Eisai Co Ltd

Thank you very much for taking your time to join the financial results presentation by ASI Company Limited. It is now time we would like to start the financial results presentation session for Q1 fiscal 2025. Today, it will be held in a virtual format. Please download or look at the slides for the presentation on our website. Let me introduce the presenter today, Mr. Keisuke Naito, Representative Corporate Officer, Executive Vice President, COO, and Chief Growth Officer. Over to you, Mr. Naito.

Thank you very much for joining us today for our earnings call for the first quarter of fiscal year 2025. I am Keisuke Naito, COO and Chief Growth Officer. With many companies reporting their earnings around the same time, we have decided to hold this conference call entirely remotely in order to take into account the burden on the participants. Let's start. This shows today's agenda. We will give you the business update, and they can be under the name FEMA or will be updated. Next, during the first quarter of fiscal year 2025, revenue increased 7% year-on-year and profit increased 55%. First, the pharmaceutical business segment expanded due to growth in what we call three Ls, comprising limbema, there can be a limborexant or divagal, To 119% of the previous year, the efficiency improvements resulting from the structural reform is implemented since last year have contributed to this growth. There can be is making progress smoothly toward achieving the full year focus as pathway establishment Progress, the double-digit growth was achieved in Japan, the U.S., and China compared to the previous quarter. In the U.S., emerging surge towards demand expansion is underway, and preparations for market launch are progressing smoothly for SCAI maintenance therapy. Launch preparations for EU are also progressing smoothly. At AAIC, a high-quality and substantial quantity of data were presented, aiming at enhancing the value of the campaign, which I will explain later. The U.S. Alzheimer's Association has also published clinical guidelines for confirmatory tests using BBM, and progress toward amyloid beta confirmatory testing is being steadily made. Then, BIMA has grown by 7% based on CER, progress toward achieving the full-year forecast is proceeding smoothly. And we have made an important progress toward maximizing patient value, receiving a favorable decision in the high-purity patent infringement lawsuit. Here is the performance update. Next. Regarding the consolidated performance for the first quarter, we have secured increased revenue and profits while continuing proactive investment in the KEMBI through the expansion of the pharmaceutical business, and we are making steady progress towards achieving the full-year forecast. Revenue was 202.7 billion yen, absorbing a negative impact of 10.1 billion yen from foreign exchange rates, representing a 7% increase from the previous year. Revenue for the pharmaceutical business was 198.4 billion yen, with a 6% increase year-on-year due to the growth of the three Ls. Cost of sales was 42.6 billion yen, with a cost ratio of 21%, the same as the previous year. resulting in a gross profit of 160.1 billion yen, a 7% increase year-on-year. R&D expenses were 38.8 billion yen, 93% of the previous year's level, and accounted for 19.1% of revenue. Due to cost efficiency improvement, this ratio decreased by approximately 3 points from 22.1% in the previous year. SG&N expenses totaled ¥100.2 billion, an increase by 1% from a year earlier, including ¥36 billion in expenses regarding shared profit with NBMA paid to Melk. As a result, operating profit reached ¥20.7 billion, up 55% a year, and the net profit reached ¥15.3 billion, a 33% increase from the previous year. Profit for the period attributable to owners of the parent was 14.5 billion yen, up 37% year-on-year, with all lines of profit showing increases. Both revenue and profits made good starts for fiscal year 2025. Next. Regarding the analysis of factors affecting revenue transition, the top left shows the revenue of ¥189 billion for the first quarter of fiscal 2024, and the first quarter of fiscal 2025, as shown in the pink box on the upper right, Revenue from three Ls was 120.7 billion yen, up 19% year-on-year. This significantly drove the expansion of the pharmaceutical business, resulting in an increase of 11.9 billion yen in revenue. Lecambi was the biggest gross driver, with an increase of 16.9 billion yen from the previous year, Devigo and Lembima also grew by 1.6 billion and 0.4 billion yen respectively. As a result, revenue was 202.7 billion yen for the first quarter of fiscal 2025, up 7% year-on-year with an increase of 13.6 billion yen. Next. As for the breakdown of operating profit transition, revenue increased due to the growth of 3Ls, resulting in a 10.8 billion yen increase in gross profit. The R&D expense ratio to revenue decreased by 2.9 points. due to the revenue growth and the cost efficiency improvements through structural reforms. The SD&A expense ratio decreased by 3.2 points due to the revenue expansion driven by the growth of 3Ls, improvements in functional and organizational efficiency, and the impact of foreign exchange fluctuations. As a result, While continuing to invest proactively in the growth of the Camby, operating profit for the first quarter of fiscal 2025 increased by more than 1.5 times from the previous year to 20.7 billion yen, representing an increase of 7.3 billion yen per year. There are no changes to the consolidated financial forecast for fiscal year 2025 from the disclosure in May. Continuing from fiscal 2024, we are aiming to establish a foundation for stable earnings