Daiichi Sankyo Co Ltd Ord

Ogawa speaking. Thank you very much for joining Daiichi Sankyo's financial results presentation out of your very busy schedule today. I'm going to explain FY2023 third quarter financial results we announced at 1 p.m. on Wednesday, January 31st, JST, based on our presentation materials. Please turn to page 3. This is the agenda for today. We will cover FY2023 third quarter consolidated financial results, FY2023 financial Forecast and annual dividend forecast, business update and R&D update in that order. R&D update will be explained by Wataru Takasaki, head of Tatan R&D. We will entertain your questions at the end. Please turn to page 4. This is an overview of FI 2023 third quarter consolidated results. Revenue increased by 225 billion yen. to reach 1,173.3 billion yen. Cost of sales increased by 52.9 billion yen from the previous year. SG&A expenses rose by 103.1 billion yen and R&D expenditure increased by 15.1 billion yen year-on-year. As a result, cooperating profit increased by 53.9 billion yen or 45.5% year-on-year to reach 172.2 billion yen. Operating profit including temporary gains and losses increased by 67.4 billion yen or 53% year-on-year to 194.6 billion yen. Profit attributable to owners of the company increased by 76.9 billion yen or 88.7% year-on-year to reach 163.6 billion yen. As for the actual currency rates, the US dollar was 143.29 yen, the yen depreciated by 6.76 yen a year. The euro was 155.28 yen, the yen depreciated by 14.68 yen. Please turn to page 5. From here, let me explain positive and negative factors for revenue compared to the previous year. Revenue increased by 225 billion yen year on year. I will explain its breakdown by business unit. First, in Japan business. Revenue increased by 57.9 billion yen, sales increased for anti-influenza viral agent Inovil, direct oral anticoagulant Lixiana, anti-cancer agent Enherd, pain treatment Tydege, and also for vaccine business, including COVID-19 vaccine Diterona, which I will explain later. Next, let me explain our overseas business units. Forex impact is excluded here. In oncology business, revenue increased by 97.2 billion yen due to the growth of Enhert in the United States and Europe, and the contribution of anti-cancer agent Van Vlieta launched in the United States in August last year. As for American region, sales decreased for iron deficiency anemia treatment, Injectifer, but sales increased for iron deficiency anemia treatment Venofa and generic injectables. So revenue increased by 1.3 billion yen. Revenue for EU specialty business increased by 12.1 billion yen as sales rose for Lexiana and hypercholesterolemia treatments Nidemdo and Stendi. In ASCA business responsible for Asia, South and Central American regions, revenue rose by 21 billion yen due to the growth of NHERTS mainly in Brazil. As for upfront payment and regulatory sales milestone, etc., related to alliance with AstraZeneca and USMARC, out of the deferred revenue related to upfront payment in a strategic alliance with USMARC for three DXD ADC products including HER3-DXD, We booked revenue for the period from the signing of the agreement up to the end of December. On the other hand, regarding multiple NHERT-related regulatory milestones achieved last fiscal year, we booked lump-sum revenue last fiscal year for the period from the signing of the agreement up to the milestone achievement, so this led to revenue decrease of 4.5 billion yen. Forest impact increased our revenue by 40 billion yen in total. Page 6 shows positive and negative factors for our core operating profit. I will explain the profit increase of 53.9 billion yen by item. As I explained earlier, revenue increased by 225 billion yen including the increase of 40 billion yen due to Forex impact. Next, I will explain cost of sales and expense items excluding Forex impact. Cost of sales increased by 44 billion yen due to the revenue increase. H&A expenses increased by 87.1 billion yen due to an increase in NHERT-related profit sharing with AstraZeneca, etc. R&D expenditure rose by 5.2 billion yen due to an increase in 5 DXDADC's R&D investments. Cost increased due to forex impact by 34.8 billion yen in total. Co-operating