Daiichi Sankyo Co Ltd Ord

Thank you for waiting. Now we would like to begin Daiichi Sankyo's financial results conference on FY 2024. I am Asakura from Corporate Communications. I am your moderator today. We will be using Japanese and English in this conference. We have simultaneous interpretation services available. Please click on the interpretation icon at the bottom of the Zoom screen. and select either Japanese, English, or original audio. If you select original audio, you will hear the original sound. On the Zoom screen, we'll be projecting either English or Japanese, depending on the language of the speaker. On the live streaming, we'll be presenting the Japanese version. If you'd like to download Japanese or English presentation materials, please go to the IR section of our corporate website. Let me introduce today's speakers. Okuzawa, Representative Director, President and CEO. Ogawa, Senior Executive Officer, CFO. And Takeshita, Head of Global R&D. First, Okuzawa and Takeshita will give you a presentation on FY2024 financial results, five-year business plan update, and FY2025 forecast. And we'll be taking questions from investors and analysts until 4.30 p.m. And we will have a separate Q&A session for members of the media from 4.40 p.m. Today's conference is recorded. Now, let's begin. Okuzawa-san, the floor is yours.

This is Okusawa.

Thank you for taking out of a busy schedule today to attend Daiichi Sankyo's financial results briefing. I will now explain the financial results for 2024, which were announced at 1 o'clock today on the basis of the presentation materials.

Please see slide 3.

We will discuss consolidated financial results for FY2024, business update, R&D update, fifth five-year business plan update, FY2025 forecast in this order. Dr. Takeshita, global R&D head, will give the R&D update. We will take your questions at the end of the presentation. Please refer to slide 4. This slide shows a summary of consolidated financial results for FY2024. Revenue increased 284.6 billion yen or 17.8% year-on-year to 1,886.3 billion yen. Cost of sales increased 1.0 billion yen from the previous year, SG&A expenses increased 97.5 billion yen, and R&D expenses increased 68.5 billion yen. As a result, core operating profit increased 117.6 billion yen, or 60.2% to 312 billion yen. operating profit including temporary income and expenses increased by 120.3 billion yen or 56.9% to 331.9 billion yen and profit attributable to the parent company rose by 95.0 billion yen or 47.3% to 295.8 billion yen. The exchange rate for the dollar was 152.57 yen per US dollar, a depreciation of 7.95 yen per dollar, and 163.74 yen per euro, a depreciation of 6.95 euro per euro year on year. Please refer to slide 5. I will now explain the factors behind. the year-on-year positive and negative factors. Revenue increased by 284.6 billion yen year-on-year, and I will explain the breakdown by business unit. First, the Japan Business Unit, etc., reported an increase in sales of Lixiana, direct oral anticoagulant, Talije, pain treatment, and Ehart's anti-cancer agent, as well as the sales of Daito Sankyo Healthcare. A gain on realization of unrealized gains on inventories related to Daito Sankyo as far as products was also recorded. On the other hand, sales decreased by 13.5 billion yen due to the exclusion of Daiichi Sankyo ESFA from consolidation and that sales of its products are no longer recorded from April 2024 onwards, as well as a decrease in sales in the vaccine business. Next, I will explain the overseas business units. This section excludes the impact of foreign exchange rates. The Oncology Business Unit reported an increase in sales of 105 billion yen due to growth in sales of Enhards in the US and Europe. The American Regent reported sales increase by 2.4 billion yen mainly due to an increase in sales of generic injections. despite a decrease in sales of Vinafa treatment. In the EU specialty business, sales increased by 38.2 billion yen mainly due to sales growth of Lixiana and Niremdo a treatment for hypercholesterolemia. The Asuka business, which is in charge of HR Latin America, reported an increase of 27 billion yen, mainly due to the sales growth of Enhatsu, especially in Brazil. Upfront payments, development and sales milestone payments related to the collaboration with AstraZeneca and US Mark increased sales in total by ¥74.2 billion, which include development milestone payments from AstraZeneca for the approval of NHERTS for chemotherapy-naive, hormone receptor-positive, hard-to-law or alder-law, breast cancer in the u.s and europe and sales milestone payments for the achievement of 3.5 billion dollars in annual sales and upfront payment based on the strategic collaboration agreement with u.s mark signed in october last year contributed to sales throughout a fiscal 2024 The total impact of a foreign exchange rate on revenue was 51.3 billion yen. Slide 6 shows the factors behind the increase or decrease in core operating profit. As explained earlier, revenue increased by 284.6 billion yen, including 51.3 billion yen increase due to falling exchange effects, and this shows the breakdown of the increase of revenue 117.6 billion yen. Next, I will explain cost of sales and expenses excluding the effect of foreign exchange rates. Cost of sales decreased by 9.8 billion yen due to an improvement in the cost of sales ratio. Despite an increase in revenue, reflecting an increase in sales of in-house developed products such as Enhertz, a change in the product mix due to the no longer including sales of Daichi Sankyo S5 products, and an increase in development and sales milestone income from strategically collaborated products. SG&A expenses increased by 71.9 billion yen, mainly due to an increase in profit sharing with AstraZeneca in relation to Enhards. R&D expenses increased by 54.5 billion yen due to an increase in investment in R&T, mainly as a result of an increase in R&T personnel in line with the progress of the development of five DXD ADCs. The total increase in expenses due to foreign exchange effects was 50.5 billion yen, and the actual increase in core operating profit excluding a foreign exchange impact was 116.8 billion yen. Slide 7 shows the changes in profit. As explained earlier, core operating profit increased by 117.6 billion yen, including the impact of foreign exchange. Temporary income and expenses increased by 2.8 billion yen from the previous year, mainly due to a decrease in temporary expenses. Financial income and expenses decreased by 1.9 billion yen year on year, mainly due to a deterioration in foreign exchange gains and losses. Income taxes increased by ¥23.7 billion year-on-year due to an increase of income before income taxes. As a result, profit attributable to the owners of the company was ¥295 billion, an increase of ¥95 billion from the previous year.

Next, I will talk about business updates. First, I would like to talk about the progress in 2024 for the realization of the maximization of 3ADC. Please look at slide 10. This slide shows the sales situation of EN-HER2. The sales of the product in 2024 are due to the growth of the sales, focusing on HER2 subcutaneous cancer secondary treatment and the HER2 subcutaneous cancer of chemical therapy.

