimed at expanding the market and increasing awareness of the Azave brand. We expect quarterly sales growth throughout the fiscal year, and we are targeting a total patient share of about 40% by the end of FY24. Finally, the future outlook. We are progressing as expected toward our forecast of 100 billion yen or more for FY25, which we announced in our second quarter results. We expect sales to significantly outpace expenses, and we look forward to a full-fledged contribution to profits in the future. I would like to explain some of the key events we expect in FY24 for Xtendi and other strategic products. For Xtendi, we expect a decision from the Chinese regulatory authorities in the third quarter on its application for an additional indication for M1 SSBC based on the China Arches study. Regarding PADSF, we expect regulatory decisions in the second quarter for the second-line and beyond metastatic urothelial carcinoma based on AV203 in China and a third quarter for first-line metastatic urothelial carcinoma in Japan and Europe. Bylaw is on track to respond to the completed response letter received from the U.S. FDA in January and plans to resubmit the application in the first quarter. If accepted, a decision is expected in the second or the third quarter, depending on the classification of the reapplication as determined by the FDA. The regulatory decisions in other regions are expected in the second half of FY24 in Europe and in the fourth quarter in China. We currently expect top-line results from the Phase II setting in pancreatic garden carcinoma to be available in the fourth quarter as of now. If the data are favorable, we plan to proceed with application of an additional indication based on the results. ISAV has a target date of November 19th as Peru's target in the U.S. In Europe, we currently expect a decision from the authorities in the second half of FY24. The timeline may change depending on comments from the regulatory authorities, and we'll provide updates as appropriate. Thank you. On page 19, I will explain the outlook for POC judgment under the focus area approach. In the lead programs in each primary focus, for programs such as 8845 for genetic regulation, ASP2138 for immunology, ASP7317 for blood and cell regeneration, and targeted protein degradation, ASP3080, will advance to the POC review stage by the end of FY25. We expect that the success of these lead programs in obtaining a POC will enhance expectations for success of follow-on programs utilizing the same platform and bring the concept of the focus area approach closer to reality, which is to generate promising new drugs continuously. To accelerate the program creation and POC decision, R&D has made significant reform to its organization and operational model for development projects with proactive delegation to teams to enable faster decision-making. In addition, we are reviewing the use of external resources and strengthening our internal capabilities to more effectively and efficiently promote development in new modalities and disease areas in which we have little experience. In addition to these measures, we will further strengthen resource allocation to priority projects and focus on POC decisions. Page 20, I will explain the change in the definition of core basis. In addition to the old adjustments, amortization of intangible assets, gain on the divestiture of intangible assets, and a share of profit or loss of investments accounted for using equity, methodology have been newly excluded as new adjustment items from old core definition starting in FY24. This is because the acquisition of Iberica Bio has resulted in a significant increase in amortization of intangible assets, which makes it difficult to adequately represent profitability under the old definition. We believe that the new definition of core basis will more appropriately show the company's profitability and ensure comparability with the global pharmaceutical companies. For reference, the lower part of the slide shows a change in cooperating income reflecting the new definition. Now, you can see that the acquisition of Iberic Bio has significantly increased the amount of amortization of intangible assets and the ratio to revenues compared to FY23. Page 21. The decrease in sales of Mirabegron is expected to be offset by sales growth of Pazer, Fiosa, and Azave, which are expected to increase by 120 billion yen year-on-year. SG&A expenses are expected to be 757 billion yen. SG&A, excluding co-promotion expenses for extend in the U.S., is suspected to be 568 billion yen, an increase of 22.8 billion yen year-on-year. The main reason for this increase is the necessary investments in growth drivers such as Parsev, Bailoi, Vioza, and Azeve, which are expected to increase by about 35 billion yen year-on-year. On the other hand, we continue to reduce expenses for mature products, which is expected to decrease by about 9 billion yen a year. In addition, we expect to realize cost reductions of about 10 billion yen as a result of global organizational restructuring implemented in FY23, including a review of sales structure in Japan. R&D expenses are expected to be 317 billion, an increase of 22.8 billion yen, Year on year, we will continue to invest in strength in primary, focus on R&D functions in general. On the other hand, we will also review our portfolio to reduce costs. We will strictly prioritize allocation of management resources and investment growth areas, while thoroughly reviewing expenses that will not contribute to future growth and value enhancement. As a result, cooperating income is expected to be 250 billion yen, a decrease of 26.9 billion yen year-on-year, and a cooperating margin is expected to be 15.2 percent, a decrease of 2.1 percentage points from the previous year. Although the impact of generic mirror background in the U.S. will be factored in. We will prioritize expenses thoroughly and minimize the decrease in cooperating margins. The lower part of the slide shows a forecast on a full basis. Operating income is projected to be 48 billion yen year-on-year. We expect amortization of intangible assets of 140 billion yen to be a major adjustment item that is excluded from the core basis. Thank you very much. remain confident about future profit growth and have increased our dividend forecast to 4 yen per share. On the page 22, I would like to explain the CSB 2021. In light of the progress made so far on the three performance targets outlined in the CSB, we believe that it will be difficult to achieve the targets for FY25. On the other hand, the original theme of the CSB 2021 is to build a structure that can overcome the patent expiration of Xtendi. and we believe that it is extremely important to firmly establish such a structure during the remaining period. In terms of revenue, the main growth drivers are passive, ISV, BUSA, and Baylor. We expect total sales of strategic products to nearly double to 300 billion yen in FY24. In FY25, we expect this figure to triple to 500 billion yen. We expect profits to grow along with this success growth with a core open margin expected to rise from 15.2% in the FY. 24 forecast to the low 20% range in FY 2025. We believe that the initiatives and milestones shown on the right side of this slide will be particularly important for the future growth of our priority strategic products. We will continue to pursue a core OP margin of 30% as our goal by steadily advancing these initiatives. If we succeed in acquiring a POC for primary focus program by the end of FY25, we expect to build a pipeline that will enable sustainable growth. Thank you very much. That's all from me.