profit increased by 48.6 billion yen, excluding forex impact. Next, page 7 shows positive and negative factors for profit attributable to owners of the company. As I explained earlier, co-operating profit increased by 53.9 billion yen, including forex impact. due to factors such as lump sum payment received from Novartis following the settlement of Plexicon's patent infringement lawsuit. Temporary income expenses increased a profit by 13.5 billion yen a year. Financial income expenses, etc. increased a profit by 4.5 billion yen a year due to increase in interest income and improvement in investment securities valuation gains losses despite deterioration in forex gains losses. pre-tax profit increased, but due to the impact of the tax effect accounting associated with our decision to transfer Daito Sankyo ESFA, income taxes, etc., decreased by 5 billion yen year-on-year. As a result, profit attributable to owners of the company increased by 76.9 billion yen year-on-year, to reach 163.6 billion yen. Page 8 and 9 show revenue increase or decrease in Japanese yen by business unit and by major product in Japan. Earlier on page 5, I explained the situation of each unit by excluding the Forex impact, but here we are showing the results including the Forex impact. Next, I will explain FI 2023 forecast. Please turn to page 11. Revenue has been revised upward by 30 billion yen from the October forecast to 1,580,000,000 yen to reflect the positive Forex effect by the yen's depreciation and sales increase of Inagil due to the outbreak of influenza and sales increase of Dijerona with 1.4 million doses we supplied in December. We are expecting cost of sales to increase due to the revenue increase and Forex impact. On the other hand, Due to the improvement in the COGS ratio by product mix changes, we are expecting cost of sales to increase by just 3 billion yen. We are expecting SG&A expenses to increase by 9 billion yen based on ADC production expansion. R&D expenditure is forecast to decrease by 7 billion yen by increase of cost sharing for three DXD ADC products with U.S. mark. As a result, core operating profit has been revised upward by 25 billion yen to 180 billion yen. Operating profit has been revised upward by ¥50 billion to ¥200 billion, mainly to reflect the temporary income increase due to payments received from Novartis following the settlement of Blessigon's patent infringement lawsuit. Pre-tax profit has been revised upward by ¥45 billion to ¥205 billion, mainly to reflect increase in financial expenses due to deterioration in forex gains, losses and others. Profit attributable to owners of the company has been revised upward by ¥40 billion to ¥175 billion. In response to the upward revision of pre-tax profit, a fourth quarter currency rates ¥145 for the US dollar and ¥155 for the euro, according to assumptions. Due to the ongoing yen's depreciation vis-à-vis our October forecast, Forex is expected to have an impact to increase our revenue and cooperating profit by about 8.5 billion yen and about 5.5 billion yen respectively. Page 12 is about the revision of annual dividend forecast. We will increase FY2023 annual dividend forecast per share to 50 yen. As of April last year, we were planning to increase annual dividend per share to 34 yen, up by 4 yen from FY2022. due to increased likelihood of achieving KPIs for FY2025 driven by sales growth of Enhert and others. As of October last year, we revised our plan to increase dividends by ¥6 to ¥40 compared to our April forecast, due to received upfront payment related to strategic collaboration with US Merck for three DXDADC products and strong performance of Enhert and others. Based on continuous strong business performance and ransom payment received from Novartis following the settlement of Prexicon's patent infringement lawsuit in the United States, we made an upward revision of FY2023 consolidated forecast. to 50 yen, up by 10 yen compared to our October forecast, and up by 20 yen from FY2022. We will continue to increase capital efficiency, further enhance returns to shareholders, and aim for DOE of 8% or higher in FY2025, which is set as a KPI in the fifth mid-term business month.

