Astellas Pharma Inc

Thank you very much for your attendance in this fiscal 2025 Earnings Call by Acelus Inc. I am Kato, Chief Communications and IR Officer. I would like to serve as a moderator for today. Following our presentation today, we will move on to the Q&A session. The presentation will be based on the presentation materials available on our website. Some attendance interpretation in Japanese and English will be provided throughout the event, including the Q&A session. Please note that we cannot guarantee the accuracy of it. You can select your preferred language from the menu at the top of the Zoom webinar screen. If you select the original language, you will be able to listen to the audio in the original language without simultaneous interpretation. This is some notes from us. This material, oral presentation, and answers and statement in the Q&A session includes forward-looking statements based on assumptions and beliefs in light of the information currently available to management and subject to significant risks. and uncertainties. Actual financial results may differ materially depending on a number of factors. They contain information of pharmaceuticals including compounds under development, but this information is not intended to make any advertisements nor provide medical advice of any kind. Now, let me introduce you the participants from ASTELLAS here today. Naoki Okamura, President, CEO. Clinical Research and Development Officer, Tadaaki Taniguchi. Chief Commercial and Medical Affairs Officer, Klaus Seiler. CFO Atsushi Kitamura. So these four are attending in this meeting. Now I would like to start the presentation. Okamura-san, the floor is yours.