552.8 billion yen, achieving double digit growth across all regions, mainly driven by increased sales in second line treatment for HER2 positive breast cancer. and chemotherapy treated HER2 low breast cancer. For FY 2025, we expect product sales to increase by 109.3 billion yen, reaching 662.1 billion yen. In the U.S., sales for FY 2024 rose by 34% year-on-year to 302 billion yen. Enharts has solidified its number one position by maintaining over 50% new patient share in existing indications for breast, gastric, and lung cancers. In addition, in the newly approved indication for previously untreated HR-positive, HER2-low or ultra-low breast cancer granted approval this January, N-HER2 has already achieved the number one share among new patients. Moreover, in HER2-positive solid tumors, prescriptions are expanding steadily across major applicable cancer types. with Enhartu taking the top new patient share position in second-line treatment for multiple cancers, including HARTU over-expressing non-small cell lung cancer, endometrial cancer, and ovarian cancer. In Europe, sales grew by 47% year-on-year to 149.6 billion yen. Sales are steadily expanding, especially in the EU four countries, Germany, France, Italy, and Spain. In second-line treatment for HER2-positive breast cancer, the new patient share remains above 60%, while in chemotherapy-treated HER2-low breast cancer, the share exceeds 50%. NHER2 has secured the top position in both indications across all four countries. Furthermore, In March of this year, NHER2 received additional approval for previously untreated HR-positive and HER2-low or ultra-low breast cancer. In Japan, sales rose by 30% year-on-year to 31 billion yen. Enhatsu continues to maintain and expand its number one new patient share across all approved indications, breast, gastric and lung cancers. The new patient share for second-line HER2-positive breast cancer remains above 50%, while for chemotherapy treated hereditary low breast cancer, it has expanded to over 60%, solidifying its top position in the market. In the Asuka region, sales increased by 58% year-on-year to ¥70.3 billion, with significant growth particularly in China and Brazil. In China, as of January this year, second-line HER2-positive breast cancer and chemotherapy-treated HER2-low breast cancer were included in the National Reimbursement Drug List, or NRDL, and reimbursement has started, leading to increased sales. In Brazil, prescriptions are steadily expanding in existing indications. Enhatsu holds more than 70% new patient share in second-line HER2-positive breast cancer and has also achieved the top share in chemotherapy-treated HER2-low breast cancer, firmly establishing itself as the market leader. It should be noted that sales figures in the Asuka region include co-promotion revenue from countries such as China and Hong Kong, where AstraZeneca books product sales. Going forward, we will continue working to further penetrate existing markets, expand the number of countries and regions where Enhatsu is launched, and obtain additional indications so that we can deliver this medicine to as many patients as in need as possible. Next, I'd like to talk about the regulatory approvals for that doorway. Please turn to slide 11. Since December of last year, we have obtained regulatory approvals for Dutroway, our anti-Trop2 ADC, in Japan, the U.S., and Europe. Dutroway is the second product developed using our DXD ADC platform following Enhatsu. It was approved in Japan in December, in the U.S. in January, and in Europe this month. The approved indication is for patients with unresectable or metastatic HR-positive HER2-negative breast cancer who have received endocrine therapy and chemotherapy. Sales have already started in Japan and the United States. In FY 2024, global product sales reached ¥1.4 billion, indicating a smooth market launch. By offering a new treatment option for breast cancer, we aim to contribute to improving outcomes for more patients. Please take a look at slide 12. In August last year, we added MK6070, an asset under development by US Milk, to our strategic collaboration agreement covering three DXD-ADC products. Like the other three products, this asset will be co-developed and co-promoted worldwide, excluding Japan. We are also expecting synergies through combination therapies with candidates such as IDXD. Next, let me update you on our progress in FY2024 toward driving profit growth of existing businesses and products. Please turn to slide 14. First, progress in Japan. We obtained a new indication for the anti-cancer agent Esalmia and took over the marketing of the insomnia drug Belsomra from MSD. In the vaccine segment, we launched the COVID-19 vaccine Digerona and the intranasal influenza vaccine FluMist. Additionally, in February this year, Lixiana received approval for a new indication. In Europe, in May last year, Niremdo, Nustendi, our treatment for hypercholesterolemia received approval for the reduction of cardiovascular event risk. We will continue to strengthen our product portfolio to further enhance our contribution to patients. Next, I will talk about progress in FY 2024 toward identifying and building the next pillars of growth. Please turn to slide 16. In December of last year, based on the potential of DS3939, our sixth DXDA-DC product, we acquired the intellectual property rights for the anti-TAMAC1 antibody. Currently, DS3939 is undergoing Phase 1-2 clinical trials for various solid tumors. Next, I will speak about our FY 2024 progress toward co-creating value with stakeholders. Please turn to slide 18. This slide shows our FY 2024 annual dividend forecast. With strong business performance, especially driven by Enhatu, we plan to increase the annual dividend per share by ¥10 year-on-year to ¥60. Please turn to slide 19. To enhance and enrich shareholder returns, we decided to conduct two rounds of share buybacks since April 2024, acquiring a total of 250 billion yen worth of our own shares. We will continue working to maximize shareholder value through improved capital efficiency and enhanced shareholder returns. From now on, we have R&D update. The head of global R&D, Takeshita, will take over.

