Shionogi & Co Ltd

Thank you very much for your participation out of your very busy schedule. So we would like to start the first quarter closing meeting explanation. So I'd like to introduce the speakers today. So first of all, Mr. John Keller, Dr. Sinclair, Senior Executive Officer, Senior Vice President, R&D Sponsor Advisory Unit. And next, Dr. Toshinobu Iwasaki, Senior Executive Officer, Senior Vice President, Healthcare Business Supervisor Unit in the Pharmaceutical Commercial Department. And then, Dr. Koji Hanasaki, Executive Officer, Senior Vice President, Supply Supervisor Unit in the Global Business Division. Next, Noriyuki Kishida, Senior Executive Officer, Senior Vice President in Corporate Supervisory Unit, and Dr. Ryuichi Kiyama, Senior Executive Officer, Senior Vice President, Corporate Strategy Division, Dr. Takeki Uehara, Corporate Officer, Senior Vice President, Direct Development and Regulatory Science Division, and last, Ms. Masako Kudo. Vice President of Financial Accounting Department and Corporate Strategy Division. And first, Ms. Kuro will explain about the overview of the closing and Kiyama will explain the major activities and achievements for the first quarter. And then after that, we take a question and answer time. And we'd like to close at 7.30. 15, the maximum. So you can use the simultaneous interpretation function today. So in case you use the simultaneous interpretation, please find the global icon in the bottom of the screen and you can choose either English or Japanese. So let me start right away. So Ms. Kuro, please. So I am Kudo. I would like to explain the overview of the first quarter financial result. So on page 4, this is a highlight of the financial result. So for the first quarter of this year ended in 109.3 billion yen operating profit of 46.6 billion yen. Profit before taxes 55.7 billion yen. The quarterly profit of 42.6 billion yen. And EBITDA, which was newly set as KPI in the STS 2030 revision mid-term management plan, announced last month was 51.3 billion yen. In this slide, year-on-year increase rate is shown. And as you can see, both sales and profit increased significantly in all the categories, and both reached record high. in the first quarter of the fiscal year. On page 5, this is a consolidated financial result. So, since we do not disclose a forecast for the first quarter, this is a percentage of progress against the first half forecast, and they all exceed 50% showing the favorable progress. Regarding the foreign exchange rate, it then has depreciated More than expected, it resulted in a foreign exchange gain. Page 6, statement of P&L. For revenue first, as explained in the note, we received the upfront payment of about 25 billion yen for the transfer of ADHD drugs license. which was a significant increase over the previous year, but even excluding this, all business, both domestic and overseas, are progressing steadily. R&D expense increased 10.9% over the previous year due to the active promotion of COVID-19 and other major development projects as indicated in STS Phase 2 Median Term Management Plan. Financial income and cost. A total of 9.1 billion yen, a significant decrease of 18.8 billion yen from the previous year. This was due to the impact of the dividend from Vive company, which declined significantly in the first quarter, as the company received a one-time larger amount of previous year due to the delay in the payment period and the large increase due to the lump sum payment received in connection with the settlement with Gilead. But excluding this one-time effect, a dividend is on schedule and we expect to see the increase in the later portion of the dividend received in the full year compared to the previous year. And so the seemingly smaller percentage of increase from the operating income to income before income tax is due to these factors from beef that reduced the dividend. On next page 7 shows the sales revenue