Shionogi & Co Ltd

My name is Kyokawa from Shionogi PR Department.

Thank you very much for joining us today. This is Shionogi, the financial briefing of the result of the first quarter of 2024. Let me introduce who we have today. First, Dr. John Keller, Senior Executive Officer, Senior Vice President. Senior Vice President, Healthcare Business Supervisory Unit, Dr. Iwasaki. Senior Executive Officer, Senior Vice President, Supply Unit, Dr. Hanazaki. Senior Executive Officer, Senior Vice President, Corporate Business Strategy Division, Dr. Hata Naka. Corporate Officer, Senior Vice President, Dr. Uehara. And then, Vice President, Finance and Accounting, Dr. Kudo. Now let me briefly explain the format for today. We'll introduce the result of the first quarter and also the progress of the pipeline, followed by a Q&A. We are planning to complete the session at 5 o'clock. As to the financial results, Dr. Kudo and Dr. Hatanaka will have a briefing, and then Dr. Wihara and Dr. John Keller will talk about the progress of the pipeline. Today, we have the vice presidents from four divisions and also the head of the R&D and head of finance. We are ready to answer any questions. And now, let me explain simultaneous translation. Simultaneous translation is available today. If you wish to use simultaneous translation, please choose either Japanese or English by clicking the globe icon. Now, let us start. Dr. Kudo. I'll explain the overview of the first quarter financial results. Please refer to page 4 for the highlights. At the left side, revenue was ¥97.6 billion, down from ¥109.3 billion in the previous year. The main reason for this decline was the ¥25 billion one-time payment from the transfer of the ADHD drug license in the first quarter of the previous year. Excluding this, revenue increased by ¥13.3 billion due to significant growth in royalty income and overseas business. Additionally, for all profit items, excluding these one-time factors, we achieved both revenue and profit growth, with operating profit increasing by 6.5 billion yen. Next. Regarding the consolidated financial results, the results were revenue of 97.6 billion yen, operating profit of 228.1 billion yen, profit before tax of 36.5 billion yen, and quarterly profit of 30.6 billion yen. Overall, it might seem that progress against the first half forecast is weak. But this is because we have projected higher sales of Zocova in the domestic market for the second quarter, and the first quarter results are better than expected, thanks to strong growth in the HIV business and overseas business. Despite the significant impact of the one-time payment of the ADHD drug license last year, resulting in decreased revenue and profit. As mentioned earlier, excluding this one-time payment, we achieved revenue and profit growth in all profit items. Regarding foreign exchange, due to the yen depreciating more than expected, we recorded foreign exchange gains in each currency. Moving on to page 6, statement of profit and loss. As mentioned, revenue started with a negative impact of $65 billion, due to one time factor from the previous year. However, thanks to the steady performance of the HIV in overseas business, we achieved better than expected results. On the other hand, cost of sales increased by 10.1% from the previous year. This is due to changes in the product mix, such as the growth of our overseas business, and the result is in line with the first half forecast. As for SCNA, as indicated in our mid-term plan, we are currently forecasting on global expansion. We have increased spending on strengthening our global sales infrastructure compared to the previous year. For R&D expenses, the 70.7% increase year-on-year is due to the smooth progress of our development pipeline and the inclusion of QPEC's R&D expenses. which are not recorded in the first quarter of the previous year. Additionally, both SG&A and R&D expenses are more impacted by foreign exchange due to our expanded global activities this fiscal year. While operating profit and quarterly profit appear to have decreased year-on-year, considering that the 25 billion yen one-time factor from last year was recorded without any expenses, our business is progressing very well. Next, on page 7, revenue by segment. For domestic prescription drug, due to the 25 billion yen one time last year for ADHD drug license, there was a significant impact, resulting in 66.4% decrease year on year. Regarding infectious disease drugs, which we will explain in more detail later, sales have been increasing in response to the epidemic situation. For overseas subsidiaries and exports, revenue from Sefidero coal increased by 50.5% in the US and 45.7% in Europe from the previous year. While foreign exchange had an impact, sales volume also steadily increased due to the expansion of sales countries and the growth of sales in existing markets. Regarding royalty income, the HIV franchise saw significant growth due to actual sales and foreign exchange effects. Progress has already exceeded 50% of the first half forecast, and we expect to land at around the same level as the current forecast for the first half. That concludes my expansion. This is Hatanaka speaking. Let me present the achievement of the first quarter. Please refer to page 8 for the HIV franchise. The graph on the left shows the quarterly transition of Shionogi's HIV royalty income. While there are slight fluctuations in quarterly income for various reasons, it can be seen that it has been increasing very steadily in the mid to long term. Compared to the first quarter of the last year, It's increased by 15.5 billion yen. The main factor driving the steady growth is the expansion of market share of new products, including LA formulations. The graph on the right compares the sales of six products, including beefs, doltegrava and kaltegrava, with the last year. The dark color represents the sales of new products, including LA formulations. And as you can see, the sales of new products have grown significantly. Especially for LA formulations, sales have increased by a strong 76.8% year-on-year. We anticipate continued growth centered on new products. Next. This is overseas business. Overseas business is achieving steady growth centered on Cefidelo Call. The graph on the left shows the quarterly sales transition of overseas business, which has increased significantly by 3 billion yen compared to the previous year. Regarding Cefidelo Call, Sobi, which signed a sales agreement last year, has started sales in Central and Eastern Europe. and we anticipate further penetration of prescription in existing markets and expansion into new sales countries. In China, we've achieved a primary endpoint in the Phase 3 trial and are preparing for the approval application. We'll continue to aim for further growth in the overseas business, including through Pingyang Xiongnoji. From now on, I'll explain the situation regarding acute respiratory infections, particularly COVID-19. The graph on the left shows the transition of COVID-19 and influenza infection trends. Since the first quarter of FY24, which the influenza epidemic has rapidly subsided, COVID-19 infections have gradually been increasing. Next, the graph on the right shows the sales of acute respiratory infection drugs for the first quarter of the past few years. Like last year, sales of influenza family were almost zero in the first quarter of this fiscal year. while sales of Zakova were recorded to a certain extent. Traditionally, there has been almost no sales in the accused respiratory infection area in the first quarter. However, by having treatments for both COVID-19 and influenza, we are becoming able to secure certain revenues. Regarding acute respiratory infections, by having multiple infectious disease assets, we are steadily building a new business model aiming to always secure a certain level of revenue. Next. Again, about COVID-19. This is detailed overview of the prescription of Zocoba. This shows the trend of prescription rates for oral COVID-19 treatments since February this year. Although the special measure for full public funding ended in April, increasing the out-of-pocket costs for patients, the importance of early treatment with antiviral drugs has become well recognized, so the prescription rate has not declined much and is gradually increasing. Additionally, there is a trend of rising prescription rates as the number of infections increases, and we anticipate that the prescription rate will continue to expand. This shows the share transition of three oral drugs with the red line indicating the cobalt share. Amongst the three, the cobalt share is increasing. Especially since April 24, with the expansion in prescriptions for patients with risk factors for severe diseases. Later in this session, we'll introduce various real-world evidence accumulated for the COVA, such as its effect in preventing hospitalization in patients with risk factors. We'll continue our efforts to ensure that the COVA reaches the patients who need them. This is the summary of the first quarter and outlook for the first half of 24. As mentioned, the top line is steadily progressing, driven mainly by the HIV business and overseas business. Excluding one-time factors, we achieved year-on-year revenue growth, indicating a solid earning capability. Regarding the Koba, we anticipate a wave of COVID-19 infections in the second quarter, and a first-half forecast is weighted towards the second quarter. Given the steady expansion of the Koba's market share, we expect to achieve the first-half revenue forecast. We'll continue to strengthen our efforts to prepare for the expansion of acute respiratory infections. On the COTS side, while maintaining meticulous cost management, will prioritize and actively promote R&D. Considering the achievements of the first quarter and our future initiatives, we currently expect to meet a first-half forecast. That concludes my explanation.