Thank you very much. That's all as our explanation from our company. We now would like to entertain questions from the audience. If you have a question, please press the raise hand button at the bottom of your Zoom screen. If you're joining from your smartphone, if you tap the details, raise hand button will be shown, so please press it. The MC will name you one by one. If your name is called, please unmute yourself on your screen. Please mention your name and your affiliation before asking questions. Thank you for waiting. First, Mr. Yamaguchi from Citigroup Securities, please. Can you hear me? Yamaguchi from Citigroup? Yes, we can hear you. Thank you. I have a few questions. First, regarding CSB, you reviewed your assumptions as explained in your presentation. FY 2025, the same will remain the same, but the numbers are a bit challenging. The numbers... are you reviewing the assumptions for the numbers? The final numbers will be revisited once again. Is there any such possibility? Thank you for your question. What do you mean by revisit? I wonder how I should interpret the current numbers in assumptions which you think you can achieve. CSP 2021 We set performance goals in CSB 2021. The performance goals themselves, we have no intention to change. This was developed three years ago. So instead of changing through rolling, we'd like to keep the goals as is. And for the goals, what is going to be a landing? That's what I presented today. In that sense, in FY 2024, we have an annual plan already. In FY 2025... Basically, based on the plan for FY2024, we added scenario planning to show these numbers for you. When we have an annual planning for FY2025, we cannot rule out the possibility that the assumptions have changed, but these are the numbers we have confidence about, which we are presenting today. I hope I answered your questions. Thank you. The second question is about ISAVE sales forecast. You explained the sales forecast earlier. If I understand what you explained, JCODE was approved effective the first of April, which increased demand. And also, label update, PDUFA date is November 19th, when the volume will increase further. In terms of the impact, it can be a big product. What would be the biggest, what would be the most impactful element? Thank you for your question. Where should I start? First of all, permanent J-code has a big impact, I think. Reimbursement procedures will be easier for physicians and ACPs if they are not accustomed to such a procedure. some of them may be waiting until the procedure is simplified. We can expand the customer base, so in that sense, it's very important. On the other hand, for each patient, how much the drug can be utilized. In that sense, there's going to be no more restriction about the usage period for 12 months. This is a drug you have to use on a chronic basis, so I think that's also important. And Regarding the numbers in FY2024, it's not reflected so much, but not just in the United States, but also in other countries. We'd like to launch ISAVE in those markets as well. So we'd like to expand the number of countries as well. So these three elements are very important. Instead of saying which is the most important, we'd like to implement those three at the same time. And about mirror background, It's a sensitive question. It's difficult for me to ask you, but still, it's included in the sales forecast. According to a press release last week, the district court... recommends denying your motion. According to generic manufacturers, I heard that the injunction in the appeals court worked. So, on this point, as far as you can share, could you give us your comments? Yes, you're right, as a fact, but the injunction by the appeals court, it's called temporary, how long it's going to be effective, it's not so clear. So it's an injection. Compared to what we call injection in general, the duration is very limited. Understood. Thank you very much.