by business segment. For domestic sales of prescription drug for the period from April to June, totaled 14.5 million yen, significant increase over the previous year. Although the sales of intuneve has continued since this year, but the decrease was more than offset by Zocoba, a COVID treatment drug. and as one-time payment for the transfer of the license of ADHD drug, as I explained earlier, which resulted in a large increase of 141.6% year-on-year. Overseas subsidiary and exports also increased year-on-year due to the growth of Cephidocole in Europe and the U.S. The Chinese business is 23.4% of the first half forecasted. But it is as expected because normally second quarter forecast is larger. Royalty income from the HIV franchise grew significantly due to both actual sales and the impact of foreign exchange rate. And on the page 8, I will explain about sales revenue of a prescription drug in Japan. As I explained earlier, it is progressing nicely. The sales of COVID-19 related products and the influence the franchise reproduces. Products amounted to 7.1 billion yen, an increase of 7 billion yen from the previous year, and almost all of the increase was attributed to the sales of Zocoba. The current situation and the future prospect of Zocoba will be explained later on page 11. Next, page 9. This is the first quarter summary. Again, all the businesses are strong and the top line grew substantially year on year. Even excluding the one-time ADHD-related payment of about 25 billion yen, we believe that our earning power is still increasing. In addition to these, basic business is expected to remain strong. We believe that we will be able to achieve the first half forecast at this point, given the steady penetration of Zocoba in Japan. That concludes my explanation. Next, Aiki Yama will explain the major activities and achievements in the first quarter. On page 12, that is the current status of Zocoba in Japan and the progress of the development plan. Zocoba was launched for their general distribution four months ago, on March 31st, and its use in Japan has been steadily progressing since it was moved to Category 5 infectious disease in May. In the post-marketing surveillance conducted during the latter half of the emergency approval period, more than 70,000 patients have used the rack. As a result of the safety evaluation, no additional safety measures were deemed necessary in the derivation of the safety committee. Although the post-marketing surveillance has been completed, we will continue to report the corrected safety information on the regular basis. In addition, our general use results survey of 3,000 patients is underway to correct the secondary information on safety and efficacy under actual condition of use, and we have just received the first interim report. As disclosed in our website of health care professionals, a variety of data that is in line with actual clinical condition has been collected. And although it is only the interim report, the results are similar to those of the clinical trial in terms of efficacy and safety. The fact that more than 80% of the registered patients have no risk factors also reflects the current prescribing trend of Zocoba. And although the infection rate are on the rise, prescribing opportunities are expanding, especially for patients with no risk factors. The right-hand side shows the slide summarizes the progress of Zocoba development plan. The onset for prevention study and the pediatric study in Japan started the enrolling of the patient in June, and the studies is currently on progress. We will continue to accelerate the global expansion of the COVID in consultation with regulatory authorities in each country. In Taiwan, we have reported that we have filed EUA application, but EUA application has ended temporarily, so we will continue to accelerate global expansion in consultation with the regulatory authorities in other countries.