Hello, everyone. I am Naoki Okamura from Asteris Pharma Inc. Thank you very much for joining our FY2025 financial results announcement meeting out of a very busy schedule today. This is a cautionary statement regarding forward-looking information. As this was explained by Kato earlier, I'm not going to read this page. Page 3 is the agenda for today. First, I start with FY 2025 financial results. On page 4, I will give you an overview of FI 2025 results. Revenue reached over 2.1 trillion yen and core operating profit exceeded 550 billion yen. Both achieved record high results. Significant growth of strategic brands by over 140 billion yen year-on-year has driven double-digit revenue growth. As for SG&A expenses, thanks to the robust progress of what we call SMT, sustainable margin transformation, a company-wide cost optimization initiative, SG&A ratio improved by 2.3 percentage points year-on-year. Driven by strategic brands' growth and robust cost management through SMT, core operating profit rose significantly, up by 42% year-on-year. Core operating profit margin increased by 5.5 percentage points year-on-year to reach 26%. Our pipeline also progressed substantially. PAD-SEV made a significant progress in MIBC, muscle invasive bladder cancer development. Following POC achievement by Cetidegressive in PDAC, pancreatic ductoid adenocarcinoma in FI2024, a total of three POCs were achieved in FI2025, namely Cetidegressive for NSCOC, ASP2138, and ASP7317, For 30-day aggressive phase 3 study was initiated for PDAC in the first line settings. Promising external assets ASP546C and VIR5500 were licensed in and pipeline expansion made progress. On page 5, I will explain FI2025 financial results. Across revenue, core operating profit, and full operating profit, we broke records to hit all-time high since the founding of Astellas. Let me explain main items. Revenue exceeded the 2 trillion yen mark for the first time to reach 2 trillion 139.2 billion yen, up by 11.9% year-on-year, achieving the double-digit growth for two consecutive years. Co-operating profits substantially exceeded the 500 billion yen mark to reach 555.7 billion yen, significantly increasing by 41.6% a year. The bottom half of this page shows full basis results. Operating profit was 382.6 billion yen and profit was 291.6 billion yen. Both rose significantly year on year. On page six, I will explain FI 2025 financial results of our main brands. Sales of all brands increased across the board with strategic brand sales combined strongly growing by over 140 billion yen in total year on year. First, sales of five strategic brands, namely PadSafe, Isovay, Viroi, Vioza, and Zosparta, reached 480 billion yen in total, substantially up by 143.9 billion yen, or 43% year-on-year. PadSafe and Viroi, in particular, drove the strong growth, increasing by more than 50 billion yen, respectively. Strategic brands have high profitability, and their growth made a great contribution to the FI 2025 consolidated revenue and profit increase as a whole. Next, I will explain individual strategic brands and extend it. PADSEV sales increased to 221.2 billion yen, up by 57.1 billion yen, or 35% year-on-year. Global sales growth was driven by strong first-line MUC penetration continuously. Sales expanded in all regions. In addition, early momentum for CIS-ineligible MIBC, approved in November last year in the United States, also contributed greatly to sales expansion. As for ISAVE, sales rose to 77.6 billion yen, up by 19.3 billion yen, or 33% year-on-year. New patient starts, which are important metrics, steadily increased. In the recent fourth quarter between January and March, demand grew more than 10% quarter-on-quarter. treatment rate for implement complement inhibitors as a whole including the competitor's product rose to about 20 percent market penetration made steady progress with regards to vital sales reached 63.1 billion yen substantially up by 50.9 billion yen year-on-year Significantly exceeding our initial expectations, market penetration progressed extremely well across all regions. High clothing 18 testing rates contributed greatly to strong performance. Vioza and Zosparta sales rose steadily, respectively. Extended sales increased to 960.8 billion yen, up by 48.5 billion yen or 5% year-on-year, reaching projected peak sales levels 13 years after launch. Page seven is about cost items. With SMT initiative, we realized the cost optimization of about 25 billion yen in FY 2025 for SG&A expenses, earned expenditure, and cost of sales combined. Partly due to the SMT effect, excluding US extended co-promotion fees, SG&A cost ratio improved by 2.3 percentage points year on year. Let me explain a specific breakdown of SG&A costs and earned expenditure. SG&A expenses, excluding Forex impact, rose by 2.6% year-on-year. While increased our revenue by more than 10%, we are able to manage SG&A expenses at a level almost similar to the previous year. Investment toward further growth of strategic brands was increased by about 10 billion yen year-on-year. On the other hand, as an SMT progress, we realized cost optimization of about 11 billion yen through steady progress in continuous global organizational restructuring, reduction of mature products related expenses, and streamlining IT infrastructures, etc. As a result, while fully executing investments for strategic plans, we were able to offset the increase through SMT cost optimization according to assessment. Earned expenditure excluding forex impact decreased by 3.8% year-on-year. While clinical development costs for pipelines such as 30-day aggressive and ASP546C increased by about 5 billion yen, we made progress in outsourcing cost reduction through insourcing development capabilities including clinical trials, etc. under SMT, which led to cost optimization of about 10 billion yen, so we were able to fully offset the cost increase factors. In addition, with the completion of large clinical studies, development costs for strategic brands decreased by about 5 billion yen. Page 8 shows life cycle management of strategic brands. Let me explain main achievements in FI 2025. Updates since the last financial results announcement are shown in blue, including the achievements in April 2026. Strong development progress was made toward maximization of our strategic plans' value, notably for PatSafe. I will explain the latest status of PatSafe on the next page. Regarding Vioza, in Phase 2 study in China, primary endpoint was met in April this year. Based on the study results, we are planning to file a submission in China. On page 9, I will explain the latest status of PADSEV development in MIBC. In addition to development in the perioperative settings we have worked on so far, we also started development for bladder-sparing MIBC to potentially maximize PADSEV's impact. As for cis-eligible MIBC, shown on the left, we presented the latest data from EV304 study at ASCO-GU in February. As is shown in the figure, perioperative PADSEF and pembrolizumab significantly improved EFS event-free survival, a primary endpoint, compared to neoadjuvant chemotherapy. Also, OS overall survival and QCP, a PCR pathological complete response improved significantly as well. Based on the study results, we took procedures for an additional indication globally. Regulatory applications were accepted in Europe in March. In the United States in April this year. In U.S., we were granted priority review designation with PDUFA date set for the 17th of August, 2026. Next, let me explain the right-hand side, development for bladder-sparing MIBC as an opportunity to further growth. It is known that about 30% of MIBC patients are ineligible for or refuse radical cystectomy or RC. These patients will not be eligible for EV303 or EV304 studies. There are high unmet medical needs for treatment options that delays or avoids RC and preserves the bladder. Based on the extremely favorable data obtained consistently from clinical studies in MIBC by now, we initiated development of PADSEV for bladder-sparing MIBC. EV209 is a single-arm Phase II study initiated in April. The study enrolls MIBC patients who are eligible for but select not to undergo RC to evaluate the efficacy and safety of PADSEV and pembrolizumab combination. PADSEV is administered in nine cycles. They are same duration of treatment with MIBC studies so far. Primary endpoint are clinical complete response, CCR, and bladder intact event-free survival, BIEFS, at two years. In addition, EV309 as a registration of Phase III study is under preparation in parallel. We are planning to start this study in the first half of FY2026. Also in China, regulatory application is under preparation based on EV303 and EV304 studies. Blood aspirin treatment in China are not factored in to our current peak sales forecast for parts sales, so if successful, there can be further upside potential. On page 10, regarding focus area approach, I will explain main achievements in FI 2025. Achievements made in April 2026 are also included in here. Over the past one year, our pipeline made a significant progress and expansion, with three POCs achieved, one Phase III study initiated, three clinical entries, and two promising external assets in-licensed. ASP2138 in immuno-oncology achieved POC in gastric and GEJ gastroesophageal junction adenocarcinoma. Preparation is now underway for rapid initiation of phase 3 study. Furthermore, as a follow-on program, we licensed in VIR5500, from Burr Biotechnology ASP2998 made clinical entry to expand our portfolio. Ceti-degressive in TPD-targeted protein degradation achieved multiple important progresses. In PDAC, where POC was achieved at the end of FY2024, Phase III study was initiated in the first-line settings. Furthermore, POC was achieved also in NSCLC. Phase III study is now under preparation. In addition, ASP5834, a pancreas degrader, also made the clinical entry. Pipeline expansion is making steady progress. As for ASP8845 in genetic regulation, additional analysis is ongoing for POC judgment. ASP2957 also made the clinical entry. New programs including ASPE-2998 in Immuno-Oncology will be explained in detail on the next page. ASPE-7317 in Blindness and Regeneration achieved POC in patients with severe vision impairment due to GA . The next study plan is now under discussion with the regulatory authorities. Also, we licensed in ASB 546C from Evopoint to further solidify our leadership position in the clothing 18.2 space. On page 11, I will explain new clinical programs. Next generation innovative programs have advanced into clinical development. ASP-2998 is a program which leverages a platform called immunostimulatory ADC, or IADC, generated from joint research with SUTRO. TROP2-directed monoclonal antibody is conjugated with two payloads, cytotoxic topoisomerase-1 inhibitor and immunomodulator sting agonist. In non-clinical studies in mouse model, superior efficacy was demonstrated versus the existing TROP2-directed ADCs. From now on, efficacy and safety will be confirmed in human in clinical studies. ASP2957 has been created as a gene therapy for XLMTM, X-linked myotribular myopathy, like AT132. It uses a novel muscle-targeted AAV capsid High muscle specificity and reduced liver targeting was demonstrated in non-clinical studies. This enables clinical study initiation at a dose level about 100-fold lower compared to AT132. With the progress of ASPE2957, we decided on a strategic hold for AT132. Moving forward, we will focus on the development of ASP2957 as a gene therapy for XLMTM. ASP2246 is a program to aim for recovery from motor dysfunction associated with ischemic stroke by using an approach called direct reprogramming. messenger RNA encoding human neuroD1 is encapsulated in novel LNP lipid nanoparticles to enhance efficiency of delivery into cells. Messenger RNA encoding human neuroD1 promotes conversion of brain astrocytes into neurons and induces neuronal regeneration. In a non-clinical study using a monkey model, improved motor dysfunction was demonstrated With intracerebral infusion of ASP2246, Phase 1-2 study enrollment has been initiated by now. FSD first subject dose is anticipated for the first quarter of FY2026. You can find non-clinical study data of these programs summarized on page 37 in the appendix, so please refer to it. At the leisure. From here, I will explain FI2026 outlook. On page 13, I will explain an overview of FI2026 outlook. In FI2026, our performance is forecasted to reach record high results. Revenue is expected to expand over 2.2 trillion yen. driven by growth of strategic plans by over 130 billion yen year-on-year, according to a forecast. Due to this significant growth, we're expecting a revenue increase. Regarding cost items, we will continue this empty initiative to achieve about 40 billion yen cost optimization. SG&A ratio is expected to improve by 2.3 percentage points year-on-year.