Thank you very much, Okuzawa-san. Next slide, please. So it's a pleasure to give you an update on our progress towards maximizing our three ADCs. First, as a review of achievement for fiscal year 2024, I would like to highlight this one single slide here as our major achievement in the fiscal year 24, Destiny Breast 06, a phase three study. I think all of you are quite aware of this, but I have to say that we are very, still very proud of our accomplishment here that we have demonstrated within HER2 efficacy in the HER2 ultra low, as well as HER2 low chemo Navy breast cancer, and it is now approved in the US and Europe. The data are shown here for both the HER2 low patient population and HER2 low plus ultra low patient population. And in both cases, you'll see that the hazard ratio is very strong with a very significant p-values. And it is now approved in many countries, including US and Europe. And these approvals cover about 90% of all patients with metastatic breast cancer. Next slide. Okay, now this is our breast cancer map. And I'm going to talk now about the new study breast cancer DB09. And here in this slide, it illustrates exactly where DB09 sits in our breast cancer map. It is in the front line setting for patients with HER2 positive breast cancer. And it is basically a phase three study evaluating the efficacy and safety of ANHR2 compared to pertuzumab plus standard of care in the frontline setting. Next slide. And as you are all aware, we have issued a press release indicating that we have achieved a positive clinical trial data. Therefore, that N-HER2 plus pertuzumab is a highly statistically significant and clinically meaningful improvement in progression-free survival as a frontline therapy. Just to go over the details of this clinical trial, it is a three-arm study. Arm A is N-HER2 alone plus placebo. Arm B is N-HER2 plus pertuzumab. Arm C is the standard of care THP. which stands for trastuzumab plus paclitaxel plus pertuzumab. So this is their interim analysis and not the final analysis. So the interim analysis is really designed to show only the superiority of progression-free survival. And this is exactly what we saw. We have indicated in the press release that the arm B achieved a PFS improvement that was highly statistically significant and clinically meaningful. And so very, very, very happy with that result. In HER2 monotherapy arm, this is arm A, remains blinded to patients and investigators and will continue to the final PFS analysis. And we will be reporting the data from this study at some point in the very near future at an upcoming medical meeting. And we also plan to share the data with regulatory authorities. Next slide. Now moving on to gastric cancer. And this is also here a gastric cancer disease map. And I want to make sure to mention that we reported recently that the gastric 04 study was positive. And the gastric 04 is the, you can see here that it's a second line clinical trial. As you may know, we are already approved in the US for a second line gastric cancer, but in other regions of the world, such as Japan, Europe, and China, where we either are not approved, for second line or where we only have a conditional approval, the gastric O4 study will be very useful to bring this therapy to second line cancer patients. I think we also want to mention that the frontline study that we have two of them, DESTINY-GASTRIC-05 and ARTIMED-A-GASTRIC-01 study, both of these are phase three studies in the frontline setting, and both of these started in March of 25. Next slide. Okay, just to go beyond these indications to include now the small non-small cell lung cancer particularly in the HER2 overexpressing non-small cell lung cancer we are planning to start this clinical trial HL06 and here is the study design it is a combination of in HER2 plus pembrolizumab versus the standard of care which is pemetrexed plus platinum of choice plus pembrolizumab We plan to start this in the first half of the fiscal year 2025. Next slide. Okay, now here's a brief update on our pan tumor program for N HER2. As you know, we are approved in US as a pan tumor indication for N HER2 patients with any positive HER2 positive solid tumors. And as an update for you, we have filed in Japan for a HER2-expressing or recurrent or metastatic solid tumors based on the HERALD study, which was a Japan-only, Japan-specific clinical trial, as well as the supporting data from the PANTUMER02 colorectal cancer study and lung cancer study. And we hope to therefore bring this therapy to the many patients in Japan in the tumor agnostic manner. In terms of expanding our HER2 Expressing Tumor program, I would like to mention that we have initiated, based on the various promising data, Destiny BTC01 study, focusing on biliary tract cancers, targeting not anymore the relapsed refractory setting, but the frontline setting. So this is a phase three study that we have started. with the aim of obtaining approval in this patient population. We have also started now our plans to initiate a new study in ovarian cancer called Ovarian 01 Study. And the next slide shows the details of this ovarian cancer study. We plan to start this in the first half of fiscal year 25, and here is the study design. This is a frontline setting patient population in which we are comparing Bevacizumab maintenance therapy, which is a standard of care, versus a combination of Bevacizumab Plus and HER2. This is a 580 patient study, and we are, of course, very hopeful that it'll give us positive data in ovarian cancer in the very near future. Next slide. Okay, now we are going to move on to natural way program. And we're going to start with our, again, our breast cancer disease map. And you'll see here that our major natural way focus is in blue, which is a triple negative breast cancer patient population. I think you are aware that we have obtained approval for triple negative breast cancer based on a tropium breast cancer 01 study. Okay. And now we are still waiting on results of some of our ongoing clinical trials, particularly tropium breast cancer 02 in the PD-L1 low patient population, the sister study of the tropium breast 05 in the PD-L1 high patient population. Okay, and you want to mention that the top line results for propion breast 02 is anticipated in the first half of fiscal year 2025. Okay, next. Next, we're going to touch on our progress in the rest of the non-small cell lung cancer program, specifically focusing on the EGFR mutated patient population. So here again is the entire disease map for lung cancer and to really focus here on EGFR mutated patient population. And here is our update for you here. First, as you remember, the FDA issued a CRL, complete response letter for HER3-DXD, HER3-Lung-01 study back in June. based on some manufacturing issues found at an inspection. We did report that in September, HER-30102 made its primary endpoint. But in the meantime, we have submitted the DETROA submission as a priority review for EGFR mutated non-small cell lung cancer. And we are expecting a decision from the FDA by July 12th, 2025 for DATROA approval or not in this EGFR mutated patient population. It's the PDUFA date of July 12th. You can also see here in the rest of the lung cancer program that we have a number of phase three DATROA studies that are started in physical year 24. And we are, of course, awaiting the results of the ADVANZAR study in the frontline setting, which is anticipated in the second half of the calendar year 2025. Okay, now I do want to mention here that we have seen the ORCHARD clinical trial data in which detroway is combined with osimertinib in patients with EGFR-mutated small cell lung cancer who have progressed after the frontline osimertinib therapy. So this is really a data generation hypothesis testing clinical trial in phase two setting in the ORCHID study. And you can see here that even in this patient population, we are seeing a very promising efficacy data in terms of progressing for survival, in terms of number of months that we're seeing, particularly on the right-hand side, you'll see 11.7 months with the Osimertin plus a higher dose of Dicto. And based on these, we have two new studies, phase three studies of tropion lung 14 and tropion lung 15, which will evaluate the efficacy of DatroA in combination with osemertinib in the EGFR mutated non-small cell lung cancer. Next slide. Okay, now we are going to move on to the HER3-DXT program. And they get to give you an update on this study, this is a new study that we plan to initiate in the first half of fiscal year 25. The study is called her thing abreast zero three study. It is a follow up to the very promising data that were reported already as single agent her three dxd from the French Icarus study, so this is a designed to be a signal seeking. study in neoadjuvant setting in which we are studying various combinations of HER3-DXD plus pembrolizumab in various patient populations. Okay, next slide. Okay, now in terms of profit growth for current business and products, next slide. I do want to briefly update you on the rest of the program, particularly for the ID XD and the RD XD programs. On the ID XD side, we are making very steady progress in advancing the pipeline, particularly in this small cell lung cancer setting. This is small cell lung cancer, which is in contrast to the non-small cell lung cancer program that I mentioned to you earlier. And in small cell lung cancer, we know already based on earlier data that this drug appears to have a very active profile in small cell lung cancer. And we are proceeding to confirm that activity as well as to make progress in advancing our pipeline towards an approval. And we hope to be able to give you a very good update on this in the very near future. In addition for the IDXT program, we are planning to start a new trial in esophageal cancer and also in prostate cancer. And I'll go over this with you a little bit more in the next few slides. Moving on to the RDXD program on the, please go back, yes, okay. Moving on over to the right-hand side in the RDXD program in ovarian cancer. Again, we want to mention that we are making very steady progress in advancing ovarian cancer program and that we do hope to update you on any advances in the near future. But we are very happy so far with the results that we are seeing. And we do want to mention here again that we have initiated additional RDHD programs beyond ovarian cancer to include exploratory studies in multiple solid tumors, including lung cancer and various GI cancers. Okay, next slide. Okay, this is some results, I mean, some details of a new clinical trial. in the IDXT program. We plan to start this clinical trial in the first half of physical year 25. This is a prostate cancer program in a chemo-naive metastatic castorine-resistant prostate cancer. And this is a clinical trial, very simple design of IDXT versus docetaxel. This is a 1,400 patient study. And as I mentioned, we are basing this we're starting this the first half of this fiscal year based on some early gator already that we have seen in the phase one to study that we have already presented to you back in as more 2023 In addition, Next slide. We show you that in addition to the prostate 01 study, we are also investigating various ways in which we can give IDXT as combination. This is the ID8 prostate 02 study, which is a phase one slash two combination study. Again, in a chemo-naive setting in which we want to bring combinations. of IDXT with two important drugs. One is the MK5686 drug. This is a Merck investigational drug, which is a CYP11A inhibitor. Again, being developed by Merck in prostate cancer indication. And of course, this is a major advantage of our alliance and partnership with Merck that we are able to access very promising drugs in combination with IDXT. Second combination is with the ARPIs, abiraterone or enzalutamide. And this is also going to be a combination that will be studied in this prostate 02 study. And again, this is a study that will be initiated in the first half of this year. OK, next slide. Finally, just to round out the update on the RDXD This is a new study in which we are going to study diseases other than ovarian cancer. So prostate cancer, biliary tract cancer, colorectal cancer, and GE adenocarcinomas. Again, this is an exploratory signal-seeking study, and we will start this in first half of 2025. Okay, next slide. Okay, and this is just really to complete the rest of the major pipeline advances with ISARMIA, Banflita, 3939, 2243, Alexiana, Talija, and Aichirona. We're also making very steady progress in the rest of our pipeline. Okay, next slide. Okay, in terms of ASCO 2025, next slide, I want to alert all of you to the fact that we want to hold an Investor Relations Conference call at ASCO as ASCO highlights, and here are the dates and times listed here, so we do hope that you will call into this and join us as well. Next slide. Okay, in terms of the news flow for 2025. Okay, next slide. Okay, here it is. For ASCO, these are the confirmed presentations at ASCO. So I guess I want to just emphasize the word confirmed because there are, as you can imagine, some potential late breaking abstracts which have not yet been accepted formally by ASCO. But for example, some of the most recent data sets like DB09 may or may not be part of the late breaker session. But at least for this slide, it does show that what's already confirmed as a major presentations. And as going from that and her to program that that's way program and her three programs. Okay, in terms of a regulatory decision, so this is a listing of what we are expecting to be hearing from various regulatory agencies, particularly in terms of Destiny Breast 06 study. We do hope to hear from the Japanese agency sometime in the first half of 2025. In terms of tropion programs, dead throwaway programs, TL05, the NGFR mutated patient population, We do expect to hear a decision from the FDA sometime in the first half of 2025. Actually, July is what these are . In terms of a key readouts, there's a listing of the key readouts that we're expecting sometime in the near future from the breast cancer DB011 study, DB05 study, and DL04 study. These are all coming from enterative programs. From the DETROIT program, the TB02 study, the triple negative patient population in advance of study, these are going to be the key readouts that we're expecting in the near future. And from the IDXD program, the small cell lung cancer phase two data should be available in the near future. I do want to mention that we do have major plans for presentation of new data at ESMO and WCLC, et cetera, and the San Antonio Breast Cancer Meetings Also, however, they are not part of this because we don't have any confirmation from any of the submitted abstracts. So once we have confirmation, we will give you updates on ESMO and WCLC and other conferences. Okay, and then I think now it's time for me to turn back to Oksava-san for the rest of the call.

