Chugai Pharmaceutical

My name is Miata. I will be facilitating today's session. And this session is held using a Zoom webinar platform. As page three of the presentation material speaks, we would like to go through today's proceedings per agenda. Today's presentations are made in Japanese. However, we do have English simultaneous interpretation service available. Please make sure you select the language of your preference by clicking on the blue mark on your screen. For those who wish to listen to Japanese, please select Japanese. For those who wish to listen in English, please select English. and please make sure that you click on Mute Original Audio. This way, you can only listen to the language of your choice. We will take questions after the presentation. We plan to spend about 30 minutes for Q&A session. During the presentation session, you are all muted. Now, I would like to invite Okuda to give us the review of the first quarter result of 2024. My name is Okuda speaking. I am the representative CEO. I would like to explain about the result of the first quarter of 2024. Please refer to the slide page 5. The first quarter, made a strong start for the core business as been expected. Revenue dropped by 24.1% year-on-year. This was because last year in the same period, we have had a supply of loan approved to the government of 81.2 billion yen. net income and operating profit, although despite the revenue drop, dropped only 3.1% respectivity. This was because we do not have income coming from RONAPRIV anymore, the product mix improved. OP margin was 43.1%, which was high. As you can tell, the core business domestically and globally made a good start. On a four-year basis, we are aiming to achieve the record high number for both operating profit and income. Moving on to the next slide, this shows our global product performance. As for the HEMU library, We see growth momentum for the overseas local sales. And in this fiscal year, we expect that export revenue will grow on a full-year basis. Domestic market, due to the NHI price revision last year, revenue was flat. However, we are gaining share. Now for Akutemura, export was negative. This was due to the timing of the shipment. Overseas local sales, due to some impact of biosimilars, dropped slightly. But this was within our expectation, and we do not change our full-year forecast for export. Export was negative to the previous year. However, this was due to the shipment timing, and we do not change the export four-year guidance. In U.S., NSCLC indications have been added, and we have good expectation on future growth. Japan, Europe, we are expecting to receive approval. For end spring, we see strong growth. domestically and globally. The result of GMG was unfortunately below our expectation. However, NSPRING has several ongoing studies targeting, for example, at TED. And we have a big hope on the success of those ongoing studies. Starting this April, we have new management team. As you see, we have 10 team members with supervisory responsibility. They are going to utilize their expertise, knowledge, and experience. We are going to exchange various opinions. In order to achieve the top I2030, this team is going to lead the business management. With this, I would like to conclude my presentation. Next, I would like to invite Kusano to explain about the development pipeline. I am Kusano from Project Lifecycle Management. I would like to explain about the development pipeline. Please refer to page 9 of the presentation. This is the list of the topics for the first quarter. For approved and filed, except for the public knowledge-based S&DA filing, the information have already been published. For PiaSky, this is the fifth global product. This is targeting at P&H and approved in Japan, China, and reviews going on in Europe and America. This is subcutaneous dosing once in four weeks. This brings great convenience. We would like to contribute to the patient around the world. Alicensa. This was approved in US this year in April for the indication of ALK positive early stage NSCLC. ALK positive early stage NSC. Well, this is the very first adjuvant therapy for that indication. There is no other ALK inhibitor for this same indication. We are bringing in new therapy to the patient. The review is going on in Japan and Europe. Nemorizumab is targeting at the prurigo nodularis and atopic dermatitis, and our finding was submitted this year in February in Europe and US. Please move on to page 10. In terms of the initiation of study, we have three Roche products, RG6299, ASL factor B, will be explained later on. SRP9001 is targeting at non-ambulatory Duchenne muscular dystrophy, we started global phase 3 study. Glofitaba is targeting at previously untreated large B-cell lymphoma. Global phase 3 study was initiated. Readout has already been published. In the N-Spring GMG global phase 3 study, we have achieved the primary endpoint However, the result was below our expectation. As a reference, we have detailed information on the study on slide 17. Based on this time's result, we've discontinued the development. This time's study result does not impact risk-benefit profile of long-term use of N-Spring for NMOSD. MOGAD, AIE, TED, We have other ongoing development effort for AirSpring so that we can offer new value to the global patients. And below that line, we have already published the information. Anemolizumab was presented in the Society, and Xylebesilan, where we signed a licensing agreement with Roche, will be explained later on. Please move on to page 11. The major R&D event in 2024 is summarized here and already been explained in the earlier earnings, but we have highlighted the progress this time.