We plan to increase investment in R&D in line with the growing number of new Phase 3 trials. Co-OP is expected to increase by 12% to over 600 billion yen, and the Co-OP margin is projected to rise to 27.9%. In our pipeline regarding PACSA for MRBC, we plan to conduct multiple filings and regulatory decisions as well as initiate new phase 3 trials. We also plan to initiate phase 3 trials for CTD-aggressive and ASP2138. Regarding shareholder returns, we forecast dividend per share at 80 yen up to ¥2. On page 14, I will explain the full-year focus for FY2026. For FY2026, we anticipate revenue of over 2.2 trillion yen and core OP of over 600 billion yen, surpassing the record high achieved in FY2025. First, for forex rates, we are assuming 150 yen to U.S. dollar and 180 yen to euro for FY2026. We focus revenue of 2.22 trillion yen, an increase of 80.8 billion yen year-on-year. Although we anticipate a decline in sales of Xtendi, we expect to secure overall revenue growth driven by a strong performance of strategic brands. We focus on G&A expenses of 800 billion yen down 60.3 billion yen a year. Of this amount, extended co-promotion expenses in the U.S. are expected to decrease in line with the decline in its U.S. sales. Excluding co-promotion expenses, its G&A is projected to be 584 billion yen down 28.1 billion yen a year. The cost optimization through SMT is estimated to about 40 billion yen. The majority of this relates to SG&A optimization as expected to contribute to the reduction in SG&A. R&D expenses are projected to be 355 billion yen up 42.2 billion yen year-on-year. This increase is primarily due to the high clinical development costs, including in sessions of Phase III studies. To further solidify our mid-to-long-term growth, we will accelerate investment promising pipeline candidates, such as CDD-aggressive, ASP2138, ASP5460, and VIR5500, in addition to the life-cycle management of PASF and BILOI. As development progresses, we expect to continue investing at this level or higher. As a result, the focus is core OP of 620 billion yen up 64.3 billion yen year-on-year, representing double-digit growth of 12%. We anticipate that growth in strategic brands and cost optimization through SMT will contribute significantly to this profit increase. We expect the core P margin to be 27.9% up to percentage points year-on-year. Next is full basis operating profit. As a major adjustment item excluded from the core basis, we anticipate amortization of intangible assets of about 140 billion yen. Additionally, we have factored in about ¥80 billion in other expenses. This includes impairment loss risks of about ¥40 billion and costs associated with organizational restructuring. As a result, we focused operating profit of ¥395 billion and increase of ¥12.4 billion year-on-year. Page 15, the explanation, the outlook for our main branch of FY2026. The strategic brands will continue to drive growth in consolidated revenue and profit with the particular contributions expected from PADSEV, ISAFE, and VILOI. We anticipate adaptation growth for each of these brands with total sales expected to exceed the 600 billion yen mark and reaching 610 billion yen, yet on an increase of about 130 billion yen or 27%. But self-expect continued strong growth driven by further market penetration of first-line MUC. In particular, we anticipate growth in the EU where reimbursement is progressing. In the U.S., in addition to the full-year contribution from cisplatin-ineligible MIBC, we anticipate sales contributions from the cisplatin-eligible MIBC indication for which the filing was sufficiently accepted starting during the current year. As of it is expected to see steady sales growth building on the sales infrastructure expanded last fiscal year. We will further strengthen promotional activities and through GDC initiatives, we will aim to expand the complementing inhibitor market and increase the number of new patients. By the way, we anticipate a continued solid growth across all regions driven by a further increase in testing rates. and expansion of the patient base and market share. We expect steady growth for both Vioza and Zospada. Extended, the negative impact of price reduction associated with the IRA, which takes effect in January 27 in the U.S., is expected to become apparent starting in the fourth quarter. In addition, combined with the impact of patent expiration in certain countries, global sales are expected to decrease by about 50 billion yen year-on-year. Please note that starting in fiscal year 2026, we have discontinued the disclosure of sales forecasts for individual products. We believe it is important to grow five strategic brand as one whole, and we hope to engage in dialogue focused on third-mate to long-term growth trajectory rather than being preoccupied with the short-term fluctuations in individual products. Regarding Stanley and Amira Bagram, we anticipate that they will be significantly affected by external factors such as patent situations in the future. So, as an exception, we are disclosing their sales focus for your better understanding of our assumptions and outlook. Going forward, through timely and appropriate information disclosure and communication, we will continue to strive to enhance our meat to long-term corporate value by engaging in constructive dialogue with investors. Page 16, about the life cycle management of the strategic brands, I will explain the major events expected in FY26. We are expecting multiple regulatory events across strategic brands. For PACEF, we expect regulatory decisions on the EU and Japanese filing based on the AB303 study for cisplatin-ineligible MIBs in the first and second halves of the fiscal year, respectively. In addition, expected Japanese filing based on the AV304 study for cis-bluctin-eligible MRBs in the first quarter, with regulatory decisions for the U.S. and EU submissions anticipated in the second quarter and the second half of the fiscal year, respectively. Furthermore, we plan to file in China based on both the EV303 and EV304 studies in the first quarter. We also plan to initiate the Phase III EV309 study for blood sparing therapy in the first half of the fiscal year. As of today, we plan to file in China in the first quarter. There are currently no approved treatments in China for geographic atrophy and serious condition. In following constructive discussions with the authorities, we plan to file based on data from overseas clinical trials. We expect study data readout from the Starlight 3 trial, which evaluates long-term safety in Japanese women, to become available in the first quarter, and we plan to file in Japan in the second quarter based on those results. We also plan to file in China in the third quarter. On page 17, this is an outline of the key pipeline events expected in FY26. We plan to initiate phase three trials for ASP2138 in first-line gastric cancer and for CT digressive in second-line or later non-small cell lung cancer in the first half of the fiscal year. We are also considering announcing additional data for each of these studies within the current fiscal year. Details will be provided once the announcements are officially confirmed. Although this is an ex-event that has already been achieved, we initiated a global Phase 1B2 study of ASP546C led by Astellas in April. ASP7317 will present additional data from Phase 1B trial at Arvo Association for Research Innovation and Ophthalmology in May. 48845, we are currently conducting additional analysis of POC judgment and expect to reach a decision in the first half of the fiscal year. Finally, I would like to review corporate strategy plan for our SSB 2021. On page 19, I will explain the transformation of our organizational culture and operating model that we undertook during the CSB 2021 period. As a foundation to continuously generate innovations, we have implemented various initiatives related to human resources and organizational structure and have embedded them across the company. In fostering organizational culture, we established organizational health goals at the start of the CSB 2021 and advancing efforts company-wide. As reported in previous sustainability meetings, we have achieved many results directly linked to our business over the past five years. Furthermore, in April 2025, we simplified and consolidated our cultural foundation to define organizational values and behavior by ensuring that every employee acts based on a clear shared understanding We aim to strengthen collaboration and create and deliver greater value to patients more quickly. We have also significantly transformed our operating models. Under the new structure launched in April 25, we shifted the top-level management focus from vision or function to patient access and introduced an end-to-end business model. With empowering cross-functional teams organized around programs and brands, and strongly promoting agile ways of working, we have enabled clear and rapid decision making thereby improving productivity and efficiency. Page 20, the review of the performance goals in SSB 2021. Overall, we believe we have succeeded in establishing a foundation to overcome extended exclusivity and deliver sustainable growth beyond it, which was our original objective. Regarding Performance Goal 1, Revenue, thanks to newly launched products such as Vioza, Isovay, Vialoy, and the acceleration of lifecycle management centered on ParchSafe, the total sales of the strategic brands and extended exceeded 1.43 million. Performance Go-To Pipeline Value. We face a situation where programs already underway at the start of SSP 2021 did not progress as anticipated. However, as explained at the R&D Day in March, we thoroughly focused on strengthening discipline and improving productivity through the transformation of our R&D organization. And by accelerating the development of priority programs, we achieved significant progress and expansion of the pipeline, including the achievement of a total of four POC. About performance goals three, co-operating margin, while we made investment associated with the launch of multiple new products, the SMT initiative progressed well, achieving cumulative cost optimization of 65 billion yen over two years. As a result, the co-OP margin for FY25 reached 26 percent, up four percentage point compared to FY2020. Page 21. To ensure the reliable execution of CSP 2021, we set three enterprise priorities closely linked to our performance goals and launched full-scale implementation in FY 2024. Growth strategy aims to maximize the potential of strategic brands. Board ambition aims to increase pipeline value, and sustainable margin transformation aims for company-wide cost optimization. The following slides will explain the result of each. Page 22. I will explain the result of maximizing the potential of strategic brands. In addition to patch 7 and Zospada, which were already on the market at the start of CSP 2021, we successfully launched Vioza, Isovay, and Avilo during the period of CSP 2021. establishing a diverse, high-emotion portfolio of strategic brands. Furthermore, we obtained approvals for Parsev as first-line treatment for MUC and for the additional indication of MIBC, which serves as key growth drivers, thereby further strengthening our growth foundation. As a result, our strategic brands expanded robustly, achieving a remarkable growth of 10 poles over five years. Since the majority of strategic brands are fully owned and are high-margin brands, they have strongly elevated Astellas' overall revenue and profit growth during the CSP 2021 period. The solid track record built over the past five years has further increased the certainty of our future growth, where we carry this growth momentum forward into the next corporate strategic plan. On page 23, I will explain the increase of pipeline value. We accelerated the development of flagship programs in each primary focus area and achieved a from three assets. Furthermore, we strategically and systematically generated programs and incorporated innovation based on our focus area approach, thereby expanding our pipeline. As a result, we have established a franchise in multiple therapeutic areas, such as prostate cancer, clothing 18.2 targeted therapies, and retinal diseases, where we have cultivated strengths through the development and sales of main products, thereby building a foundation for sustainable growth. Page 24, I will explain the outcome of the SMT. Since launching the SMT in FY24, we have achieved cumulative cost optimization of 65 billion yen over two years. Furthermore, cost optimization measures for FY26 and FY27 have already been identified, and we are now at the stage of ensuring their reliable execution. We are fully on track to achieve total cost optimization target of 150 billion yen. In addition, the SG&A ratio improved by a total of more than five percentage points over the two-year period from FY24 to 25, and we are gaining clear traction toward improving profitability. Moving forward, we will continue to advance cost optimization through SMT to establish a highly profitable financial structure. Page 25, I will explain the revenue and co-op growth over CSB 2021 period. Revenue expanded 1.7 folds over the five years, driven by the strong growth of strategic brands. Co-OP expanded 2.2 folds over five years, driven not only by the revenue growth but also by significant contributions from cost of optimization through SMT starting in FY24. The Co-OP margin also improved significantly. Page 26, today's key takeaways. Our strategic plans delivered exceptional growth, raising confidence for future expansion. Furthermore, we have established a robust pipeline and built foundation towards post-extended loss of exclusivity growth. Additionally, through SMT cost optimization, we have made significant progress toward resilient cost structure. Over the five-year period of CSB 2021, we are now fully prepared to overcome the extended loss of exclusivity and to continue to grow. In our next corporate strategic plan, we aim to demonstrate how we will achieve sustainable growth by building on the foundation we have established to date. At the end, I would like to remind you of the briefing session for SCSP 2026. It will be held on May 26, and we hope you will be able to attend. That concludes my presentation. Thank you for your attention.