Thank you very much. Next, Morgan Stanley, M.U.

Morgan Stanley, M.G.F.U. Securities. Mr. Muraoka, please. Good afternoon. Muraoka from Morgan Stanley speaking. Thank you very much for giving me the opportunity. Would you show up slide 22? That is co-OP margin based upon the new definition is going to be the low 20%. That is where that you are going to return to in the next fiscal year. Would you please explain about the journey toward that a bit more into details? With these five products to make a growth, then OP margin is going to be improved automatically. I think that's a simple story, but from the current status, I believe there's a certain distance. So would you please explain a bit more about this? Thank you for the question. What you said is exactly what we are thinking. I see. In that sense... PatServe and ISAV, those are likely to grow greatly, so you depend on that. Well, those two products, sales expansion, well, that is likely to be the sales expansion that is likely to hit the bottom line. I don't know if that is the right way to say it. Okay, then when it comes to Beoza, after this revisiting in FY25, it is coming up with the profit or still waiting for the profit from Beoza in FY25? It is not appropriate to disclose the detailed number to you here today, but at least it has to go to the nearly break-even point, personally speaking. But, of course, sales loan or the revenue itself we cannot control, but we can control the cost. Therefore, even in the middle of the fiscal year, we always would like to refer to the KPIs so that we can flexibly adjust the cost. the ourselves mix that is going to be the foundation that we have currently so around 25 I hope that this achieves the status of coming up with a profit thank you now about the dividend within this one to two weeks among us investors we discussed and also we received a lot of questions about the dividend and you came up with a number of 74 yen and in some page certain picture, but depending on that in the next fiscal year, the profit will grow. So this time, every 10 yen basis, therefore from next fiscal year, another 10 yen is likely to be added on according to the picture that you are drawing. so the 500 billion yen for the major product and the copy margin and the low 20 percentage, then the conventional level of the increase is something you think you could achieve. Is that okay to consider in that way? Thank you very much for your question. Of course, I would like to continue the increase of the dividend and also would like to increase their range as well. But on the other hand, as you know, patent expiration is going to start from FY27 and afterwards. Therefore, this year 10 yen, next year 2, next year 10 yen, next year reduction 10. That's something we would like to avoid. We look at the profit situation from mid to long terms, and based upon that, we would like to decide the amount of the dividend every year. So if by 2025, 2026, what would happen is something I would rather refrain myself from commenting. But as I've mentioned, capital allocation. perspective, the stable increase of the dividend is our basic direction. So it's not the frequent increase or decrease depending on the level of the profit so that we can avoid such situation. We would like to always do that in a planned manner. If there's a stable profitability, then According to this current situation of your company, 4 yen is appropriate level. Yes, that's right. Thank you. Now about Vioza.

