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...