That's all as a presentation. We now try to entertain questions from the audience. If you have questions, please press the Raise Hand button at the bottom of your Zoom screen. If you're joining from your smartphone, please type details, then Raise Hand will be shown. So please press Raise Hand. I will name you one by one. If your name is called, please unmute yourself on your own screen, mention your name and affiliation, and ask questions. so that as many people as possible can ask questions. Each person can ask up to two questions. Thank you very much for understanding and cooperation. So we'd like to take questions. First, City Group Securities, Mr. Yamaguchi, please. Emma Gucci from Citigroup. Can you hear me? Yes, we can hear you. Thank you very much. Hello. Thank you. Thank you very much. My first question is as follows. As you explained during the presentation, for strategic brands, in particular, You would share some forecast for some of the products, but not for strategic brands. So external parties cannot see the forecast. It may be seen as receding, but what are you going to do about the individual trends of each product? The disclosure of individual product information is not going to happen. What's the reason why? Could you explain once again? The results will be explained for each product, as we have been doing up until now. But in the process of the growth of new products, there are uncertainties for each product. There is an increase or decrease for individual products. Focusing on such a fluctuation is not very constructive in our view. So based on that, what kind of action we are going to take and how that's going to be reflected onto the actual results, that's something we want analysts and investors to see. So this product is expected to have this much revenue or sales in this particular region. Rather than having such discussions, we are hoping to discuss the situation of five strategic brands as a whole. So in the mid to long term, we are going to capture the development and the growth of the product. So It may not be the right expression, but you can demonstrate your capabilities. So I'm looking forward to future interaction. So once again, you're on the May 26th at 4 p.m. You're going to explain the next CSP. So you're not going to talk about individual products very much. between 4 and 5.30pm. Are you going to share the presentation materials on the same day or the previous day? If you change how we can prepare. So after the closure of the market, we are planning on preparing to disclose the documents after the close of the market like at three o'clock like today. Thank you very much. Next, JP Morgan Securities. Mr. Wakau, please. Wakau from JP Morgan speaking. Thank you very much. I have a question about Xtendi and the five strategic brands, the results in the fourth quarter, and also the outlook for the current fiscal year. As for Xtendi, you can just talk about the actual results. Fourth quarter, was a little bit weak in the United States. I'd like to know why. Five strategic brands, but SEV was doing very well. So what's going to happen this year, particularly in MIBC, how we should look at the situation, I'd like to hear your view. And Aizaveh as well, the plan was not achieved, but in principle, it's going to grow continuously in the current fiscal year. I'd like to know more details. Thank you very much. Thank you very much.

