Eisai Co Ltd

thank you very much for taking your time out of your busy schedule to attend the financial results presentation session by acai company limited we would now like to begin the meeting uh to present financial results from fiscal 2023 this will be held in hybrid format Those of you who are in this room, please find four presentation materials, including the presentation deck, flash report, and press release that was announced today and the start of the rolling submission for subcutaneous injection and change in the personal or rather announcements of new appointments. I would now like to introduce the presenter, Mr. Haruo Naito, Representative Corporate Officer and CEO. Mr. Naito, the floor is yours.

Thank you very much. has reduced by 3 percentage points. This is due to the ongoing efforts for reducing costs and also the improvement of the product mix. As a result, gross profit was up 4% year-on-year, and profitability has improved by 3 percentage points. As regards to expenses, such as R&D expenses, which accounted for 22.8% of the revenue, that was the reduction by about 0.5 percentage points. Over the past two years or so, oncology and neurology business group R&D have been integrated, human biology-based, integrated approach has adopted for integration, and as a result, the benefits are now arising as the effect of such integration. Now, for external expenses which have increased, the major driver for the increase was one thing, due to the expansion of LendVima, therefore, there was an increase of expenses regarding shared profit of LendVima paid to partner. And currently, we are making utmost efforts in development of Lake Enbi. So with these two major positive investments, we are making exchange rate expenses increase. However, if you look at expenses in total, which was 1% up from a year earlier, so these have been controlled within the increase of gross profit rate. Therefore, operating profit was 53.4 billion yen, up 33% increase, which was significant increase year on year, and the profitability has improved as well. Profit for the year has decreased. However, in the previous year, there was the repayment of paid-in capital from a consolidated U.S. subsidiary. Therefore, there was the reduction of the tax expenses in the previous year. Excluding that impact, profit for the year should have increased. Therefore, there is no change to the sound structure of the financials. Given these, now take a look at the revenue migration. As you see in the headline, 3L, Lembima, De Vigo, because generic name of De Vigo is Lemborexant, therefore L is taken and the L can be. With these three Ls, which I believe have contributed to the expansion of pharmaceutical business. Lenvima increased by 48 billion yen year-on-year, DeVigo by 12.4 billion yen, and Lecambi increased by 4.2 billion yen from a year earlier. Therefore, pharmaceutical business increased by 7 billion yen in its revenue. and there was some decrease in the one-time income. However, overall, revenue was almost flat. Now, a breakdown of operating profit. Migration is provided here on this page. The profitability of a pharmaceutical business was increased from 47.6% to 49.7%. There was an improvement in the profitability because of the adjustments in headcounts in various areas and also better efficiency of spending. And R&D expenses, as I said earlier, of the areas of R&D activities have given rise to more efficiency and 8 billion yen in pharmaceutical and 4 billion yen in more improved efficiency R&D activities. So these were the contributing factors. for improving the operating profit. And offsetting the decrease in the one-time income, operating profit increased by 13.4 billion yen, which was up 33% year-on-year. There was a significant increase in operating profit. As you see in the bottom right, for LENVIMA, Lecambi, a total investment in R&D and A expenses were at 110 billion yen level as planned. Now, today, I would like to put focus on Lecambi in my presentation. Now, Eizai has been rolling out globally with what mission as a pharmaceutical company we are rolling out our business operations worldwide. That is shown here. ASI has paved the way as a pioneer in the treatment of Alzheimer's disease worldwide, and it will continue to play this role. 1997 by Aricept, exactly 25 years ago, with Aricept as the first ever treatment for Alzheimer's disease has been provided to the world. And 2023 by Lecambi and about one quarter of a century later, again, similar pioneering role is played by us. At the very bottom, you can see we are aiming for more treatments for more pathologies, including tau and other various pathologies are being addressed in the pipeline. Now, as Pioneer, we are unhappy in paving the way, but this is not merely drawing a beautiful picture on a white canvas. It's not like that. You needed to remove large rocks. You have to build a bridge over a large river, and you needed to dig a tunnel into a mountain. So you needed to do such enormous, huge work. The poem written by Takamura Kotaro called Dotei, which I read many times recently, there is no way before us, but there will be a way after us, as the poem says, particularly in today's world. Diagnosis and care for AD has progressed a lot. There are a lot more tests to be conducted and also nuclear medicine is used for monitoring of the ADR. So a very important pathway needs to be established in today's treatment for AD. So pathway establishment is very important today. As a pioneer, we have put ourselves into such areas of work, particularly in the United States. Over the past one year, we have been working on this. So, first of all, what we are doing and have been doing, I would like to seek your understanding of what we have been working on. For fiscal year 2023 and the past one year, what about the revenue of Lecambi in the global market, which was 4.26 billion yen? There may be various opinions saying this is a lot or small, but here you can see the trend of revenue on a quarterly basis. During the fourth quarter of last year, compared to the immediate last quarter, it has sharply increased by 2.7 times. This trend, the angle of the increase has become sharper from the beginning of this fiscal year. I would say the sales have been increasing. So looking at these trends, now I'd like to talk about the current status of Lecambi in the U.S., Japan, and China. First, in the United States, we are moving towards a new phase. That is to say, the pathway establishment has seen a certain level of progress. And now, at last, on this pathway, the patients will be able to smoothly follow the path of the treatment, therefore reaching the prescription expansion phase. Then appropriate go-to-market structure for prescription expansion phase needs to be established in the field. The front line should be strengthened. The Lecambi in the U.S. has entered such new phase. Similarly, the Lecambi revenue in the United States for fiscal year 2023 is shown here. If you compare Q3 and Q4 as gain, you can see the rapid expansion. And on the right, you can see the... the number of vials sold to medical institutions on a weekly basis. As you see, again, week by week, in an accelerated manner, the number of vials sold to sites has been increasing in an accelerated manner. The foundation, including the pathway, has been almost established and reaching a certain level. On the left, you can see the map of the United States, although this seems to be very busy. You can see the areas where prescribing facilities, the established pathway are located with our field people are location. Therefore, you can see the very dense map. And this pink shaded area covers almost the entire nation. Therefore, in most parts of the United States, the prescriptions have been initiated. On the right-hand side, From three aspects, we are showing the status of pathway establishment. First, we identified important targets, IDN. If you could turn to the bottom of the page, IDN is Integrated Delivery Network. Large-scale hospital group had such system to provide health care. For example, Washington University IDN in St. Louis perhaps have dozens of hospitals under it sharing the common policy or protocol to provide health care services. There are such IDNs like that. In the United States, they are playing very important roles in providing health care service in a business model. And most