Eisai Co Ltd

Thank you very much for taking your time to attend the financial results briefing session by ASI. It is now time we would like to begin the briefing session by ASI Company Limited on financial results and business update for fiscal 2024. Those of you who are in attendance in person, please find materials including a deck of presentation and flash report. Those of you who are virtually attending, please find these materials on the website. Let me introduce the speaker, Mr. Haruo Naito, Representative Corporate Officer and CEO.

Now, we would like to report on the financial results for fiscal year 2024. First, let us share with you the P&L for FY2024. Revenue and profit both, while we continue to invest resources into Kenbi, have achieved an increase in both revenue and profits. As we have already announced, the forecast for FY2024, but both revenue and profits exceeded that forecast. If you look at this table, cost of sales increased by 0.5% each point. This is due to what is described above, other business or one-time decrease of revenue, which increased the cost of sales ratio. And if you turn to the expense side, R&D expenses accounted for the ratio, which was reduced by 1.6 percentage points in terms of its ratio to the revenue, mainly in the United States, research laboratories outside of Japan. There are some inactive research laboratories or obsolete research laboratories were decided to be closed, but among the themes of research were dropped with some impairment losses. Absorbing those, R&D expense ratio to revenue was reduced by 1.0 percentage points, and SG&A expenses increased by 1.2 percentage points. Because we continue to invest resources into that can be particularly marketing resources were invested in this SG&A expenses in which includes expenses related to the structural reforms in the United States that was carried out during the year under review. There was a temporary increase in expenses related to the U.S. structure reform, which are related to the termination benefits. Such increase was absorbed to control R&SG and A expenses, whose increase was controlled within 1.2 percentage points. Now, turning to the revenue migration. We have three global brands, three Ls, Renvima, Renvirexant, or Davigo, and Renkembi. In total, these three global products, as you see, have achieved the 426.5 billion yen. YOY increase was 24%. What contributed most to the growth was the increase of 40 billion yen in Lekempi and a 30.8 billion yen increase in Lemdima and a 12 billion yen increase in Devigo. So in the overall pharmaceutical business, revenue increased by 57.6 billion yen. And the bottom half We described one-time income or changes from the previous term, which was minus 9.9 billion yen. But as you see on the left-hand side, we achieved 106% of the previous year by increase of 47.6 billion yen to reach 789.4 billion yen in revenue. Next, turning to the operating profit migration. In pharmaceutical business, by proactive investment into Lecambi. Although we continued such proactive investment, but we could achieve the increasing RP by 26.3 billion yen in pharmaceutical business, turning to R&D business expenses. As I said earlier, as you see on the right, BB1701 impairment loss was recorded, but which increased the profit by about 3.7 billion yen. And payment of a shared profit of LENVIMA to Merck, in accordance with the expansion of the LENVIMA business, increased as such. And other businesses included upfront payment and others, and we achieved 54.4 billion yen in operating profit, which was up 2%. from a year earlier. Now, let me share with you the Kenbi situation. This was carried in the local TV program in Boston in the United States, which featured Boston Marathon. There is a runner in blue uniform who achieved the full marathon running. and this continued with the interview with him. But this person participated in the Lekanema clinical trial. And as you see here, he is a man from Portland in Maine, about 100 miles away from the hospital in Boston. But he continued to visit that hospital biweekly for about 10 years. and he could run through the whole distance of the marathon after which he was interviewed. During the clinical trial, he did not know which of the placebo or active drug was administered, but there were various improvements in the daily activities as reported by caregivers, and after that, in 2023, FDA approved the drug And he realized that the drug he was receiving was actually Lecambi. In the media coverage, he made that comment. As shown in this case, there have been various reports on improvements in the behaviors or activities of daily living. For example, the patients are now able to go for shopping in the neighborhood or they have been able to start enjoying the hobbies. These are called humanized messaging, CDRSV, and not such a clinical end point, but rather there have been reports on the improvements in activities of daily living. There are also increasing number of such reports in the medical side and the SNS or social media both in Japan and the United States, such number of reports are increasing in number recently. For Rekenbi, in Europe, Rekenbi