This is Uehara from R&D, and I would like to give you an update on the progress of our pipeline. First, with regard to 309309, this is a MGAT2 inhibitor for anti-obesity. And as we have explained in the R&D day held in June, We were unable to confirm the 5% or more weight loss effect of a single drug, which we had set internally. On the other hand, since this is a new mechanism action and there are still unmet needs in the anti-obesity drug market, the safety risk and also from the cost perspective, we would like to seek for a way to have this used as an add-on and also as a maintaining weight loss after discontinuing GLP-1 agonist, we will be able to provide less expensive and safe and convenient oral regimen So for add-on and for maintenance, we are conducting a clinical study. And at the timing of the latter half of this year, we will be able to provide you with a result of the study. And we would like to consider the design of the clinical study and also the partnering engagement as well. based upon these results. Next, I would like to give you some clinical data update on citroen bill. In Japan, on the right-hand side, as you can see, this is the post marketing data, and there has been data for patients with risk and without risk, and there has been No changes from the clinical study results. We have been able to confirm the characteristic of the drug in the actual practice. On the left-hand side, we see the effectiveness in reducing hospitalization, and it is a... large-scale Japanese health insurance claim database where we have made analysis and we will give you some details in the following slides. In the patients with serious disease or severe disease risk factor, we have been able to show that there is evidence that the risk of hospitalization was statistically significant reduced by a certain percentage. And also here, 167, 310 COVID-19 outpatients were given the drug and we have collected the data of these patients and the hospitalization rates of one month after the administration has been investigated and we have been able to aggregate the number of the a reduction of the hospitalization of such patients and we have been able to confirm that the hospitalization was reduced by 37% and therefore by administering this drug early, we can say that severe disease aggravation can be prevented. And also, there has been a progress with the global phase 3 HR-scopio study results. Last week at Munich in Germany, there was a conference in which we had been able to provide the information of the results of our phase three trials. And also in this study regarding long COVID, we had been doing some follow up, a six month follow up study. has been completed and the key has been broken based upon the data that has been fixed and a very interesting data has been become available and Therefore with regard to this data in the international conference going forward We would like to provide the results so that we can proceed with the discussion with the doctors of NIH now in Japan We are collecting more cases, and right now there is more COVID-19 patients in Japan, so we would like to complete our effort in the summer season of this year in order to file. And also for prevention in global Japan, U.S. and Asia as well. In the global nations, we are doing a study. So by administering Enstrovelbio, we want to prevent the onset of COVID of the people or around the patients. And so with regard to this study, the enrollment will be completed in the first half. And as soon as we get the results, we will make this available to you. we want an early recovery from hospitalization as soon as possible. And that is the objective of the STRIVE study. And right now we are collecting various information. And also with regard to long COVID, we are conducting a prospective study for long COVID in Japan as well. With regard to Scorpio HR study, this is the result of the census study symptom endpoints at the very top. These are the endpoints of a Scorpio HR study of 15 symptoms, all of the symptoms. So after the resolution, has started after more than two days, we have collected the data as to the total resolution of the symptoms. And so with regard to the HR study 0.07, was achieved. And so with regard to the SCOPIO-HR study, although the endpoint could not be achieved, however, with regard to the secondary endpoint and with regard to the SR studies, you can see the results, and there are five symptoms. That is a resolution of the symptoms for more than one day, and 0.04 is the p-value, which showed a significant difference. And so, in the SR study in the Asian area, in the third phase, the endpoints, could be applied to the six symptoms in the global. And with regard to the six symptoms in the global, we were able to see the significant difference in the global study with regard to the six symptoms. So the result of the Asian study was reproduced in the global study. And so with regard to the direction of the alleviation of the symptoms, we were able to confirm the efficacy and based upon this result, we will be able to discuss with regard to this issue with the authorities of various countries. And with regard to the antiviral results, and as you can see, the study environments is a little different, so it is difficult to do a direct comparison, but PCR has been And in the global environment, from the administration point of time, the viral copy number is about two levels lower. And in this kind of environment, there has been a statistical significant difference between the active drug patients and the control patients. And therefore, in the HSR and the HR studies, we were able to confirm the antiviral activity. And on the right-hand side, we see the antiviral effects. So antiviral on the fourth day, negative. 95.5%. So most of them, after three days of administration, on the fourth day, the virus had become negative. Therefore, from this perspective, there was no rebound and also there was no recurrence of the symptoms. This has been confirmed. And from this viewpoint, we can say that the virus level had been minimized. And so with regard to the titer and also with regard to the rebound, we were able to confirm the efficacy of the drug in the third phase study. So in US, Asia and in different countries, we are engaged in the consultation with the authority.