of the top 100 target IDNs have established pathways. And the target physicians in the second box, they are the physicians or neurologists who belong to IDNs and also other physicians who are providing care in the community practice. In the ordinary communities, there are neurology clinics or hospitals. Those physicians who have experience in AD consultations and treatments whom we understand very well and asking them whether their pathway for prescription have been established or not. And 100% of them said that they have their pathway ready for treatment. And another is AIC. You may not be familiar with with this term, but this stands for ambulatory infusion center. In the neighborhood of where patients live, this is the facilities dedicated for infusion. They are not dealing with patients with AD, but also patients with immunology and oncology as well. So they are one of the very important medical institutions which are providing infusion. And most of them are managed and run by companies. And 82% of AICs or infusion centers said that They are ready for our infusion of Alekembe. Therefore, the establishment of foundation is largely completed, in our opinion. Given these circumstances, what we are trying to do now is provided here. We call this system as a go-to-market structure in the United States, but front-line people in the sales in Japan. In the second packet box, there are NASS, ARM, and HSAE. You may not be familiar with these, but if you could look at the bottom footnotes, NASS stands for Neurology Account Specialist. MRs, medical reps specializing in neurology, they are playing a central role in go-to-market structure. ARM stands for Access and Reimbursement Manager. including IDN and all medical institutions in the United States, are meant to make profits. Therefore, AD-related treatment or healthcare services need to be reimbursed. They need to confirm in details whether their services are reimbursed. So what should be done is advised. And they are seeking such advice from us. And these other people, ARMs, are deployed all over the nation to provide such support. And the next HSAE account for... It stands for health system account executives. And they are responsible for thinking about how established the pathway can be made more efficient. And it has taken two months for studying treatment. How this can be shortened to one month. And it has taken a lot of time for first referral. Can it be shortened further? So they are the ones who are providing information and advice on these, and they are rolled out throughout the country. If you could look at the left-hand side, this NAS is going to be increased by 30%, and half of them are going to be the stuffers of biogens. where we can have key accounts with greater potential have been already identified by us. So we are collaborating with them. And ARM, who are providing advice on the reimbursement, and then FTEs of ARM will be doubled, increased. And also the HSAE personnel will be also doubled. And on the right, you can see three bullets. We have been targeting 100 IDNs so far, but we are going to expand the target IDNs to 150. And particularly under pathway, from diagnosis to the start of treatment, it used to take a lot of time. And a large IDN used to take eight months. That has been shortened to two months. Therefore, with various IDNs, we would like to adopt a similar shortening of the duration. And given the increased number of patients, we need to refer the nearby infusion center or a patient assistance program or support for reimbursement because the need for support is increasing as well. Therefore, we have to strengthen our patient support system. Now, by this, a go-to-market structure in the U.S. is going to be strengthened so that we will be able to achieve the expansion of the prescription. And next is about omnichannel marketing. This is quite a well-known, widely known marketing method nowadays, and it is being used widely. But omnichannel marketing was first used in oncology or LENVIMA in the United States over the past three years. We have seen a great effect of this. Simply put, what we are aiming to do is as follows. On the left, you can see Data Lake. Proprietary Data Lake is going to be established, which will contain the digital promotion information for healthcare professionals or patients and consumers and information about in-person contact in the field and information about the major academic societies, and if amyloid or beta test or APOE4 test are required or ordered, such information are all put into data lake, and the AI is used for comprehensive analysis. As you see in the right bottom corner, in the end, they will come up with a recommendation on the next best action. In-person field force will be given the recommendation on what the promotion for Dr. A or IDNA, what kind of actions need to be taken. Rather than having in-person contact, peer-to-peer healthcare providers' communication should be conducted, or without time, you need to rely on SNS. Such a recommended action package will be provided. This, I believe, will enhance the efficiency, not depending on the share of voice, and the more efficient the marketing will become possible in our Salesforce activities. So we'd like to accelerate this. Next, direct-to-patient campaign is something that I'd like to explain now. Now we see pathways being established. Therefore, We now believe I have to directly communicating with the patients and families. And the slogan here is, you still can be with Rekembe. Please look at the bottom. You still can be social with Rekembe. You still can be authentic with Rekembe. You still can be relatable with Rekembe. You still can be empowering with Rekembe. To raise awareness for earlier visit to physicians' diagnosis, as you can see at the website or mini-channel or digital marketing and video or display or print advertisements in waiting rooms, this message will be carried in a DTP campaign. Let's roll it out and start it from February. and disease awareness can be raised and we can encourage the patients to seek earlier consultation with physicians. Another point I would like to ask you to understand here is the progress we are making in enhancing the value of Lecambi by adding new formulation dosage form and also maintenance therapy on top of initial treatment Early AD and clinical AD are shown. For early AD, if you look at the right-hand side chart, IV initial treatment with 10 mg per kg biweekly dosing, this has been already approved. So this is the treatment regimen in Japan and the U.S. and China, and in other jurisdictions or countries where review is ongoing, submission is going to be made for this IV initial treatment. And in the middle, IV maintenance treatment, 10 mg per kg monthly with half dose, which will be used for maintenance treatment. The submissions have been filed. So before maintenance treatment, what about initial treatment? And this will be consulted with regulatory agencies. And today we made a press release. SCAI self-cutaneous auto-injection maintenance treatment submission has been initiated. The fast track designation has been granted for this SCAI maintenance treatment and a rolling submission is allowed. Therefore, we immediately started submission. We are aiming for maintenance treatment with 360 mg weekly dosing. This is going to be manufactured by Terumo pen type auto-injector. This is prototype, rather, this is almost the drug product, but without any label indicating the name of the therapy. So please understand that this is a model, and the thermo-made AI dosage form has benefits. Having one thing, tapered needle. Tip of the needle is tapered. Therefore, this reduces pain a lot. And a syringe itself is made of a plastic. Therefore, at home and at nursing care facilities this is not made of glass therefore this does not break not causing any injury to patients or caregivers this is very safe and this reach in order to make it the smoothier usually silicone oil is applied to silicon but this does not use that at all therefore it is difficult to have any aggregation of drug substance and administration shall be done within 15 seconds. Therefore, this shows it is very usable at home and at nursing care facilities. Patients themselves or carers are able to safely administer the drug with this syringe. There are several patents obtained by Terumor in this auto-injector.