was approved in Europe, 27 countries in Europe, plus three, and in total, in 30 countries, Rekenbi has been approved. More recently, in the Middle East, Lecambi was approved as well. So currently, today, in 44 countries, it is approved, and it is under regulatory review in 12 countries. In 44 countries worldwide, Lecambi has been approved. Therefore, Lecambi has achieved a global reach and making steady progress toward a truly global drug. Now, turning to the approval in Europe. as many as 26 months have passed since submission was filed. That suggests that there are a lot of discussions and deliberations, one after another, in the process of correspondence under the review. But at last, on April 15, 2025, Elekhembe was granted approval in Europe. Lecambi is the first therapy in Europe that targets an underlying cause of AD. As you see after the second bullet point, in Europe, APOE for homozygotes, which accounts for about 15% of patients with early AD, these patients people are not included in the patients eligible for receiving the drug in Europe. Having said that, in the US, Japan, China, and Europe, so-called four major agencies have approved Rekenbi around the world. This European regulatory approval may serve as a reference for regulatory authorities in other countries where there can be submissions are filed and being reviewed. As you see at the bottom, the first launching countries in Europe are going to be Germany and Australia. We are aiming at getting the drug to be launched in the second half of fiscal year 2025. We are making preparations now. Now, global there can be revenue for FY 2024 was 44.3 billion yen. As you see, this exceeded the full-year forecast. In America, revenue was 26.1 billion yen. In Japan, revenue was 12.7 billion yen, 4.7 billion yen. In China, 0.7 in others means Israel and South Korea as well. we have started to record revenues. So in total, 44.3 billion yen was recorded as global revenue for us. It has been the first full year in 2024, fiscal year 2024. Therefore, 44.3 billion yen as the revenue for the first full year shows that we have been able to make a steady start. in building up revenue. Now, turning to the growth trajectory for Lecambi, how should we depict the trajectory, which is explained on this slide? We are able to divide the timing into three major periods, namely pathway establishment phase, demand stimulation phase, and demand expansion phase. We would like to ask you to understand that such, and we would like to organize ourselves in thinking in this way. First, in the pathway establishment phase, we needed to start from scratch in terms of establishing diagnosis and treatment pathway for Alzheimer's disease. What I often mention is that this can be emulated to the work, which is as if we are removing a big rock and building a bridge over a large river and dig a tunnel, penetrating a large mountain, one of the most difficult and most burdensome pathways in a modern world, which requires pioneer-like efforts. We believe that we are the pioneer in the dementia treatment, and we believe that we have dedicated ourselves to establishing the pathway. What needs to be done more specifically? As you see, after the second bullet point, you needed to create a flow of diagnosis and treatment of AD, cognitive function testing, APOE testing, amyloid beta testing, PET or CSF, were needed, therefore, it will be very expensive and invasive. Administration, which requires infusion, therefore, infusion needed to be attended by nurses. For the sake of infusion, patients had to visit infusion centers. So there was quite a cumbersome step. And area monitoring utilizing MRI will be conducted. So first, this flow consisting of all these steps needs to be created, and each step has to be established. And for realizing this, you needed to get the reimbursement. All these medical procedures have to be covered by reimbursement under each system of health insurance in each country in order to minimize the burden on the patients. So doing all these are required in the pathway establishment phase. Needless to say, what is supporting each step is done by HCPs. So you need to consider deploying and education for HCPs, which cannot be done by ASI alone. Through collaboration with HCPs at medical institutions, we are conducting these efforts. At the same time, we need to promote market introduction of Lecambi. There are so-called formulary at each medical institutions and there are committees to decide adoption of the drugs. Explanation of the safety and efficacy needed to be provided in order to convince the committee to adopt the drug. And now that is the pathway establishment phase. After this, and a pathway has been established. Now turning to demand stimulation phase, you needed to establish capacity to accommodate a certain number of patients for each step in the pathway. Then the indicated patients or patients with early AD, you needed to support introduction of such patients to pathway. During this phase, efficacy and safety profile of Lecambi had to be established. So that means that the administration of Lecambi can be promoted under safe environment. Such