Please turn to slide 12. For Nemorizumab at AAD annual meeting, the long-term data for Atopic dermatitis and prurigo nodularis was published. On the left-hand side is atopic dermatitis phase 3 test study results. The improvement of itchiness at week 16 with nemolizumab continued to week 48. As you see in the purple line, even when the dosing interval is extended from once every four weeks to once every eight weeks, the efficacy was maintained. On the right-hand side is phase 3 study for prurigo nodularis. With the dosing of nemolizumab, the percentage of patients who saw improvements in itchiness for 52 weeks has increased. And in close to 90% of the patients, the itchiness was eliminated or almost eliminated. As you see in the blue line, For patients switching from placebo to enamelizumab, a similar result was seen in each study. As you see in asterisks number one and two, we saw improvement in skin lesions and sleep disorders. In each study, for the safety, the results were the same as we have seen in the past. For both diseases, in the United States and Europe, the submission was accepted in February of this year, and in the United States for Prurigo nodularis. Priority review designation was made. Please turn to the next page, which is for ASO factor B. ASO factor B is uptaken selectively by hepatic cells. And it is a nucleic acid drug that inhibits a complement B factor production. The target disease is IgA nephropathy. We see deposition of complements and IgA at the glomerulide. Hematuria and proteinuria are seen persistently. On the left-hand side is ASO. As you can see on the left-hand side, ASO factor B is uptaken into the cell, and this factor B will be released from N-acetylgalactosamine, and the protein that will cause the disease, messenger RNA that produces that protein, will bind complementarily and create a double protein. And afterwards, this double chain with the specific enzyme will be degraded. So on the right-hand side is the mechanism of the onset of IgA nephropathy with complement B factor. complement, the second path of a complement will be activated. And with ASO factor B, a complement B production will be inhibited, and the pathway activation will be suppressed. It will suppress the progression of IgA nephropathy. And next is the licensed in. a contract concluded with Roche, which is RNAi . RNAi is a mechanism that exists in the human body, and it interferes with messenger RNA, which transmits proteins of DNA. And the RNA treatment drugs utilizes this mechanism. This is a new modality. The RNA inhibitor treatment drug, siRNA, moves to the hepatocell and it will create or produce a complex with the protein necessary for RNA interference. This complex will bind to the small interfering RNA and this messenger RNA will be degraded. And the next page is the RNAi treatment drug, which is being developed for hypertension. As you see on the left-hand side, zilabesirag is at the most upstream portion of the renin-angiotensin aldosterone. which is related to blood pressure regulation. It inhibits persistently the synthesis of AGT. As you see on the right-hand side in the Phase 2 study overseas, For hypertensive patients who saw a lack of efficacy with standard of care, with the use of dilvesiran, at three months after start of treatment, compared to placebo, there was a significant decrease in blood pressure. The safety profile was good with no adverse events leading to death or discontinuation. For hypertensive patients with uncontrolled blood pressure, the cardiovascular event risk will go up and there is unmet medical needs. With the new modality, value will be provided to patients. We are working with RAS L9. Alnylam on this. These are the main project market. At the top, you see the domestic sales. On the left-hand side is Chugai Products. On the right-hand side is Roche. At the bottom, you see the products that are being developed or the ones that are being developed in multiple projects. So these are in-house products, overseas sales. And therefore, Hem Libra and Alicenza, which we introduced to you last year, are not included. For Roche products that were disclosed this year in February, the reasons for changes are shown. For Enspring, The GMG was deleted, but for 1BM positive CHF potential shows high promising results. It is not included in the chart, but for hemolibular. The domestic environment is very difficult, and further growth in the market is expected. For Alicenza NSLLC adjuvant treatment, additional indication increasing sales is expected. This is a submission. Schedule, the right stars are for new indications, and the blue is the change in submission year. With the progress of the test, the submission year was changed for some. Please refer to the following slides for your reference.