And current IV...

Under the current formulation, the patients have to go to an infusion center. In the case of the United States, some patients have to drive a car by one and a half hours. Therefore, it will be very burdensome for patients to visit the center, and recommended infusion time is one hour. Therefore, pre-treatment process and also post-treatment time for monitoring the condition of the patient, you need to have nurses to monitor and take care of patients. And it is also burdensome for nurses. So considering all these SCAI formulation, may potentially reduce such burdens significantly, and we believe that it is very important In order to realize long-term administration, we believe that this is going to be a mainstay formulation or dosage form going forward. As you see at the bottom, for both initial and maintenance treatment, we would like to replace the current dosage form with SGAI. We are preparing such programs. we aim to obtain approval by fi 2026 for this and in the left bottom you can see pre-clinical ad as you know this is the stage before mci development Therefore, patients will not feel subjective symptoms, but if you conduct an amyloid beta test and the position of amyloid beta is about to start or is starting. So a HIT 345 phase 3 study is ongoing for patients with such status, and the duration of treatment is long. And it was expected to have difficulties to enroll patients, however, with enormous speed. we have been able to enroll a lot of patients. We are targeting enrolling 1,400 patients, which we think that will be completed by the end of this fiscal year. And even one step before MCI, that initiation of a treatment can be earlier than MCI. Therefore, we can expect an enormous effect of this. Now, safety. I would like to share with you the current status of ARIA in the United States. Please look at the first bullet. The reports of ARIA from real-world clinical practice were consistent with what was observed in the clinical trials or as described in the U.S. package insert. Most reports of ARIA in real-world clinical practice in the U.S. are non-serious, asymptomatic, and occur early in treatment. Reported symptoms, as you see here, include headache and others, as you see. Given these, in the real-world clinical practice in the U.S., prescribing doctors are following monitoring and performing of MRI for symptoms described in USPI and management of such conditions. At EIZAI, we are providing a website called Understanding ARIA, where we provide educational materials. And this website has been already accessed by over 15,000 healthcare professionals. Therefore, attention has been drawn duly to ARIA, and healthcare providers are following such instructions. Therefore, we believe that safely, Rekembe is being administered in a real-world setting. Thank you.