Next, I would like to talk about the business update. Slide 14 shows the breakdown of NHER2 revenue. The sales in the first nine months of fiscal year 23 grew by 136.3 billion yen year on year to 276.0 billion due to growth in the US, Europe and other regions. The sales situation in each country will be explained later. The development milestones are as follows. With the approval of the second-line treatment of herd-to-mutant NSCLC in Europe in October last year, the development milestone of ¥3.6 billion was listed in the third quarter of FY23 for development milestones achieved in the last fiscal year, the amount equivalent to those from the signing of the agreement to the achievement of the milestone was recorded as a lump sum revenue for the last fiscal year. As a result, it decreased by 9.7 billion yen from the same period last year to 10 billion. As a result, and her two total revenue, including upfront and quick related payments and development and sales milestone payments, was 294.4 billion yen, an increase of 126%. over the last year. The full year forecast for FY23 is 436.5 billion yen, an increase of 2.9 billion yen from the October forecast. Slide 15 and 16 show the sales of NHER2 in each country region. First, I would like to talk about the U.S. For the nine months was 162.8 billion or U.S. $1,136 million dollars 63 billion yen from the same period of the previous year. The full-year forecast for fiscal year 2023 is 226.3 billion, a decrease of 3.2 billion from the October forecast. Although we have lowered our full-year forecast slightly, the market share for each indication is growing steadily, and we have no concern about the future growth of the market. The current indications are as shown here. Market share in each indication remains favorable. The market share of new patients in the second-line treatment of HER2-positive breast cancer has increased to approximately 60%. Maintaining a market leadership position, the market share of new patients with HER2-low breast cancer previously treated with chemotherapy also remained at approximately 50% and number one in the market. The company also maintained its leading position in new patients for second-line HER2-positive gastric cancer and second-line HER2-mutant NSCLC. Furthermore, following endometrial cancer and cervical cancer in September, head and neck cancer in December 2023 and ovarian cancer this month were included in the NCCM guidelines. Sales in Europe are also on track. The sales for the first nine months of fiscal 23 increased by 42.4 billion yen from the same period of the previous year to 64.7 billion yen. The full year forecast for 2023 is ¥94.5 billion, an increase of ¥1.7 billion from the October forecast. The share of new patients in each market to the country region is also steadily increasing. The share of new patients with HER2-positive breast cancer in second-line treatment is in the 60% range in France. and 50% in Germany and Spain, maintaining the leading positions. In Italy, the share of new patients increased to the 60% level, achieving the market leader. The share of new patients with chemotherapy-treated breast cancer with low HER2 expression was in the 40% range in Germany and 30% range in France, with the market leader's positions. Slide 16 shows performance of N-HER2 in Japan and the ASCA region. Sales in Japan for the... Nine months and December 31, 2023 were 72.7 billion, up 9.2 billion yen from the same period of the previous year. The full year forecast for FY23 is 22.8 billion yen, an increase of 1.3 billion yen from the October forecast. In November, the HER2 mutant NSCL-C second-line and later treatment was approved as a recommended regimen in the guidelines for the diagnosis and treatment of lung cancer. The share of new patients in each indication is steadily increasing. The market share of new patients in the second-line treatment of HER2-positive breast cancer is increasing. 40%, maintaining the leading position. The share of the new HER2-positive breast cancer patients pretreated with chemotherapy has also increased to approximately 20%, the market leader. The market share of HER2-positive gastric cancer third-line treatment is also about 70%, consolidating the leading position. The share of new patients in the second-line HER2 mutant and the CLC is also expanding steadily. Sales in the Asuka region for the first nine months were 30.8 billion yen, an increase of 21.6 billion yen from the same period of the previous year. The full year forecast for fiscal year 23 is 40.3 billion yen, an increase of 2.4 billion yen from the October forecast. The sales in Asuka region include the promotion revenue in China, Hong Kong and other markets where AstraZeneca booked the sales. Sales in the region are favorable with significant revenue growth in Brazil, China and Taiwan and others. In November, the drug was approved in Brazil for second-line treatment of HER2-positive gastric cancer and second-line treatment of HER2-mutated NSCLC and started sales promotion. We will continue to strive for market penetration and expansion of countries, regions, and obtain new indications. Thus, we will deliver in HER2 to as many patients as possible who need it. Slides 17 and 18 show the major updates of the patent disputes. First, I would like to talk about the U.S. patent dispute over U.S. subsidiary Plexiclin. This is in relation to Novartis BRAF inhibitors of HINDA. Plexiclin filed a claim in the U.S. District Court and Novartis filed an appeal to the U.S. Court of Appeal. In December last year, Plexiclin and Novartis entered into a comprehensive settlement agreement As a result of this settlement, Plexiglas received lump sum payment of 182 million US dollars or 26.1 billion yen from Novartis, resulted in the dismissal of Novartis' appeal. The amount received was recorded as temporary income in the third quarter of the current fiscal year. Next, I would like to inform you of ADC technology-related dispute with Cijun. The arbitral tribunal rendered the final award in November last year. The