This is John Keller from R&D, and I will share with you some of the information presented by Vive at the recent AIDS 2024 conference in Munich, as well as additional highlights of the pipeline progress. First, with respect to the AIDS 2024 conference, on the left side of the slide, with respect to Devato, the oral combination of dolutegravir and lamivudine, two drug combination, and still a very important product for us, there was additional data supporting its further use. Its direct comparison to Biktarvi First of all, we were able to confirm non-inferior antiviral efficacy, but also significantly less weight gain. And as shown below, roughly one kilo less weight gain, and the proportion of participants with over 5% weight gain, again, about 10% less in the dovado group. And so showing that it continues to be a very attractive treatment option, not only in terms of viral suppression, but also with respect to the impact on weight. On the right side of the slide, turning to long-acting injectable compounds, our S365598, which we have licensed to Veve as a next-generation integrase inhibitor for long-acting. we were able to demonstrate first non-clinically that this compound 598 maintained antiviral activity against strains with mutations resistant to other integrase inhibitors. And furthermore, in the initial phase one oral results to confirm favorable blood concentrations and tolerability, Now, over the next nine months, there will be three additional elements of important data related to this compound that will be coming out. First will be additional oral administration data, this time in HIV patients showing, we hope, both tolerability and also viral load reduction. With respect to injectable formulations of the same compound, data with respect to every two month at home administration format, and also with respect to ultra long acting up to six month injectable format, data will be coming out over this period. Next slide, please. Now, with respect to a progress of the pipeline first in infectious disease, with respect to those projects that we have not discussed so far. First, just to briefly note the Japan approval last month of COVGALS. And then turning to 337395, our RSV antiviral, to note that it is in the progress of a human challenge study. and that results from that study will be emerging later this year. Furthermore, the Cupex collaboration and the compounds that we have brought in by the acquisition, both combinations are now progressing well. Next slide, please. Turning to the non-infectious disease parts of the pipeline. First, the digital therapeutic for ADHD has been filed for approval in Japan and review is in progress. With respect to Zoranolone for depression, we expect that filing to be done quite soon toward the end of the summer. For Zetomelast, for Fragile X, our pivotal studies are continuing. And I'll just skip to the bottom here with respect to the maize compound, 606001. The other compound that begins to form our rare disease franchise, or Pompe disease in this case, The tech and information transfer from Maize has been successfully completed, and we are on track to begin phase two next year. Moving further back up into the slides, just to mention that the first combination from our obstructive sleep-apnea joint venture with AptiMed will be entering phase two around October. And then that 011, our anti-CCR8 oncology, is progressing well in the continuing phase 1B2 studies. Thank you very much.