Now, turning to Rekembe in Japan. Establishment of the pathway has been fast in Japan, faster than we expected. Diagnosis and treatment for eligible patients are progressing faster than expected. Within four months of launch, This is what has been achieved. Bar chart includes pale purple bars in almost 600 facilities. Diagnostic and treatment pathway establishment has been completed, and treatment has been initiated in all of 47 prefectures in Japan, and optimal usage guidelines, OUG, as noted at the bottom of the page, and all case surveillance are being complied to as we are expanding the entry of Lecambi in the market. On the right side, cumulative sales is shown. And about 600 million yen of sales was recorded cumulatively by April. And in May, the pace is further picking up. And we are seeing progress, which is faster than we expected. In Japan, we are making efforts by the entire Japan team. What are we doing? Left-hand side pyramid shows that we are layering facilities in Japan to four layers. OUG has stringent requirements for initiating facilities, initiating like can be treatment. And there are facilities that qualify by satisfying such requirements are at the top two layers. Facilities initiating leg and b treatment at top layers are led by many top key opinion leaders. And we have specialized medical reps, including Biogen's reps, approaching these top two layers of facilities. These two layers at the top of the lake can be as well as the bottom two layers of the pyramids, who are PCPs, are important. PCPs are playing a very important role of referring patients to the facilities initiating treatment. And PCPs are greater in number, and initiating treatment is for six months. And to follow up, after the initial treatment, initiating treatment can be given not at the top layer treatment facilities but in facilities qualifying at the bottom two layers and therefore information communication amongst these facilities is very important and around 650 MArts, regional cooperation MArts, are supporting the communication coordination amongst these facilities. Referral, initial treatments, and follow-up flow is established by specialized medical reps and regional cooperation medical reps and are achieving results. Another characteristic in Japan is that we have a history of irisept, and we are able to leverage that history made through irisept. This year, we already have organized two large-sized academic symposiums on the KEMBI. The second one in red, an academic symposium of the Japan Academy for Alzheimer's Disease. This academy was established at the time when RCEP was launched. It was launched in 2000, and it was attended by 290 people when the first symposium was organized. And St. Mary's University's Professor Kazuo Hasegawa was the leader of this academy. And Professor Hasegawa is known as the father of Alzheimer's disease in Japan. And for 25 years, 24 years, efforts have continued steadily. And this year... More than 500 physicians were attending in person as well as those attending virtually, and the number of members has grown to about 4,800. And physicians have contributed to the activities of the academy, and this is playing a very core role in AD care. And we believe that a very important role was played by this Japan Academy for Alzheimer's Disease. Various topics are discussed about every year patients of Alzheimer's Disease, especially in younger age, also appear as speakers. And these days, dementia patients are caring dementia patients. Peer-to-peer care is the most modern type of care, and this is said to be the most invigorating treatment for patients. And we have a program that aims for inclusive society by inviting patients AD patients as speakers, and that has been the future of the academic symposium from the very beginning. In each medical region, we also have smaller-sized gatherings organized. In Japan, this has served as a major backbone, and as noted at the bottom of the page, We have solid, strong relationship of trust with dementia specialists. We take pride in having established such relationship. And they can be introduction is faster than planned or expected. And the important background factor is this history made through Aricept. In Japan as well, we are promoting efficient omnichannel marketing, which will be contributing in a similar manner in Japan. Now, as for they can be in China, we are planning for launch in July. and Pathway that differs from Japan and the U.S. is aimed to be established, and the characteristics include industry collaboration and digital technology. With the next page I would like to describe, the headline says, Pathway Establishment Through Online Merger Offline Strategy, and the next line, Screening Stage, Diagnosis Stage, and Treatment Stage. Screening stage has a major role, which is that commercial insurance, private health checkup, and private nursing home will be playing that role, and commercial insurance. Quite soon, benefit card insurance will be launched. AD pre-screening opportunities. can be provided under the insurance. And there will be also a recommendation to seek physician consultation for people at high risk. And it also has an element of reducing economic burden of patients. This will be on sale quite soon. And the private health checkup includes cognitive function test and APOE4 test and MRI. And at nursing home, there is also early screening. As a result of these screenings, Patients at risk can seek diagnosis through two different channels. First is direct referral to hospitals, and there is another channel shown below. We have ePhantom, which we started with a JD group. This is a dementia online health platform. On this platform already more than 400,000 people have become members and there are 6080 specialists registered. This is a very active platform. On this platform referrals can be made and memory map is one example of an app and in the neighborhood of the person using the app Hospitals, specialists, doctors can be identified and recommended, and A-beta test sites can also be identified in fusion centers as well. And our pointing outwards indicates that there will be a switch from online to offline. Diagnosis in China... in such that PEP and CSF are not so widely available. And from the beginning, we are developing a diagnosis model mainly using BBBM. We are establishing diagnostic network with ICLDT and IVD companies. In infanton, in the middle, there is patient care package as shown in this diagram, and online consultation and service to accompany patients can also be provided. Once there is a definitive diagnosis, it will be shifting to right-side treatment. Infusion itself will be, of course, offline. with diverse options for Lecambie administration. There's potential sites for Lecambie administration can be accessed or area monitoring. This is also done offline, but guidance can be given by Infantone. And using a long-term management app memory care center from Infantone, at what infusion center, what area monitoring