Page 12. This is about the progress of our vaccine business. Recombinant protein vaccine S268019 is under deliberation to the Pharma Second Subcommittee We are expediting our preparations so as to supply the vaccine as soon as it is approved. We are also working on life cycle management for additional indications for adolescents and school children. And in addition, we are preparing to start clinical trials for the monovalent vaccine for XBB strains recommended by WHO and MHLW after S268019 approval in Japan. On the right-hand side, the universal vaccine is progressing very well, and we hope to start a clinical trial in 2024. On page 13, we discuss progress in building a foundation for global expansion. In June, we acquired Cubex Biopharma, a US biostartup as a wholly owned subsidiary. It has strong R&D capabilities of antimicrobials and a diverse network with U.S. government organizations and experts. We believe that this acquisition will generate a wide range of synergies in our infectious disease business, such as strengthening R&D of antimicrobial agents and external collaborations. We also acquired exclusive global development, manufacturing, and marketing rights for zero-larbactam and beta-lactam antibiotics. When used in the combination with zero-lactam, beta-lactam antimicrobial can exit the broader spectrum activity against drug-resistant bacteria. Providing a new treatment option for drug-resistant bacteria will lead to an environment in which beta-lactam antibacterial agents can be prescribed with confidence, so we will continue the development. Next, on page 14, This shows the progress in milestones of major development projects. There are also investigator-initiated trials. But here, on this table, the company-initiated clinical trials are shown. On the right-hand side of the table, in red, these are the most current results of each project. Our focus is the anti-obesity drug 0309309 and the painkiller raciniferatoxin. We would like to have the presentation in the following slide on page 15. First, S309309. It is the new mechanism of action of the anti-obesity. the obesity drug, which is different from the now popular GLP receptor agonist. This uses a new MOA that inhibits MT82 monocular glycerol transphase. We are increasing the speed of the development as the top priority. The table shows the overview of the phase 2 trial underway in the US. Adults with BMI 30 or over are randomized in a placebo-controlled double-blind study Once daily, overall, S309, S309's efficacy and safety are verified. The primary endpoint is the change of body weight from the baseline to week 24. The secondary endpoint is the percentage of patients who had the weight loss of 5%, 10%, 15%, and 20% or more. And in this particular study, we built a POC and compared doses for the sake of the phase 3 trial. And then we will decide the best doses. So that purpose, we set to the three dosages. And as soon as we get to the POC and the optimal dosage, we would like to start a global phase three study. Next, on the right-hand side, and the next is Resiniferatoxin, licensed from Gurenental. It is an analgesic with a novel mechanism that acts on TRPV1 on sensory nerves projecting to the knee, causing strong desensitization and pain separation by causing sensory nerves to retract on the knee. Currently, hyaluronic acid injections, NSAIDs, acetaminophen, and opioids are the main drug therapies for patients with knee osteoarthritis in Japan, but the balance between the long-term efficacy and safety is necessary. A clinical trial so far has shown that once per six months administration to the knee joint, significantly reduces pain and improve the physical function as well as good safety and tolerability profiles. FDA has also designated it as a breakthrough therapy. These characteristics will make it a drug with great potential to become a new treatment option to meet the unmet needs of patients with knee osteoarthritis. Next, page 16. This is the HIV Business Progress Guide B GSK presented its financial result last week. This is an excerpt from that. The bar chart on the left shows the sales trend of the new products every quarter. The overall two drug regimen, Dobat and Jeruka, and the LA formulations, Cabinuba and Apertude, these four products are growing in terms of the sales and growing the entire HIV business. The line graph shows that that the sales of these four products as a percentage of the previous total sales of anti-HIV drugs, and it is up to 51% now. In LA formulations, which is very important for immediate to long-term growth, the treatment regimen, Cabinuba, increased the sales by 50 million pounds compared with the previous term. In solar study, in comparison to big therapy of Gilead, 90% of the subjects preferred Kabe Nuba to the orally taken daily products. And in many clinics in the United States, there are many patients who hope to start the prescription of Kabe Nuba. And the 70% or more of the patients prescribed with Kabe Nuba were switchers from the competitor's drug. This will give us a sense of confidence for the future growth. On the prevention side, Aperture in the US sales is trending positively, and then the European CHMP has a positive opinion for the approval. Next, the European Commission will make a decision on the approval, but this positive opinion is an important step for the approval. The BIB is going to have the explanatory meeting on HIV in late September, to talk about the update of the mid- to long-term strategy of primarily LA formulations. Page 17, this is about the human capital management for 2030 vision. Since the SD 2030 was developed, our colleagues and group understood the importance of proactively acquiring new capabilities that are necessary for growth, and we have engaged in at rescuing and retraining actively. Last July, we set up the Human Capital Strategy Office to execute initiatives to maximize human capital. We changed the HR and grading system to allow diverse people to thrive and to speed up the Shionagi's growth, and we started work-from-home and four-day workweek systems for a better work environment. And we also set up the joint venture for back office work with Accenture. We also developed the early retirement program to speed up the review of the talent portfolio. Going forward, we will hire people with specialist skills from outside and develop talents for globalization more. And we will do engagement to transform our corporate culture by addressing our future challenges. so that we can build a talent portfolio for further growth to ultimately embody 2030 vision. Lastly, at a return to shareholders, as a part of the financial strategy for STS Phase 2, the company decided to conduct a buyback and cancellation of its shares. The buyback is scheduled from August 1 to March 31, 2024, with an overall limit of 12.5 million shares of 75 billion yen. Taking the share price, which we think is undervalued, and the performance trends into account, we plan to obtain the largest ever number of shares. We will continue our efforts to strengthen shareholder returns and improve capital efficiency. My presentation will end here. Thank you very much.