final award followed and incorporated the August 22 decision by the arbitrator and required Cijun to pay $46 million of the cost of the arbitration. This award confirms that arbitration court totally denied that Cijun's claim. With this decision, the arbitration proceedings were concluded. In this slide 18, I would like to talk about the dispute regarding CJIN's U.S. patent. The U.S. District Court in Texas ruled in October last year in the first instance. In November last year, we filed an appeal. In addition, we filed a request with the U.S. Patent and Trademark Office for a post-grant review to examine the validity of the patent on the grounds that CJIN's U.S. patent is invalid. And this month, US Patent and Trademark Office rendered final written decision that Seijin's patent is invalid. We appreciate this decision. The patent is the only patent on which Seijin found basis for the claim in the pending patent infringement lawsuit. In the next slide, we show the other regional initiatives. In Japan, COVID-19 vaccine Daichirona, Omicron strain XBB.1.5 monovalent vaccine, was supplied as the first messenger RNA vaccine made in Japan last December. As a Japanese pharmaceutical company, we will continue to contribute to the safety and security of the society and health of people. In Europe, we announced that our subsidiary DSC and Esperian signed an amended agreement this month. The manufacturing and supply responsibilities are transferred from Asperion to DSE. In addition, DSE has acquired the rights to develop and market the three drug combinations in Europe and in other regions. Furthermore, DSE will lead the regulatory affairs with the European Medical Medicines Agency for the additional indication of neuromodustandy based on the clear outcome study results. As a result of this contract amendment, DSE will pay Asperian $125 million, $100 million upon execution of the amended agreement, and $25 million after EMA's approval of the additional indication. There is a difference of opinion regarding the requirement for development milestone payments based on the results of the clear outcome study as Perrion had filed a lawsuit against DSC. However, Asperian dismissed the pending litigation against DSC due to the results of this new agreement. Slide 20 is on meeting information. In February, we will hold an ESG meeting. Speakers will include Kama, outside director and chairperson of the board, Manabe Sio, Okusawa, COO and Fukuoka Chief Strategy Officer. In March, we will hold an NHER2 business briefing. The speakers will be Manabe, CEO, and Ken Keller, Global Head of Oncology Business Unit. We will inform you of the details when they are finalized. Now, we would like to present the R&D update. I will now hand over to Mr. Takasaki, Director of the R&D Division.

Takasaki speaking. I'm going to talk about R&D update. First, an update on five DXD ADCs. Please turn to page 23. This is a repost of the DestinyPlanTumor02 study data we presented at ESMO last year. The study was performed in advanced solid tumors in the second line settings and beyond, where HER2-directed therapies are not yet available, such as HER2-expressing solid tumors, including endometrial, cervical, ovarian, and biliary tract cancers. ORR, a primary endpoint, was 37.1% in all patients. and 61.3% in patients with IHC3+. Clinically meaningful response was confirmed in both groups. In addition, safety profile was consistent with the known profile, including ILD. We included in the submission package this data, Destiny CRC02 study, and other data, under the real-time oncology review program. Our filing was accepted by USFDA and priority review was granted for tumor agnostic therapy in HER2-expressing solid tumors in the second-line settings and beyond. PDUFA date is set for the 30th of May, 2024. From page 24, let me explain two new Phase III studies for DATO-DXT. First, tropion breast 04 study. Tropion breast 04 is a phase 3 study in patients with previously untreated stage 2 or 3 triple negative breast cancer and hormone receptor low, HER2 low, or negative breast cancer. We started the study in November last year. We are evaluating the efficacy and safety of neoadjuvant DatoDXT plus duvalumab, followed by adjuvant duvalumab with or without chemotherapy, compared to pembrolizumab-based neoadjuvant and adjuvant therapies. Primary endpoints are pathological complete response, PCR, and event-free survival, EFS. Next, on page 25, I will explain another new phase 3 study, tropion breast 05 study. This study is evaluating the efficacy and safety of DATO-DXD alone and in combination with durvalumab in patients with first-line PD-L1 positive, locally recurrent, inoperable, or metastatic TNBC versus chemotherapy plus temblorizumab. Like tropion breast 0.4, this study also started in November last year. Primary endpoint is PFS, progression-free survival. From page 26, I'm going to use two pages to explain the progress of HER3-DXT, which is the potential first HER3-directed cancer drug in the world. First, the current status of HERCINA LUNG-01 study. In this study, HER3-DXT demonstrated promising efficacy across diverse mechanisms of EGFR-TKI resistance and across a broad range of pretreatment HER3 membrane expression. In December last year, under the Real-Time Oncology Review Program, a filing was accepted by USFDA based on the study results, and priority review was granted. PDUFA date is set for the 26th of June, 2024. In EGFR-mutated NSEOC, a sena-lang02 study is ongoing in the second-line settings. Top-line results are expected in FY2024. Also, Phase 1b study in combination with osmertinib is ongoing in earlier treatment line. On page 27, I will explain HER3-DXD's new Phase II study. HER3-NAPA Tumor 01 is a study aiming to expand indications to new tumor types. We will evaluate per cohort new tumor targets selected based on our in-house non-clinical research and other data. We are planning to start the study first in melanoma, squamous cell carcinoma of head and neck, and HER2-negative gastric cancer in FY2023.