structure, targeting ROE of 8% by 2025, enhancing operational efficiency through structural reforms and strategic optimization of R&D resource allocation. And we aim to achieve revenue of 790 billion yen and operating profit of 54.5 billion yen. Next, I will explain the global business update for Rekenbi. Global revenue of Rekenbi for the first quarter was 23.1 billion yen. Sales in Japan, the U.S., China, and other regions all saw double-digit growth. In China, the results include one-time impacts of stockpiling by distributors in response to the risk of tariffs, but even excluding that, sales grew at a double-digit rate due to expanding demand. The number of markets where submission for approval has been filed is also steadily increasing, showing steady growth as a global drug. McKinby is advancing smoothly toward achieving fiscal 2025 sales forecast over 76.5 billion yen. Next slide, please. In the United States, there is emerging surge for demand expansion. Sales grew 20% on a constant exchange rate basis from the previous quarter. Amyloid beta tests are also increasing. BBM blood biomarker triage tests have grown by an average of more than 130%. and the amyloid beta positivity rate has increased. The number of PET or CSF tests conducted has also increased by an average of more than 120%. We are delivering humanized messages to healthcare professionals emphasizing how the CanBe treatment may help patients maintain who they are for longer, encapsulated in a message, you still can be with the CanBe, featuring the actual patient's treatment, treated with the CanBe, and incorporating empathy and differentiation into the CanBe treatment. The approval of IV maintenance treatment is confirmed to have a positive effect on the CanBe initial treatment. Regarding future growth factors, we launched a targeted DTC campaign, TV campaign, from June 9th. This campaign has been highly evaluated by healthcare professionals for its effectiveness in encouraging early medical consultations. By targeting patients who have received an early AD diagnosis, the DTC campaign is fostering the understanding of the can-be treatment and encouraging a positive attitude towards treatment. BBM clinical practice guideline was issued by the U.S. Alzheimer's Association at AIC 2025. For the first time, the association recommends BBM as a confirmatory diagnostic tool. We anticipate that BBM will be widely adopted as a triage test and confirmatory test in the society. The PUDUFA date for SCAI maintenance treatment is set for a very close date, August 31st. The introduction of easy-to-use SCAI has made home administration possible, significantly lowering the barriers to long-term continuous administration and may enable substantial reductions in medical costs associated with intravenous infusion. Preparations are steadily underway for a swift market launch following approval. Starting in the third quarter, we will begin an approach led by PCP-specialized MRs, focusing on areas where pathways have been established through IDN to strengthen coordination with PCPs. I believe you can see that such factors as targeted BDC, BBM, SCAI, and others are creating an emerging surge towards demand of expansion for Ekembi, and a progress towards achieving the full-year sales forecast is proceeding smoothly in the United States as well. Next slide, please. The differences between IV infusion and SCAR are summarized in the table below. Both IV infusion and SCAR are maintenance therapies, and they start after the initial 18-month treatment period. IV is administered once every four weeks, while SC is administered weekly. Administration time is one hour for IV and an average of 15 seconds for SCAI with ALT injector. IV is administered by HCPs at the hospitals or infusion centers, while SCAI is intended to be administered at home by the patient or caregiver. Some patients feel reassured by receiving recanvir treatment at the medical facility. On the other hand, there are also patients whose families have to drive them long distances to the hospital for treatment. For such patients, administration at home by the patient themselves or their caregivers offers the advantage of reducing the burden of hospital visits and enhancing the efficiency of healthcare resources. This approach is patient-centered and the introduction of SAI is considered an important move towards the demand expansion phase in the United States. Next slide, please. In Japan, progress is being made in establishing pathways and the demand continues to expand. Sales from wholesalers to medical institutions stood at 130% of the level of the previous quarter and in July saw a record high, demonstrating steady growth. Cooperation between primary care physicians and specialists is also progressing smoothly. And for patients who have undergone treatment for more than six months, 1,500 facilities have agreed to serve as follow-up facilities, enabling patients to receive treatment at nearby medical institutions that are more convenient for them. From the perspective of increasing the value of Rekembe, the significance of long-term administration has been discussed at Japan Academy of 80 meetings, and understanding of this has been deepened. As for future growth drivers, preparations are underway to add a new formulation of SCAI with a potential submission targeted for this fiscal year. Additionally, ongoing disease awareness campaigns are contributing to increase the awareness of MCI and encouraging patients to seek medical consultation. Currently, the second phase of the DTC campaign is underway. We are pleased to report that progress toward achieving this fiscal year's revenue forecast is proceeding smoothly.

