Chugai Pharmaceutical

Thank you very much for taking time out of your busy schedules to attend Chugai Pharmaceutical's FY2026 Second Quarter Financial Results presentation today. My name is Miyata from the Corporate Communications and Investor Relations Department. I'll be serving as today's moderator. And today's presentation has been held for investors, analysts, and members of the media in a hybrid format combining an in-person presentation and a Zoom webinar. and please note that if the name displayed by the Zoom participant cannot be matched with the registration information, the participant may be removed from the webinar without prior notice. Today's agenda is shown on the screen at the venue, on the webinar screen and on page 3 of the presentation materials. We'll proceed in accordance with this agenda. This presentation will be conducted in Japanese. Simultaneous English interpretation is also available via the Zoom webinar. To select your preferred language, please click the interpretation icon at the bottom of the screen. Select Japanese to listen to the Japanese audio or English to listen to the English interpretation. After selecting your preferred language, click Mute Original Audio to listen only to the selected audio channel. Please also note that we'll allow time for screen captures before each presentation for those who wish to take them. We'll take questions together after all presentations have concluded. We have set aside approximately 30 minutes for the Q&A session, and we encourage you to actively ask questions. Please note that all participants will remain muted during the presentations.

Results presentation today.

My name is Miyata from the Corporate Communications and Investor Relations Department. I'll be serving as today's moderator. And today's presentation has been held for investors, analysts, and members of the media in a hybrid format combining an in-person presentation and a Zoom webinar. And please note that if the name displayed by the Zoom participant cannot be matched with the registration information, the participant may be removed from the webinar without prior notice. Today's agenda is shown on the screen at the venue, on the webinar screen, and on page 3 of the presentation materials. We'll proceed in accordance with this agenda. This presentation will be conducted in Japanese. Simultaneous English interpretation is also available via the Zoom webinar. To select your preferred language, please click the interpretation icon at the bottom of the screen. Select Japanese to listen to the Japanese audio or English to listen to the English interpretation. After selecting your preferred language, click Mute Original Audio to listen only to the selected audio channel. Please also note that we'll allow time for screen captures before each presentation for those who wish to take them. We'll take questions together after all presentations have concluded. We have set aside approximately 30 minutes for the Q&A session, and we encourage you to actively ask questions. Please note that all participants will remain muted during the presentations. Now, President and CEO Okuda will provide an overview of the second quarter of FY2026. We'll pause briefly at the beginning, so please use this opportunity if you'd like to take a screen capture. Okay, let's get started. I am Okuda, President and CEO. I will provide an overview of the second quarter of FY2026. Please turn to slide 5 of the presentation materials. For the first half of FY2026, we recorded increases in both revenue and profit. This was driven by steady domestic and overseas product sales, as well as a significant increase in other revenue. So given the steady progress made in the first half, we expect to achieve our full year forecast. On the business front, we filed eight regulatory applications in Japan, making steady progress towards achieving our plan for the highest number of regulatory filings ever. We also initiated Two Phase III studies for NEXT-007, which we expect to become a next-generation growth driver. Overall, both our financial performance and business activities progressed steadily during the first half. This graph shows the changes in revenue compared with the same period last year. Revenue increased by ¥84.8 billion or 14.7%. I will walk you through the items from left to right. Domestic sales increased by ¥14.6 billion as growth in mainstay and new products more than offset the negative impact of the NHI drug price revisions and generic penetration. Overseas sales increased by ¥40.5 billion as increases in export volumes and the positive foreign exchange impact more than offset the decline in export unit prices. In particular, exports of Hemlibrary for Rush and Nemluvia to Gaudema increased. Other revenue increased by 29.8 billion yen due to a significant increase in one-time income as well as higher royalty income mainly related to Hemuraibara and Nemuruvio. Domestic sales, overseas sales, and other revenue all increased, resulting in overall revenue growth. Next slide, please. Next, I will discuss... Two Chogai originated global new products that are important to our revenue growth over the short to mid-term. NEM LUVIO is driving our revenue growth through export sales and royalty income. As announced in Galderma's financial results yesterday, global sales for the first half totaled US$433 million. Its share of new to brand prescriptions was approximately 42% for prurigo nodularis and approximately 9% for atopic dermatitis, indicating continued strong momentum.