This is Taniguchi speaking. I am a CFO of the company. Now, I would like to explain about the core base, the first quarter result. The revenue dropped by 75.3 billion yen year-on-year, and it was 236.9 billion yen. Operating profit dropped by 3.3 billion yen, and it was 102.1 billion yen. The major reason for the drop was because last year in the first quarter, we had revenue of COVID-19 treatment run up previously. which we do not have anymore. So except for the RONAPRIV impact, the revenue actually increased. Now, out of the revenue, the product sales was 204.5 billion yen, dropped by 29.8%, which is 87 billion yen. Domestically, revenue dropped by 89.5 billion yen, including RONAPRIV. But if we exclude RONAPRIV, The drop range was 8.3 billion yen, reason being the GX penetration of the NHI price revision. Overseas, Himalaya doing well, up by 2.5 billion yen year-on-year, growth of 2.5%. The other revenue, so increase in Himalaya royalty income and one-time income and increased by 57% year-on-year, which is up by 32.5 billion yen. The cost of sales ratio was high with Rona Pre, but we don't have this anymore. So the cost-to-sales ratio improved by 16.3%. and became 35.5%. Expense side, we improved the efficiency, SG&A increased only by 200 million yen. R&D expense under the Redshift strategy, drug discovery and early development project progressed quite well and increased by, R&D expense increased by 5.1 billion yen. As a result, operating profit was 102.1 billion yen. 43.1% up by 9.3% and income tax decreased and net income was 76 billion yen dropped by 3.1%. This is the change in product. sales, domestic oncology area revenue dropped by 6.5%, equivalent to 3.9 billion yen. Due to the impact of GX generics penetration, Avastin revenue dropped. And for the growth of Fesco sales exceeded the drop of the Progetta and Herceptin. For the specialty, revenue dropped by 64.6%, which is 85.7 billion yen. But the RONAPRIV 81.2 billion yen and TAMIFOR 4 billion yen revenue drop impacted quite largely. Except for those two, the revenue was in part with the previous year's level. The NHI drug price revision impact we saw, however, for BISMO and SPRING, the sales grew nicely. Overseas, it grew by 2.5%. Actemra is seeing the impact of BIOS similar. However, HemRibra and Enspring grew its export sales. Moving on to the next page, this shows the change in operating profit. From left, you see growth. gross profit. This was dropped by 8.7 billion yen. As you can see, we had a negative impact from NHI price decrease and export unit price. However, we made some We complemented that with the increase of export. However, we were not fully able to absorb that. As for the impact of sales volume, the magnitude of this range was relatively low. That's because of the impact from the run-up period. And this is the change of the operating income. A profit, excuse me. And this is the quarterly change in cost and the profit. So this shows basically the quarterly trend. To your left, you see the first quarter last year. The size of the bar is quite big, but this is due to the roadmap pre-sales. But since then, the profit level has been normalized. There are some changes in the timing of export. Sales recognition timing as a result varies, thus quarterly profit can move. Next page shows the structure of revenue by quarter, on a quarter basis. In 2023 first quarter, we recognized the sales of RONAPRIV to the government. And as a result, the domestic product sales was boosted. And overseas product sales. I would like to explain about this later in more details, but the revenue dropped in Akutemura, but somewhat compensated by Himuraibara. Next page. And it shows the progress against the four-year guidance published at the beginning of the year. Last year, due to the impact of corona, the first quarter number is looking quite high. And this year, first quarter, for both sales and expense items, they are trending in our expectation as per our expectation. The first quarter domestic product sales is impacted by the lesser number of business days, meaning that sales volume tends to be low in the first quarter compared to the other quarters. And overseas product sales, the export to Russia due to the production and exporting schedule, can move by product on a quarterly basis. But just like domestic sales, the number in the first quarters tends to be low compared to the other quarters from April and beyond. Regarding hemorrhoid reality, the rate increases against the four-year cumulative sales, meaning that we have a tiered structure, meaning that the reality tends to go up toward the end of the year. And for the expenses. The expenses is expected to fall under our four year expectation and based on those situation in general, things are moving as per our expectation as per our four year guidance announced at the beginning of the year.