Thank you. I'll make the summarized comment briefly, and because Klaus is here, the rest is going to be explained by him. As has been mentioned, extended in the first quarter, the business is a bit weak, and we did our own analysis, and of course, the countermeasures for that plan to be executed. But as you know, for extended in 2027, January, in line with the IRA, the price is going to be revised. So in the history of Xtendi, it's going to be the year of the reduction. And that impact was already explained within my presentation. And just like you mentioned, FY25, the track record is that PatSafe and Availoy, monetary value-wise, their growth level is outstanding. And that was just launched in the market, so growth rate is over our expectation. And what is going to be happening in FY26, we are not going to share with the individual products situation, so I don't know if it is right to talk about it. However, for PADSF, for their first line, other than the United States, it's going to grow further, and the U.S. market, as a trigger, for MIBC market as well, we expect that the sales is going to contribute to it. And as well, 2025 is a little bit on a resting situation. However, in just a couple of months, looking at the track record of that time period, still there is a room of the growth. That's why we didn't revise our sales forecast. It has to grow further. So we are having such a varied expectation. Klaus-san, do you have any additional comment?

Maybe just briefly to the three brands you asked about, Xtendi, Padserv and iSurvey. So I think the fourth quarter is indeed a little bit weaker, but we see the entire market being weaker in the ARPI. So I think it's probably a mix of market effect and turbulent competitive and market dynamics for Xtendi in that particular quarter. But we've grown very, very well over the year, and we've now reached the peak sales for Xtendi. So I think that's a very strong contribution to our growth rate. Let me turn to PADSEV, because PADSEV, I think we need to distinguish between U.S. growth, where we have the 303, so the ineligible MIBC indication already approved. And on approval, as always with PADSERV, we see the market responding very, very quickly and uptake. goes up. However, please let me also remind you that that uptake usually plateaus after about six months. So we're expecting that also to happen. So U.S. growth is very strong right now, but we do expect a plateau to come in end of Q1 or Q2. Whereas Europe, And the other ex-US countries do not have MIBC in any noticeable fashion in FY26. Here we expect strong growth to be driven by reimbursements coming through on the first line metastatic indication. So you get a very different dynamic in the two parts of the world. But overall, I think PADSEV will continue its strong growth trajectory. Now let me talk about iSurvey. You do remember about a year ago when the foundation funding dried up, the entire market, the new patient starts for the entire market, both in geographic atrophy but also in wet AMD. went down significantly. And it has affected sort of the base from which we have regrown. As Naoki said, we have regrown from that lower base since then, but we've done it in a very consistent and very successful fashion. It's about 11% quarter on quarter that we've grown since that rebasing. And I also would like to draw the comparison to other products in the intravitreal space. So if you look at, let's say, ILEA, Vibismo, Sifovri, they've actually all decreased in sales. ILEA by 27%, Vibismo by 10%, Sifoviri by 4%, and we actually have grown more than 30%. So I think in a very difficult market environment, iZervay has really produced a very, very impressive performance of consistently growing from that lower base. And we do expect that to continue as the complement inhibitor class also grows.

Thank you very much for the details.

As a follow-up, MIBC has a good market penetration, but it could reach a plateau quickly. That's understandable. As for 304 to get the approval, so a similar thing can happen. Is that factored in into the forecast if the uptake is so fast? Overall, there can be a further increase by PADSEV.

So we do expect the 304 approval by the PDUFA date as stated previously. So that would indeed then produce another uplift on PADSA.

Thank you very much. My second question. In the past five years, extended cliff is to be exceeded, and you have a platform to increase your product. You have improved pipeline as well. And I have a question to you. Large-sized M&A possibility, how much leverage are you going to use? I think that's in the appendix, but in principle, According to the pipeline which is shared with us, you would exceed external decrease to grow. Is that your assumption? Is my understanding correct? Depending on the status of the products under development, you may need an M&A deal. As a base case scenario, you would use your own pipeline to grow. Can I understand that way? Thank you for your question. Up until now, as we said a few times by now, This is an illustrative extended figure. Extended will decline. Strategic products will increase. We would have programs from focus area approach to be added in a chart like this. In 2026, a peak is expected for sales. Then we have during the course of CSB 2026, revenue may decline and then we go back to growth trend once again. And your view and our view may not be so different. Then if there's going to be a dip, a large M&A deal is going to be used to prevent the dip. to minimize the dip or to make it flat? If that's your question, we're not going to do such an M&A. That's my response. This is the so-called Rescue BD. To rescue us from the dip or decline, we have no intention to do such a thing because such a deal would have an increasing price because everybody wants such an asset or a transaction. After we get something, if there is a small room for us to get the value, it's not going to be very good. Cash flow for deal. This is just the exchange for cash. So there aren't many elements to force us to do something like this. If we don't do a rescue deal, then are we going to pause BD? You may interpret it that way in an extreme fashion, but as we have been doing before, our franchises and the existing primary focuses to be reinforced by technologies and attractive assets, we are going to pursue such opportunities very actively. Everybody talks about M&A very easily, but in the world of pharma, sharing the risks with the owners, there are many ways to do so. Back-end licensing agreement is one way, or milestone payments. to be linked with regulatory outcome by doing so. A huge amount of payment is made at the beginning, but nothing happens. We can prevent such a situation. Of course, we are making such efforts. Still, having said so, how attractive our pipeline is right now, because of this world, failures could occur. So 2030 and beyond, the growth we want to achieve could not be envisioned. In that case, we should be able to use flexibility, so under Kitamura, We try to repay the debt as soon as possible, gross leverage ratio EBIT one time up to 1.5 times as we declared. We think we are ready sufficiently within this range. If necessary, large size EBIT can be done because we have such extra financial capabilities, EBITDA, is growing bigger than before, so the money we earn would be returned to shareholders partially, but also we'd like to make the investments for future growth. And also, various investments will be made by using such money. For the details, on the 26th of May, we will announce CSP 2026. We will try to talk about our plan as much as possible, and you can ask further questions during that meeting. But that's all the information I can share today.