is provided, such information can be accessed and area monitoring reminder can also be sent as a service on this app. By merging online and offline, we are going to provide a platform from the very beginning in China As a result of these efforts, we estimate 56.5 billion yen to be revenue from REC-MB, about 43.5 billion from the U.S., 10 billion from Japan, and 3 billion from the rest of the world, mainly China. Now, this is the core message. of my presentation today. Thus far, we have established the value of Lecambi, and I would like to take time to describe the value of Lecambi. As noted in the first blet, Lecambi, this is potentially one of the most extensive treatment data set on EAD, early AD. Represented by Clarity 80, we have wealth of information from clinical trials, trial data, and open label extensions are run in these clinical trials. Day by day, the data is expanding. And after accelerated approval, for about 18 months, real-world data has been accumulated, and we have a very large volume of data, extensive data. And as for EAD... Indication for Lecambi. Well, Lecambi is not looking at a subset of patients, for example, stratified by tau, but to broader group of EAD patients, safety and efficacy have been demonstrated. This is a distinct characteristic. settings that can be apart from other ADDMT. And as for the number of patients with MCI, we are unparalleled. In low tau group in MCI, when we look at the improvement of cognitive function or including the improvement of cognitive function, we have outstanding data. And this suggests a greater benefit for early start of the treatment. And this brings about hope for patients. And we also have a growing volume of data for long-term administration. And we have seen sustained treatment up to 30 months and enhancement of treatment effect. EAD is a progressive neurodegenerative disease, and a continuous treatment is important. This goes without saying. And that importance, once again, is demonstrated from this long-term treatment data. Early start of the treatment and continuous treatment will provide the best outcome for EAD patients, as shown by the Chem-B data. Thus far, we have established the value of the Chem-B. In this way, we believe this is the greatest value of the Chem-B. And the second value is that dosage and administration from dosage and administration, and we are continuously improving the dosage and administration. For example, IV maintenance is under submission, and dose is less frequent by half. SCAI, as I mentioned earlier, will provide reduction of burden on caregivers and patients substantially, and it will make it more convenient to continue treatment with Lecambi. and we are continuously expanding value through developing various dosage and administration groups. The third bullet, as I mentioned a little bit earlier, is that we have started 25 years ago, and the treatment initiation was at the stage of mild AD. At that time, there was no concept of MCI. 25 years later, MCI is not opposed as a condition to be treated by anyone. And NCI is now the stage where treatment is initiated as shown in the approval. And with that treatment effect is expanded. And preclinical AD. will be an earlier stage where treatment may be started earlier, and if that becomes possible, AD treatment landscape can dramatically change, and in some cases, cure may be within our vision. And in the real world, Last bullet point, the status of area seems to be within the range described in the package insert, and appropriate monitoring is ensuring safety, and that is also an important point in terms of value of Lekembe. This one page shows the status of Lenvima. Already, as you may be aware of, Currently, regarding high-purity Lanvima patent, and this is a substance patent or material patent, we have a very strong patent, and we are challenged by ANDA, Generica Manufacturers, and we have pending lawsuit in the United States. And the key company in that litigation, one of which is Sun Pharma, and we have entered into settlement agreement with Sun Pharma. And under Lenvima brand, there is a possibility to continue to contribute to patients in the medium to long term. We consider this to be an important step forward. LOE. How long will LOE be extended? The details I'm not able to comment since there is still an ongoing litigation with other companies, but I would like to report that there has been an important step forward. And as shown in the second bullet point, We would like to further expand indications, and we have three LEAP studies that will lead to expanded indication, upper gastrointestinal cancer, HCC, and esophageal carcinoma. And for two of these, LPI is already achieved. And we are adding values to Lenvima, and capabilities to add value to Lenvima from these results will be great. And the last bullet point is about RCC. Currently, in multiple indications of Lenvima, RCC is the fastest growing indication and first choice drug. Lenvima as a first choice drug for RCC is what we would like to establish and strengthen. And to strengthen that position, light spark studies two studies are underway marks if two alpha inhibitors will be given in combination with lenvima in these studies and in these two studies we have achieved lpis plus patients in and as a result if these are successful then we believe that it will have a very positive impact on the performance as It may be extended. And going forward, we would like to continue to contribute to patients in the mid to long term, as well as continue to generate 300 billion yen level revenue. Going back to 3Ls, in fiscal 2024, revenue forecast is 18% over 400 billion yen with 3Ls in terms of revenue. Today at the board, acquisition of own shares was resolved and this will be up to 6.5 million shares and it will be 2.3% as a percentage of total number of issued shares. Total amount of acquisition cost is up to 30 billion yen and it will be from May 16, 2024 to November 15, 2024. The background of this is that So far, we have focused on cash return and dividend in terms of shareholder returns, but we will be entering the phase of expanding revenues, growing revenues, and we have to also be mindful of equity capital ratio. as we continue to provide returns to shareholders. And from the point of equity capital management, we believe that acquisition of own shares is the simplest method to realize shareholder return. And therefore, we are implementing this measure as one dimension higher level method of providing return to shareholders. KPI improvements will be what we will continue to work on. and our determination to increase shareholder value remains unchanged. And the final page is the consolidated financial forecasts. We will now open the floor for questions. We will have about 20 minutes of Q&A for analysts before opening the floor to members of the media. If you have a question, please give us your name and affiliation before your question. From analysts, investors, if you have questions, please raise your hand.