Affordability was mentioned in your slide. I'd like to confirm. In year two, there would be competitors lowering the price to secure the coverage. Thank you very much. What to do with this price? What about the gross to net? That's one thing, but what we'd like to say here is that what is going to be the co-payment of the patients? We are talking about the absolute amount. Original assumptions were made initially. We are assuming a small amount of co-payment. as an assumption for the patients to use this drug, but that's not really the case in reality. Prescription was given, they go to a pharmacy, it's available, but copay is high, so patients may say, no, thank you, there are such patients. So how we can decrease the out-of-pocket payment by the patients, we have to consider it. lowering the list price itself or increasing the growth to net, there can be a variety of ways. But for us, we shouldn't hurry too much increasing growth to net or rebate. Then in the long term, the value of the product would be undermined. We don't want to do this. So we'd like to think of a smarter way in taking a variety of action. That's all. Understood. Thank you very much. That's all from me. Thank you very much. Next, Goldman Sachs Securities. Mr. Ueda, please. Ueda from Goldman Sachs Securities. First of all, I'd like to ask you a question about the process to develop your plan. When you announced the results before, you are going to review the process to develop your plan. Specifically, how did you change? You said you want to be ambitious, but you also paid attention to something achievable. What has been changed compared to last fiscal year? What is the difference in the probability of achieving your plan? Thank you for your question. I'd like to explain where necessary. Kitamura, sitting next to me, can add comments as well. First of all, Thank you very much. it could not be achieved. That should not happen. We would perform a scenario analysis in advance. We refer to bottom-up, but in the end, as corporate as a whole, we will take risks here and here, and in other areas, we would not take risks. We incorporate such a process in the annual plan for FY2024. And also, it's easy to talk about prioritization, but doing this, for sure, is something tough because we see people and things, but there are three priorities internally, and accordingly, at various places, we determine the priorities. Some may have to endure, and we may have to give up in some areas, or we may have to postpone but we want to allocate human resources and money to what requires such resource allocations. That's the current status. As I said on page 15, background generics entry. Financially speaking, we need to factor in such a potential risk. We don't have any sign, but intangible assets are always on the balance sheet. For what reasons, projects terminate, there would be impairment loss. So we have to pay attention to those areas, and that's how we are planning this time. Tamara-san, anything to add? Thank you. As Okamura said, yes, I agree, but I'd like to add two points. Regarding scenario, in principle, it's quite severe. Will it be a worst-case scenario? And to overcome that, what should be done? There can be good scenarios and bad scenarios as well. Based on very conservative scenarios, we developed a course planning. Regarding priorities, which was mentioned earlier, we had very tough prioritization. On the other hand, not just creating numbers in the plan, but we have to think about how to do the operations. It's about the actual processes specifically. When do we need to make what commitments? By then, what do we know and how to do this? Such a process was discussed in detail by the top management, so we try to deliver these numbers for sure. That's all from me.

Thank you.

Thank you very much. The second. This may be related to the operation, just like you mentioned. The focus for SG&A this fiscal year, including 35 billion yen for the strategic products, relatively the amount is larger. Maybe you invest in advance for those products. By next fiscal year and after SG&A, was to think about outlook, what would be this distribution, the percentage? And this time, once again, is it okay that the current investment is advanced treatment? Okay, for this as well, I answer, and Kitamura-san will follow. As I've mentioned at the very end slide, core OP, based upon the new definition, that is the 30%, for the pharmaceutical companies like our position or the direction, is the appropriate amount to aim at. From there, we are going to back-calculate for the cost of goods and so on. So then automatically you come up with the SG&A level to achieve the 30%. So with this as a goal, Overall, within this range, so that we can operate our business, we would like to establish the structure of the system. So we would like to have a more masculine-like structure with this target. Thank you very much. What is quite important, as you see on this slide, In FY25, for these strategic products, we come up with the source of more than 500 billion yen. This is critical. So in order to realize this necessary investment, it's definitely executed. And at the same time, just like Okamura mentioned, there will be the increase. So why should it decrease? That would be the other SG&A and other expenses, for example, including the digitalization. We can reduce certain costs, so we would like to do that. At the same time, FY25, there are more than 20 months. until then. So we are going to do the short-term investment for this fiscal year, and by 2025, that is going to be the mid-term improvement. So the time axis will be different, but we are doing so in a simultaneous manner. Understood. Thank you very much. That's all from me. Thank you. Next. UBS Securities. Ms. Haruta, please. Haruta from UBS. Thank you very much. First question, that's about extending U.S. forecast. That's a question from me. In the guidance this time, FY25, January to March, there will be a negative impact, but the remaining calendar year of 25, that impact will continue. But for 26, well, in the 2025, the drug price is reduced, and from there, to what extent demand will improve? Based upon that, you come up with a focus for 2026. 2027 in IRA, if you will be included within that list, then further price decrease by about 30%. So for the coming three years, is it okay to expect the coming three years in that way? Would you please explain that? Well, the journey or the route to think about what's coming, I think what you mentioned is quite right. But is there anything else needed to be added, Klaus? If you have any, would you please make a comment?