Slide 28 discusses the new Phase III study of IDXD. IDXD is an abbreviation for the generic name of DS7300. In addition to the international generic name, the Japanese generic name was finalized last December as Ifinatamab Deluxe Deccan, or in English, Ifinatamab Deluxe Deccan. With favorable test results of IDXD, a pivotal study in patients with advanced small cell lung cancer, ID8 Lung-02 study, is planned to be initiated in the first half of fiscal 2024. The study will be conducted in patients who have received at least one prior therapy, including platinum-based chemotherapy, to evaluate the efficacy and safety of IDXD compared to physicians' choice of therapy, including topoticin and amuribicin. The primary endpoints are ORR and overall survival. As shown in the figure on the left, we intend to provide optimal treatment options to as many patients as possible and as quickly as possible by evaluating multiple products of DXDABCs in each segment of lung cancer. Slide 29 describes a new DS6000 study. The Rejoice Ovarian 01 study is a Phase 2-3 study of DS6000 in platinum-resistant ovarian cancer designed based on the positive data from the DS6000 Phase 1 trial. It is scheduled to start in the fourth quarter of this fiscal year. The Phase 2 part will determine the recommended dose for Phase 3, and the Phase 3 part will evaluate the efficacy of DS6000 compared with the physician's choice of treatment. The primary endpoints of the Phase 3 part are PFS and ORR. On slide 30, I will discuss other clinical trial progress and of regulatory updates of 5 DXDA DCs. For in HER2, in December of last year, filing was accepted in China for HER2-positive gastric adenocarcinoma or gastroesophageal junction adenocarcinoma based on DESTINY gastric 06 study data. For DatoDxD, it is expected to obtain filing acceptance in U.S. in the fourth quarter of this year, based on data from the Tropion Lung-01 and Tropion Breast-01 trials, respectively. Slide 31 and after give next wave update. Slide 32 shows Valimectastat. In the Valentine PTC-L01 study, valimetostat showed clinically meaningful benefit for patients with relapsed or refractory peripheral T-cell lymphoma. Ministry of Health, Labor, and Welfare gave Sakigake designation for valimetostat in PTC-L, and the filing was accepted based on the data from this study to date. In this slide 33, I would like to explain about Dicerona. Dicerona is the first messenger RNA vaccine made in Japan that employs our proprietary cationic lipid. It was approved in Japan last November as an anti-COVID-19 vaccine for Omicron XBB.1.5 strain. Slide 34 shows DS2325. DS2325 is a KLK5 inhibitor developed for Netherthorn syndrome, a rare genetic disease affecting ichthyosis and atopic dermatitis. In the U.S., it has received orphan drug, fast drug, and also orphan pediatric disease designations. A Phase 1b2 study was initiated last December. Slide 36 shows the future news flow. First of all, as I mentioned earlier about NHER2, it is expected that the results of the approval review of NHER2 for second or later lines of HER2-expressing solid tumors across cancer types will be received in the first half of the fiscal 24th. In addition, for HER3-DXD, the company expects to receive the results of the review in the U.S. for the third-line treatment of EGFR-mutated and non-small-cell lung cancer based on the data from the Hatena Lung-01 study in the first half of fiscal 24. The data for the ongoing Destiny Breast 06 trial for NHER2 was previously expected in the second half of the current fiscal year, but it will be available in the first half of the fiscal 24. This change in timeline is not unexpected due to the event-driven nature of the trial, and the trial itself is progressing smoothly. The slides after 737 are appendix. We have lists of milestones and pipelines for your reference. That's all from myself.