Thank you for your presentation. My name is Wakao. I am from J.P. Morgan. My first question is for this fiscal year, 2024, revenue plan for Rekenbi. assumptions for the forecast, as well as the reasons why you believe such target can be achieved by region. For the United States, $300 million, I think, and the number of vials growing in a linear way, achievable to reach this target number, or do you have more rapid expansion, such exponential growth? inclusive of the number of potential eligible patients, the patients receiving treatment, please. And in Japan, it seems that you are performing well. According to the MHLW, the materials, last year or this year, ASI has shown the potential assumed growth of the quarterly number of patients.

Thank you.

By reason, Mr. Haruna and Mr. Yusuf are going to explain. Thank you very much. I am in charge of the commercial aspect of Rekembe in the United States. My name is Haruna. I would like to give you the status of the Rekembe in the United States. First, as for forecast, current trend as well as what we explained today, the effect of the rolling out of our strategy being considered and the forecast is going to be with high probability. And for the month of May, we believe that the performance is exceeding our plan. Therefore, we are very confident in achieving the plan. If I may supplement, for FY2023, we focused on the establishment of pathways And now we are transitioning to prescription expansion phase. As was explained in today's presentation, let me... share with you some examples on what we explained. At the site in Midwest in the United States, over 200 patients have received treatment and about a little less than 200 patients are also currently under screening. Therefore, as growth is continuing and in even more accelerated manner, and so-called loyalists by us. The sites with 50 or more patients are expanding in number, and there are also increasing number of potential loyalist candidate sites. And last week, we could have an opportunity to talk with a patient who is undergoing the Lekembe treatment. Before initiation of the treatment, that person said that he was very frustrated because of the worry or fear of losing memory. and also lowering of the ADL or activity level lowering that was felt strongly by the patient himself. But after initiation of Lecambi, his ADL could be improved, and also he could start to see or feel zest for living, and he was pleased to have such changes as regards to the infusion to visit patients. hospital has become a routine of his daily living, and this person has continued treatment with Lecambi over more than, longer than one year. And with this, we believe that we are very confident that this target can be achievable with high probability. Thank you for your question. Now, Mr. Yusa, who is responsible for the Kenbi in Japan. Thank you very much, Mr. Wakawa. As you said, in Japan, as has been already published in the press, the size of the market and also if we can achieve the number of patients by quarter, we believe that and we are confident in achieving 10 billion yen in Japan, particularly for this fiscal year 2024. So far, We have established a very strong relationship with KOLs, and that's why we have been able to successfully start the initial stage. But for this fiscal year 2024, first, for patients with MCI, we needed to raise awareness about the disease. The number of patients receiving a prescription exceeds 70%. in Japan and there are some sites which have already treated 80 patients or over. and we have touched upon the potential number of patients in Japan. And by adding the education to raise awareness of the disease, and I think that the mild AD and MCI patients will start to seek treatment with increased number of patients at each site where a pathway will be established and capacity will be increased by such efforts. For this fiscal year 2024, there will be patients who will be receiving treatment for over six months. Then at the sites where they started the initial treatment and also follow-up facilities or sites. where they will be dosed to patients. And that means that even with the existing patient pool, capacity for treatment will be expanded. Therefore, with these in mind, we are very much confident in achieving the target in Japan in revenue. Thank you very much. I'd like to ask for further follow-up on the U.S. and Japan as well. Regarding the trend of the number of patients receiving Lecambi in the U.S., as of quarter three, there were potentially 8,000 patients. What about the update? And 10,000 was also mentioned earlier. What is the current status? Regarding the number of patients, we would like to refrain from talking about the number of patients because It is quite difficult to accurately grasp the number of patients. If the reimbursement claims data is available, that may be possible, but calculating backward from a number of vials shipped, but we cannot reach an accurate number of patients on treatment. For example, the number of vials shipped or real sales data. These are real figures, therefore, we would like to utilize such real data, real numbers to discuss. If you could understand this, I don't know whether you agree with me, but that's our position. Understood. All right. Needs in the United States are increasing. If you could give us your gut feeling, I would like to seek your comment on that. And then for Japan, patients who are receiving treatment for over six months, are there enough sites for receiving such patients? Okay. The gut feeling regarding the United States, Mr. Haruna is going to respond. Thank you for your question. I am in charge of Akembi in the United States. My name is Haruna. Regarding the needs and also expectation for the Canby going forward, we believe that it is rising. As has been introduced by our CEO, we are seeing an increase in revenue week by week. That has been obvious and shown in data. And on a weekly basis, there is ongoing upward trend. Therefore, as God's feeling, we believe that We are feeling very powerful growth. Thank you for your question. Thank you for your question. In Japan, follow-up sites for accepting or receiving patients who are receiving treatment for longer than six months. Yes, of course, in each region or area, we have started discussion in order to prepare follow-up facilities, and we are going to make adjustments as necessary in some regions. As you see in this diagram, regarding the area where we are going to establish follow-up facilities, We will hold the regional lecture meetings and initiating the sites as well as the follow-up facilities, how to refer the patients to follow-up facilities, and that explanation briefing session is being held throughout Japan. Therefore, I think that we will be ready to prepare follow-up facilities responding to those who are on treatment for over six months. Thank you very much. I don't think that you have explained this, but regarding the changes of the representative corporate officer, there will be two representative corporate officers that has been released today. What is the background for this at this timing? Although it was mentioned in the press release, but why now? A candidate to be the CEO after the current CEO, is this the plan for the company to consider the most powerful candidate as the next CEO, Casey Neito? Considering the business model and the networking, and hiring of talents. These are very fundamental aspects of the company's business. We needed to change dramatically the conventional way of doing business. This is not something applicable only to Eizai, but applicable commonly to all the companies in all industries. We also believe that there is a necessity to do so. Therefore, for the succession of a CEO means that the generational change So, tens of age should be the magnitude of a change in succession. So in consultation with the Board of Directors, we are making thorough preparation for the change, as a part of which is as announced today to appoint a new representative corporate officer. Did you ask when CEO is going to be changed? Are you asking about that as well?

I am not able to respond to that question.

We are now entering in the very important expansion phase for Rekinbi and also the patent extension period for Lenvima as well. Therefore, at such a crucial period, we would like to refrain from making any comment on when the CEO is going to be changed. Thank you.