So to the next page to more details by product. progress against the full year forecast of sales. There are some variations, but roughly speaking, things are progressing as expected. Like Bavismo, there are products where the progress seems to be slow. However, overall, we are expecting an increase in sales. So for the full year estimate, there will be basically no change. next is the impact of the foreign exchange rate so the content is different from last year by a quarter the assumed rate and the actual rate are shown on the right hand side so well exports to ross and royalty from rosh and purchases that will have an impact on cost. Actually, for 80%, it is hedged by foreign Forex contracts. But for the remaining 20%, the position is open. So spot rate exchange rate will be used. So this portion will be the Forex First, the assumed rate for Q1 a plus 1.1 billion on an operating profit basis was shown. Basically, on the sales side, the hedging assumption at the beginning of the year and the actual foreign currency denominated transaction was different. So actually, the yen was lower than expected. The assumed rate is different depending on the quarter. But for foreign exchange contracts, it will be done for the full year. So the actual hedging transaction and the annual average rate will be slightly different. So for the comparison against the previous year, if you look at the far left-hand side, the forex rate has been weak yen since last year. This is positive for the revenue, but it is negative for the expenses. For net position, On an operating profit basis, we saw a forex-based profit contribution of 17.7 billion yen compared to the previous year. So far, I talked about the profit and loss statement, but from the next phase on, I will talk about the balance sheet. Total asset, 1,897.8 billion yen compared to the end of last year, minus 34.7 billion yen. As of end of year, the accounts receivables were received, and because of that, the numbers went down. But net owned capital has increased because of home profit. shareholders' equity ratio has increased 2.4 percentage points to 86.5%. And for net cash, since the end of last year, we've seen an increase of ¥25.6 billion. And as of the end of March, ¥764.6 billion. So here we look at the net cash changes. Corporate taxes and dividends are paid after the sales, but still 25.6 billion yen positive is what we see here. The next page is about the situation of investments. In January, when we announced our results, we showed you numbers and there isn't significant change. for an important um point for manufacturing at the bottom uh ukema factory uk bio api production building is already in operation and 20.3 billion including investments for improvements of facilities included. For R&D, Singapore CPR will be expanded and the facilities are to be moved. And with it, a $60 million Singaporean investment is expected. And for the medium-term environmental targets, 109.5 billion for capital expenditure is expected. The next slide, the final slide, is non-core adjustments. The depreciation amortization, 400 million for intangible assets, and for others, 400 million for restructuring. The old research center moved, and after the movement, costs are incurred. And for restructuring costs, currently, ERP project is ongoing. And with the project, temporary business rebuilding expenses are incurred. And that is all from my side. We are looking forward for questions.