In Europe, we are planning to prepare for launch in October. In Germany, preparation to meet European approval requirement is steadily underway. For six months, there will be reimbursement of discretionary pricing, after which economic evaluation for formal reimbursement pricing negotiations will follow. In France and Spain, we are preparing with the aim of starting early access program in the third quarter. In Europe as well, we will be building a pathway quickly to start contributing to patients. The other day, AAIC was held in Toronto, Canada. I would like to report to you the presentations made at AAIC. At AAIC, including SCAI-related data, a large volume of high-quality data were presented. 48-month long-term treatment effect, and real-world data confirming equivalence of SIAI, SCAI with IV maintenance dose and potential for safe administration at home by patients and caregivers were presented.

Thank you.

This is related to 48 months of continued treatment data. This showed the suppression of deterioration of dementia in this population together with quality ADA population as for The treatment effects comparison was made to the natural course of AD shown by apnea and biofinder in addition to clarity AD population. At 18 months, difference with apnea was 0.52 and with biofinder 0.57, but the difference was 1.75 and 2.17 respectively at 48 months. From these results, After 48 months of treatment in early 80s, the same benefits were shown. Case reports of 178 patients with early AD from nine medical institutions in the U.S. were reported. Disease stage, age, APOE4 status, etc. of 178 patients were shown to be similar to clinical trials. At the time of this case, reports 87.4% were continuing treatment. Average treatment duration was 375 days. A beta diagnosis was mainly given with PET or CSF, but BBM was also used. In the U.S., BBM test use is doubling every four to eight months. In particular, the use of PTAL-217 is accelerating and the use of BBM is increasing. Eighty-four percent of patients did not progress to the next stage. Thus, very favorable results were obtained. As for adverse events, area E or area H incidence was 13 percent. In vision-related reactions, 3 percent. There were no reports of deaths or serious bleeding events. Satisfaction with lichen B treatment was high. Physician satisfaction was 8.7 out of 10. Patient satisfaction was 8.8. Caregiver 8.2 and HCPs 8.7, two-year real-world data highlighted the favorable evaluation of Laconimab's efficacy and satisfaction of stakeholders. SCAI Maintenance Treatment, FDA, Beruva action date of August 31st is fast approaching. Using modeling and simulation approach, appropriateness of 360 mg weekly dosing for SDAI maintenance treatment was confirmed, while equivalence with IV maintenance treatment was also confirmed. In human factor study, Safe and effective use of SCAI under development in expected use environment was examined. SCAI maintenance dosing appropriateness was confirmed based on clinical efficacy shown by CDR-SV amyloid PET and progression-protecting blood biomarkers. Regarding confirmation of a pregnancy with IV maintenance treatment after 18 months of IV initial treatment, 10 mg per kg monthly IV maintenance treatment and 360 mg weekly SCAI maintenance treatment showed similar PKPD profiles and favorable safety profiles. A human factor study which examines human behavioral and cognitive characteristics, safe and appropriate administration of SCAI by caregivers, patients, and HCPs were confirmed, supporting safe and effective administration. Based on these results, SCAI maintenance treatment showed equivalence to IV maintenance treatment. Human factors study supported administration by patients or caregivers in nursing homes or at home. SCAI maintenance treatment is expected to bring benefits such as reduction of overall health care system cost. Results of area incidence rates between leucanumab and donanumab in indirect treatment comparison were presented at AAIC 2025. This study conducted indirect treatment comparisons using comparison with placebo of each drug, where placebo was the common comparator to understand safety differences between lacanumab and donanumab, such as area outcomes and depth. Results using Clarity AD and Clio Laser. ALG2 are that the more towards left, the more favorable the results are for leucanumab. In comparison to donanumab, the results indicated that leucanumab has a lower risk of area events. Using modified titration of donanumab, results indicated numerically lower risk for leucanumab in O area, area E, and area H. This network better analysis supports the indirect treatment comparisons using original dosing schedule of donanumab and supports conclusion that in patients treated with leucanumab in comparison to those treated with donanumab, area incidence is lower. In area comparison, once again, it was indicated that area incidence is lower in leucanumab in comparison to donanumab, showing advantage in safety as well. I will now go over the progress towards implementation and wider usage of BBM for a beta confirmatory test. On May 16, U.S. FDA granted IVD clearance for Fujiwebio's Lumipulse G. Leading clinical laboratory companies in the U.S. have adopted it and started its use in June. There is also development towards reimbursement in the U.S. U.S. Alzheimer's Association announced BBM clinical practice guideline. Looking at this guideline, for one thing, BBM criteria are clearly defined, and if criteria as confirmatory testing is met, replacement of PET or CSF is possible. This is quite significant. that BBM tests with 90% or greater sensitivity and 75% or greater specificity can be used as a triaging test, and that BBM tests with 90% or greater sensitivity and specificity can serve as a substitute for amyloid PET imaging or CSF-80 biomarker testing. The development speed of BBM and the evolution of diagnostic paradigms are taken into consideration in encouraging clinicians to stay informed about emerging paradigms such as biomarker combinations or ratios and multithreshold testing that may further refine the diagnostic accuracy of BBM. A-beta confirmation by A-beta PET and CSF may be replaced with simple BBM, and accelerated social implementation of BBM can be expected, leading to streamlining and expanding of the capacity of pathway. The use of BBM in confirmatory testing is expected to be a major driver to expand demand. This is the summary. In 48 months of continued treatment, treatment efficacy continues to expand compared with the natural course of AD, and improvement was shown in 56% of patients with low tau. With two-year real-world data, after an average treatment period of more than one year, it was confirmed that about 84% did not progress to the next stage of the disease. High evaluation and satisfaction with efficacy were also confirmed. Concerning SCAI maintenance treatment, modeling and simulation confirmed equivalence to IV maintenance treatment in terms of exposure, clinical efficacy, and biomarkers. Appropriateness of administration by patients and caregivers at home or nursing home was indicated. Significant benefits are expected, including cost reductions in the entire medical system, streamlining, and increasing the capacity of treatment pathway. Area comparison through indirect treatment comparison indicated that leucanumab has a lower risk of area events compared to donanumab. A beta confirmatory test using BBM is showing steady progress for its social implementation and wider usage. Hence, significant benefits are expected, including cost reduction in the entire medical system and streamlining and increasing of the capacity of treatment pathway. Ahead, 345 is progressing steadily towards obtaining top-line results in 2028. Now moving on to update on Lendvima. Q1 global revenue from Lendvima was 83.9 billion yen. In the U.S., the biggest market steady progress at 104% year-on-year growth on constant exchange-free basis was achieved. despite impact from IRA. Lenvima maintains top market share in renal cell carcinoma and endometrial carcinoma, and top market share among TKIs in HCC and thyroid cancer. In terms of sustained value creation, ASI received a favorable decision in high purity patent lawsuit, making significant progress toward OA extension. Our IP strategy contributed to a maximization of value for patients. In China, lymphoma combination therapy with case and Keytruda was approved, and ASI is starting to make new contributions to the world's largest HCC market. We are making steady progress towards achieving global fiscal 2025 revenue forecast of 312 billion yen. This is the summary of what I have presented today. Once again, I would like to point out that a surge for demand expansion is emerging for Lakembi treatment at AAIC. 48-month continued treatment results and two-year real-world data were presented. For SCRI maintenance treatment, August 31 FDA action date is approaching. Our efforts to strongly appeal unique value that only Lakembi can offer is appearing in outcomes. I myself have felt the enthusiasm about and expectations for the can-be treatment from KOLs at AAIC in Toronto firsthand. ASI is now at a turning point. That is how I feel. And through these efforts, we expect to cause a major paradigm shift. The initiatives that I've described today are shown here, and through these, we expect the change in revenues and profits towards achieving 8% return on equity in fiscal 2026.