Thank you very much. So now we would like to move on to Q&A session. If you have any questions, please raise your hand.

I will call your name and please identify yourself before asking your questions. After asking questions, please click the hand raising button as well. From Citi, we have Mr. Yamaguchi. Yamaguchi speaking, do you hear me? Yes. I have three questions. First, 309309, non-clinical environment add-on and maintenance. I was a bit confused about this. So this is not clinical trial. Is this animal study? This is animal study. Mouse. After obtaining new data, we will consider the clinical trials. Thank you. And the result of the study will be available in Q3. That is October, December. So that will be after October, December. So the timing of the partnering will be the next year?

You're right. We will be both disclosing our thoughts on the future clinical plan as well as our thoughts with respect to partnering after receiving those results. Thank you.

My second question is about the COVID sales. As to the environment, are you expecting the increase of the sales in the second quarter? Having said that, nobody can tell about the future as compared to the last year. The sales might be smaller than the previous year, according to my simple calculation. So, based on the result of the Q1, the full year... I think it's about 600 million, so you think that you can achieve your forecast. Iwasaki speaking from healthcare unit. As compared to the last year, the circulation delayed a little bit, considering that the increase of the sales delayed. There is no out of pocket, and the market share, because of lower NHI price, it was less than 50% last year, but now it's about 70%. Considering these factors, if it circulates, I think we'll be able to achieve the target. Okay? The reason for increased share is evidence and also the price. Is that correct? Yes. Of course, as to evidence, we have data about long COVID, and those are all supportive data, but the out-of-pocket is a very big factor. But high-risk patients, elderly patients, they have to pay about 10% to 20%. So rather than price for elderly patients, I think real-world evidence is having a positive impact in terms of the share. Okay, thank you.

