Chugai Pharmaceutical

Thank you for joining Chugai Pharmaceutical's earnings call on the financial results for the fiscal year 2024 third quarter. I am Miata from Corporate Communications Department. I'd like to serve as your moderator today. Today, we have an on-site presentation as well as a Zoom webinar, and today's agenda is in the document distributed. And today's call is going to be held in Japanese, but through the Zoom webinar, you will be able to listen to the simultaneous interpretation in English. Please find the interpretation mark at the bottom of the screen and select the language of your choice. We will take questions after the presentations. We plan to have 30 minutes for the question and answer session following the presentations. During the presentations, please allow us to mute your microphones. We thank you for your cooperation. Now, Dr. Osamu Okuda is going to present the fiscal year 2024 third quarter overview.

Okuda, the President. I'd like to give you the third quarter of financial year 2024. Please take a look at page 5. Up to the third quarter, we have achieved increased revenue and profit, and revenue increased by 3.7% year-on-year. This is a turnaround from the slight decrease in the revenue in the second quarter. Operating profit increased by 25.3% year-on-year, so it has continued to increase year-on-year, and both are higher than our original forecast. Domestic sales decreased significantly due to the completion of government supply of loan-approved, which was recorded last year, and NHI drug price revisions, as well as the impact of generics. Overseas sales and other revenue increased significantly, particularly due to exports of Hemlibra, the in-house product, to Roche and Royalty Income. Based on the strong performance, which exceeded original expectation, the initial forecast has been revised upwards to revenue of 1,350 billion yen and operating profit to 540 billion yen. Compared to the original forecast, revenue and operating profit have been revised upwards by 80 billion yen each. As for revenue and operating profit for the next fiscal year, at this moment, we're assuming that they will be at about the same level as the upwardly revised forecast for this fiscal year. The original announcement is scheduled for the end of January next year, and there are some uncertain factors, but we will provide this information as a yardstick based on our current assumption. Please take a look at page 6. will show a breakdown of the difference between the original forecast of 1 trillion 70 billion yen and the revised forecast of 1 trillion 150 billion yen for revenue. Domestic sales are 0.8 billion yen lower than the original forecast, reflecting progress with each product and revision to our assumptions. For overseas sales, we expect Himalaya and Actimura to exceed our original forecast. Himalaya exports have been revised upwards by 36.7 billion yen due to growth in overseas local sales and increased demand. And Actemra exports have been revised upwards by 21.2 billion yen due to the impact of biosimilars being lower than expected. Overseas sales overall have been revised upwards by 64.8 billion yen.

Other sales revenue, royalties, and profit share revenue represents an increase by 4.4 billion yen due to increased revenue related to HemRiver. Other operating revenue represents an increase of 11.6 billion yen due to milestone payments from out-licensed products. The top line was revised upwards by 80 billion yen or 7.5% compared to the initial forecast. Please turn to the next slide. In 2024, significant progress was made in strengthening the foundation for the short to medium term growth, particularly with three of Chugai originated products. PeerSky is our second product using the antibody recycling technology. With once every four weeks subcutaneous injections for PNH, we expect to reduce the treatment burden for patients. Next, as you can see at the center, nebuluvial, an antibody drug that inhibits IL-3-1, which causes itching. Our partner, Galderma, has obtained approval under priority review in the United States for nodular prurigo, and filing has been submitted in Europe. Filing was also submitted for an indication of atopic dermatitis in both the United States and Europe with expectations for early heat relief and improvement with inflammation. Later, Kusano will present data on early efficacy and long-term effectiveness recently shared at EADV and others. The third is Allicenza, approved in Japan, the United States, and Europe as the only ALK inhibitor for early-stage lung cancer treatment. It is expected not only to lower the risk of postoperative recurrence, but also to offer new treatment opportunities that may lead to cure. We will continue to provide unprecedented new value with Chugai-originated products like O4 Glipron and GYM329. Aiming for global product launches every year as outlined in TopEye 2030, we will strive to further contribute to global healthcare. That concludes my explanation. Thank you.