From me, Okuzawa, I'd like to talk about the fifth five-year business plan update. Please refer to slide 44. This slide shows the FY2025 targets of the fifth five-year business plan and the four strategic pillars for moving into the sustainable growth stage. On the next two slides, I will explain the progress of each strategic pillar over the four years since FY 2021, when the fifth five-year business plan started. Please refer to slide 45, first about the progress of realization of 3 ADC maximization. Regarding NHER2, in addition to the existing indication for the second-line treatment of HER2-positive breast cancer and chemotherapy treated, hard-to-low breast cancer, we obtained an indication for the treatment of chemo-naive hormone receptor-positive hard-to-low or ultra-low breast cancer in fiscal 2024. In addition to the NSCLC indication, the product also received an indication for the second-line treatment of hard-to-positive solid tumors. The first anti-hard-to therapy approved across early cancer types. and it's making steady progress in maximizing product value. With steady market penetration and expansion of the number of countries and regions where the product has been launched, sales of Benhatsu are growing faster than originally planned. In addition, as mentioned earlier in the L1T update, further indication expansion, studies are progressing smoothly. That way, was approved in Japan, the US, and Europe, and launched in Japan and the US for the treatment of hormone receptor positive and HER2 negative breast cancer with prior endocrine therapy and chemotherapy. In addition, a filing for the indication of previously treated EGFR-mutated NSCLC has been accepted in the US, and studies to expand the indication to the early treatment line of NSCLC are progressing. R3-DXD, along with IDXD and RDXD, has been in need of capacity, resources, and capability enhancement to maximize the DXD-ADC franchise, and we have decided to form a strategic collaboration with USMARC. Quickly, we have started co-development with USMARC so that we will be able to deliver it to more patients more quickly. In addition, we have added MK6070 from USMARC to our strategic partnership and have started co-development as well. with respect to profit growth of existing business and products. Sales of Lixiana, whose product value has been enhanced by the addition of new dosage and administration, are steadily increasing. In addition, sales of Tarije, Benefa, Niremdo, Nustandi, have steadily increased, contributing to the generation of resources for investments for sustainable growth and shareholder returns. Transformation of the business structure to one based on new drugs is also progressing steadily. In addition to the launch of new products such as EMGAL-T and ISAUMIA, and the transfer of products after the expiration of exclusivity periods in various countries and regions, the decision to transfer shares of Daichi Sankyo ESFA and its execution have steadily strengthened profitability. Profits at American region and Daichi Sankyo Healthcare are also growing steadily. Please refer to slide 46. We have also made significant progress in identifying and building further growth pillars. We have positioned IDXT and RDXT as the next growth drivers after the three ADCs as favorable clinical trial data has been accumulated and product potential has been further enhanced. Development of IDXD for small cell lung cancer and RDXD for ovarian cancer is preceding, and exploratory studies in a wide range of cancer types have also been initiated. In addition, the sixth ADXD-ADC, DS3939, has started clinical trial for solute tumors. In addition, clinical studies have been initiated for DS9606 and ADC with a modified PBD payload, which is different from DXT, and approval and supply of Dicerona, a messenger RNA vaccine against COVID-19, have been achieved, and the selection of post-DXT ADC modalities is progressing steadily. In addition, we have established research and innovation institutes in the EU and the US to accelerate continuous innovation through collaboration with external business partners and academia, and established a smart research lab in the US to make progress in establishing next-generation drug discovery processes such as AI drug discovery through robot-based experiments and the use of advanced software. With regard to value co-creation with stakeholders, we decided to increase the dividend for the third consecutive year, reflecting the profit growth of Enharts and the receipt of an upfront payment from the strategic collaboration with US Mark. In addition, since April 2024, we have twice acquired and canceled. own shares to strengthen and enhance shareholder returns. We have also made progress in addressing pandemic risks such as the supply of Daiichi Rona. In addition, in order to reduce the environmental load of our entire value chain, We have joined the international initiative RE100, which aims to achieve 100% renewable energy for the electricity consumed in business activities. We are making progress in our efforts to address environmental issues. Furthermore, through workshops and other activities conducted by management and all employees, we are deepening understanding of the three core behaviors common to the group and promoting efforts to embody them, thereby fostering a 1TS culture in which all employees can work vigorously across national and cultural boundaries. As described above, the four strategic pillars of the fifth five-year business plan are progressing smoothly, and we are even more confident to achieve our goals for FY 2025. Next, I'd like to discuss the prospects for achieving the KPIs of the fifth five-year business plan based on the progress made so far.