The only thing I would add is that we are very encouraged by the volume growth that we are seeing. I mean, we have been on the market for more than 10 years, and we're growing 4% in paid demand. And that has even strengthened in the last quarter with the publication of And the approval of the embark indication. So there is demand in the market. And yes, we have an environment which over time will be unfavorable on the price front. But the volume prospects, I think, continue to be very good in terms of long-term growth.

Understood. Thank you very much. The second point, that's about the doctor's or HCP's intention for the treatment. That's what I'd like to know. There's a market itself because of the hormonal therapy. But now VMS recognition as a disease to be treated amongst the HCP is lowered and there is no activation by HCPs for the treatment. What is the current status with that regards? That's what I want to learn. Rather than the enthusiasm for the treatment itself, the coverage of the insurance, that itself is a more strong factor for the bottleneck. That's the question. Thank you.

I'd like to comment a bit, and then I'd like to ask Klaus to make additional comments after. Yes, you're partly right. A VMS in the education process or in educating the clinical information, they may not have studied much, but open their practice. Oh, we noticed that's the situation. So... Thank you very much. Regarding the coverage, if you perform market research, they have intention to prescribe. They are willing to prescribe. But what kind of patient should come and how they should explain to prescribe, that's a missing link. So sales force and medical reps have to fill this gap. The coverage gap, coverage issue, what we are concerned about is that doctors are willing to prescribe and there are patients coming to them and a prescription could be written under those circumstances. But because there's going to be no reimbursement, as some doctors would not prescribe, they wrote a prescription, but the patients bring it to a pharmacy, but it's too expensive, so they may say, no, thank you. Because of no insurance coverage, they were told to take... the advanced procedures, so it's too cumbersome. There are doctors who would like to prescribe their patients, but still it's not linked to the actual prescription. I think that's the area where we'd like to see faster progress. Doctors themselves must be, we need a education to them because they didn't learn in medical school so much about this and as our customers well we want a doctor to prescribe a drug still they don't write a prescription so we have two dilemmas because

What Naoki just described is exactly right. So the one factor is the perception from HCPs that we know from our market research that they think the coverage is not broad enough for them to prescribe. And it takes time to overcome perceptions in any market, right? Now, We are making good progress on the payer front. We always said we would reach 50% coverage by the end of FY23. We've delivered on that. We're now aiming for more than 80% coverage by the end of FY24. I think we're going to be very nicely tracking on that. And over time, we will be able to convince HCPs that coverage is now broad enough for them to prescribe freely. And that is the Salesforce job, just as Naoki just said. And at the same time, we're building a new class, right? So we have to educate doctors of the advantages versus the SSRIs or HIT treatments that they're used to prescribe in the past. So those are the two factors, exactly like Naoki said.

Understood. Thank you very much. It's now clear for me. Thank you very much. Thank you very much. Next, Mr. Hashiguchi from Diver Securities, please. Hashiguchi speaking. Thank you very much. On page 22, you talked about extending LOE and you are going to establish a structure to overcome extended LOE. What's your definition? What kind of a situation would mean a sufficient structure to overcome extended LOE? When you announced CSP 2021, I am seeing the slides. Once again, according to the forecast at the 10th Sales and Co-Operating Profits in 2023, I think it's going to be a higher level, but you are changing the definition of the core operating profit. Products which you think are going to grow extended, according to the new definition, the profit structure is going to be different. there may be operating profits for some of the products and not for other products. So I'd like you to elaborate on what you're talking about in this regard.