Thank you very much. That's all. Thank you. Next, UBS securities. Take some, please. is my name. Thank you very much for your explanation. First, the question is about dividend. This time, 80 yen increased with two yen. In the past two times, the increase is every four yen, but this time, two yen increased. I believe that you had a lot of discussions about this situation. I believe that discussion was quite difficult. But you have four, four, and this time, two. I think that itself includes some message, not about the But this 2 yen increase, what's your intention? What's the message? Kitamura is going to explain. Thank you for your question. I'm Kitamura, CFO. First of all, this dividend, as Okamura explained, investment for the growth and also return to the shareholders, those are continued. That is our policy for capital allocation. There is no change whatsoever on net. For dividend, a single, rather than single-year performance, mid to long-term performance, cash flow forecast, Against that, or based upon that, the stable dividend is provided. That is our decision. So two yen per year, and the performance was good, so dividend is increased. It's not something like that. We have a sustainable plan. And this time to yen, in the past, for yen increase. Well, rather than talking about a single year, again, made to long-term perspective is necessary, and based upon that, we decided to increase to yen. For details, around the end of May, when we make a presentation at CSB, next CSB, we would like to give further explanation. Currently, margin is good. Cash flow is good. Financial performance is strong. And just like Okamura mentioned, when we do something and we are fully prepared, so we'd like to be flexible to think about capital allocation. That's all. Thank you very much. The second question is about pipeline. Last week, ACR took place, and CARES competitors' data, Revolution Medicine's good data was shared, not only data, but also 055, the non-clinical data was also good. Based upon such data, your franchise, carers, project, your ways to look at is not different. The area is still, the therapeutic area was investing. I am going to make an answer, first of all, and the photo by Taniguchi. We consider that Keras is quite an important target. Their success means that Keras is definitely a target that we should more focus on. So their success is proving it, the difference of the mechanism of action. But first of all, that data is a very early phase, so us, the benefit due to the difference of mechanism of action is available in our product. So at the very end, when the late phase of data becomes available, that is a time we can say which wins or lose. I think, as has been mentioned, thanks to their success, that became our confidence of targeting the carers. Thank you. Taniguchi speaking. As has been explained by Okamura, revolution medicine data, PAMRAS inhibitor by revolution, and that data is disclosed. And this is really good data. We have the KRAS target project. So the KRAS itself is quite promising. That's what we've learned, including PDAC, NCLC. KRAS is suggested to be a really good target for the treatment. CT digressive that we have. The first line of PDAC phase three has just started regarding this indication. we are a bit ahead compared to Revolution Medicine. And our carers, G12V targeting, said aggressive, not only efficacy but safety as well, the preferable result is available. So it is easier to combine with chemotherapy that is a current standard of medicine.

In the case of PDAC, in severe patients. It's difficult to administer the drugs already, so IV infusion, CTD aggressive, can be used for such patients as well. That's our expectation as for the data. We disclosed some of the data already, and based on our data as well, KRAS target is going to be important into the future for important PDAC and lung cancer targets. That's all from me. Thank you very much. Thank you very much. Next, Goldman Sachs Securities. Mr. Weda, please. I'm Weda from Goldman Sachs Securities. My first question. Your initiative's in SMT. I'd like to know more details. 40 billion yen reduction is going to be incorporated into your plan for the current fiscal year. What kind of items are going to be the major ones in 2027? Your measures, as was shown here, some are already identified. So what are you planning to do? Specifically, is there anything you have already decided? What about the certainty of these measures to be implemented? As we said, We are going to do something which is already identified. So we will just work on it. But still, in areas like this, if we do something like this, we may not be able to realize the effect as we planned, or it may take more time as we were planning. So the value could be diluted. So there can be such risks. Now that everything is already identified, so we just need to do and work on that? No. And we have to pursue further opportunities for SMT continuously. Kitamura-san can talk about the further details as far as we can share. In 2026, we are expecting additional 40 billion yen. By FY2025, we work on various measures, and we'd like to harvest the benefits there. Specifically, as you know, we have global operations. In order to increase the productivity in FY2025, we made huge investments, creating new bases. to concentrate operations there to come up with a scale and implemented automation. We took such a major action and we'd like to harvest the effectiveness there so it will generate a certain level of huge benefits. And creating necessary capabilities in-house, that's also one of the measures we are working on. capabilities integration, including integration with vendors also ongoing. So sales promotion related back office, or material development. And there can be a lot of synergy. So we are going to harvest the results. So those are the main things we are considering for fi 2026. What about 2027? We've explained in the future SMT is not a single year initiative, but it's a multi-year initiative. In the first year, we worked on lower hanging fruits, easier to realize, to prepare for the mid to longer term in 2027. That is going to be the final year. So action which requires a longer time, and we are going to harvest the results from longer term projects, such as supply chain. and larger scale projects with longer lead time would be realized in 2027. That's what we're expecting. Understood. Thank you very much. My second question. In the United States, I'd like to ask you about the business environment in the States, pharmaceutical duties and MFN. Are you Do you have anything you can share in terms of the negotiation with the US government and also MFN and the tariff? How do you see the potential risks in your plan? Is that going to be fully manageable in your plan? So I'd like to ask you this question. Thank you. Thank you for your question. Needless to say, receiving a letter based on that, negotiation with the authorities about some companies. You know those company names and what was the result. We heard such a rumor, and the first round seems to come to an end. So we haven't received a letter from the U.S. government, but still we do, we try to open a channel to discuss with the government authorities.

And looking at the components of the agreement, we can learn what kind of factors are incorporated. And for each factor, what can we do, what we cannot do? Those are, of course, we've already considered and discussed. Tariff or MFN. There are some rumors or stories ongoing, but we don't know any specifics. So we have prepared ourselves, but those are not really quantified so that it could be incorporated into the corporate strategic plan. Of course, we do a certain level of risk analysis. We have coming products from a focus area approach, and once they come to the market, what kind of price environment we will face around that time. For that purpose, we have to have a very sensitive antenna. From marketing access perspective, what can we do and what kind of preparation we need to do, those are all under the consideration. This might be the repetition, but regulations and rules, those are not something we can set by ourselves. The rules and regulations are decided by somebody else, and we basically have to follow that. And within, in order to follow that, we do whatever we can do. in a maximum way, and the rules are likely to be changed, and if there are some countermeasures conceivable, then we would do so. So that's probably the only way we can do for this type of issue. Is this a big problem? Yes, it is likely to become a big problem, but... Nothing can be studied, just being moved or make action only with partial information. Because we have patients, the patients are around the world, we cannot make a decision. We think about only U.S. patients and not ignoring other countries' patients. We always would like to think about delivering a value. in a uniform manner throughout the world. I think that's probably what we can do. Did I answer your question? Thank you very much. That's all from me. Thank you very much. Next. Normal Securities. Matsubara-san, please. Matsubara from Nomura speaking. Thank you for the explanation. I have two questions as well. The first one is a question related to Ueda-san, so follow-up question about SMT. You might say that please wait up until CSP 2026 announcement. There are some areas you can do the cost reduction. In FY27 afterwards, cost reduction through SMT is possible to be expected? Thank you very much. Partly, this is personal opinion. First of all, cost optimization and journey of that, that is going to be continued. If you were to ask me, have you completed that? Well, that's one way to look at it. But at the same time, technology has been advancing day by day. And my personal perspective, cost optimization never ends. However, cost cuts is not only the way, not only pursuing the numbers just in front of us. What is important is to continue to deal with that from a mid- to long-term perspective. For that purpose, you need a certain mechanism. And when you say cost, you tend to talk about only input, but maximizing output is also important. The bigger value is going to be delivered to the patients as early as possible. With doing that, we need to increase the productivity. So your question, are we going to do this FY27 afterwards? Of course, we will do that. What about approaches? Well, we have conventional approaches that is based upon the Sustainable Margin Transformation or SMT with a four-year plan and execute those plan and the PDC is turned around. So it will continue the same thing? Well, I myself, this approach still has to be evolved. So rather than doing the same type of SMT for the next four years, rather we are going to accelerate that so that we can boldly work on this. And such details? are going to be further explained, possibly to be explained at the time of CSB presentation. Thank you. So then I'm looking forward to that.