Please refer to slide 47. There have been changes in the development strategy of Dattolo, but the sales of main products such as Enharts and Lixiana have been growing steadily, so we will continue to aim for the level of sales revenue estimate of a year ago.

Revenue from the oncology segment is expected to reach 900 billion yen. I will go into the details later. We are aiming to achieve a core operating profit margin of 40% before deducting R&D expenses supported by improvements in cost of sales due to changes in product mix and the efficient and effective execution of expenses. We also aim to achieve an ROE of 16% or higher by balancing R&D investment for sustainable growth and shareholder returns. For DOE , we continue to target 8.5% or more by further improving capital efficiency and enhancing shareholder returns. The assumed exchange rates as of April 2025 for KPI outlook are 140 yen to the US dollar and 160 yen to the euro. Please turn to slide 48. This slide presents our FY 2025 revenue outlook for the oncology segment. Although we expect some decline in revenue due to changes in Datraway's development strategy for lung cancer and delays in the launch timing of HER3-DXT, Enhatsu continues to show strong growth. As such, we expect oncology revenue to reach 900 billion yen. Slide 49 shows our forecast for R&D expenses. For FY 2025, we expect R&D expenses to be approximately 455 billion yen, which is about 75 billion yen lower than the estimators of April 2024. As for clinical development costs, our strategic partnership with U.S. Milk has progressed, and as a result of refining development plans for HER3DXD, IDXD, and RDXD, expenses have decreased compared to the previous estimate a year ago. The partnership with U.S. Milk remains a critical collaboration for us, and we will continue development in close cooperation with them. In addition, medical affairs expenses have also decreased due to changes in the development strategy for DATRO-A in lung cancer and delays in HER3-DXD launch timing compared to one year ago. Over the past four years, Enher2's product value has exceeded initial expectations significantly. We also successfully launched DATO DXD DATRO-A as the second DXD ADC product and efforts to maximize its value are progressing. Toward achieving the FY 2025 targets and realizing our 2030 vision, we will continue to pursue sustainable growth while maintaining a balanced approach to necessary investments for future growth and shareholder returns. we'll continue to challenge ourselves to deliver innovative solutions and contribute to healthier and more enriched lives for people around the world finally i'd like to present our financial forecast for fy 2025 please turn to slide 53. For FY 2025, we are targeting revenue of 2 trillion yen and a core operating profit of 350 billion yen. While we expect some negative impact from foreign exchange due to yen appreciation, we anticipate revenue growth of 113.7 billion yen compared to the previous year, driven by increased sales of Enhatsu and other products, as well as higher milestone income From our strategic partnerships with AstraZeneca and US Milk, cost of sales is expected to increase by ¥14.3 billion in line with sales growth. SG&A expenses are forecast to increase by ¥40.2 billion, reflecting greater profit sharing with AstraZeneca due to enhanced sales growth, increased investment in the oncology business, and strategic investments in DX and IT, and human capital to support medium- to long-term growth. R&D expenses are expected to rise by ¥22.1 billion due to increased investment in the development of five DXDADCs, expanded medical affairs activities, and enhancements to our R&D infrastructure. As a result, core operating profit and operating profit are expected to increase by ¥37.2 billion and ¥18.1 billion respectively reaching 350 billion yen. Profit attributable to owners of the parent is expected to increase by 4.2 billion yen year-on-year to 300 billion yen. The assumed exchange rates are 140 yen to the US dollar and 160 yen to the euro. We expect a negative impact of approximately 75 billion yen on revenue and about 3.5 billion yen on core operating profit due to exchange rates. As of now, No decision has been made regarding the introduction of tariffs on pharmaceuticals in the United States, and the details are still unclear. Therefore, we have not included the potential impact of such tariffs in our earnings forecast, as it is very difficult to calculate the impact. Slide 54 shows our FY 2025 annual dividend forecast. As I mentioned earlier, due to strong performance led by Enhatsu, we plan to increase the dividend again in FY 2025, marking the fourth consecutive year of dividend hikes. We forecast an annual dividend of 78 yen per share, which is an 18 yen increase from the 60 yen dividend in FY 2024. Next, please turn to slide 55. To enable flexible responses considering our share price levels and other factors, we have set a new share buyback limit. The buyback period will be from May 1, 2025 to March 24, 2026. The maximum amount is 200 billion yen, and the maximum number of shares to be acquired is 80 million. Through profit-linked dividend increases and agile share buybacks, we expect the dividend on equity, or DOE, in FY 2025 to exceed 8.5%. We will continue to maximize shareholder value through improved capital efficiency and further enhancement of shareholder returns. Now, we will move on to the Q&A session to take your questions.

I would like to move on to the Q&A session. I'd like to explain how to ask a question. If you have any questions, at the bottom of the Zoom screen, there is a raise hand button. So please press it. I will call your name. When your name is called, please unmute your microphone and ask a question. After you asking a question, please lower your hand on the screen. Now, anyone, if you have any questions, please. The first question, City Group, Yamaguchi-san, please. I have three simple questions. First about R&D expenses level. You have explained that and I think that it's been lowering. After the next fiscal, I think that it is still lower than the pre-existing levels. Do you think that you can manage R&D activities with this level? Or only for 2025 it is at this level of the 4.5? So could you comment on this? That's my first question.

Thank you for your question.

The first question is about the level of R&D expenses. This time, some of them we have reviewed our development plans and the prioritizations of the plan was reviewed and we made it more precise. including the timings we revisited the programs, and as a result, we came up with this level. For the long-term level, As we move forward, we will also study and probably will be able to discuss this when we talk about the upgrade of mid-term plans and so on. And currently, over 22% of the R&D expenses out of revenue, that's the current level. And as much as possible, in the long run, we would like to achieve a 20% level. But going forward, while making necessary investment in R&D activities, we would like to develop the precise development so that managing the budget well would like to be active in our R&D programs.