Thank you.

So we'd like to move on to the question and answer. If you have any question, please click the raising hand button. But after your statement, would you place that raise hand button again to put down your hand? So Mr. Yamaguchi of the City Security Police. Yamaguchi speaking. Can you hear me? I have two questions. First of all, Zocoba, there is no disclosure for the sales of this drug as one drug, but in terms of Q4 explanation, you mentioned about the prescription ratio. And Ragurillio is still selling, but in terms of prescription ratio in the share of the market, well, seemingly, it seems that there is room for further growth. But currently, what do you think about the situation of Zocoba in its growth in the market share? Iwasaki speaking, I will answer your question. For Zocovar, the treatment ratio from the external source out of the three drugs, a little less than 20% out of the three treatment drugs, this is the fixed time point observation, not a very accurate one, but I guess reality is close to that range. And 60% of them is by Zocovar, and for a risk-free patient mostly, Zocobar is prescribed. And for the future, there is a ninth wave coming now for us from August to September. I guess that the ninth wave will reach its peak in the time frame. As a whole treatment ratio, I hope that it should be increased furthermore. Just to follow up, so the treatment ratio is increasing, correct? Originally, you forecasted as 10%. Gradually, it is increasing. And one more question. For 309, 309 obesity drug, the clinical.com says that the phase 2 completion will be April next year. In the interim analysis, will there be a disclosure of interim analysis? And after Phase 3, I understand that Shionagi alone will proceed, but the co-police question with GLP-1 would be the possibility. combination, I mean. Will there be any global development inclusive of such a kind of combined treatment development? Thank you for the question. We will answer your question. 309, 309 obesity drug for the future. The size of the clinical trial is not a very big one. After the registration, six months, there will be a primary end-point evaluation. We'll keep the blind until the primary end-point announcement. And after all the analysis is over, in the end of the fourth quarter, I hope that it is not fixed yet. And so for the second phase trial is over, the global phase three will be on the way. But as you said, with the combined possibility, the combination, it is very likely that we have a combination, right? And the alliance partner candidate company are coming to us for a possibility of a variety of the deal. I think the What kind of alliance strategy will take with them? We would like to discuss with the possible candidates. So the alliance possibility. Yeah. So there is a great opportunity for alliance with other company, correct? Yes. We should not depend upon alliance that will delay the start of the phase three. We'd like to shorten the timeline. But Impera, we'd like to consider the partner. Thank you. That's all.

Thank you very much.

Next, Goldman Sachs, Mr. Weda. Weda from Goldman Sachs.

On Zocomba.

infectious disease there is a plan and then the first half the progress was not that much and compared with the plan how good was the progress and for the prescription plan is there any bottleneck of the prescription? Okay, Iwasaki on health care. I'll handle that question. As for the progress, The number of patients is not dramatically increasing. So on the sales, it may not be spectacular, but the prescription rate is 60% out of three choices. So in terms of that, the milestone was reached. And going forward, now it is in category five, And the broader spectrum of hospitals, increasing number of hospitals may prescribe the drug. There is no restriction anymore. But still, the medical institutions who accepted the patient with the fevers are still the mainstay of the prescribers. So we would like to encourage local governments and medical associations and the academic societies and present the long COVID study results to appeal the necessity of the medical treatment, so that the prescription rate overall needs to be higher by doing these efforts. Thank you very much. And the second part is about safety data call. Compared with the last year and compared with the plan, the growth is quite good. What is the background for this positive trend? On this, Harasaki On Supply will take care of this question. As a physical, the progress, especially in the United States, the new account is being opened. And also, the hospital which used this drug decided to continue using this This is another positive trend. So the users of the drug are assured with the efficacy and then come back to reuse it. So this is how growth comes. And in Europe, in Spain, last November, it was launched in Italy and Germany. The price negotiation is going well. And then that's why we are ahead of the plan. That's all. It was Hanasaki.

Thank you very much.

Thank you. That's all from me.

Thank you.

Next, Mr. Hashiguchi of Daiwa Securities, please. Hashiguchi. Well, the Zocoba situation in China, the development for obtaining the approval, is there any update? Is the probability of achieving the sales plan in China for buy Zocoba increased? Yes, Anazaki will answer. Well, data has been already presented to Chinese experts. FDA, but we are answering the question from a Chinese authority. In May and June, the second wave arrived there, and considering from the past situation, I think the blood level of the gamma has increased after some time, and in the coming winter, there will be yet another wave coming in chamber. So I think Zocoba is necessary. And also the preventive measures. I think it is very highly expected in China that our Zocoba will be used for preventive purpose. And achieving the second half plant, you mentioned that it can be achieved with You have a special retirement plan which is recorded for the budget of the second half. Is it included from the initial or even if it is added, you are able to achieve the business plan? Kikuro will answer that question. A special retirement program, it is not included in our forecast. However, in terms of the impact, in terms of the amount, we are now studying how much impact it will present. For the first half, the progress ratio of achieving the plan is on our schedule. So inclusive of that forecaster, we see the achievement of the business plan is quite likely. Thank you.