Next question from the attendee seated at the front of the room. I have two questions. First about the impact from the competitive product. What is your expectation and how is that taken into account in the plan? the competitor's product may be approved in Japan as well as in the United States even within this month. What is the estimated impact in terms of volume and value? My response, the responses may be long, but Keisuke Naito will respond first. This is Keisuke Naito, responsible for Global Lecambi. I will be speaking at some length. There is no direct comparison between Lecambi and Donalimab, and clinical protocols are different, and I believe it is difficult to make a head-to-head comparison about Lecambi. In order to evaluate the available data, there are certain characteristics of REC-MB that we consider to be important. First, regarding in the broad group of EAD patients, consistently safety and efficacy have been demonstrated. Rather than selecting a most responsive patient group that is most likely to respond, we consider it important to consistently show safety and efficacy in large group of EAD subjects. There has been no TAO stratification. And irrespective of TAL level, clinically significant results are shown. They can be not only in subset based on TAL level, but in broad patient group of EAD, safety, and health. efficacy have been demonstrated. And the second is a clinical benefit is suggested for people who are receiving early treatment. I've seen that last fall in TAO PETA subgroup, based on that data, according to our definition in low TAO patient, 60% of such patients, CDR-SB improvement included, a very favorable clinical outcome was published at CTAD. Alzheimer's disease is progressive and irreversible neurodegenerative disease. And earlier the diagnosis and earlier the start of the treatment, the greater potentially the benefit. And therefore, in early stage in low-tell patient, favorable data was shown, and that is a uniqueness of Lecambi. In addition, in low-towel patients, in order to identify low-towel patients, we are also focused on biomarker research. Liquid biomarker, we believe, will be enhancing the value of Lecambi. And the third is favorable safety profile. There's no data comparing head-to-head that can be in other drug, but area, incidence, and timing we consider to be different from drug to drug. And that is also noted in the U.S. package insert. ARIA mostly caused by lecambi occur in early stage of the treatment and mostly asymptomatic and non-serious. And that is shown in actual clinical usage. And in ADPD 2024 held in spring of this year, Professor Landfeld presented the results using human sample that showed lower binding of lecanibab to CAA than other anti-A-beta antibody. We believe that this scientifically supports the clinical study results. And the fourth is the efficacy safety related point. AD is progressive, chronic, and neurodegenerative. Even after the removal of FAC, the disease continues to progress. We believe that this is very important in considering the treatment period. In case of Lekembe, until the completion of Clarity 80 study, treatment emergent ADA incidence was 10%. There is no effect of immunogenicity on efficacy, safety, and pharmacokinetics. It is suggested that ADA is not a limiting factor for continued treatment. And regarding the efficacy and safety in case of continuous treatment over 18 months with Lakembi, Clarity 80 open-label extension study, 24-month data was presented at CETAD last autumn. We expect to be able to present even longer-term results in future academic congresses. In order to reduce burden for the patients and caregivers, we are also developing SCAI, which will be less burdensome on patients. And we believe that because of these, we can be confident that they can be a drug of choice for patients and ACPs. And we anticipated the launch of Donanemab and have taken that into consideration to a certain degree in the revenue level of Lecambi going forward. But the four characteristics that I've discussed about Lecambi can be a very important advantage for Lecambi, as CEO discussed earlier. In establishing pathway, we have made tremendous efforts on a daily basis with HCPs. and infusion centers, CMS, payers, advocacy groups, and various other stakeholders. With them, we have been able to build very strong relationship. And through commercial activities every day after the launch, we have continued to make efforts, and we are confident of the evaluation that can be in actual clinical use. And therefore, and of course, we do anticipate that at a gradual pace, the roundabout may increase here. But we are also confident that Lecambi will be able to maintain its strong share in the immediate quarters. Second question, between initial treatment and maintenance treatment, what is the distinction between the two in your submission? After how many doses will it be a maintenance dose, or what is the degree of reduction of amyloid plaque that is required to switch to maintenance dose? That question will be addressed by Dr. Linkramer.

Yes, thank you. I'm Dr. Lynn Kramer. I'm the Chief Clinical Officer at AZI. We are discussing with health authorities the duration that would be needed with initial therapy before converting to maintenance therapy. We expect that to be in the 18 to 24 month timeframe, but that's a review issue related to discussions with health authorities, which would include PMDA, for example, and FDA. Thank you.

Thank you.

The person in the third row, please. My name is Sakai from UBS Securities. I'm sorry, I still wanted to ask a question about the Kimby. You have shown us numbers for the Kimby spending 110 billion yen for this fiscal year. considering the SG&A expenses and R&D as a total, and then this accounts for 20% of the total SGA and R&D expenses. So do you want to continue this level of spending? Pathway has been established, and SC will be introduced. And the remainder of work is how the drug is going to be used. expansion of indications and monitoring on their safety will remain and then the investment or expenditure is expected to reduce or do you need to maintain certain level of investment? You touched upon competitors. Competitors are making a lot of money with different drugs, so maybe they can double the amount of AZA's investment in the initial year after launch. You don't have to talk about if, but... If you are making excessive investment into Lecambi, some analysts and investors may be concerned. So that's why I think it's hovering down. dragging your share price down. How do you think? Mr. Sakai, you always ask us very difficult questions to answer, so I am wondering what to offer in my answer. For example, in fiscal year 2025, Product P&L over Lecambi in the United States will be turned into the black ink. And the global product P&L, Lecambi product PL, will be achieved in 2026. Of course, we have to be careful in investing resources. For example, manpower resources in the United States has reached almost maximum level. In my opinion, therefore, we do not intend to further increase more than today's. And in Japan as well, we do not intend to increase further than the current level. In other major areas, which is Europe, in Europe as well. By reallocating the manpower from oncology to neurology, We do not intend to increase the total manpower. Therefore, we do not think that there will be further expansion of SG&A expenses. I believe that we are at the peak in expenditures for SG&A for this fiscal year in R&D expenses, preclinical A345. Now, once we see the completion of last patient in these studies, then the R&D expenditures will end the peak. Therefore, I think that this fiscal year is going to be the peak for both S-gen A and R&D. Thank you very much. Once review is done and then approval is expected, however, regarding the reimbursement, which may be delayed, therefore, you do not incorporate the number in the revenue for this fiscal year, right? I think this has been already published, so I can say this. SAG was held once. However, because of the review of other drugs, European Court of Justice, because of the background of reviewers, some of them had the experience of getting involved in the review of competitors' products. Thus, it was ruled not acceptable. Therefore, the members of the SAG was reviewed again, and then it was found to be problematic. Therefore, result of the previous SAG meeting was canceled. And with new members, again, SAG-N will be held again. We have not heard of the date yet, but inclusive of that, for EMA, In the first half of this fiscal year 2024, towards the end of the first half of this fiscal year, the result will be provided. The result of the review will come around at the end of the first half. In Israel, for example, the sales is being generated, although it is minor. and the drugs are purchased in the United States, and that is included in number for Europe. But massive recording of the sales is not included in this number. Understood. Thank you.

