Chugai Pharmaceutical

Thank you very much for taking time out of your very busy schedules to attend our first quarter FY2026 earnings call. My name is Miyata from Corporate Communication and IR department, and I'll be serving as the moderator today. Thank you for your kind attention. The session will be conducted via Zoom webinar. We will proceed according with the agenda shown on page 3 of the presentation material. The briefing will be conducted in Japanese, but we will have simultaneous interpretation in English also available. Please click the interpretation icon at the bottom of your screen and select either Japanese or English. for your preferred language. Questions will be taken together after all the presentations have been concluded. The Q&A session is scheduled for approximately 30 minutes. Please note that participants' microphones will remain muted during the presentation. First, Dr. Okuda to provide an overview of the first quarter of FY2026. I am Okuda, President and CEO I would like to give an overview of the first quarter of FY2026. Please refer to slide 5 in the material at hand. In the first quarter of FY2026, both domestic and overseas product sales progressed steadily, resulting in both increase in revenue and profit. Growth was driven mainly by Libra exports to Roche, as well as increased NEM Lubio exports to and higher low-income from Kaldurma. As a result, compared with the same period last year, revenue increased by 11.5%, operating profit by 17.1%, and quarterly profit by 19.6%. As such, first quarter got off to a smooth start in line with our initial expectations. Details of the revenue will be covered on the next slide, slide 6. This shows the year-on-year changes in revenue compared with the same period last year. Revenue grew by 33.2 billion yen, up 11.5%. I will walk through the items from left to right. Domestically, despite the negative impact of the NHI drug price revision and generics penetration, mainstay products as well as new products performed well, resulting in an increase of 8.4 billion yen. Overseas, while export unit price declined, The increase from volume and foreign exchange effects more than offset this, resulting in an increase of 23.4 billion yen. In particular, Hemlibra exports to Russia and Nemrubio exports to Galderma increased significantly, marking solid progress. Other revenues increased year on year, primarily due to higher royalty income related to Nemrubio, despite a decrease in one-time income. domestic sales, overseas sales, and other revenues all increase achieving overall revenue growth.

Please move on to the next slide. I would like to explain about the key progress made in the first quarter. Regarding exit 007, we plan to initiate two phase three trials In the second quarter, aiming for a regulatory filing in 2028, we have discontinued development for SMA and FSHD. On the other hand, Based on the clinical results obtained, we believe this will not impact development for obesity, where the target myostatin is highly prevalent. Therefore, we will proceed with the Phase II trial. As for N-Spring, we presented the result of the meteoroid study in MOG-AD at the American Academy of Neurology in April. Further details will be provided later in Mr. Cassano's section. Regarding Ghirardestrant, while numerical improvement in PFS was observed in the Persevera study for the first-line HR-positive breast cancer, the primary endpoint was not met. Consequently, we have discontinued development for the first-line setting. Meanwhile, based on the results of the Evera and Lidera studies, which have already achieved their primary endpoints. We aim to file for the second to third-line adjuvant treatment for HR-positive breast cancer within 2026. For DOC52, we have commenced an in-house Phase 2 study targeting celiac disease. Overall, progress remains on track toward achieving a record number of regulatory findings. Next is Phase 8. I will discuss new product launches and indications. In February, we launched Elevides, Japan's first gene therapy for DMD. We are truly pleased to be able to provide Elevides patients with DMD, a hereditally muscular disease that has been difficult to treat. And in March, the combination therapy of Lusimil and Poli-B became the first in the world to receive approval in Japan for relapsed or reflective large B-cell lymphoma. We also launched a subcutaneous formulation for Lusimil and obtained approval for an auto-injector formulation for in spring. And regarding out licensed products, Orgofor Glypron, the brand name Foundeo, was approved and launched in the U.S. as a treatment for obesity. Foundeo is the only one steady oral GLP-1 receptor agonist. that can be taken at any time without any restrictions of food or water intake. Applications for approval are currently pending in over 40 countries for obesity and type 2 diabetes, and we look forward to contributing to further to patients worldwide. For pneumonia, we anticipate a further growth. especially as Galderma has raised its peak sales projection to over $4 billion. Finally, I will explain the composition of the Board of Directors. We have launched a new management structure, having newly appointed Ms. Kinuko Mutani, a medical expert as an independent external director and a member of the nominating committee. To ensure prompt and decisive management decision-making, the Board maintains an appropriate balance of diversity, including expertise and gender, as well as an optimal scale. We'll continue to strive for further enhancement of our corporate governance. That's all. Thank you.

Next, we have Makusa. We will ask him to provide FY2026. Q1, Overview of Development Pipeline. Thank you very much. I am a head of Project Lifecycle Management Unit. Please refer to slide 11 in the materials. These are the topics for Q1. I will go through them from the top. There's one launch, Elevides. A microdystrophin gene therapy has been launched as the first regenerative medicine product in Japan for DNA. The five approvals in spring has received approval for a new dosage form, an oral injector, which we expect to improve convenience for the patients. A once-daily oral GLP-1 receptor agonist that can be taken without restrictions on food or fluid intake is our in-house innovation. Our licensee, Eli Lilly, has received approval in the United States for obesity and has begun commercialization. Lunsumio and the Polivy combination therapy has also received approval as indication extension for relapse or refractory therapy. large B cell lymphoma. There's one finding. We have submitted a regulatory application for the ocular implant for Ranibizumab. A finding for Ranibizumab formulation dedicated to ocular implant delivery is also planned within the year. Four studies have started. has initiated phase 3 studies for two types of PIC3CA mutation, breast cancer respectively. CT388 is a long-acting GLP-1, GIP receptor agonist. And the phase 3 study was initiated for obesity without type 2 diabetes. In our in-house, DONG52 started Phase II study for celiac disease. There are four pipeline removals. N-Spring has been removed from the pipeline following Roche's decision to discontinue Phase II clinical trial for DMT-D for strategic reasons. GYMMA329, in light of the results of the Manatee study development for spinal cancer, Muscular atrophy has been discontinued, and based on the results of a maneuver study, development of FSHT has been discontinued.