Mr. Sakai from Credit Suisse.

Thank you, Sakai, from Credit Suisse.

On the cover, on page 11 on the right-hand side, The situation in the U.S. is described. Long COVID trial. Is it with Scorpio? Please update us about the study of the long COVID. Any update? Is a new data available now? Or do you see some trends? Okay, Uehara will handle that question. Long COVID, as you can see on this slide, at KROI, the follow-up, three months and six months, mainly in Asia, this is the phase two studies, the phase three part, this data was published. The 12-month, one-year follow-up, The data is now available in September at ESWI, that is an European Respiratory Infectious Disease Academic Society. That is where we are going to publish. We are preparing the late-breaking papers. We think that we can deliver positive results, so please look forward to the press release and also the publication at that meeting. And in global studies, SCOPEA HR study. Now, the SR studies, two, three studies, the evidence are the basis. And the endpoint collection method was predetermined to look at the reduced risk of the long COVID. And this is going to be checked and tested in many different countries. Now the subjects are being accumulated. This is a large study, so it takes some time. But more than half of the subjects were accumulated. And as soon as the result is available, that will be shared. OK. Then first in September. And one more. A little concern. There was a news or event. On page 14, the development project progress at the top all of them in the United States, the FD2 SG, that is the submitted and the complete response letter was issued from FDA in June. And then the result, that data will be collected together with the coordination with FDA And it says this is global, and how is Shionogi involved in it? And is there any impact on domestic development? Anything to update about this? Thank you for your question. As you understand, in the United States, there was a result, the response, but it is about the interim analysis report, and then the there was a strong request for the speeding expedition of the approval process. And then there was the lasting class, very severe patient who will be the target. So there is a high need for this. And with a limited needs data, we tried to submit the document with a limited data. However, the FDA required additional data. And on that data, this is not the interim data, The first 200 cases, the entire data of these patients are available based upon which we will discuss the possibility of the expedited approval with FDA. We are going to start that negotiation with the regulatory authority. Well, with this package, can we really apply? That is applicable only to the United States and Japan and Asia and Europe where we have licenses. The Phase 3 trial is underway in parallel, as the arrow shows in FI23 and FI24. Phase 3 will be conducted, and in Japan, the subjects will be accumulated, and also in China, we try to accumulate the subjects, and we are on track about that. So including Japan and Asia, the Phase 3 completion will be expedited accordingly. Thank you very much. So to clarify, in the U.S., 200 subject packages, the data is already available, right? Yes. So it is after the letter came? Yes, that's right. After the letter was issued. Okay, I got it.

Thank you very much. Thank you.

Next, JP Morgan, Chicago Police. I am Wakao from JP Morgan Security. Thank you for your experience. I have a question about Zocoba, first in Japan. 7.1 billion result includes the Zocoba, I guess. That is the April or June result, and most can be considered as Zocoba. I guess Zofuruza is included, but would you please tell us the breakdown of this amount for Zocoba? Because COVID is now the category five so that the global is now available in the market of rotary. So in a way you are selling out of accumulated inventory out of a 7.1 billion. How much is inventory and how much she is actually prescribed? That's the first question. You said he answered a question. For the breakdown detail, I cannot tell you. As you said, mostly that's by Zocowa. Yes, the inventory situation. Well, the infection itself is expanding so that we are not accumulating the inventory. They are all used in a way. Thank you. And the Chinese situation, looking at the infectious situation in China and also the approved oral drug, considering that even though it is approved, I guess, I think 40, 50 billion yen is anticipated, but it is, I guess, very difficult to achieve considering Chinese situation. This is a three month delay in a way in recording in China. So by the end of December you can get approval and having a 40-50 billion yen sales. I want to know the probability of achieving that sales plan. Hanasaki will answer your question. For the Chinese situation. Yeah, we have presented as data to the authority and we are discussing with them in many ways. I have mentioned earlier already that the first and the second wave infection situation in China is suggesting that yet another infection onset from winter. And I think this efficacy of Zocoba will be very much wanted to deal with this. And so the second half, I think the progress for approval and increasing the sales will be on the way. I guess there are some oral drug approved already. But in a way, I think those already approved oral drug will be used first. In a way, a bit pessimistic or kind of conservative too much. So if your stock over is approved, it is regarded as the existing COVID drug in China. So kind of equal stance. There is, yes. And one more drug already approved. But yes, there are some Chinese oral drug also. But the Restoraville of our company has kind of a viral, I think, excretion. The effect is very high. So I think it will be a likelihood. Thank you.