environment has to be in place. As I said, mentioned, humanized message is being conveyed during this phase and accumulation and the academic presentation of Lecambi real world data by specialists are being done. And on the right-hand side, you see demand expansion phase. What is needed here is to have coordination network with PCP, primary care physicians, nearby physicians, and specialists or neurologists. There needs to be established a network between the two. That is the condition for this phase. That means the PCPs will play certain roles in diagnosis, testing, and treatment. So not everything is left to specialists. But whenever diagnosis by specialists is necessary, referral should be made. So the time for referral can be significantly reduced. That is one of the important conditions for demand expansion phase. And the coordination between initiation introduction facilities and follow-up facilities, which is applicable to Japan. During the first six months, initial introduction facilities are in charge of treatment for patients, and another different medical institution is engaged in the follow-up treatment after that. And that is prescribed in the rules in Japan. So we believe that we have been able to establish such system in Japan already. Second bullet point is DTC, direct-to-consumer advertisements for disease awareness. In most cases, these awareness campaigns are conducted under the branded method, as you see below. In order to streamline pathway, there are various innovations. For example, BBM will be utilized for confirmatory testing and change from infusion to SCAI and utilizing voice and others for conducting digital cognitive function testing. And MRI will be utilized for assisting AI will be utilized for assisting MRI reading. These are becoming visible, and during this phase, these innovations shall be implemented. So these are thought to be the conditions for this demand expansion phase. In FY 2025, five regions where we are rolling out this therapy, so below you can see which position Each region is now Europe and Asia, where recently the Lecambi was approved, and these regions are in the pathway establishment phase. And in private markets, Lecambi therapy is being provided. So in China, which is positioned in the demand stimulation phase, in the United States, which is in between the demand stimulation phase or towards the end of the demand stimulation phase, because it is in between stimulation phase and expansion phase. And for Japan, which we believe has already entered demand expansion phase. Now turning to next fiscal year, the U.S. is expected to enter demand expansion phase. So for fiscal year 2026, revenue and the penetration of the lecumbe is expected to be boosted because of this. Now, Lecambi in the United States, what are we going to do for this fiscal year? The hope is to convey the core evidence of Lecambi in Alzheimer's disease, which is a progressive and a fatal disease, which will continue to progress. Unfortunately, in the end, the patient will die because of this disease. Therefore, early initiation of treatment and the continuation of treatment is necessary, and the discontinuation of treatment is not desirable. So such co-evidence needs to be conveyed, and also messages related to the improvement in the activities of daily living will be conveyed. This is going to be the basic task that we will continue to do. In the middle of the year, national educational event is considered. The summary or coverage of the data will be conducted on a national level. The second bullet is related to the IV maintenance dosing, changing to every four weeks, approval of which has been already obtained. But what is the significance of this? If you look at the right-hand side, FDA has recognized that for ADD, long-term treatment is necessary and treatment should be continued. So this approval indicates that FDA has recognized such necessity of long-term treatment and the benefits of a long-term administration was confirmed. Of course, after 18 months, streamlining administration will be achieved. That is one of the advantages. But This shows the necessity to continue long-term treatment that has been, in a sense, authorized by these regulatory authorities. Actually, at the medical institutions, initiation treatment is being provided, have shown the effect of increasing number of patients initiating treatment. Next one is potential IVD approval for BBM for confirmatory testing. It used to be done through PET, which was very expensive. CSF, which was very invasive. These could be replaced with simple blood-based testing. This is thought to be around the corner. And for how to use this method, Alzheimer's Association of the United States is planning to publish the clinical guideline and the draft version has been already circulated. So we believe that this guideline will be published soon. And BBM may be utilized for confirmatory testing, which may be implemented by them this fiscal year, which will lead to streamlining and generalizing amyloid beta testing. Now turning to SCAI. currently being utilized with 360 milligram dosing for maintenance treatment. Actually, the submission