My second question is about Zospata. In partial study, primary endpoint was not achieved. Peak sales assumption is 100 to 200 billion yen, no change. So what's your view on the peak sales? Thank you for your question. Unfortunately, primary endpoint was not met. Regarding this indication, for us, in principle, we are not going to pursue this indication globally anymore. As for the change in the sales forecast and what is going to be happening into the future, Klaus Zeder is going to add. Klaus-san.

Yeah, I mean, so Sparta is on a stable growth path. It's not a very fast growth path, but it's a stable growth path. So we do expect that to continue. And even in the Pasha study, there are some elements which are actually quite interesting for doctors to study. Our reputation for Sosparta or Gilturinib as a FLT3 inhibitor is very much intact, even with a lot of first-line competition coming into this market. We expect this agent to continue on that slow, single-digit growth path that we've had in the past.

Then for the future in subgroup with gene mutations administering this to those patients or in combination with chemotherapy, primary endpoint was not met, but this Zosparta could be utilized in different types of patients. Is my understanding correct? Taniguchi-san, anything to add from you? Okay, may I? As for Zosparta, PASHA study, primary endpoint was not met and analysis is now underway. Of course, subgroup analysis are included as well. From various angles, analysis is being performed. As soon as we get the results, we're hoping to share with you. And in which segments we are going to go for or not going for, we are hoping to have such an opportunity so that we can explain. Okay, understood. Thank you very much. Thank you very much. Next, Morgan Stanley, MUFG Securities. Mr. Muraoka, please. Thank you very much. Morgan Stanley, Muraoka speaking. Most of the topics already covered, but externally, quarterly results, or quarterly figures, hopefully we've explained. Today, it doesn't make sense to talk about the details of each product. But my question is, according to your forecast for FI2026, in the initial nine months, It may flat or increase, but in the fourth quarter, there can be a big decrease year on year. Is that your image, perhaps? If you can share such an image, I'd like to hear. Thank you. Thank you very much. First of all, externally as a whole, discussing the figures, for example, as a whole, it can be dangerous. So we have to discuss U.S. and ex-U.S. separately. As for U.S., as you said, in the fourth quarter, IRA will kick in. So how much is a different question, but it's clear that it's going to be in the negative column. In other countries outside of the United States, There was the pace of growth. Up until now, it's going to slow, needless to say, because more than 10 years have passed since the launch. If it's going to grow at the same pace as before, no, that's not going to happen. But we have Embark data and other data we can use, so we still have room in the market where we can grow or we should grow. That's my basic principle. Klaus, anything to add?

No, only to add that, of course, ex-U.S., the patent, the exclusivity is much longer, 28 in Europe, but in Japan, in Australia, in Russia and some other markets, we have quite a long patent life. So this is not just one patent. patent exclusivity that we lose, it's really country by country over many, many years, about over four years in total. So that's the only thing I wanted to add.

Thank you very much. One more question to you. What OP margin? 30%? has been discussed quite often by now. I may ask you a question about CSP, so I hesitate a bit, but 30% corporate in profit margin, is something you are very particular about in pursuing. If that's the case, how are you going to work on this? It's difficult to imagine because of the cliff. How are you going to achieve? Where are you going to achieve this? This can be a decline, and then you go up again. So what's your philosophy, and how much do you want to be particular about this?

In a word, please looking forward to May 26th, but I would like to make some comment here just a little bit before that day. I think in the past I mentioned about it. We are this size of a pharmaceutical company, and with the innovation we try to contribute to the society. This is our style, and as such biopharma company, Cost of goods, 25%, S&A, 25%. And the cost is reduced a little bit, and S&A might be increased a little bit, and vice versa might happen. But anyhow, adding up these two, 50% is the level that I would like to manage. So before the deduction of R&D, the profit is 50%. Out of that, the 20% of sales is allocated to R&D because that leads to the continuous delivery of innovation. That's my way of thinking. Based upon that, we come up with a number of 30%. The sales is reduced, so you cannot do in that way. I understand you would say in that way, but further details are going to be described on May 26. Understood. Thank you very much. One brief question. Mila Petric, the actual January to March, $180 million. It's increased to that extent. What's the background of that? I just got a little bit confused. I can explain about this, but Kitamura can explain in a thorough manner. First of all, you asked me about Mila Petric. With the generic companies, we come to the settlement. In line with that, other settlements took place and partially the royalty aspects are agreed, including the royalty as well in the fourth quarter and afterwards some adjustment is applied. That was the situation and that will continue So, please look at the number of the mirror metric as that as a precondition. So, some others, one time factor also added that leads to the increase in the fourth quarter. Rather than one time, precisely speaking, the transaction not included until the third quarter is now included, and agreed patent, period. During that period, this will continue. That's the way to look at. So 26 metric number is disclosed, and as you know, the number is not that low. That's because of the inclusion of loyalty adjustment. Understood. Thank you very much. Thank you. Next. Macaulay Capital Securities, Tony Lansome, please.

Yes. Okay, perfect. Thank you for taking my questions. I have two. So the first one is about your intangible assets on slide number 35. You commented that you had some impairments for your gene therapy. It appears to me that the value for some very successful products such as Vyloy and Isovay have also decreased a little bit. Could you comment, is it because of impairment or is it because of normal amortization? So that's my first question.