Next, Jeffrey's. Jeffrey's Securities, Stephen.

Thank you.

It's hard to hear your voice.

Sorry about that. Now, do you hear me loud and clear? Yes. On Zocoba in Japan, the number of patients right now and the prospect, what do you think about the trend of the number of patients in Japan? So the out-of-pocket payment, currently it is zero for patients, but after September, how much does patient have to pay and is it going to affect the demand and also the price on the list in april there will be the replacing what will be the price of the cobra at that time wasaki will answer to that question And now we have the point-based static observation of the number of patients. So we don't know the exact number of cases. However, from available data, currently 70,000 or 100,000 patients are being affected by COVID. That is our estimate. The current ninth surge, this will peak in mid-August, or it may continue until October. The peak will be happening in that time frame. And given the current trend of increase, compared with the eighth surge, the peak height will be 80% this time. And as for the payment, the out-of-pocket payment, we cannot make any difference about it depends on the government decisions. Two months ago in May, at the Academic Society of Infectious Diseases, there was a request issued by them to defer or delay the start of the out-of-pocket payment. Now the treatment ratio is 10% or 20%, which is low. And then there will be another round of surge coming in the winter. And if there is no subsidy, And if everything has to be paid out of pocket, the treatment ratio will become lower even further. So because of that, the academic society requested a continuance of the public fund for the treatment. So these doctors and our PMS long COVID data, these will be used in order to encourage the, for the sake of the public health, the continuation of the public subsidy for the treatment. This is something that we have to do. But we cannot make a change just by one single company. It depends on the decision by the government. And we would like to work together with the academic society. At the price revision, there is no talk about that. So for now, I am not able to answer that question. Thank you very much. And about the vaccination, as we speak, there is a deliberation underway under the second subcommittee. And if the result is positive, then the official approval, when do you expect to have the official approval? And I think that you are already talking with the government. Is there any possibility that the government is going to purchase it? And what is your idea about the potential things of the vaccine? I am Iwasaki. Well, the subcommittee is being held and it is irregular. Usually in advance, the items to be discussed will be published one week before, but it was just before the meeting it was announced. And when it comes to COVID-related things, there should be some additional special review. And so when is the approval going to be given? It's hard to tell. but it will not be so distant in the future. And about the purchase by the government, whether they are going to do it or not, there is no clear announcement. So the volume of the purchase and the price for the purchase, that discussion will start in full scale once the approval is given. If it is purchased by the government, Well, then the company will be working for the preparation of the distribution. So once we get the approval, there will be a negotiation of the price, and then if the distribution system is clarified, and as soon as those decisions are made, we are able to provide the products to the market. Okay, thank you very much. That's all from me. Thank you.