Now we would like to have a Q&A session. We would like to receive questions first from analysts, and then we would like to follow that session with Q&A session with media. And I'm going to call you, so when your name is called, please mention your name and affiliation before asking your questions after unmuting yourself. Please use the function for raising your hand. The first question is from Mr. Wakao from JP Morgan. Can you hear me, Mr. Wakao? Yes, this is Wakao speaking of JP Morgan. Thank you very much. Regarding the first quarter progress when compared to the internal plan, In Rikimbi, China, excluding the one-time impact of China Rikimbi business, but I think that the progress for the first quarter has been faster than original plan. If that is correct, in what area of business the progress has been faster than the original pace? And if the same pace continues into the second quarter, do you think that there will be a chance for you to revise the full year forecast? Mr. Ike is going to respond to your question. Thank you very much for your question. This is Ike speaking. Thank you for your question, Mr. Wakao. Regarding the actual results for the first quarter, we seem to be above the internal plan, exceeding the plan. The major factors are due to the three global major products, namely Lembima, Lekembe and Adebigo in each region have grown and exceeded the plan. That was the major factor. Regarding the advanced delivery of Lecambi products, that impact in China is excluded. Still, we saw the driving growth. And there was some delay of the expenditure in R&D activities, but in combination with ST&A expenses, we have been working on the structure reforms from last fiscal year in order to enhance the efficiency of expenditures in R&D. That has been bearing fruit. If this cadence continues into the second quarter, which we would like to see, but the upside revision may be considered at such time. So we do not intend to make any revision to the current plan at this moment. Thank you. Understood very well. And compared to this fiscal year's plan, I think that there was a plan to account for the one-time revenue. Do you think that there is no change to that? Yes, your understanding is correct. Thank you very much. My second question is related to the trend of there can be business in the United States for April through June. The full basis results were much better than our expectation. I would like to ask you to explain the background for that. On May 10th, BBM and other measures and initiatives were explained. But other than that, compared to the past quarters, during the current quarter and the review, what changes have you seen? And the competition for share of the market with Donanema, what is the current status? Yes, for your question, Mr. Haruna is going to respond. Thank you very much for your question. I am in charge of a F&B business in the United States. My name is Haruna. Regarding the share with the competitors, based upon the file data, and making adjustments to the dosing frequency and the doses of Rekembe and Kisumla. And based upon the calculated share, Rekembe takes about 75% of the market and Kisumla having 25%. Actually, Kisumla was launched. And compared to the last quarter, the Kimby could achieve double-digit growth. And on the constant exchange rate basis at 120%, the growth was reported. Therefore, the launch of Akisunda has not slowed down the growth of the Kimby. And AD market itself has been expanding because of the advancement of BBM and other diagnostic tools. The market itself has continued to grow. Since the launch of Lecambi, 18 months have passed, and there are increasing number of patients who are transitioning to the maintenance treatment. The great majority of our patients are wishing to be transitioning to the maintenance, and the AD is life-threatening and a chronic disease, and the early start of the treatment as well as the continuous long-term administration are being regarded as significant. So that has contributed to the continued growth. Earlier, our COO, Mr. Naito, reported on what was presented at AIC, and a 48-month long-term administration data was presented, particularly for early-stage low-tell patient groups over the past four years, more than half. of the patients have shown improvements. And therefore, in the actual critical setting, the significance of the Can-B long-term administration has been demonstrated. Therefore, maintenance treatment as well as the benefit of ICAI for the Can-B are being approved so that we'll be able to continue to grow in the third quarter onward. Thank you very much. Comparing the fourth quarter of FY24 and the first quarter of FY25, do you think there has been any change? Because the growth seems to be much stronger, and we are still in early August. Have you seen any change in the trend since then? Again, Haruna is going to respond. One piece of information for your reference, regarding the quarter from April through June, there has been an increasing number of new prescribers. Particularly such new prescribers, compared to the last term, has shown the double-digit growth, which about 70% of them, new prescribers, are the ones who are prescribing the drug at the newly opened accounts. So the prescription expansion is increasing during the quarter and the review. And for the past one month, July, because we have just entered August, and we have seen such continued trend based on the weekly sales startup, based on the demand. Last week, the demand was shown to be record high last week. So it is obvious that we have been saying that there has been an emerging surge. Such an emerging surge is continuing throughout the month of July, also into August. Thank you very much. Just one last question regarding the U.S. situation. Mr. Ike would like to supplement our answer. Thank you. This is Ike speaking, Mr. Wakao, regarding the recanby in the United States. Mr. Haruna? responded to your question, but I forgot to tell you in the outset, there can be in the United States for the first quarter of FY25 exceeded the internal plan. So that is what I wanted to supplement. Yes, understood. Just one simple question regarding BBM. There has been a guideline issued for that, for the confirmatory test. And what about the timing of Medicare coverage? This is my last question. Mr. Haruna is also responding to this question as well. Thank you very much for your question. For BBM pricing, recommendation has been already prepared. So that will be applicable from January next year. Reimbursement will be started from that timing onward. I see. Thank you very much.