The last question…

this question might sound strange, but share buyback, you are very active in share buyback in the first quarter, and we are expecting, some people are expecting to have another round of share buyback. There's been no announcement so far, but if you can explain your stance on share buyback. Kudo speaking. First of all, for this year, we'll continue to consider the investment in business. And as to COVID-19, the forecast, depending on the circulation of COVID-19, we will choose appropriate timing to do or consider share buyback. Okay, thank you very much.

Thank you very much. So from Goldman Sachs, Mr. Ueda, please. This is Ueda from Goldman Sachs. Thank you very much. The first question that I have is with regard to HIV franchise. The royalty progress, I think, is higher than the plan. And is there any special factor behind that? Or is it just because you are progressing very smoothly? And also, this time you introduced... You have also presented the usage expansion of Apertude in the conference, and I would like to ask you about the future prospect of Apertude as well.

Thank you very much. So first, with respect to the royalty, yes, it is going according to plan. I think both Veve's sales growth has been very strong and so far continues to be this year. And so we don't see any... change to those underlying trends. And then on top of it, of course, the currency does help somewhat, which we accept. And with respect to Aperture, yes, two things I would note. First of all, I guess three things. One is, yes, the progress of Aperture has continued strongly. Secondly, as we presented at CROI and the plan is coming out, the every four month version to follow, we anticipate certainly the formulation of cabotegravir is clearly capable and we should be able to launch that by 2026. And then I guess with respect to the overall prevention market, we certainly expect the prevention market to continue to grow. And I think our own forecasts are that the prevention market should at least triple in the future. There are some forecasts that go up to tenfold increase in the prevention forecast. For the US, that's globally. For the U.S. specifically, the critical factor in dramatic growth, doubling, tripling, or beyond, is really government support. And that has been progressing well. It's not completely... in place yet. And of course, the election creates some unpredictability on timing. But overall, I think we are confident that the government support of PrEP will be expanding, most likely in the coming year.

Thank you very much. My second question is with regard to Zocoba. So with regard to the prescription rate and also the share rate that you introduced, so compared to the company plan, what is the actual situation? How do you evaluate this? And also with regard to antiviral effect and with regard to the long COVID data, has the understanding at the at the clinical practice changed? And also, has there been any negative impact by the fact that the endpoint could not be achieved in the SCORPION study?

No.

So 90% of market share is being attained for Zocoba. And therefore, in a good sense, our anticipation had not come true. Rather than people saying that the treatment is not necessary, I think in the society, the environment is that there needs to be a prevention of severe diagnosis. And 15,000 or even 20,000 payment should be worthwhile. in order to prevent severe disease. And I think that is the understanding of the society. So in July, compared to the previous year, the prescription rate is only down by 10%. And therefore, I think the situation is quite positive. Thank you very much. That's all for myself.

Next, from JP Morgan, we have Wakao-san. Wakao speaking from JP Morgan. Just to confirm, following up to Ueda-san's question, HIV royalty had an upturn Is this correct? According to your explanation, first quarter, you progressed well. But for the first half, you will land at the expected level, indicating that it may be slower in the second quarter. So how can I understand the situation? Kudo speaking. As to HIV royalty, as we mentioned, because of the increase of the sales, it's exceeding the budget. In the first quarter, it's a 35% increase from the previous year. It's very strong. But for the first half, we are expecting to have the regular increase of the sales. So we are expecting to have the land at the budget level for the full half year. I couldn't understand. Because if the sales in the first quarter is strong, it should be strong in second quarter. So are you saying that it's going to be dropped in the second quarter? Some of the sales come earlier in the first quarter. That's what we think. And GSK financial results will be announced. So you may want to listen to their presentation of the financial results of OK, I understand. And the second question about the COVID. Your negotiation with FDA, can you elaborate on what's going on? If there is any additional update from the previous discussion with FDA, has there been any progress or update? Or what about the timing of the application? Thank you for your question. We had Type C meeting with FDA once. Based on the data we have, we discussed how we should proceed going forward. The data we presented was SR and HR studies, and also real-world evidence. Those data was presented at the negotiation, and then we had discussion. More specifically, As to the application, as to real-world data, we have to follow the guideline of FDA in analysis. There are many follow-up discussions with FDA, so we have to have more follow-up discussion with FDA. In those follow-up discussions, we are going to have a negotiation or discussion about real-world and other data. So you are having discussion now? So we cannot tell if there has been any progress. Specific milestone like application, there is no such thing that we can announce. We continue to have a discussion with FDA. So as Yonogi, do you think their response is positive? Do you think it's more certain now? It may be subjective. I refrain from answering your question, but we still have the possibility. That's what I would say. And lastly, 309309. I want to understand the current situation. As of now, you are not doing partnering activities yet, or based on the current data, are you sharing the data with your potential partners? I would like to understand the situation of your partnering activities.