Excuse me. I am not quite sure what I should answer. Would you please repeat your question once again? Well, Well, let me ask you in a different way. When Jake was announced in FY2121, the more than 500 billion yen of the sales increase of FY25 for the strategic products, then you can overcome the loss of the expressivity of the extended, and you can come up with the long-term growth. Just like Oka Murasa mentioned today, for a focusing project, currently there's a bit of a delay in such situation. With what you can declare that you're now prepared to overcome extended LOE as of FY25? As you see it on the slide 22, strategic products, and also with those sales increase, extended issue can be overcome. or the new definition why is that profit is exceeding the current level? So when do you declare that you are able to overcome the issue of loss of exclusivity of extending? That's the question. Understood. So, well, first of all, the sustainable or continuous growth that we think. Well, of course, these are the drugs, so the LLE or the patent issue, they always come, so they'll be the ear products. of discontinuity. And I believe I discussed this a lot with Hashiguchi-san in the past, but there is almost no case that the profit comes out during that vacuum period. So what we are aiming at is the current extended sales is about 700 billion yen. And there we come up with a profit. And that profit, if that is raised from other products, In other words, extended is gone, but we have the other products as alternatives, as replacement. Then, as of FY21, because at the time, well, at the time we didn't have ISA-B, but there were six compounds, and 8132 was added. But anyhow, with those key products, Thank you very much. Operating profit that is gained from the extended can be replaced or offset. That is the status we would like to achieve. And at the same time, based upon that, from the primary focus, if we have some other products potential, then with the replacement of the extended, we have another potential product from primary focus. That will lead to the further growth. That's what we are thinking. However, the strategic products status is different from the time of FY21. And also primary focus potential products are not near but rather a bit far future. And if we can see, that is, we highly expect, ended up with a failure in the clinical trial. So in order to offset such situation, we came up with the Azeve with acquiring Abirik. Did you get it? I just wonder if that is a logical explanation. I understand it quite well. But with the Azeve now available, so according to your explanation, operating profit is... it can be replaced. But you are thinking about the replacement of operating profit based upon this current and new definition, right? Right. Rather than the accounting-wise profit, I always think the situation based upon cash flow. So for me, As of today, from the cash flow perspective, regardless of the definition of a co-op and profit, it's the same thing. But from the investor's perspective, based upon the current co-op definition, you don't understand actually what is happening. We hear that a lot. That's why this time we decided to change the definition of co-op. Understood quite well. Thank you very much. Another point for me. That's about Zove Taksimov. or violoi in Japan, maybe. In Japan, initially you focus on the penetration of the testing That's why you come up with that number for the sales of this year. But clouding 18.2, recognition among the HCPs here in Japan is expected to higher compared to Western countries. And if you come up with that forecast here in Japan, in Western countries, after getting the approval, it seems... that the ourselves growth will be relatively slower. Is it okay to stay in that way? Thank you for your question.

In the HCP community, from the Japanese physician's perspective, how to think about clothing 18.2? I'd like to have a comment from Taniguchi. And what about the plan by the commercial team together with the medical affairs in collaboration? how to roll out a viral in Japan. That is going to be explained by Klaus. First, Taniguchi, please. Okay. I'd like to talk about clothing 18.2, awareness. From the medical affairs perspective, the awareness is getting higher. Gastric cancer prevalence. It's high in Japan. There are many cases in our country. Japanese doctors are eager to learn and study. So a new marker with high sensitivity, they are dealing with this at GIEC. Physicians are meeting. We have a booth and many doctors visit our booth at an exhibition. From that perspective, still, it's very important for them to test. In gastric cancer, HER2 and PD-1 testing were generally done, including 18.2 testing. hopefully it would be done by the doctors to begin with. So we'd like to penetrate the testing. That's very important for the success of VILOI, as we wrote here. Class, please.

So we are very encouraged by the fact that the guidelines have already included in Japan VILOI, Claudine 18.2 testing together with the HER testing. So that gives us a very good basis to communicate to doctors that both tests should be done at the same time when a patient presents. So I do think that In Japan, we actually have a very good environment in terms of getting doctors to understand, be aware, and then also order the Claudine 18.2 tests.

Thank you.