Next, from City Group, Mr. Yamaguchi, please. Please unmute and please start. Can you hear me? Yes, I can. Thank you. I have a few, or I've received a few updates regarding Europe. As for insurance, it seems that the views are critical. In the U.K., has there been any progress in negotiations? Mr. Ike is going to respond. Thank you, Mr. Yamaguchi, for that question. In the UK, it wasn't as expected regarding rice, but we have continued to engage in negotiations. There are further developments we would like to update you. Amongst the private sector, there may be foundations, and even without coverage, sales may start. But rather than that, are you going to wait until negotiations are finished with NICE? In the U.K., it is already sold by private sector. Thank you. I also have a question regarding page 11 between IV and SC. Medicare will change. It is going to be after Robusta 31st, but from B to D, Part B to Part B, You're prepared to support this transition of reimbursement from Part B to Part D. Mr. Haruna is going to respond. Thank you for your question. This is Haruna speaking. As you rightly pointed out, SCAI will be covered by Medicare Part B. and the Medicare Part D is provided by private sector insurers, and depending on their insurance program, they have their own formulary list, and CMS will review the formulary list and approve. Usually, for a product that is launched outside of the cycle of Medicare Part D bidding, It will be delivered through medical exception process usually, and this process is initiated by healthcare professional or healthcare staff. And this medical exception process is a process that is generally used in other therapeutic areas such as diabetes. This is a very general process. To support such process, there can be companion services. what we call the Kembe Companion. This is our service team, and there are account managers who support reimbursement through these services. Transition from Medicare Part B to Medicare Part D, patients who will be transitioning for maintenance treatment will be supported from the launch, the day of the launch of SEAI.