I think, you know, thank you for your question. I think the intangible asset, you know, is a combination of amortization, especially that is more like, you know, move to the, you know, sales right in the market. You know, a product related to the intangible asset is now classified from the in-process R&D to, you know, the sales right as is. And sales right, yes, you know, they will be amortized over years. So it's kind of very healthy transactions. Now, the impairment loss are sometimes bigger in the in-process R&D because the in-process R&D amount is still as it is and up until the product will qualify to the market. If we fail to qualify the market, we need to write off the asset 100%. Now, we didn't have, you know, we did have, you know, the impairment loss recorded in AT132. That is the gene therapy, you know, product asset, but we have the new asset, you know, in the clinical trial. So we shift our focus from 132 to, you know, the 29. 57. 57, thank you, as Naoki already mentioned. So, I see, you know, the different move in intangible asset, but overall, you know, this time, we make the progress so that, you know, we shift to the focus from one project to new project, and also the, you know, the amortization start and move as we plan because product is in market. I hope I answer your questions.

Yes, it's very clear. Thank you very much, Ketamula-san. My second question is about your clinical collaboration partner, Kelonia. So obviously Eli Lilly acquired Kelonia. You have been cooperating with Kelonia over CAR T, in vivo CAR T cell therapy since early 2024, so it's about two years now. Have you guys considered acquiring Kelonia? Was it because you did not want to compete against the Eli Lilly? Or was it because CAR T or blood cancer is not part of your key priorities? And how does your collaboration with Colonial change after the Eli Lilly acquisition?

Thank you for the question. Probably that question should be answered in a very scientific, you know, aspect. So I would like Tadaki to answer those.

So, thank you. Our Kelonia collaboration is actually have one, you know, the project. And, you know, as you mentioned that in vivo CAR-T platform, we work together in a preclinical, you know, the program. you know, our decision is that we're not pursuing that, you know, project moving forward to the further. So we, you know, terminated that project. And so that's where we are now. And so I don't think we have any impact that really is going to acquire the Kelonia. But of course, we have still connection with them, but we don't have any significant project working with them now.

Okay. Did you guys have the discussion over possibly acquiring Kelonia?

No, obviously, you know, we haven't, we have no intention to do that. Okay, thank you very much. Thank you very much.

Thank you. Thank you very much.

Next, Sanford C. Bernstein, Ms. Sogi, please. Thank you very much. First, about K-RAS, I have a question to you. Revelation Medicines, Pan-RAS, Dioxin-Raseb, Phase III results were announced for a second line plus for PDAC. As for the first line, they have a PDAC program, a monotherapy combination. And your safety day aggressive KRAS G12D and competitor is going to be earlier. Because of the PRAS for revolution medicine, this one, may be more effective or similarly effective. KRAS G12D specific target is your product. So this can be a disadvantage for your product. Pan-RAS versus KRAS G12D specific. In terms of efficacy, what kind of scenario are you hoping to see? It's too early to say specifics to explain the differences, but Taniguchi is going to explain as much as he can. Thank you very much for your question. Revolutions pan-RAS. It's pan-RAS, so it's not just limited to KRAS, but RAS-on inhibitor more broadly. Because of this, the target patient population is broader, according to understanding. Maybe because of that, we don't know clearly, but I saw their data, for example, of skin-related adverse events and GI-related adverse events. seem to be high in the incidence according to our impression. When this is brought to the clinic, what's going to happen? Regarding our safety day aggressive, not just efficacy but safety, relatively speaking, is also favorable according to understanding. So we just started PDAC first line study chemotherapy combination is going to be the main regimen in the study we are planning to execute. When I discuss with the doctors, the opinions might be different from doctor to doctor, but in the targeted population by the drug and a drug with a broader coverage, which one to use first? As far as we have heard from the doctors, more targeted product is the one they would like to use. So such a response is more frequent. So once the phase one data is going to be available, they would decide. One more question.

ASP2998. drop to targeting IAGC, that is a new type of AGC. Regarding linker, Within the cancer cells, selectively, it is cleaved or outside, especially regarding sting agonist. Outside of the cancer cells, when it's released, it comes into the cancer cells for the action. Is it already confirmed? And also, these linkers are cleaved only within the cancer cells. For that, I think there has to be the patient selection strategy considering the drop to ADC development so far. With this regards, what is your strategy? Taniguchi is going to explain. Thank you very much. That is a very scientific question. 2998. As has been mentioned, String Argonist and also Topo1 are used as dual payload targeting at TROP2. This is such ADC. And if the cleave does surround the target, the design is in that way, according to my understanding. One of the characteristics of this drug is top two target, not only ADC, but because of the existence of a sting, the very tumor or tumor microenvironment then activity is promoted to enhance the anti-tumor action. That is the concept of the design. Looking at the preclinical data, Compared to the conventional ADC targeting Trump, efficacy is superior. So that is where we have higher expectation. And what is the focus of STEAM? If we learn about that, we can share that with you. But so far, I don't remember the data. So I take it back, I bring it back, and if I identify some information, I would like to share that. Thank you very much. There are some more waiting for asking questions, but because of the time, next is the last question. Nikkei newspaper, Ozaki-san, please. Ozaki from Nikkei newspaper, can you hear me? Yes? Please. Thank you. This might be a little bit different question. The current Middle East situation, I just wonder if that has an impact onto your business. Not the previous time, but for this time. Does it have any impact? Thank you for your question. In the middle is the countries where we have footprint and having operations. Of course, the employee safety is a priority. At the same time, it's the area of the war. Because it's the area of war, there are patients who are still requiring our products, so we definitely would like to make sure that the delivery of the products to them. The homes straight is now closed, and because of that, the various type of the oil-related materials are a bit delayed in terms of the delivery. And with that impact perspective, so far we can say that there is no big impact on us, and we are not thinking that we'll have a bigger impact But our product is one of the components of all of the medicine or healthcare. And as has been mentioned, if there are some more problems that happen for the materials, For example, the infusion back issue or cylinder for the injections. If there were some problems in terms of the supply of those, there might be the question or problems incurred. So we always would like to continue to pay attention. And as has been mentioned, the topic of the U.S. administration We are not going to be reactive for each individual event. Of course, we do our preparation. We do not consider that the business is going to be all of a sudden better or worse. It's just one thing. So we would like to be prepared all the time. Understood. Thank you very much. Thank you very much.

Thank you for many questions. Time has come, so with this we'd like to close today's meeting here. Thank you very much for joining us once again.