Thank you very much. That's all from me. Thank you. Thank you very much. Next, JP Morgan Securities. Mr. Wakao, please. Wakao from JP Morgan Securities. Thank you for your time. First. As Hashiguchi-san asked the question, I'd like to know more about the same topic, CSP 2021, extended LOE. You talked about the structure to overcome extended LOE. If you have such a structure, if you cannot establish such a structure... what measure are you going to take? If by 2025, strategic product sales of 500 billion yen, that's next fiscal year. I think the possibility or the probability is quite high, but based on the definition, there can be some challenges. So strategic products may not grow as expected. Then something like an acquisition, like ISAVAY may happen. It may be difficult to acquire those products, but there may be an acquisition of late-stage compounds, which you may consider. And regarding focus area, you need to judge POC. If you cannot achieve POC, another focus area would be tried one after another. Should I understand that way? Regarding the focus area, Do you have a plan or way to make further improvements? Thank you for your question. Regarding your first question, for us, in principle, innovations to create a company, if possible... Products close to completion in the late stage phase or companies we don't want to acquire them. but as you said, things may not proceed as we expect. We say we want to generate innovation, so we just shouldn't wait. We decided to acquire ISAVE this time, as you pointed out. If you look at our balance sheet next year, It's impossible to acquire a company of 500 billion yen worth. Average value acquisition was done for the coming few years. Acquiring a big product or a company could be difficult, so the people sitting right to me must work very hard. Sitting on the left of me is Klaus. So we delivered a strategic product to the market, so Klaus-san, you have to work hard. Of course I feel that way. Regarding the focus area, focus area, is our way of thinking about R&D. You wanted to talk about primary focus, right? Primary focus. Within one primary focus, biology, modality, and disease exist. By making small changes one by one, this is what we call a pivot. By moving the triangles little by little, mitochondria is now dissolved. we may terminate a certain primary focus and creating different primary focus somewhere else. There is flexibility here. That's the good thing about the focus area approach.

Then more specifically, by 2025, I expect it to gain the POC. But if that would not happen, what should we do? That's also what I'm interested in. So I would like to hear it. So let's start with the clinical phase. So first of all, Taniguchi. Then after that, Shidaka, higher than that level, what you're thinking about. Something we'd like to hear. Thank you. Let me speak first. It's about clinical development. First, ADA45. This is for Pompe. NASB2138. This is oncology. And 7317. This is the AMD geographical atrophy test. And the 3082, this is a KRAS decorator. So these four, we would like to get the POC decision by the end of 2024, 5. So at least these four. Of course, other than those, we have other programs that we may be able to decide the POC in this period of the time. But new products or early developed products or products in an earlier development phase, those are also something we would like to focus on. Shitaka is going to talk about it after me. But from the research, we get something and we have it into the clinical phase so that we can increase the probability of gaining POC. That's what we are trying to do. On top of that, as has been shown in the slide 22, For example, POTSF, LCM, or line extension, that is also something we are thinking about, and already head and neck cancer, the new study is taking place. Other than that, for viroi, there is the pancreatic cancer. But for the gastric cancer, rather, other than pancreatic cancer, we would like to expand the indication so that we can find other values. So those are considered for LCM. So early phase, late phase LCM go together. And with that, we can come up with a higher level of pipeline value. That's what we think, and that's why we are doing our best for that. Now, Shidaka will make explanation. Just like Okamura mentioned, I would like to transform innovation for the value of the patients, and that's the driver for our growth. Now, primary focus will be turned over, as has been mentioned this time, and we'll find another opportunity of the science innovation. That's one way that we can do. And also within the primary focus, different and several platforms are verified one after another based upon the hypothesis that we have. For example, immuno-oncology. Unfortunately, Potenza and AVEC couldn't come up with the evidence to verify our hypothesis, but some is already in the dose escalation study. But we have 2130 and so, and within immunooncology, the different factors are utilized, and And we have something else that we can expect for the next phase. And also the targeted protein degrader, the situation is the same. The KRAS is the first so that we can launch the product. So the mutated types are now in the clinical phases. and degrader, depending on the mutation, KROS degrader that is also identified for the clinical phase. Non-KROS oncology and immunooncology are where that we would like to make use of. We change PF or within a PF or primary focus, we can verify the different platforms. We can do other ways. But which of our cases would like to transform the innovation to the value so that we can grow further? That's what we are aiming at. Understood. Thank you very much. That's all from me. Thank you. Next. Mr. Sogi, please.

