Daiichi Sankyo Co Ltd Ord

Ogawa speaking. Thank you very much for joining Daiichi Sankyo's financial results presentation out of a very busy schedule today. I'm going to explain FY2024 first quarter financial results we announced at 1 p.m. on Wednesday, July 31st, JST, based on our presentation materials. Please turn to page 3. This is the agenda for today. We will cover FY2024 First Quarter Consolidated Financial Results, Business Update, and R&D Update in that order. R&D Update will be explained by Toshinori Agatsuma, Head of R&D Division. We will entertain your questions at the end. Please turn to page 4. This is an overview of FY2024 First Quarter Consolidated Results. Revenue increased by 85.3 billion yen or 24.3% year on year to reach 436.2 billion yen. Cost of sales increased by 1.4 billion yen from the previous year. SG&A expenses rose by 32 billion yen. An R&D expenditure increased by 23.5 billion yen year-on-year. As a result, core operating profit increased by 28.4 billion yen or 63.9% year-on-year to reach 72.9 billion yen. Operating profit, including temporary gains and losses, increased by 48.9 billion yen or 111.2% year-on-year to 93 billion yen. Profit attributable to owners of the company increased by 28.4 billion yen, or 49.8% eon-year, to reach 85.4 billion yen. As for the actual currency rates, the US dollar was 155.89 yen, the yen depreciated by 18.52 yen eon-year. The euro was 167.88 yen, the yen depreciated by 18.42 yen eon-year. Please turn to page 5. From here, let me explain positive and negative factors for our revenue compared to the previous year. Revenue increased by 85.3 billion yen a year. I will explain its breakdown by business unit. First, in Japan business unit. Due to the exclusion of Daiti Sankyo ESFA from consolidation, we no longer book sales of its products from April 2024. On the other hand, sales increased for direct oral anticoagulant Nixiana, anti-cancer agent Enhert, and pain treatment Adige, and Daiti Sankyo healthcare products. In addition, we booked realized gains on unrealized gains of inventory for Daiichi Sankyo ESFA products. So, revenue increased by 8.5 billion yen in Japan business unit as a whole. Next, let me explain our overseas business units. Forex impact is excluded here. In oncology business, revenue increased by 23.2 billion yen due to the growth of Enherd in the United States and Europe. As for American region, due to sales decrease for iron deficiency anemia treatment Vinofar, revenue decreased by 1.4 billion yen. Revenue for EU specialty business increased by 11.2 billion yen as sales rose for Lixiana and hypercholesterolemia treatment Nidamdo Nostendi. In ASCA business, responsible for Asia, South and Central American regions, revenue rose by 5.9 billion yen due to the growth of Enherd, mainly in Brazil. As for upfront payment and regulatory, sales milestone, etc., related to alliance with AstraZeneca and collaboration with U.S. Merck, We booked as revenue upfront payment related to a strategic collaboration with U.S. Merck for three DXD-ADC products including HER3-DXD, so revenue increased by 7.6 billion yen Forex impact increased our revenue by 30.4 billion yen in total Slide 6 shows the factors behind the change in core operating income

I will explain the items which contributed to the increase by 28.4 billion yen. As explained earlier, sales revenue increased by 85.3 billion yen, including an increase of 30.4 billion yen due to the effect of foreign exchange rates. First, I will explain about the cost of sales and expenses excluding the forex impact. Cost of sales decreased by 8 billion yen despite an increase in revenue due to an improvement in the cost of sales ratio resulting from an increase in sales of in-house developed products such as NH2 and a change in the products mix resulting from the elimination of sales of Daiichi Sankyo S-Fab products. SG&A expenses increased by 17.4 billion yen due to an increase in profit sharing with AstraZeneca for NH2. R&D expenses increased by 15.2 billion yen due to an increase in R&D investments, including an increase in R&D personnel in line with the progress of the development of 5DXT ADCs. The increase in expenses due to the impact of foreign exchange effects was 32.4 billion yen in total and the actual increase in co-operating profit excluding the forex impact was 30.4 billion yen. Next on slide 7, I will explain the increase and decrease in profit for the year. As explained earlier, co-operating profit increased by 28.4 billion yen including the forex impact. Temporary income and expenses increased by 20.5 billion yen year-on-year due to the recording of a gain on the transfer of Daiichi Sankyo ESFA shares and others. Financial income and expenses increased by 9.1 billion yen compared over the previous year due to an improvement in foreign exchange gains and losses. Corporate taxes increased by 29.7 billion yen year-on-year due to an increase in profit before tax, while income taxes decreased in the first quarter of the previous year due to the impact of the tax-effect accounting associated with a decision to transfer Daiichi Sankyo ESFA, which effect is absent this year. As a result, co-operating profit of the parent company increased by 28.4 billion yen

to 85.4 billion yen. Next, I would like to talk about business updates.