Thank you very much.

Ah, yes, I'd be delighted to comment here. Yes. So, uh, so let me just 1st, get to the conclusion of your to your question, which is, yes, I think that we are sufficiently funded. For R and D expenses for the next next year or so. For no problems, you know, the, a lot of the changes that you're seeing now are really, really result of, uh. I don't know, assessment of what initially was an overly optimistic programs that we had considered in terms of number of trials and also the timing. When would these studies actually start? And that accounts for a substantial amount of the change. in our earned expenses, as well as, as you know, some of the changes we had to make because of the outcomes of our data program in lung cancer and also the HER3 program in lung cancer. We made substantial changes to respond to those, the clinical trial data, and those also resulted in some changes. in R&D expenses downwards that you're seeing here that I think you're concerned about. But as I said, overall, I'm very happy with the yen that's being spent on R&D.

Thank you.

May I ask you another question? Thank you. Regarding the tariff, you mentioned that it is just too difficult for you to estimate or forecast, but as your assumption, the businesses that you have been conducting in the U.S., American regions, I believe that their production manufacturing are in the U.S., but Enhards and other ADCs, My understanding is that they are produced overseas and imported into the US. So oncology business, innovative business, other than American region, what is your manufacturing rate in the US out of your total business? Can you comment on this? Thank you for your question. Concerning the tariff issue, As of today, it is quite limited regarding what we can comment on. And in December, when we had a science and technology meeting, especially regarding ADCs, we introduce you the manufacturing sites. And they are regarding the CARB-X into ADC facilities. In Japan and in the U.S., we have been making investment and that's discussed. on that occasion, and currently we do have CMOs and also our own manufacturing facilities. And especially centering around the US, Japan, and EU, we have supply chains with a target of optimizing this supply chain as a whole. And on this occasion, if the tariffs increase, then what will be the future situation? We will need full review and study. At the moment, what kind of products or materials are produced in the U.S.? Regarding in-house products in Ohio, New Albany plant We have enhanced packaging lines in operation. And ADCs using both in-house and CMO facilities. And I just mentioned that we have overall supply chain comprised of these two types. And that includes the US-based CMO as well. So going forward, as I mentioned earlier, in New Albany, Ohio, the American region's site. We already started the CAPEX spending in the future ADC production preparedness. Currently, packaging lines are ongoing. And other than that, we are already making investment in this manufacturing facility. I understand.

You're hinting that you're trying to squeeze DBO9 into ASCO. And I understand you are trying, but can you confirm that you are trying, but outcomes are not known at the moment? That's correct understanding, or when we know, is the abstract, is the timing we know or not? Thank you.

Okay, so I... I think we can say that we have contacted ASCO about the possibility of including DBL9 as a late breaker abstract. Now, when the ASCO people will make a decision on this about the late breaker abstract and when that will be published. You know, it is really not up to us, but up to ASCO. So we have to wait for their decision. Of course, once we know their decision, we will certainly let you know.

Thank you. Yes, thank you. Thank you. Bye. Thank you.

Next question from Goldman Sachs Securities, Ueda-san.

I am Ueda from Goldman Sachs.

My first question is also about the impact of tariffs, as much as you can answer. The impact is not incorporated in your plan as of now. But based on what's been reported so far, if tariffs are being imposed, what could happen on the actual performance of FY 2025? Anything you can say, like cost of goods, the percentage? What about the price being passed on? What about the inventory? Can they all be controlled within your expectation? Thank you for your question. So I'll put it very simply as of now. We really can't estimate anything in terms of the impact of tariffs in terms of numbers. Once we know some numbers in impact on the occasion of financial results conference, we will update you on this as of now. As far as we understand, public comment deadline is May 7th. So from then on, in quite a short time, the actual tariff content will be announced. And accordingly, we will evaluate the potential impact on our business. So in terms of the mechanism of tariffs, what are the products that are subject? And are there any alternatives? And what are the forms, whether it's intermediates or drug substances or final products? And what are the percentage of a tariff that may be imposed? And what is the basis for the percentage? What is the valuation of our product? We don't really know anything about all of these factors. So once these factors are clarified as soon as possible, we would like to evaluate the impact on our business and share that with you. We'll prepare for that.

Thank you.

My second question is about capital allocation policy. So this time around, you have increased the dividend and DOE 8.5% is being achieved already with the dividend alone. But then you are quite aggressive in terms of share buybacks. What is the background of this announcement of share buybacks? And going forward, regardless of 8.5%, can you continue with those shareholder returns? So you have already commented on the tariffs and the business environment is quite murky. So is there any changes in your policy of capital allocation? Thank you very much for your question. So in terms of capital allocation and especially share buybacks and the timing thereof, and also there is a major uncertainty that is the tariff issue. And can we continue to have this level of share buybacks or shareholder returns? I think that's your question. So in terms of the timing of share buybacks, when it's deemed appropriate, we will implement it in an agile manner. So as has been announced, so we will look at the share price levels and other factors and decide the appropriate timing. and with an agility we will implement it so we will look at the business and also the capital allocation and the cash on hand we will make a decision as to when to have share buybacks so that's our plan in terms of the dividend And are you going to keep this trend of increasing the dividend? Well, as for the dividend, as a kind of foundational policy, we would like to have a stable dividend and also dividend in line with the profit increase. So based on this basic policy, we will pay the dividend to the shareholders. Thank you very much. Understood. That's all from me.

Next question.

Morgan Stanley, MUFG, Murauka-san, please.

Thank you very much.

Morgan Stanley, Murauka. Regarding this fiscal year's guidance, 350 billion yen, that's a very good core operating profit number. But regarding the details, I have some feelings. Therefore, I'd like to ask a question. Inabil sales is now made to be zero. Are there any background issues, or it is just a conservative number? And Rixiana in Europe, that's already assuming a downward trend. Is it because of the competition? It's naturally against my estimate. And Datto's sales, 4.7 billion yen. I think that it is too low for the fiscal year this year. And all those look upside. Could you elaborate on the background of those? Thank you very much for your question. First, starting with Inabil. Inabil, as of today, including wholesalers, there are high levels of inventories held. That's considered. So for this fiscal year, sales will be difficult to be realized. That's why we put the forecast as of this point in time zero and Alexiana in Europe. As you said correctly, because of competitors' genetics impact, we have already seen some impact started, and that's incorporated in our sales forecast. And talking about Datto, as of this point in time, As our best estimated forecast in terms of Datto sales, TL05 lung cancer sales is also expected, and including that as a best estimate at this point in time, the number we came up with, as you saw, I see every three months, Sometimes you modified numbers, so I hope that those numbers will be quickly modified going forward. So next question is about DB09. Asko rate breaking, we should wait for that occasion. The release of presentation is expected there. And so far, Enharts continued excellent results like hazard ratio. over 0.5 or 0.6. And can we expect as excellent as those existing hazard ratio expected for DB09? Or it is a first-line treatment, therefore it's better for us to be more conservative. Could you give us a little more color on this, please?