Next, Mr. Muraoka of Morgan Stanley. Please unmute yourself. Thank you very much. This is Muraoka of Morgan Stanley speaking regarding the transition from Part B to Part B. As a follow-up question on the earlier question, Penn was launched by another company, but they were struggling in the switching from B to D regarding the injection formulation. That has been mentioned over the past several quarters. For your case, this process, do you think that it will take some time at some point in the transition, or considering the demand for SCAI, do you think that there will be a smooth acceleration, for example, starting from the October-December quarter? Is this somewhat the perception that we should have? What kind of dynamics do you have in your mind? For your question, Mr. Haruna is going to respond. Thank you very much for your question. Regarding SEAI, the level of expectation toward SEAI is very high. As Mr. Naito mentioned, at the AAIC meeting, the presentations were explained. There was a high attention from physicians who you often mentioned as the key factor for change. and I believe that this represents a very high expectation level from physicians and others to this therapy. On the other hand, regarding the medical Part D insurance process, it's something that we have to go through, so we have to securely go through this process, and also this is going to be a maintenance treatment, therefore, After 18 months of initial treatment is completed and the patients who complete initial treatment will transition to the maintenance treatment gradually. And the CAI initiation, once the CAI initiation therapy is approved and launched, then there will be another surge. Thank you very much. Let me clarify again. From B to D, in that switch process, you may struggle and you won't be able to achieve the expected growth in the first quarter or second quarter, you won't be able to feel such a strong growth. So do you think that instantaneously or quickly you will be able to see the growth as expected? For your question, Mr. Haruna is going to respond. Thank you very much for your question. Regarding the switch from Medicare Part B to Medicare Part D, We have a dedicated expert team and we are preparing for a system to support patients and switch. So we do not have any concern regarding this issue. we will be ready to go through this process in order to deliver the therapies to healthcare professionals and patients. On the other hand, eligible patients for SCAI treatment is those who have finished the initial treatment. Therefore, we believe that the number of patients eligible for SCAI is going to increase gradually. Thank you very much. After finishing the 18-month initial treatment, at the end of August, how many of such patients will there be? Do you think that it will reach 10,000? Mr. Haruna is going to respond. Thank you for your question. Regarding the number of patients... We do not disclose the number of patients currently, so we would like to refrain from making comments on that, but I would say that at the next earnings call, we would like to give you a more clearer update on SCAI penetration. Thank you very much. Regarding the 2086 of a not-corporepsy treatment, at the world's sleep, I believe that you are scheduled to make presentation. And Takeda's profile is becoming clearer. And currently, as far as you have information, what do you think is the differentiating factor as the latecomer? Mr. Ido is going to respond. I am Ido in charge of R&D. I am going to respond to your question. As you pointed out, at World Sleep, there will be oral presentation to be made on our data. We would like to present our detailed data then. Currently, this drug is going to be administered daily, once daily. And also PK profile for this type of a drug is going to be very important, but this drug has an ideal profile. That is to say, during the day, the awakeness will be maintained, and this will not have a carryover effect. And on top of that, based upon the results, MT1 type 1 and type 2 as well will be covered by this drug. Therefore, we have a high expectation, and I hope that we'll be able to present that data at that time. Thank you very much.

Tony, from Macaulay, please unmute and please start your question.

Hi, can you hear me?

Yes, I can hear you.

Okay, yeah, perfect. Yeah, so a couple of questions on Lakembi, you know, congrats, very strong results. On slide number 16, you guys showed real-world data where the incidence of ARIA is roughly 13%, right? Compared to the Clarity AED trial, there you have 21.3% ARIA incidence. So this is much, much lower. So any reason why is it so much lower in the real-world setting? Is it just because it's a very small number of 178 patients?

Mr. Toyosaki will respond to your question.

Thank you for your question. I'm responsible for medical affairs in the United States. My name is Toyosaki. Thank you very much for your question on ARIA, about ARIA-A and ARIA-A incidence. In comparison to Clarity-AD, real-world data is at a lower level. This is not only five-year real-world evidence, but according to presentations by other doctors from other centers, the incidence level is similar to priority 80 or lower. Are there any specific reasons that the level is lower? We're not discussing the presentations. The impression of the physicians in their daily practice is such that in comparison to strictly centrally evaluated priority AV results, and this may differ from center to center, but area A, area A's incidence is not seen as problematic in a real-world setting, and I believe that physicians are adequately managing and controlling robustly in the actual clinical setting. going forward about how to put the control of adverse events, we would like to continue to make thorough efforts. Thank you for your question.

Thank you. Perhaps just a quick follow-up on your advantage on slide 18, your advantage against Eli Lilly's Kisumla when it comes to ARIA. The data, the advantage is assuming Kisumla Dosed using the original schedule, you know that Kisumura is now being dosed at a more gradual titration schedule. Do you think you can maintain your ARIA advantage over Kisumura with their new slower dosing schedule?

ただいまのご質問にも豊崎より回答いたします。

Mr. Toyosaki will once again respond to your question. Thank you for your question regarding area incidents. Together with efficacy for patients who receive treatment, area incidents is a very important information as we believe. And at AAIC, in the trailblazer study in addition to standard dosing in trailblazer study and also modified titration dosing in trailblazer 6 study in comparison to these advantage of lecambi is shown and as indicated on this page in modified titration dosing in comparison to modified titration dosing area risk numerically is lower for lecambi And as for AA incidents, the advantage can be, even in comparison with a modified type creation, we believe can be maintained. Thank you.

Certainly very reassuring. If I could just add a quick question on slide number 28 for your China LeCambie sales, right? Because of your inventory building there. So it looks like you're only looking to sell another $1.8 billion worth of LeCambie in China. I just want to confirm my understanding is correct. This looks fairly low number for the rest of the year, three quarters.

That question will be addressed by Ms.

Sasaki. Thank you for your question. I'm responsible for China. I'm Sasaki. Right now in China, very smoothly, prescription is increasing and number of new patients is increasing according to the plan. That is the situation. And as for the number that is shown today, we believe that this is urgent to avoid a tight risk. Distributors are building up inventory. So this number, in comparison to plan, is showing good progress vis-a-vis the plan.

Okay, very good. Yeah, thank you very much. Appreciate it.

Mr. Sakai of UBS Securities, please unmute yourself. Yes, this is Sakai of UBS Securities speaking.

I have two questions.