Now we would like to move on to the Q&A session. Takano, the head of sales, will be joining the Q&A session. In order to respond to as many questions as possible, please make sure that you ask only one question. One person, one question, please. Your questions will be posted on our website later on. So now we would like to take questions. At the bottom of the Zoom webinar screen, you will see the Raise Hand button. If you have a question, please click on this button. And as you see your hand being raised, the Secretariat will unmute you. Please make sure you state your name and affiliation. If you would like to cancel your question, please make sure that you will put your hand down. For those who are joining by telephone, please press asterisk, a star mark followed by nine. And then make sure you state your name and affiliation. And if you would like to cancel, once again, please press a star mark followed by nine. from Morgan Stanley, MUFG. Funaoka-san, please. Hello, my name. I am Muraoka speaking from Morgan Stanley. Can you hear me? Yes. Thank you. I would like to ask you questions regarding pipeline. Maybe you will tell me to ask this question to Billy. But this year in March, July, oral product amicretin showed a good result in data. All four doesn't seem to be so efficacious. That's what international investors says. But I don't necessarily agree with them. Oral drugs data, when you compare those with your own data, what do you think is the point of advantage of your products against the other competitors product being developed? Thank you very much for your question. We have licensed out this compound to the Eli Lilly, and for type 2 diabetes, there are six studies going on, and then three studies going on for obesity. We have started the dosing. The detailed question should be directed to Lilly. I'm afraid that I have to tell you that we cannot comment on this compound. What about the competitors' data? Were you surprised to see their data? Or was their data within your expectation? Thank you for your question. Once again, we cannot comment on the competitors' drugs. We are not in a position to make any comment. So please allow me to refrain from responding to your question.

So maybe I'm going to receive the same ask again. 3, 2, 9. I would like to ask about the thinking behind this study. The muscles will be increased rather than decreased. So weight reduction test. So the curve of weight reduction. Compared to GLP-1, is the curve very different from GLP-1? Is that your assumption at the moment? Or does it start to decline very suddenly or rapidly? So for the Phase 1 results to come out, what should be expected, if you can slightly briefly talk about that? Thank you very much to Mr. Muraoka for your question. For obesity, GLP-1 is attracting attention. Using it with incretin seems to be a possible option for treatment. does cause a reduction of weight, but with fat, muscles also are decreased. GYM329, as you know, increases muscles. So if it is used with incretin, with incretin, the muscles come down, but that muscle may be recovered. As a result, If fat alone will be reduced, it will have a positive impact on health and daily life of the patient. However, at what speed will the muscles come back? We have not seen the data yet, and therefore, we cannot comment. Currently, you are in Phase 1B. This is monotherapy. So the message is, don't worry if the weight does not come down that much. With the increase in muscles, the weight might go up. That may be a concern. But it is very difficult to identify how much expectations we should have for this drug. So can you share with us the image you have with this drug? Thank you very much. This is a rush-led phase one study. And the purpose of this study is to look at PKPD and safety So with regards to the content, after we get the data, if there is something that we can share, we would like to look at it. But currently, it is a Roche-led study. And therefore, at this moment, we are not in a position to make any comments. We would like to refrain from making any comments. Thank you very much. I would like to wait for the results to come out.

Thank you.

Next, from JP Morgan, we have Mr. Wakao. This is Wakao speaking from JP Morgan. Nice to talk to you today. First question is related to human library sales in U.S. Can you comment on that, please? Based on your presentation, international and Europe, the sales spin expanding. However, you didn't really comment on the sales in U.S., When I look at the Roche number this time, Y01, minus 1%. So I wonder how you see the future of U.S. performance as far as I remember. Y01, U.S. has never really shown this kind of Y01 trend. And the prescription, I guess, is growing. So I was surprised to see this number. Volume, price, can you comment on any change on volume and price, if there are any? This is Taniguchi speaking. Thank you for your question. The information was disclosed just today, so we don't have any additional information for international Europe. It's still growing, but for U.S., minus one percent. Probably there are some seasonality impact, but I don't think it's appropriate to make comment based on our guess and speculation. We do not disclose share, but we understand that share is still growing, so we are not really worried. Thank you very much. So even when we look at US performance only, you know, there are no major change from your previous, you know, thinking. Right. Thank you.