has been filed and not utilized yet, but the submission has been filed and inspections are completed or in the process of being inspected by the regulatory authorities. PDUFA date is scheduled for August 31st of this year, towards which we believe that we are making steady progress after obtaining this, and then we will potentially submit for the approval of SCAI with 500 milligram dosing for initiation treatment. We are making consultation with regulatory authorities at the end of this fiscal year or in early next fiscal year. This SCAI may be utilized for covering all the entire treatment period. So far, Up to 36 months long-term data is provided, but 48 months data is being prepared. So going forward, there will be conferences such as AAIC and CTAT. Such longer-term benefits or advantages will be shown on such occasions. Next, targeted DTC and PCP, it's will be explained in the following slides. This shows the new formulation and administration method. IV maintenance dosing currently under discussion with authorities in Japan and China, and for SCAI initiation in Japan and China, preparations are being made for submission. And the formulation, as you see in the picture on the right-hand side, the cutting-edge technology provided by Terumo, least painful, this very safe pen-type auto-injector will be used, which we believe will become the key factor for changing the treatment. Targeted DTC. Why do we call it targeted? In this case, What we mean by targeted is for those patients who have been diagnosed with READ. Actually, after getting diagnosis, until starting the treatment, it still takes several months. In the meantime, what kind of a drug READ needs to be understood by the patients who are diagnosed with READ through addressable TB with a secure target so that we will be able to contribute to shortening the time until the initiation of the treatment or as a pulling factor, we may ask the patients through this campaign to be interested in getting the treatment with Lecambi and we have seen a certain effect so far, and we would like to continue on this next fiscal year onward. Now, turning to BBM, please look at the right-hand side. Currently, the number of triage tests, which are utilized for pre-screening, after the full approval was granted in the United States, as you can see here, the number of triage tests is dramatically increasing in the testing of P-217. not seeing the accumulated amyloid beta. Such patients are to be excluded by conducting this test. And as you see on the left-hand side, for confirmatory testing, if I may repeat, not utilizing the very expensive PET or invasive CSF for confirmation of the amyloid beta, not doing these tests, but more simple and easy tests blood-based tests can be conducted, which is soon to be seen and implemented.

As for approach towards PCPs, earlier, please recall the timing, one of the conditions of expansion phase. Currently, about 80% of the patients, 80% of MCI patients are currently under the care of PCPs, but they are not diagnosed with MCI. Therefore, we have to make sure that they are diagnosed so that care can be sought by these patients. This fiscal year, neurology account specialist that Main component of our sales force around 2000. Exist in the US and or rather around 2000 high potential PCP's in the US have been identified in and AS will be targeting these PCP's exactly what are they going to do? PCP's and a neighboring specialist institutions. Oftentimes these are called ID ends in a very large in scale. and help building a coordination between PCPs and specialist institutions. PCPs can contribute to identify patients with MCI and mild AD using cognitive testing to diagnose them or use confirmatory BBM testing to identify such patients. And then if these patients are referred to specialists, The referral scheme should be built, so referral will be quick. Depending on the situation, PCPs themselves may give treatment with SCAI. Through these, AD diagnosis and treatments should become generally available, and that is the major focus in this approach. Turning to Japan, demand expansion phase is the phase in Japan. Actually, when we look at monthly sales for April, it is already above 2 billion yen. Demand is strongly expanding in Japan. I would like to further analyze that, what is included in this red band. As the basis, there is history of AD research. In Japan, iRECEPT was launched in 1999. It is about a quarter century ago. Since then, even during the COVID pandemic, there is a Japan Alzheimer's Disease Academy, and this was held without missing Any session, even during the COVID pandemic, 80 researchers, the doctors and technicians, nurses, and recently even patients are participating and multifaceted continuous discussions are underway. I believe this is a very strong foundation. On top of that, as shown on the left, at the time of the initiation, I was afraid that this is going to have a suppressive effect. All case surveillance and clinical institutions requirements under optimal clinical use guidelines. But on the contrary, these have to be satisfied. So long as these are satisfied, it can be a pathway as such model was