From here on, we are going to entertain questions from the audience. Thank you very much. First, Mr. Yamaguchi from City Group Securities, please. Hello, can you hear me? Yes, we can hear you. Thank you. Yamaguchi from City Group speaking. Thank you for your time. I have a few questions. First, Thank you for your question. Regarding the downward revision, we wanted to be as accurate as possible about the numbers which are reflected this time As we explained during the presentation, in terms of the future growth, we have no concern at all. If you look at the current segments one by one, in the HER2 positive segment, NHERD's new patient share has reached 60%, and we continue to make efforts for further growth. We are analyzing the details of the prescribing physicians and working to understand for which physicians we implement information provision and promotional activities. We are doing something similar in the HER2L segment as well. The current market penetration is 60%. We are working on initiatives to realize meticulous focus on physicians. We will see further new data readouts into the future, including DB09 readout for HER2 positive and DB06 readout for HER2 low. Based on new data, We are moving with a plan to realize further expansion and deliver the drug to more patients. Excuse me, what's the reason? What you said is not really a reason. What's the reason? In reality, our penetration has come to a substantial level. As I mentioned a bit, there are doctors who are not using NHERT at all. Doctors who are using, but not for all patients. And doctors who are using quite frequently for almost all patients. We are doing such segmentation. There can be a variety of reasons. There is a tendency for each physician. It's difficult to mention just one reason. I see. Right now, we are rolling out meticulous promotion activities so that more doctors will use our drug. Understood. So there is no special factor. You found that in FY2023, in the remaining three months, according to your plan, there is a slight shortage. So using your meticulous model, you made a revision. So there has been no special factor, right? But rather, penetration has been quite fast. There was some area where it didn't increase very much. So in total, you have made a downward revision, just slightly, correct? In the her-to-law segment in particular, market penetration has made progress very rapidly. If we want to grow further from now on, we need very meticulous initiatives. Understood. Thank you. I want to make one confirmation about DattoDXT. During the seminar at the conference, you made a presentation suggesting filing for lung cancer. Also today, your comment suggested filing for breast cancer as well. Submission was already filed for lung cancer. You already filed your submission for breast cancer and are now waiting for the acceptance of your filing? Is this a new update? Thank you for your question. As for Tropion Breast01, in the fourth quarter of FY2023, We are aiming to receive acceptance of our filing. Process-wise, we are making steady progress. Did you file your submission? We cannot disclose yet, but we are to receive acceptance in the fourth quarter of FY2023, for sure. When accepted, it will be subject to press release as the acceptance of filing, right? No change in that plan, correct? Yes, that's the plan. Please wait for some more time. Yes, may I ask my third question? Yes, please. Thank you. As for Esperion, the payment amount was described. From Novartis, you received ransom payment. Any accounting treatment of the Esperion-related payments to occur in the fourth quarter? Is that already processed? Or it's not decided yet, so there is a possibility of accounting treatment to occur from now on. This is about payment you will make. We will examine the details of account treatment and share the information when payment occurs. Do you mean this can be a factor for downward revision in the fourth quarter? It will depend on the way of booking. including the question whether it can be a major factor, we will give you an update. On this matter, nothing has been decided yet, and forecast numbers can be subject to change in the fourth quarter. We cannot rule out that possibility, but we are not disclosing the numbers as of now. Okay, understood. That's all from me. Thank you very much. Next. Next. Mr. Wakao from JP Morgan Securities, please. Wakao from JP Morgan speaking. Thank you for your time. I also would like to ask you a question about NHERT in the United States. I was able to understand the current situation very well. Regarding your FY2024 outlook, from your explanation, I got the impression that HER2 low and second line HER2 positive segments may not grow so much. On the other hand, what will contribute to your performance in FY2024 would be pan tumor 02 study now under rolling review. If approved, that will make contributions. Can I assume this way? Yes, we believe that pan tumor will also contribute. During my presentation earlier, I might have given you a negative impression So I'd like to add. In reality, HER2 positive segment is