We are sharing data, but there is definitely interest in the build-out of the preclinical package as further as we described. there is a very strong impact of diet by this mechanism. And both our preclinical models were very much focused on a high-fat diet-induced system, where our clinical studies, by FDA requirement, you must... impose a 500-calorie reduction on patients. And so there's considerable interest on the part of partners in understanding more in preclinical models how those different diet conditions might affect for preclinically as they consider together with us how to proceed clinically.

Okay, understood.

Thank you very much. That's all.

Thank you very much. UBS, Mr. Harada. This is Haruta from UBS. With regard to HIV franchise, So Gilead, for prevention, once every six months study showed good positive result. And in your case, Kabotagravil, it was a once every four months kind of administration. And I would like to ask you what kind of marketing strategy you have for a long-acting... I know that you have... a good uh situation or positioning and are you how are you going to defend yourself against gilead

that they're pursuing is a subcutaneous administration, whereas we're an intramuscular administration. And while I think Gilead's been eager to describe possible advantages of subcutaneous, it is important to note, and it's in the labeling actually for the salvage treatment indication for which it's already been approved, there is a significant frequency for 25 up to 30% of nodules occurring at the subcutaneous injection site. And these nodules and or redness are visible and palpable externally. And from our experience with patients and PrEP subjects receiving long-acting injectables, privacy is extremely important. It's one of the main attractions, probably half of the long-acting injectable appeal. And if there are visible nodules, which can last for up to five or six months, in other words, the duration of the PrEP period for Iliad's competitor, and they're visible on the skin or palpable when touched, we believe that's a serious concern for patients with long-acting injectable PrEP. Thanks.

I understand. So with regard to privacy, that would be your differentiation. So that's how I understand your explanation. And how about every four months versus every six months?

the time difference, and we are continuing to work for it in every six months. But I think really the acceptability to the patient overall, not just the frequency of injection, is key. I should mention also there's some drug-drug interaction with CYP3, which is also important with Gilead's competitor. But I think overall the properties of the compound in its entirety and the impact on the patient in its entirety, not just the space between injections is important to consider.

Thank you.

That's all for myself. Thank you very much.

Thank you. Next from Mizuho, we have Suzuki-san. Suzuki speaking from Mizuho. Do you hear me? Yes. First, scope your HR. You said type C meeting. It's not type D. It's type C. So can we say that it's a very good response from FDA? And what's going to be the next milestone? What's your plan? Thank you for your question. As you mentioned, this was not type D, it was type C, and indicating that FDA wanted to have a comprehensive discussion. So I think it was a very positive thing. Having said that, as we mentioned, we have to have follow-up discussion with FDA. For each action, we'll have to discuss if it's going to be type D or type C, but we will have to apply for discussion. Okay. Thank you. Another question is about HIV. At AIDS 2024, there was a presentation about 598. Resistance profile was very good, as I understand. So 148, 155 and 140 effect were good. Is this a correct understanding? And this time, it was a data about oral drug. Based on this data, internally, can you forecast if it can last for six months? So I want to understand how we should interpret this data.