The second point, A-Spring GMG results, what is your take on the results? So, this project will be discontinued, but Why do you think you were not able to meet the expectations? You didn't have a phase two study, and because of that, is that the reason for not being successful? Or if you look at the current data, it seems like the placebo is quite strong, and maybe that had an impact, or is it simply that For both N-Spring and placebo, the results were too strong. Can you tell us why this was not successful? For phase 3, in your case, you have always been successful. So you were not able to be successful this time. Why is that? So I'm not sure if this is the first, but actually I was surprised that you were not able to meet the expectations. So can you tell us about the background? Thank you very much for your question. Just one point before I answer that question. Well, 100% success for ourselves. That is in case of first indication, we have always been able to meet the primary endpoint. With the expansion of indications, there are some failure cases in the past. Now, for the results that we see now, So a GMG phase 3 study, if you look at the primary endpoints, the activities of daily life of patients are looked at. From the start of a treatment to week 24, we look at the average change. The end-spring group versus placebo, statistically, there was a difference. However, between Roche and ourselves, we have predetermined and assumed results, and we're not able to meet that endpoint. We've looked at various subgroup analyses, but with N-Spring, large clinical benefits may be seen with some patients. That was our expectations, but consistently we saw similar results. So as you know, multiple... bio products are already being launched. So, a meaningful benefit may not be able to be provided to the patients in addition to those. So, we decided not to make an application in Japan, and that is Roche's decision is the same. The cause is difficult to identify. And so other companies have done clinical trials, and it's very difficult to do a direct comparison. But a primary endpoint is activities of daily life. And that was slightly different from other companies' clinical trials. And as you know, interleukin-6 is controlled with N-Spring in the upstream. So it stopped at an early stage, and the observation period was 24 weeks. Maybe if we observed for a bit longer, a better result was seen. This is just imagination. So at least with this study, statistically, there was a difference, but we were not able to go beyond what we had assumed in the beginning. Thank you very much. That is all from my side.

Next, from CT Group Securities, we have Yamaguchi-san, please. Yes, this is Yamaguchi speaking. Can you hear me? Yes, thank you. My first question is related to the analysis operating income. You talked about the decrease of the export unit price. I think this was due to Alicensa. But do you have any breakdown by product? This is Taniguchi speaking. Thank you for your question. Details are not disclosed. But Akutemura has big volume. Hemuraibara, the percentage of international is growing. The pricing is different from EU and US. So these are two major changes, change factors. Sorry. Is that because of the biosimilar? No, Actemura. Actemura and Hemorhybra. Right. I understand.

So Actemura was reduced, and that was the impact of biosimilars? So there was not much impact on Russia's disclosed numbers. But we export beforehand, and we are starting to see some impact there. Thank you very much. The second question, market sales update. So with the revision of value, I wasn't able to understand Disclosure policy change, too. Sorry. This is Taniguchi speaking. So last year at this timing, a similar slide was presented. And since then, we did some alignment with Roche. So a common template or format is to be used, we decided. Basically, for global peak sales, as you see here, more than $1 billion. This kind of template will be used on a global basis, so we've aligned ourselves for domestic sales. This is a sales in Japan. So over. 5 or 10 billion is the threshold we have, so we've talked with rush so that we can show the numbers in a unified way like this. And. Hemlibra and Alcensa. Hemlibra, I think you talked about competitor, but I think the numbers were somewhere between 4,000 to 8,000, and I think you now have an early line product. Did you always have those early line products from the beginning, or have you started to include those? This is Taniguchi speaking again for Hemlibra. It is very difficult to show an outlook. So starting this time, we are not showing those numbers. For Alcindor, on this slide, more than 30 billion in Japan is the number that is shown. This is different from an adjuvant discussion. So somewhere between $500 million to $1 billion is the number that we are assuming. But we would like to discuss that with Rush. So Elson, you don't have the number, but it's a positive. That's for Azuban, yes. Thank you very much.