Mr. Sogi, please. Thank you. I have a question about POTSEF and VIOZA. First about POTSEF in 2024 forecast, 145 yen against the dollar. Based on that assumption, FY2024 sales forecast may be very aggressive according to my impression. First line, market share. What's your assumption about market share to come up with these numbers? Thank you for your question. Straight to Klaus.

So I expected you to be surprised by our PADSEV forecast because we are extremely confident on that. You will remember that in Q2, we took up the PADSEV forecast significantly. And we have delivered on that. We're actually a little bit over-delivered on that, and we think that trend will continue. Our market research shows a very typical market share in terms of new patients. About half of the new patients would go on PADSF-Pembro first-line combination. We now have three guidelines, three guidelines in the world recommending PADSEV, PEMBRO as the standard of care. That's the ESMO guideline. That's the European Association of Urology guideline. And the American NCCN guideline were also category one guidelines. I think we are upending this market. We are changing this market completely. And it is very clear from our feedback from HCPs, from medical societies, that they see PADSEV and PEMBRO as the first option for patients with bladder cancer. And that is giving us that confidence. And I think our track record since Q2 proves us right so far. So I would ask you to be confident also in the FY24 forecast.

Great. So does that mean that you are assuming, you know, the PADSEV achieved 50% market share during the first year of the new indication in the first line?

So in the U.S., for instance, where we have first line on the market, we already have more than 50% market share.

I see. Great. Thank you very much. That's very impressive. The second question is regarding Vioza. Probably this is also a question to Klaus. So, you know, thank you for explaining some of the challenges coming from the payer coverage. I also believe that, you know, another key, you know, challenge is probably, you know, the lower than expected the demand from the patients and the So I believe that the quite insignificant DCC to mobilize those patients is quite important for this product. First of all, I'd just like to understand, is that in the right understanding? And also the second question is, in order to do that, what is this year's budget for the promotion fee for Vioza? And also, if there's any... change your planning to make for the promotion approach based on what you have learned so far?

Okay, that's at least half a dozen questions in one, but I'll try to take them. You are absolutely right that our initial assumption, we expected an exponential response curve from the DTC, and that has not happened. And the more we study this market, the more we believe that we are progressing in a linear fashion. We've also modeled that versus some analogs. It just seems to be a market that progresses linearly. That is also proven true in the fourth quarter. We've increased demand by about 60% in the fourth quarter. And we see that demand creation being slower than initially expected, but being steady going into the future. So, yes, it does take DTC spend to activate that. Yes, that will have to continue for some time. I mean, please remember we're still within the first 12 months of launch, right? I mean, we haven't even completed the first year of launch. So, yes, we will continue on the DTC spending. to activate consumers. And we'll be updating you in the next call when we have some fresh market research on how we have affected awareness of HCPs, but also of consumers of the brand, which if you remember in December was still only at 25% on the consumer part. So yes, DTC will be necessary to continue to activate patients, but no, it's not exponential. It's more linear progression.

My question is how much you are planning to spend for Vyoza promotion this year? And also, I mean, if there is any new learning that you have, you know, gathered so far that will be applied to how to promote this product?

So I'm not going to give you the number you're asking for in terms of the promotional spend. I can tell you that where we have, as I think Naoki said in his presentation, we have monthly KPIs where we look whether we hit the KPIs and then we modulate the spending accordingly. To your second question, Yes, we are learning very quickly, and we are adapting the spending mix. So as you're aware, DTC is not just TV spend, right? It's TV spend. It's digital spend. It's Google choices. There are various categories in that spending mix, and we are – We are learning and adapting that spending mix as we get real-time data, and that is going on right now. So I do think our spending will be more effective in the future because of that learning curve that we're progressing on.

Thank you very much.

Thank you very much. We are already after the expected finishing time, but one more question. Mr. Suzuki from Mizuho Securities, please. Thank you for accepting my question. ASCO, I believe the title is already disclosed. EV202, the new data is going to be announced there. Is this understanding right? Can you please? EV202 study, last year for head and neck cancer, the data was disclosed and announced, and abstract is now disclosed today. Other cancer types, for example, breast cancer, lung cancer, esophageal cancer, such a data of 202 study is planned to be announced. Understood. Thank you very much. Thank you very much. Now time is up. With this, I would like to close today's signing calls. Thank you very much for your participation.