It's a qualitative question. Eli Lilly is somewhat forcing the same substance, the ranimab, Pre-symptomatic AD is targeted in their clinical trial, which has been started, and early next year, interim results, analysis results, will become available. And Rush is conducting brain shuttle. And for your Rekembe, the commercial strategy in the United States in particular, do you think there will be any impact on that? I don't think there are any measures that you are taking because they have not launched yet. So you may have various ideas. So if you can share with us such ideas, that would be very helpful. That is my first question. Dr. Dean Kramer is going to respond.

Yes. Thank you for the question. I'm the chief clinical officer. Of course, your question is, AD indication. We have our AHEAD 345 study, and that is a protocol that has been agreed with the FDA and can truly evaluate preclinical AD. And we're confident that by removing both protofibrils and plaque when present, we will have a positive result. However, there are differences in the trials from the nanomab. in which one-third of the patients have global CDRs of 0.5, which is MCI, while in our head 3, 4, 5 trial, there are no patients with global CDR higher than zero. So all patients in the trial are actually preclinical AD. And we believe that that will be a critical impact in the results of the trial. We have somewhat different endpoints. Their endpoints are looking at conversion to the next stage. We have a primary endpoint of PACT V, which we believe is a more sensitive endpoint, and also secondary endpoints that are focused on change to the next stage of disease. So we believe that our study more accurately represents the preclinical population, and our results we expect to be robust. Thank you.

Just follow-up. You said preclinical. You're really talking about pre-symptomatic. Are there any big differences between two definitions?

No, that's the same. Obviously, if you have a CDR global of 0.5, you are not pre-symptomatic. You are symptomatic, and that's the definition of MCI. The preclinical means that the patient has no cognitive impairment and has either intermediate amyloid, which means it's building up or elevated, just as in the Clarity AD trial, but no symptoms. So there's a difference in the two studies in what is being evaluated. People with symptoms already are covered by the existing label for both drugs. So their study is somewhat different than ours in the population they're studying. Is that... Clear?

Yes. Just one more. The biomarker, are you setting up any biomarker for the symptomatic or preclinical patient?

Yes. Many, many biomarkers are being evaluated just as they were in clarity AD. And that are many of the standard biomarkers, such as PTAC 217, the A-beta 42 to 40 ratio. We'll also be looking at our biomarker, MTP, MTBR, TAU-243, Neurogren, and many, many. Okay.

So you have identified biomarkers already?

Yes, many. And in the protocol.

Okay. All right.

Thanks.

Regarding the, there is a follow-up response from Mr. Ito regarding the brain shuttle antibody, Trontinemab, Ido is going to respond. Regarding the Toronti name box, this is an amyloid antibody with a combination or binding of a brain shuttle. In the creation of this antibody drug, what is most important is the toxic core. What is going to be captured by this antibody is very important. So it's not about how much antibodies can transition into the brain, how quickly. and the 20-name map session was held with four oral presentations in the AAIC. Regarding the data for the cognitive function, there was no presentation on that. And this time, the plan for phase three study was presented as well. regarding the steroid for infusion reaction may be required, and exclusion criteria includes the exclusion of the patients with over five microhemorrhages. So that means that unless area incidence becomes zero, MRI monitoring will continue to be conducted. That means that the pathway needs to be established from scratch. Until this drug is approved, there can be, would have had accumulated the real world data over five or six years. At such time, shortly, SCAI use will be started, and a phase three, Toronto NAMAP, according to the plan of the phase three trial of Toronto NAMAP, There was no specific mention, but they described IV or equivalent to LV, and a preclinical indication may become available at such time. Therefore, we do not believe that the position of Rekembe will be swayed by the launch of this drug. Thank you very much. I'm sorry. Regarding the commercial strategy of Rekembe in the United States, Currently, how much of the percentage of PCPs who are already using the Rekembe? Because once they start to use this treatment, there will be repercussions, and it may become more difficult for them to manage it earlier. For your question, Mr. Haruna is going to respond. Thank you very much for your question. This is Haruna speaking. Regarding PCPs, account for about 10% of all the prescribers, and the PCPs are introducing the can-be treatment on themselves. On the other hand, among PCPs, there are many patients with MCI or early AD being seen by PCPs. So not only starting leg and knee treatment on themselves, but they are referring patients to IDN where there are specialists available. And that will become important. As we introduced today, starting from the third quarter, PCP specialized MRs will be assigned. so that they would be able to provide information on Lecambi, as well as promote referrals of PCP patients to specialists, neurologists at IDNs. So these will be pursued. Therefore, the activities targeting PCPs will be further enhanced. Thank you for your question. Thank you very much. Next, Ms.