growing. There is still a lot of room for further growth by implementing promotional activities, in our opinion. The same is true with HER2 low. Also in HER2 low segment, we think there is still a lot of room for growth. Understood. The current indications and found tumor, if approved, will also contribute positively. Is my understanding correct? Yes. Understood. Next, I have some questions about DATO-DXD. I do understand that Tropion Lung-01 OS final analysis results are event-driven, so you may not be able to tell me the specific timings, Could you give me a rough idea, like in around which month or later? Looking at clinicaltrials.gov, primary completion was January, but in mid-January this year, primary completion was changed to the 29th of February. As the timing of primary completion, data will become available, and then analysis will start from there, so according to April or later, can you make any comment on the timing as of now? Thank you for your question. Your understanding is correct about the relationship between primary completion and top-line results. Final OS data will become available in calendar year 2024 according to a plan. We are not yet in a stage to announce the timing more accurately. Please understand that it will become available in calendar year 2024. Understood. Thank you. I also have a question about the handling of OS results. After consultation with FDA, your filing was completed. During the review period, OS final analysis results will be submitted according to my understanding. If you can achieve statistically significant difference in the final OS results in the ITT population, that will be great. On the other hand, what's complicated is as follows. If non-squamous cell alone has good results, how are you going to handle the data? Have you reached certain agreement with FDA on this point? Or have you discussed this matter with FDA? If it's not met in the ITT population, you will start negotiations with FDA at that point in time if you have already obtained promising results in non-squamous cell. Do you feel that you may be able to receive approval? Right now, because of the negotiations with FDA, what we can disclose is limited, but our position is based on the ITT population. Even if we decide to proceed with non-squamous cell cancer, still, we believe this is highly beneficial for patients. Whatever situation we would face, we are certain that we will move forward. Regarding your question about what stage we are in, in terms of the discussions, OS data is not yet available. So once OS data becomes available, we will have full-scale discussions. Allow us to refrain from commenting on the situation, including whether or not we are discussing what is. Okay, very clear. Thank you very much. That's all from me.

The first question is from Ms. Haruta of UBS. Please. I'm Haruta of UBS. The first question. Concerning Tropion Lung 01, I think I heard that the base case scenario is that PFS data will allow you to get filing submission. Is it correct in my understanding that PFS data is used for review and the final decision is made with OS data? Or is there any possibility that PFS alone will lead you to the approval? We conduct our trial with dual endpoints. Either will be enough for regulatory purpose, but we would like to provide a drug with proper product value supported by clinically meaningful data. The most desired scenario is that both endpoints are satisfied. We have a great expectation on OS data and we would like to wait for the final OS data rather than to discuss if either is enough. I think FDA is thinking on the same line. Thank you. The second question. Tropium Breast-01 for HER2-LOW may make overlap with DB04. I think that DATO is used sequentially after NHER2 has lost its efficacy. When used sequentially, the payload is the same with different targets, resulting in additional efficacy. Is that your hypothesis, correct? What is your thought on sequential use of NHER2 and DATO? Thank you very much for the question. NHER2 is for HER2-positive. Entropion is tested for TNBC in various settings, including first-line or earlier and neoadjuvant settings. Differentiation point of NHER2 and DATO is HER2 expression or TNBC. For late phase, T-tropium breast 01 and destiny B04 looks at second line and later for HER2 low or HER2 ultra low. We would like to offer treatment from late line to new argument and HER2 positive and HER2 ultra low. The strategy for HER2 low in early line Neil Adjuvant, and Adjuvant is under discussion now. Thank you. The next question. Mr. Murauka of Morgan Stanley MUFG. Good afternoon. I am Murauka of Morgan Stanley. I think you want to say that your past growth is attributable to your local rep making focused call on heavy user physicians, leading less frequent visit to non-heavy users. You said you can expect further growth if you make a little bit more effort on them. Am I right? Thank you for the question. It is difficult to explain this part, but the heavy user prescribers have used it in sufficient number. They have already used it. And the next target is those who have