Next question, please. I'm Ueda from Goldman Sachs. First question is about your plan and your assumption for cost of goods sold. And this year, this fiscal year, you assume that cost of goods sold will increase. Are there one-time factors leading to that? Or for this year, I think there will be increase in like-and-be. Is there impact from changing product mix? That question will be addressed by Mr. Tamura. I am Tamura, responsible for production. Thank you for your question. As you rightly mentioned, in this fiscal year, there can be sales and cost of goods sold are estimated here. And in comparison to the actual from last fiscal year, cost of goods sold is higher this fiscal year. And that is because of a slight deterioration in the mix. Thank you for your question. Thank you. As a follow-up, in the future as volume increases do you expect improvement substantial improvement once again speaking going forward regarding the cost of lecambi Large part of the cost is accounted for by drug substance and partner, Biogen. We have been working on reduction of cost through various different measures. I would like to cite some examples. Right now, drug substance is manufactured at Swiss plant of Biogen. And this plant is highly automated. And by continuing to produce drug substance at some scale, we expect cost reduction and yield improvements may be also achieved through process improvement, and we are making efforts towards that end. And the trend we anticipate is a declining cost over medium to long term. As for formulation, The second CMO is already launched as the second place of production, and we expect the initiation of production. And that will also be reducing costs over the medium to long term. With these efforts, we are reducing our cost of goods sold. Thank you.

In the interest of time, we would like to now turn to media for their questions. If you have any questions in the media, please raise your hand. We do not see any hand raised in this venue, so we are receiving questions from those participating online. Mr. Muraoka of Morgan Stanley, please unmute yourself. Thank you very much. My name is Murauka. I am from Morgan Stanley. Regarding expenses for the KMB, you said that this fiscal year is the peak in expenditure. How much is included in the guidance for this fiscal year? Actual result was 110 billion and 60 billion before that and 150 billion later. in total of two companies. So how much is included in the budget? Could you please give us a ballpark? Mr. Asano is going to respond to that question. My name is Asano. I am in charge of planning. Regarding the concrete numbers, we would like to refrain from disclosure, but as Gen A expenditure will be over the level recorded in last fiscal year. So SG&A expenses will be up, but R&D expenditure will be down. Is this correct? We like to refrain from specifying numbers, but SG&A expenditures are expected to be more than the record in last fiscal year. Understood. Thank you very much. I would like to ask you another question. If I may, please. Regarding the subcutaneous rolling BLA submissions have been initiated, but if you continue and then approval of the subcutaneous formulation in the United States, when can we expect to get that? Before summer next year or even earlier than that? What is the image? Dr. Lynn Kramer is going to respond.

Yes, thank you for the question. Chief Clinical Officer. As you recognize, the subcutaneous autoinjector maintenance therapy rolling submission was initiated a day ago. And in that submission, we have requested a priority review. We won't know whether a priority review is granted until from the fba that the dossier is formally accepted which takes about 60 days and at that time we would know whether we have a priority review or not if we are granted priority review that would mean we would expect approval six months after approximately six months after that so that's uh uh all I can say at this time.

Rolling submission was initiated. So various modules will be submitted in rolling manner. And the final submission will come in October. so then the time schedule as has been explained now is expected for the completion of the review well it was harder to hear so by October rolling submission will be completed and within two months the priority review will be confirmed and then six months will kick off from that please check with the secretary later

Are there any questions from the members of the media? I'm Banno from Nikkei newspaper. Thank you for taking my question. I have a question on China. This fiscal year, you expect 3 billion yen revenue under other PET, CSF are not widely available in China, but you still expect this level of revenue. How will BBBM be used, and who will be the patients that will be able to receive treatment? Mr. Okada will respond. I'm Okada responsible for China business. Thank you for your question. As for the figure 3 billion yen, this is a number in the pie chart presented by Mr. Naito's CEO. And mostly 3 billion yen is from China, but that also includes Europe. So China per se is smaller than 3 billion yen. And as presented today using these slides, Centering on BBBM, screening will be carried out in China. That is the plan that we are pursuing. And there are three approaches to screening. And patients who actually come to hospitals, in comparison to those healthy, high-end patients, are target for screening. And then, as a result of the screening, there will be a pathway to seek consultation and care at the medical institutions. PET and CSF are not so widely available and therefore we are preparing For BBBM and as for scientific validity of BBBM as a screening method with Chinese KOLs, including retrospective data, we are preparing a paper publication. It is not that what we are doing in China is exceptional. Based on scientific data, we are making efforts to establish BBBM as a scientifically valid screening method. Who will be the target? those who will be identified through the screening, and it will not be covered under NIDL immediately after the launch, so it will be out of the pocket. And therefore, drug price will be high at around 3 million. So in China, I believe initial target will be high-end people, people who are living in the cities on the coastal regions such high-end people will be the initial targets and that is already sufficient and we have begun activities and potentially we expect a very large number of potential target patients One more point, if I may, and this is a clarification question. Subcutaneous switch. By 2026, I thought Mr. Naito, CEO, mentioned that you expect switching to be completed by fiscal 2026. Do you mean that approval is expected by 2026? Launch and approval are... being pursued with a target timing of fiscal 26. Thank you.

From Kakoho, Watanabe-san, could you please unmute yourself? My name is Watanabe. I am from Akagaku Kogyo Nippo. Can you hear me? Yes. So that means that the CMO drug substance will be produced as well or filling into vials will be conducted by the second site at CMO. Is this correct? This is my first question. And the name of the specific CMO may not be disclosed, but Japanese company or is it foreign capital affiliated or in each which region? the production will be conducted. Could you please share with us such information? Mr. Tamura is going to respond. Thank you very much for your question. My name is Tamura. I am in charge of manufacturing. For drug substance, the U.S. plant of the Biogen is being developed as the second site for drug substance. For drug product, CMO in Europe is going to be utilized and it is being ramped up. Thank you for your question.

Unfortunately, we have run out of time. We would like to conclude the financial results presentation session. If you have further questions, please contact IR or PR of ASI. With that, we would like to end today's presentation session. We thank your attendance.