Okay, well, thank you very much. You know, I would love to provide some color, but unfortunately, I have to tell you that I ask you to wait until we give you the data presentation at maybe at ASCO or maybe at some other conference. But, you know, as you know, N-HER2 is a great drug for breast cancer. So please wait for our data that we can show, and then we can have a discussion. Thank you.

Thank you very much.

Just a final question regarding tariff. Currently, it's the 80 billion to 100 billion yen level. And is there any likelihood that this level will increase? Should we be prepared or the capex won't be that large number? Could you share with us what is your consideration or idea?

Thank you very much.

Regarding CAPEX, as we mentioned in the capital allocation, within this five-year business plan period, the guidance has been shared with you. Especially regarding ADC, overall it's 600 billion, that's the guidance number. And at this point in time, We don't expect any addition to that. New Albany plant investment that I mentioned earlier, that's been already in operation. Therefore, it's already included in the current guidance number.

I see.

some policies, measures taken regarding tariff. There won't be any great impact onto the CARB-X. Yes, you're right. At the moment, we don't have any specific plan to make a change. Understood. Thank you very much. That's all.

Next question from Jeffries Barker-san, please.

This is Steve Mark from Jefferies. I'll ask in English if that's okay. I wanted to ask about your vaccine revenue. It appears to have been very negative in the fourth quarter, declining almost 20 billion yen. Could you talk to what caused that? And I guess Daiichi Rona sales. I guess there was a lot of Daiichi Rona returns. But you are expecting the revenue to grow again this year. Could you talk to what's in that assumption, please?

Thank you very much for your question. About the vaccine business and the revenue, that is your question. As you have pointed out, Just a moment, please. For the fiscal year 2025, our plan is ¥15.3 billion, and this includes Daiichi Rona and Furumist. And from the fiscal year 2024, full mist is a factor that can increase the revenue. So full mist is a driver for the increased revenue for the vaccine business.

What were the Daiichirona sales, net sales in fiscal 24?

For the fiscal year 2024, right? For fiscal year 2024, it's 4.5 billion yen. So that's 4.5 billion yen for Daiichirona for the fiscal year 2024. What about for fiscal 2025? Just a moment. Well, we do not disclose the product-wise revenue expectation, but as I said, Fulmest Daichirona included the vaccine business as a whole. We have the plan of 15.3 billion yen.

Understood.

Thank you very much.

Next question.

UBS Securities. Sakai-san, please.

Thank you.

This is Sakai UBS. I understand that we need to wait for ASCO presentation. But I think at the same time, you have been discussing this with the authorities. And clinically meaningful, all those generated good topics. And we understand that we have to wait until ASCO. But if this is added on to PHP, there is already a pre-existing market. And to all of them, do you expect that Enhatsu can be introduced, meaning that at a very accelerated speed, we can expect penetration of Enhatsu in terms of penetration? Is this way of thinking right, correct? And also, your sales expectation this fiscal year, it is 1 billion yen plus. And does it include DB09 and 06 forecasted numbers? These are the questions.

Okay, let me just 1st, uh, discuss the, uh, the, the, the data part and then I'll ask, uh, uh, to comment on the revenue forecast. So, in terms of the study itself, um, it's a very good study as I said, and I think to answer your question. Yes, uh, we are, uh. communicating with the various regulatory agencies on the data and what are the next steps from a regulatory standpoint. Once we have a firm decision on this, we will certainly let you know about our regulatory strategy plans.

As regarding the revenue forecast, DB06 It's already included in our expectation. DB09, the approval timing is currently assumed in the second half of the year. Therefore, it is not a big number, but part of it is incorporated.

Well, you know, second part of the question, how about the acceleration or penetration of Engharts onto this first-line indication after given approval?

So it's a bit difficult for me to predict the adoption of this regimen in the DBO9 patient population, because I will tell you that ultimately it's not up to me to decide, but up to the prescribing physician. to decide based on the clinical data that will be shown at ASCO and subsequently a full data set will be published somewhere, I'm sure, for everyone to see beyond just a few slides at ASCO. And then there'll be, of course, updates to the various treatment guidelines, NCC and listing and that sort of thing. So I can only tell you that what's already discussed in the press release, which is that we think that it's a it's a clinically meaningful data. And of course, very highly statistically significant. And so we are very, very happy with what we have achieved in our DBO9 clinical trial data. And I do hope that many oncologists out there will agree with that assessment.

Thank you very much.

Another question as a follow-up. It is a question to Ogawa-san. About 200 billion yen share buyback in this uncertainty era, I think this is quite a meaningful volume. And I think regarding the 80 million yen, it's 200 billion yen, meaning that in terms of unit price, it's only... And this time you conducted the 50 billion yen share buyback. So what's your commitment level to this 200 billion yen? Or rather, the number of shares is the basis for your decision making. And I think it depends also on the capabilities of the brokers that you ordered this share buyback. So could you comment on this, please? Thank you for your question. Basically, this 200 billion yen, the amount is the upper limit we are considering. And while looking at the stock price, we will execute and buy back. So basically, this 20 billion yen, that's the level we are referring to, and this time 50 billion yen. This is 13.97 million shares shown in page 19 of the slide deck. Understood. Thank you very much.

Next question.

Hashiguchi-san from Daiwa Securities, please. Speaking about Enhatsu price, what's your assumption for the price of Enhatsu? DB06, an indication is going to penetrate the market this fiscal year, and especially in Europe, the price reduction is this incorporated in your revenue forecast and DB09 you are going to penetrate the market with this and what would be your pricing strategy for this indication?

Thank you very much.

So the price in Europe We have some assumptions to set the price of the product. And then this number, based on the assumptions, is incorporated. As for the US, the current price is the assumption itself. So I don't know whether I am answering your question, but we assume the current price in the US is going to be maintained, or that's our assumption, at least. meaning that the differences between Europe and the U.S. and the price assumptions are also different between the two regions. What about DB09? After the approval of DB09? Well, as of now, We're not really assuming any changes in the pricing. We're not really expecting any changes in the price assumptions. So qualitatively, directionally, the pricing policy is going to be the same for DB09 as for DB06, right? Yes. Thank you.

There are still more people raising a hand, but since the time has come to close this session, we'd like to close the meeting. And for those who raised their hands, please kindly contact to our IR. Thank you very much for your participation today.