Thanks very much. I mean, we're very pleased to see the oral data so far, and It's consistent with what we are modeling for the long-acting. But the long-acting, we have to compare currently until we have clinical data in the animal models because the properties of the long-acting formulation are very different. So based on our animal correlation of how oral behaved and how our animal long-acting looks, We are predicting that the long-acting will look good, but we need the long-acting clinical data to confirm.

Understood. If once in six months can be achievable, we will have to have additional data. What do you think about the additional data about injection?

Well, again, that will be emerging over the next nine months, as I said. Again, it takes longer. So there's three pieces of data coming across. The viral load drop in orals, the two-month format at home, and the six-month data. So those are ongoing. All of those are ongoing studies. Obviously, the six-month takes the longest, just from a practical point of view. So that will be the last piece of data emerging. But those will all be emerging over the next period.

Well understood.

Thank you very much. That's all.

Thank you. From Barnstein, Sogi-san, please. Thank you. First of all, with regard to HIV royalty, I have a question. The royalty is growing and I understand that it is a very positive phenomena and the product portfolio of HIV Aviva is growing and that's. Reflected upon the royalty and. Dovato and amplitude with regard to a dovato and amplitude. Where does the growth come from is the question I have. So as you have said, the patient number itself is growing. But at the same time, amongst the patients, the growing patients, the market share is also growing, I think. And so what is the portion of the contribution to the growth?

The patient growth overall is really in the very low single-digit percentages. The growth is driven by market share. The predominant product for growth is somewhat different in different regions. First of all, with respect to Apertude just quickly, it's all growth because for prior to Apertude, Veve did not have a prep product. So Apertude is pure capture of market share for Veve. For Devato, obviously, as we noted, key competitor, Big Tarby. In addition to a very intense competition in U.S. market, in Europe, certain countries and elsewhere have a competition. extremely good growth rate of Devoto, possibly in part due to overall cost difference. Devoto can be the most cost-effective integrase-driven modern regimen, but that's one factor in certain markets.

Thank you very much. With regard to Cephiderochol, I have a question. Cephiderochol, this is being used in the hospitals, as I understand, and the fact that it is growing is good. But so in the hospital, in each account, Cephiderochol, is being accepted, I suppose. And I suppose that that is the reason why the sales is increasing. And so in terms of account open from that perspective, how much do you think you will be able to grow further? So with regard to account opening, towards the target, how much have you achieved in terms of account opening with regard to safety or call? This is Iwasaki responding. Are you talking about overseas market? Yes. As of today, in large hospitals, in terms of prescription share, it's about 20% or so, I think. And Also, with regard to a diagnosis kit introduction included, which is automatic, I think this is very important in large hospitals. The emergency indication and other appropriate indication all included when we have achieved this, I think 25% is our target. So we have five more percent to go. since it's about 20% right now with regard to the market share in U.S. and Europe. And also we provide to ELMIC and also to the Asian countries too. I think the Cefedero Coal can be further expanded. I see. Thank you very much. Okay. Thank you very much. We have three more minutes to go. Any other questions?

Moroka-san from Morgan, this is going to be the last question. Moroka from Morgan, thank you very much. Do you hear me okay? Yes. About the COVID, you said that you'll achieve the forecast for the COVID in the first half. And the current situation in the second quarter, as I recall, The domestic budget was about $60 billion for a full year. And you previously mentioned that 50% for the first half and the other 50% in the second half. If that's so, $3.9 billion in the first half. The budget is $32.7 billion. So if you can reassure us that you are going to achieve the target. Let me add to my prior explanation. In July, there is a big circulation. And it was more than 10 billion in July alone. Based on that situation, I think for the first half, we'll be able to achieve a budget. Okay, thank you. One more question about business development. You said you focus on business development. What is the size of the investment for this year? including the financial asset, you have like 550 billion. For this year, how much investment are you going to make?

I will say you're well aware, of course, of our current cash position. But at the same time, Shionogi, from an asset valuation, we tend to be conservative, some would say cheap. But with that said, we are extremely active looking at opportunities, but it does have to absolutely meet our value judgment to support use of shareholders' money. So apologies, not going to set a target, but there is a lot of activity ongoing.

Okay, thank you very much.

That's all for myself. Thank you. So I think it's time to close. With this, we would like to close the first quarter of Fiscal 2024 Financial Results presentation session. Thank you very much for your participation.