Next is Hashiguchi-san from Daiwa Securities, please. This is Hashiguchi speaking. Thank you. My first question is related to the target of licensing. The segment wise is oncology and specialty. And I think sales has been categorized as such. is targeting at hypertension. So it's not associated with oncology and specialty. But amongst the hypertension, Unlike ARB, this is like a special pharmaceuticals? That's how you position Xelibeth serum? Or is there a different concept of licensing? With this licensing, are you going to change your sales structure? If that is the case, what is your approach to the product licensing going forward? Is there going to be any change? Hashiguchi-san, thank you very much for your question. This is Kusano speaking. First of all, the reason why we licensed in Zilibesiran this time was because regardless of the therapeutic area, we are trying to capture unmet medical needs. We would like to offer innovative pharmaceuticals. And this time we have licensed in Zilibesiran from Roche. poor control with the conventional drugs, and a high cerebrovascular patient's unmet needs, we thought, can be met by this new modality drug. And that's why we have decided to license in to the Breast Serum this time. And in terms of the sales structure, as you know, Roche Group will be actively licensing in diabetes drugs. So cardiovascular or metabolic diseases oftentimes are associated with many complications, so we expect big synergy. Roche, Chugai, our target drugs are the one who see high unmet needs, yet conventional drugs cannot address those unmet needs. So we are basically focusing on the promotion of the specialty area in hospitals. And sales headquarters and MA and drug safety functions will work together.

Depending on how the clinical development goes, is there potential of replacing existing drugs? And if so, will you be teaming up companies that are strong in those areas for sales? Or at this moment, there is almost no possibility, or you haven't thought about that. Thank you very much for your question. At this moment, we are not thinking about that possibility. But later on, when we see the data, we would like to consider what is best. Thank you very much. And the second point, this is related to the previous question about the answer you gave to a previous question. The export unit price is coming down was the question, and you talked about the volume in your answer. After the biosimilar is launched, the impact on volume was seen beforehand, but the impact on unit price is not seen yet. It will be seen at a later stage. Is that correct? The unit price impact, when the biosimilars are more widely used, we will see more impact. Yes, that is correct. So Russia's sales, after you see an impact on Russia's sales price, there will be an impact on the sales price from Chugai to Russia. Is that correct? So But you guys, a sales price will not come down in expectation of Russia's prices coming down. Is that correct? This is Taniguchi speaking. The price strategy of a rush or by a similar launch, it depends on the market penetration. So I cannot say that there is a correlation at this point in time. Thank you very much.

Thank you very much.

Thank you. Next is from Alliance Bernstein Security. Sohi-san, please. Yes. With regard to the overseas sales, Actemura and Alicensa, with regard to drugs, well, for Actemura, The penetration of biosimilar is expected. That's why the rush order started to decline compared to last year. As a result, overseas sales is dropping. That's how I interpret. But for Actemera, the rush taking down inventory, would that be the case? And for Aldecensa, ALE sensor is not really impacted by a biosimilar or generics but in the international market if sales grows unit price drops that I understand but with that factor alone can we explain about the downward impact Actually, for Actemura, a penetration of biosimilar is very difficult for us to grasp accurately. And if biosimilar penetration goes up, and then our brand export will drop. But at this point of time, it's very difficult for us to forecast. Our forecast is set in a conservative manner, assuming that biosimilar penetration will happen early. But if biosimilar penetration comes in slower than our expectation, and then we don't need to see the drop in export sales so much. Okay. And Alicenza, I talked about Himuraibara earlier, but Himuraibara outside of Japan, not in EU and US, as we sell more to the international market, then the unit price tends to drop. I think your question was about Alicenza? Yes, I was talking about Alicenza. So Alesensa is not really impacted by generics entry, but compared to last year, export dropped by 16% this time. And this year, your company's export full year guidance is almost the same as last year's actual. I wonder what is behind this. For Alesensa, When we export as a sensor, we export in a certain lot, in a bulk. So based on the inventory situation, export volume can change every time. So rush global sales and our export volume are not aligned fully. So depending on the inventory situation, our shipment timing and shipment volume are adjusted. So sometimes our export sales doesn't look big, but for Alice Sensa, we have an expectation on adjuvant therapy. So sales can grow into the future. So export sales can grow into the future. But when we look at this year on a single year basis, it may not be necessarily the case.