Sogi from Bernstein, please. Please unmute and please start with your question. Thank you very much. The other day in Japan, Chuichiro determination of drug price of Lecambi. That is the question. Cost-benefit analysis, and according to that, Lecambi's value should be one-third to one-fourth of the current prices. That is the view shown by Chirico. What is the background of this? What is the data analysis that led to determination of Lecambi value being one-third to one-fourth of its current price? And 15% drug price reduction may be imminent, according to my understanding. But what is the timing of actual price reduction? And one-third to one-fourth, together with that determination, will drug price be lowered quite dramatically, rapidly? Mr. Yusa will respond to your question. Thank you for your question. I am Yusa, responsible for Japan business. As you pointed out, at this time, HTA, regarding HTA, first there was this news report. In a medical setting, we are hearing from physicians and healthcare professionals, and we are responding to their inquiries. As for their inquiries, the background of HDA, for example, the difference between companies' analysis and public analysis, are fully explained to physicians and HCPs, and currently we are not seeing any negative response from health professionals. It is called cost-benefit analysis, but only clinical trial data is used, not real-world data is reflected. The major difference between company analysis and public analysis, we have issued the first release, and for one thing, in company analysis, AD pathology is taken into account, and beyond 18 months, treatment continues, and the effect of that treatment continues. That is the assumption for our analysis. And in HTA, turning to the last part of your question, public analysis assumes that the administration stops. We expect treatment beyond 18 months in our analysis. But on the other hand, in the public analysis, The treatment period is limited to 18 months, and after 18 months, public analysis assumes that there is no effect of the Can-B. After 18 months, these are major differences, and in our company analysis, caregivers' QOL is directly reflected, but in public analysis, The care burden only is taken into account, and only part of that difference is reflected. And looking at these differences, the model used in the analysis included the analysis is carried out in a completely different way, and that has led to the results of HTA. So one-fourth of the value, that is not completely our view. Not at all. And we expect that there will be formal decision on drug price revision and the effective date we expect will be announced eventually. We are already making estimates of that impact on our fiscal 25 revenue. but we consider that there will be no problem in achieving full-year ¥24 billion revenue, and we will continue to make thorough preparations to respond to such impact. Thank you. I have a follow-up question. I don't think it is persuasive for ASI, but under Japanese system, is it possible to challenge public analysis? Once again, Mr. Yusai will respond. Thank you for your question. Regarding that point, Regarding the deliberations of Chiwetel, we have been engaged in exchange with the authority on the analysis. Going forward, we will continue to communicate the value of this drug, seizing various opportunities. including by citing data from actual clinical setting and various other data to inform the public of the value of flakembi. I have one more question. As for the view expressed by Chirikyo, is there any inquiries from overseas payers about the views expressed by Chirikyo? Thank you for your question. None so far. Thank you.

In the interest of time, we would like to move on to the Q&A session for the media. If you have any questions from the media, please raise your hand. From Nikkei Shimbun, Banno-san. Please unmute yourself. Yes, this is Banno speaking. Ms. Banno from Nikkei newspaper. Can you hear me? Yes. Thank you very much. I would like to ask about the tariff and MFN, most favored nation treatment by the United States. Regarding the tariff, I believe there are uncertain points. But there may be a 200% tariff may be imposed on pharmaceuticals. And what kind of impact do you see on the performance for this fiscal year? What kind of measures are you taking currently? And regarding MFN treatment, which was announced the other day, and this does not include Japanese companies yet, but I wonder what will happen. And now, Biogen, or is it U.S.? And I'd like to know whether you have been engaging with the U.S. administration. If that system is introduced, what kind of potential impact on your performance? For your question regarding the tariff, sorry, Mr. Ike is going to respond. Thank you very much for your question. This is Ike speaking. Regarding the tariff, to be imposed by the U.S. Still, we do not have a specific timing when such new tariffs will be imposed are not clear yet. On the other hand, as we reported to you earlier, the inventory and supply chain in the United States have been enhanced in order to minimize the impact of tariffs, if and when tariffs are imposed. And that is my response to your question about the tariff. And Mr. Yasuno is going to respond to your question about MFN. Regarding your question about MFN, Mr. Yasuno is going to respond. Thank you very much. I am in charge of U.S. business. This is Yasuno speaking regarding most favored nation pricing. for pharmaceutical products that has been already known to you because letters have been sent to 17 pharmaceutical companies in the West, in Europe and the US. by President Trump on July 31st. And let me share with you the four conditions for that. And MFN pricing shall be provided for Medicaid, which is a public insurance system for low-income earners. And a second condition is that most favored nation pricing shall be provided provided for products to be launched going forward. And the third one is that strengthening price negotiation in other countries than the U.S. and the increased revenue shall be used to lower prices in the United States. And utilizing the direct-to-consumer or direct-to-business model will be utilized without having the intermediaries and high-volume repaid products shall be offered with MFN pricing. And these are the four conditions. And these were all mentioned and demanded to the pharmaceutical companies when executive order was issued in May. And there hasn't been no change to that. And these are not legally binding yet as well. And these are the responses which are expected to be done on a voluntary basis by pharmaceutical companies. Therefore, these are not legally binding. And regarding your question whether we have been engaging with the administration or government, we have not been contacted regarding the specific products, and we have not received the letter which has been sent to 17 pharma companies. We have a team in Washington, D.C. in the U.S., so This D.C. office team has its unique proprietary network, and also we are working with pharma in the United States. So through pharma as well, we will continue our engagement with the Trump administration in order to identify how specifically this most favored nation treatment will be conducted. And with that, we would like to take necessary measures.

With that, we would like to end today's briefing session on the financial results from Q1 fiscal 2025 of ASI Company Limited. Thank you very much for attending today.