clearly indicated as a result nationwide. I believe there was good progress in pathway establishment currently. Number of patients who have been treated for more than six months is increasing initiation. Initial introduction facilities and follow up facilities are cooperating and there is a good cycle between these two types of facilities based on trust relationship referral is made. The diagnosis is given. And that care is provided, and then patients eventually come back to follow up facilities. Follow up facilities are encouraged to refer patients to initial introduction facilities. And we see this virtuous cycle. Large number of patients are receiving treatment, and the safety information is provided as a result. And including humanized message, the value of receiving care is communicated amongst five regions. Japan was the first to enter into demand expansion phase. This is the forecast for fiscal 2025. Forecasted revenue 76.5 billion, 40 billion in the United States, about 50% increase, 24 billion in Japan, 1.9 times, 9.5 billion in China, and EU, mainly in EU, and some of the Asia included, 3 billion. Total of 76.5 billion is the revenue forecast for Lecambi globally. The basis of this was, as I mentioned earlier, pathway establishment phase, demand stimulation phase, demand expansion phase. Based on that analysis, this forecast is made. This is the last slide on Lecambi. Lecambi has the potential to expand A-beta treatment for patients around the world. First, looking at drugs, in the second full fiscal year, 500 million U.S. dollars or in excess of 500 million U.S. dollars will be blockbuster drug, and Lecambi will satisfy that criteria this fiscal year in terms of global approvals, currently including major agencies, 44 countries have given approvals. On the left side, efficacy and safety, these are established. Data is enriched. As for administration method, maintenance administration with half-dosing and SCAI, we have seen progress as shown at the very bottom. Preclinical AD, this is a high potential indication where treatment stage will be brought earlier by one stage and We are steadily accumulating findings and knowledge to prepare submission, and in agreement with the authorities, preparations are underway. and I believe that Lecambi has the potential to further expand A-beta treatments. Now briefly, I would like to share with you following themes in neurology. In particular, I would like to give an update on E2814 antibody. Left side shows a study on dyad. These familial hereditary Alzheimer's disease population. targeting study, which is a phase one study, looking at tau pathology, and it has become clear that we should be looking at these two tau pathologies, early tau pathology by using p-tau-217 and to use MTBR tau-243 for late tau pathology. It was confirmed that both reduced sporadic early AD shown on the right. Targeting Phase 2 study is also starting. In combination with Alekhembe, 18 months of administration is how the study is designed. The features are shown in the middle of the box. ASI has data from ClarityAD and other clinical studies. Based on this data, we have biomarker algorithm. Based on that biomarker algorithm, accurately, we are able to screen patients to be entered into the study. MTBR TAU-243 and TAU-PET are used to confirm therapeutic hypothesis in sporadic AD. That is the objective, and we also plan to achieve LPID. before the end of this fiscal year. And another topic is what we've shared with you on other occasions. Dave Eagle is antagonist, and on the other side, on the flip side, there is agonist, daily excessive sleepiness, falling asleep or falling unconscious, which is narcolepsy. narcolepsy type one and the development for that is steadily underway as shown in the middle of the page. This compound was found from the library of 250,000 compounds. We identified this as one true agonist. And then there was further synthetic development to improve activity by 10,000 fold. This is similar to the drug discovery history of Aricept. So we were able to find this compound, which is quite lucky and inclusive of my memory of Aricept. I have much hopes for this once daily administration may be possible, given in the morning it can fight sleepiness during the day, but During the night, it will allow sleep, and we plan to obtain top-line results from the POM study in first half fiscal 2025. Now, revenue driver, Lenvima. Lenvima is celebrating the 10th anniversary and has been administered to more than 500,000 patients since launch. This fiscal year, global revenue is in excess of 328 billion yen, achieving double-digit growth and major driver is America's. Year-on-year growth was 28%. What is noteworthy is that amongst these four cancer types, all cancer types growth was achieved. All these cancer types are seeing new competitions entering into the market. Ten years ago, The first cancer type was thyroid cancer, and then HCC followed. In these two cancer types, the indication is monotherapy, not in combination. But in monotherapy, despite a very fierce competition in monotherapy setting, growth is achieved steadily. This shows the power of this drug, I believe.