Next, from Mizuho Security, Mr. Tsuzuki, please. I'm Kuzuki from Mizuho Security. Can you hear me? Yes, thank you. I have two questions, one for the treatment drug and one for the vaccine. In the regular report in April, June and after July now, I think the number of patients is about three times. Is it correct understanding? And currently, Now, the effect of the immune incorporation, because, well, even though the vaccination is done, it wouldn't show the vaccination effect of some immunology. a kind of inhibiting. So is it the correct understanding? I want to know about this situation. I will answer. As you see here, gradually, the number of infections are increasing as compared to April, June. The dry situation is, in a way, increased one. We have a 60% of market share. especially the risk-free patient to viral excretion is very effective for those patients and that push up our share. So in a way, the number of patients increased and also number of the hospitals which prescribe our drug is increasing. So gradually, our sales is on the rise. And for the vaccine situation, yes. And the vaccine and also the acquired immunology by the neutralizing body, well, basically, for the people who once infected again will be infected. And so, XBV is a kind of the vaccine for a different type of the strain which is promoted. And so, I think the pandemic will increase. for the future too. So this sounds a bit too strong, but the second quarter result in the first half, I guess Zocoba cells will contribute very much. Thank you very much. One more question is about the vaccine. I think this immunology establishment will have an effect, and you are promoting the monovalent vaccine for the Omicron XBB strain response. and also you mentioned about the increase of the manufacturing capability so what is the current situation of the manufacturing enhancement xbb the the specificity is very different so uh i don't have xpb human result so i can't just say uh for sure broadly but zero one nine the uh the vaccine for Wuhan strain, the immunology is well-induced and kind of sustained efficacy is proven. So this kind of gene-recommendant vaccine will be really useful so that this monovariant vaccine for Omicron XBB strain is very much effective. And we will be preparing for human study. And we'd like to get the data as soon as possible. For the production, Aihana Saki will explain. So 019 production, well, In Akita plant, we will make the first lot for you. For the mass production, there is a unigen plant in Gifu, which will be utilized for mass production. From the Akita scale to unigen scale, there is a scale enhancement trial. There are improvement of their cell culture and other bio processes improvement going on. And for the scale of production enhancement, we'd like to discuss with contractor company. So depending on the variety of the scale, we are able to manufacture in the future are adaptive to that scale change. Thank you.

Thank you. Thank you.

Thank you. Thank you. Thank you. Thank you. The vaccination doesn't deal with the Omicron variants. And then after the approval of this vaccination, is this product going to be used? How much? And how much of the sales do you expect? And how widely is it going to be used after the approval? And for the JV with Accenture, could you elaborate on that? Because this may have a cost impact. How big will the cost impact be? And what is the timeline of having this JV? On vaccinations, Iwasaki will handle that question. Omicron variants. This is not specifically developed for the Omicron variants, that's true, but however, non-clinical trial, the neutralizing antibody was confirmed, so the mortality and onset are not directly observed. However, looking at the change of the the neutralizing antibody, there are certain roles to be played by this. And as for messenger RNA, having the additional immunity and also the fatigue, there are certain people who do not like to have the vaccinations, like 100,000 to 200,000 people don't like it, the vaccinations. And this vaccine is for the Wuhan strain, however, After mRNA and RNA vaccinations, there will be some additional immunity to be provided. So using this kind of data and also looking at the safety, the messenger RNA vaccine, if people don't like that idea, this can be a used candidate for them. And as for the sales, what we expect, as I said, it depends on the talk with the government. So it is nothing we can say for now. Okay, on JV, Kishida on corporate is going to explain about the details. The contents, the details of this JV is that the Shionagi business partner was a subsidiary up until May this year in HR, accounting and general affairs. This back-office work was done by them for the Shionagi group. For me, due to long-term perspective, sending human resources to that subsidiary turned out to be difficult. In investing human resources in terms of our strategy, it will not be easy to do that. and give the good training and the human resources development in that organization was difficult. So now we join hands with Accenture. Those who are seconded right now or who are being transferred to this subsidiary, those who are directly hired by the business subsidiaries, for their development and for the their future career development, to look at all these things overall, and also looking at the cost management. In order to achieve both of them, we decided to have the JV. This is how we came up with this idea. And the specific efficiency, we haven't disclosed that to the public, but with Accenture, We are planning to have a long-term contract, more than 10 years. Over the next 10 years, for example, we would like to have a negotiation of what kind of efficiency we will pursue. And from that perspective, we would like to set up the negotiations and contracts. So the commissions, will be controlled in this long-term point of view. That's all. Thank you very much.

Thank you. Well, all the time is running out, but there is no one lazing hand, so it's already the time I'd like to close the meeting for the They are explaining the closing result for the first quarter of 2023. Thank you very much for your kind participation. I hope you have a busy schedule. Thank you.