After this, the press conference will begin at 4 p.m. Please continue to participate. you you Thank you. you you Thank you. Let's pray. you you you you you Thank you. Thank you for waiting.

Now we would like to have a Q&A session for the members of the media. We have the same speakers, Okuzawa, Representative Director, President and CEO Ogawa, Senior Executive Officer and CFO and Takeshita, the Head of Global R&D. If you have any questions, please use the raise hand button at the bottom of the screen of Zoom and I'll call upon your name and when your name is called, please unmute yourself and ask your questions. After your questions are over, please I decline your hand and then mute again. So if you have any questions, please go ahead.

First question is from newspaper, please.

newspaper.

Can you hear me okay? Yes, we can. Thank you very much for today. I have a question to As the other analysts asked your question, I am also concerned about the medical health care issues under the Trump administration. It is reported that the Trump administration decided to impose a levy on health care products and started investigation. And I think that yet the impact cannot be known. but how you are prepared. For instance, Ilariri or Roche or Novartis, they announced one after another the expansion of investment into the US. Do you have any plan to expand your investment in the US? Thank you for your question. Actually, last year, starting from April, In Ohio State, New Albany plant, that is our group member company, American Regents plant. In that plant, we started up the ADC new manufacturing system and we already started the construction. of that manufacturing lines. And it is in total 350 million US dollars investment plan. And in that Albany plant, currently packaging for Enhatsu is ongoing. And with this capital investment, not just the packaging, but beyond that, the manufacturing can be done, and it is ongoing now. And around 2027, the operation will start. And including that, to the American patients, we would like to deliver necessary amount of Enhatsu in a stable manner. And with that, I think we'll be ready for our supply system with this investment. Thank you.

Mr. Kurose, are you on mute now?

Excuse me, it was on mute. Sorry. Now, can you hear me? Yes. So this Ohio plant, $350 million, and targeting at the operation start, in 2027. You, I think, announced that. And no changes in this announced plan? That's true. That's correct. And it's under construction, and the construction is on track. Another question. In the fifth five-year business plan, I think this fiscal year is the final year of this five-year business plan. And for the next six five-year business plan, what is your main point? Is ADC remaining as a main core part of the products? What about your progress of preparing the next five-year business plan? Thank you for your question. Actually, starting from last fiscal year, 2024, In our executive management committee members, we started our discussions on the six five-year business plan. And coming into FI 2025, we'll be having the full-fledged discussion on this topic. Which direction we are aiming at as a midterm vision up until 2030 in oncology space would like to become a global top 10 company. In various occasions, we made that statement. And at the moment, Enharts, within this fifth five-year business plan, the growth exceeded our initial plan, and it's now growing as a major pillar. And after that, Datraway also achieved a launch. And following DXT ADCs are and good progress of development. Therefore, by 2030, in oncology space, we'd like to become oncology top 10, and I believe we'll be able to achieve that goal for sure. And therefore, furthermore, in the six five-year business plan, we'd like to even target at the global top five, but such a voice is also generated in our discussions and business plan is for five years. Therefore, as an innovative drug company, we also aim at sustainable growth. And especially for the drug discovery researches, we should make a good investment so that we'll be able to ensure sustainable growth. And that is a big theme of the next six five-year business plan. In-house data array are supported by DXD ADC platform. And something next to replace that, the new platform technology, Breakthrough Generating Therapy BGT in-house and that's under review now. This BGT it will be identified clearly in the six five year business plan and with that going beyond 2030 in that time frame business plan we'd like to actually achieve sustainable businesses. So that's going to be also a core topics of the next five year business plan. Thank you.

Thank you. Thank you. Next question.

From Bloomberg. About tariff, I have some additional question. In New Albany plant, you will go beyond the packaging. It's not because you want to reduce the impact from the tariffs. And it was a plan even before the tariff issue. came up and if it is going to go beyond the packaging, does it mean that you have some processes being transferred from other plants? And if this understanding is correct, from which other plants you will be transferring other processes to the new Albany plant? Well, to answer your first question, In April 2024, the construction already started. And of course, at that timing, we couldn't have imagined or anticipated this kind of tariff issue. Therefore, because of the big potential of the product Enhatsu and the biggest market, the United States, we thought that we needed to have manufacturing capabilities or capacities that go beyond simple packaging. So that decision was already made back before this tariff issue came up. So what other processes will be transferred? I can't really touch upon that. From the perspective of whether other processes will be transferred from other plants or not. The demand of NHERTS is going to be further up. Therefore, rather than transferring processes from other plants, we would like to increase the capacity, production capacity for NHERTS.

Thank you.

Next question.

Next, the question is from Jihou Nikkan Yakugyo. Narita-san, please. Can you hear me okay? Yes. I have two questions. Positive and the HATSU law approval was granted, and I think it will be competing with Dattaway when it's approved. What kind of strategy are you going to take against this competition? If you have any strategy fixed up, please share with us.

Yes, so let me just explain how we are overlapping or not overlapping with the Chodewi program. So the TRODELV study that you are referring to, I believe, is the ASCENT-04 study. And this is the triple negative patient population whose PD-L1 status is high. So that is an overlap with our current clinical trial called TROPION-REST-05. We have another study called tropion breast 02, which I think we referred to earlier today in our call, where we are expecting data to be reported sometime this year. That one is called the TB02, and there is no overlap between that study and the TRODELEVI study that you are referring to. Yes, we do have some overlaps with the TRODELVI program, but not completely with the ASCENT-04 trial. I hope that answers your question.

Thank you very much. A triple negative breast cancer regarding your developmental status. Could you organize what kind of study is ongoing? Could you tell us?

the triple negative breast cancer program. I know that we don't have our slides up right now, but if you could just refer to slide number 29 in the original investor call slides that you were given, it does show what we call a breast cancer map. And if you refer to the slide, you'll see that we have the triple negative breast cancer program is is in blue, we have a tropion breast 02 and 05 that we just referred to earlier. These are in the frontline setting for triple negative negative cancer with a natural way program. And in a neoadjuvant and adjuvant population, we have a tropion breast cancer 03 and 04 clinical trials. I do want to mention very importantly that they're in her to program, particularly the destiny breast 04. Did cover a substantial portion of the triple negative breast cancer patient population, because, as you remember. We know now that then her to her to has a broad activity, not just in her to positive patient population. But also they hurt to low and ultra lows so so we know that it is using some patients with a triple negative breast cancer in relapsed refractory setting. But I do want to mention again that in the frontline setting and earlier lines of therapy that's your way is our major focus in triple negative breast cancer.

Thank you.

If anyone else has a question, please press the button which says raise hand in the middle of the screen at the bottom. Any further questions? If not, I would like to conclude the Q&A session for the members of the media. Thank you very much for your attendance.