Thank you very much. So if you do phasing in one year, you will come back to the major trend. But in the case of Alicenza, every year there will be a shift, not on a quarterly basis, but on an annual basis. Well, the volume itself is not very large, so that can happen. Thank you very much. I have another question about hemlobular royalty. Currently, the Swiss franc was very strong at the end of 2023, and now it has come down. against the euro or dollar. And that situation is expected to continue. But for him, Libra royalty forecast So Swiss francs against Euro and US dollar, what is your FX assumption of the Swiss francs? In other words, if the Swiss franc continues to be strong and if that is your assumption, currently the Swiss franc has come down. So, Hem Libra's royalty that you will be receiving may go up, is that correct? The basis of royalty is global sales. A lot of those sales come in other currencies like US dollars. So, if you look at the currency relationship, So the non-Swiss franc currencies will be converted into Swiss francs, and then you calculate. So if the Swiss franc becomes stronger against the yen, for example, it doesn't necessarily mean that it is advantageous. Sorry, what I wanted to say is that the Swiss franc... when it becomes weaker compared to U.S. dollars and euros. But currently, if the Swiss franc is too strong, U.S. dollar-based European Hem Libra in Swiss francs will be discounted. So the royalty for you will be discounted on a calculation basis. So with a weaker Swiss franc, a Swiss-Franc-based ex-Japan Hemlibra sales. may be higher than you had expected. And hemblibra, royalty that you will be receiving, may go up. Is that a possibility? It depends on the currency. And when the Swiss franc becomes stronger against the Japanese yen, that is a possibility. But when you exchange from Swiss francs to Japan, it is hedged in the previous year in most cases. So, in terms of difference with the planned rates, there is not much impact. Thank you very much.

Next is from Goldman Sachs, Ueda-san. This is Ueda speaking from Goldman Sachs. First of all, with regard to Hemlibra, new dosage form. This time, based on the Rush presentation, they talked about the new vial option and dosing kit, and I guess we need to wait until the presentation at the Society, but I think you are receiving feedback from the clinical field. What kind of improvement can we expect? For example, a dosing adjustment per body weight or injection site reaction, would there be any improvement? Thank you very much for your question. I am Takano from sales. With regard to the dosage form,

We cannot talk about the details, but here in Japan, we have a similar goal.

Going forward, including a new device, there has been some study into new device, currently used dosing kit are appreciated well by the physician.

Next is about the next 007 development status. At last year's ISDH, the healthy subjects data was disclosed. And when will the patient part data be disclosed? And for this study, I think you increase the number of cases. So why did you increase the number of cases? Thank you very much, Ueda-san, for your question. This is Kusano speaking. So for detailed development plans, I am not able to talk about that. For Asia, including Japan and in the United States, healthy subjects and homophilia patients are included. And safety, PK, PD, and efficacy are being evaluated in the phase one and two studies, which are ongoing. With regards to the results, at the moment, I would like to refrain from disclosing any information. And as you mentioned, we have added a number of cohorts. So this is related to the development plan. So at this moment, we cannot disclose information. But once we have the results, I hope we can have an opportunity to introduce those results to you. Thank you very much.

We are afraid that time has already passed, so with this, we would like to conclude today's session. With this, we would like to conclude conference on FI2024. Q1 financial result. There are some questions. Unfortunately, we were not able to respond. For those of you whose questions are not answered, please let our team know. And this is the contact information. Once again, thank you very much for your participation despite your busy schedule. And this is the end of the conference.