used the product, but not for all patients who are indicated. and they use other drugs. Non-users have various reasons why not, but they are limited in number. Very important target is physician who have used but not to all the patients who are indicated. I don't know. It's a good way to express it, but you have kind of ignored them. Do you have any reflection? We would like to focus in our activity so that we can better allocate resources. So far, market penetration didn't require such a focus. Understand. Thank you. The next question is on the next term. This is to confirm you. The mid-term plan is up to 25, and you said that you will have significant growth in fiscal year 24 toward the mid-term plan. It is a profit. So is it okay to expect your result in three months? Yes, significant growth. It is very difficult to define significance. But we have updated April last year, the KPI of the mid-term plan for 2025, and we are more confident in achieving this target. With the coming future plan in mind, we would like to make an update when we can make an announcement of the account settlement for this fiscal year. Thank you. This is the last question of mine. The plan you made the revision three months ago and this time have some effects on milk alliance and in order to understand it better I think that you have the deferred profit of 13 billion yen for three products. If I remember correctly, three months ago, you said that 10 billion yen for the Sales of Milk Alliance and suppressing 10 billion yen for R&D, and these effects are incorporated. This is what you explained. Are there anything which is not included? Will you please explain this? Yes. For the products to be developed or developing products, we have developing plans and it is more specific, it becomes more specific through the discussion with Merck and the projects on the items to be developed became much clearer, resulting in the increase in the share received from Merck. So in October, our guidance is 10 billion yen, but currently we think that it would be 20 billion yen. Concerning the deferred profit, there is no major correction made. There is some minor adjustment made due to the change in the exchange rate. All right. In page four of your appendix, there are three, patalitumab, iphinitumab, and DS6000. The total is 13 billion. In the past, there is zero. The number is zero. So they are included, but you haven't broken down, correct? Correct. Correct. Essentially, we have included these in the previous calculation. So you have just shown the breakdown. Yes. Thank you. I understand. That's all. The next question. BOA Securities, Mamegano-san, please. Can you hear me? I'm Mamegano of BOFA. Thank you. I have a question on Destiny Breath 06 of NHER2. The top line results will be delayed a bit. I heard that it would be available in the first half of this fiscal year and it is delayed one after another, and this time you said that it would be in the next fiscal year or up to the September of this calendar year, so there is one year delay. It is a big delay compared to the original idea, but you are confident in achieving a good top-line result. Thank you very much for your confirmatory question. As mentioned in my presentation, the study is event-driven, and the data cannot be collected unless the event takes place. We are waiting for that. We said that it will be available in the first half of 2024, but the first half is long. There are six months. So we are not so much worried about it, and we would like to make it as transparent as possible. I would like to have your kind understanding. Thank you. Another question is HER3-DXD. Now you are doing confirmatory phase 3, and you are doing the phase 3 study for the second line. This is the Haterna Lung 02. That's okay. But for the further ahead, the first line, with the osmeltinib combinations, and there is a phase 1B study with the combination of osmeltinib, And when we look at the competition landscapes, the competition is very harsh with the Johnson & Johnson product. Are you thinking of combining with those drugs, or are you... comparing with Johnson & Johnson. For Hortana lung, 01 and 02 are in progress, as you mentioned, and we are conducting the study with a combination of osmoltenib. Data will be available in the future, but these three would be the major pillars. Understand. My post-study showed that Johnson & Johnson product wins against osmoltenib So you are fighting with that product? The direction for Ocimelta nerve is not determined or is not finalized until the data is available. We don't know who will be the best segment, best patient, what would be the position. We are conducting her 10 along 1 and 2 to lay the foundation for her 3. And this foundation will support the whole program in the future. and we would like to share the information when the program is finalized. Thank you. There are other people who raised hands, but sorry, we have come to the scheduled time. If you have further questions, will you please send your question to IR. This concludes today's meeting. Thank you for your kind participation.