Eisai Co., Ltd.

Haruo Naito - CEO Yasunobu Kai - President, Oncology HHC Unit, Eisai Japan Ivan Cheung - Deputy President, Asia Oncology Head and Lenvatinib Global Lead Hideki Hayashi - Corporate Planning and Strategy and Chief Information Officer Rami Suzuki - Senior Direct, Head of Business Development Unit Kenji Matsumae - President, Eisai Japan Integrated Community HHC Unit

Hidemaru Yamaguchi - Citigroup Atsushi Seki - Barclays Securities Japan Takashi Akahane - Tokai Tokyo Research Center Shinichiro Muraoka - Morgan Stanley

It is now time. We would like to begin Eisai Financial Results Presentation for Fiscal 2014.

Before we begin, I would like to ask you to confirm whether the materials are all in front of you. There is presentation slide and press report and reference materials and ASCO abstract list that was released to the press today and epilepsy related press release.

If any of the document is missing, please raise your hand. Now I would like to introduce the directors in attendance today.

Representative Corporate Officer and CEO, Haruo Naito. Mr.

Naito, CEO, please begin.

Thank you very much. Now we'd like to begin the explanation of the financial results for FY ‘14, for fiscal year 2014.

What year we have had for fiscal year 2014? We at Eisai made a commitment to make further growth in the future and decided to make proactive investments in the growing field.

We allocated management resources and the growing areas for the future. Revenue stood at ¥548.5 billion, which was 91% of the previous year.

The background for this number was as follows. In two regions, performance was behind the plan significantly.

That is to say, in this country, Japan, we were affected by the drug price revision of about ¥19 billion. Aricept and Pariet and so forth, I don't want to use the unexpected impact; however, there was accelerated erosion by generics and penetration of generics we have seen in the market, in the domestic pharmaceutical business, that's why this business underperformed the plan.

Another region, which is in the United States, LOE AcipHex impacted negatively. That led to the significant reduction in revenue.

Cost of sales increased by 2.8 percentage points. The reasons are as follows, one of which is the drug price revision impact as well as the changes in the product mix.

As a result, gross margin - gross profit stood at 88% of the previous year. As I said at the outset, in three areas, we allocated management resources.

The first of the three areas are to grow four global brands, Halaven, Lenvima, Belviq, Fycompa. These global brands should be grown.

In order for that purpose, we made prioritized investment, particularly in SG&A expenditure area. In R&D expenses, we have focused on eight pipeline candidates, including two modifying candidates in AD area and mainly in oncology and neurology.

We have eight pipeline candidates in these two main areas. In order to accelerate development of these pipelines for the candidates, we made - prioritized the reallocation of resources.

Third area is emerging markets such as Canada, Australia, Russia, Brazil, Mexico. For Eisai, these very promising large markets are named as strategic markets.

In order to make good entry in these big markets, we prioritized our investments in these areas. As a result, R&D expenses stood at 97% of the previous year and 96% of the previous year for SG&A expenses.

Beyond the fluctuations of the expenditures, operating profit stood at 43% of the previous year at ¥28.3 billion, significantly behind our original plan. On the other hand, profit for the period was ¥43.5 billion, which was up 13% year on year, double-digit growth was achieved.

The major reason for this was to correct the imbalance of the cash in the global markets. In order to correct this, $500 million of trading capital has been repaid back to the Japan from the United States.

¥27.8 billion was accounted for in this profit for the period line. Therefore, that led to 13% from the previous year, reaching ¥43.5 billion in net profit.

¥80 for the yearend dividend has been resolved at today's Board of Directors' meeting. Therefore, the full year dividend is to be ¥150 per share as we have already announced.

Dividend payout ratio on accounting basis is now 99%. That's already within 100%.

This is the breakdown of revenue migration. Impact of the global brands, four brands, made upside positive contributions.

As for geographical regions, China and Asia grew rapidly. On the other hand, downside, impact of AcipHex LOE in the United States and decrease of the business in - pharmaceutical business in Japan due to the drug price revision's negative impact, and generic erosion, was about ¥32.2 billion negative impact.

And divestiture of marketing rights of Zonegran in the United States had an increasing factor. However, decrease due to the divestiture of the global rights of Dacogen as well as OTC business in Japan.

And leading to the resulting revenue for ¥548.5 billion. Now, regarding operating profit, similarly there are three factors for upside.

Global brand expansion as well as China, Asia expansion and during fiscal year 2013, we had impact of one-time structure reform that has been eliminated for fiscal year 2014, similar decreasing effect. These had a positive upside.

But as I said earlier, we made upfront proactive investment in three areas, about a little less than 30% - ¥30 billion decrease in operating profit, and due to the delay in the progress in the pharmaceutical business in Japan had a negative impact on operating profit and other factors leading to the negative impact on operating profit. Therefore, OP for fiscal year 2014 stood at ¥28.3 billion.

Now I said that we had made a proactive strategic investment in three areas. What was the result of that investment?

First of all, four global brands. Halaven.

Halaven's revenue was ¥35.3 billion, grew by 23%. Steady growth was achieved for Halaven.

As for Lenvima, in February 2015 we made a launch ahead of other markets globally in the United States, and the launch and the progress has been made steadily in the United States for Lenvima. However, Belviq and Fycompa, these two neurology related products, these are both global brands that revenue for both products underperformed target.

Although we made very proactive, significant investment in order to promote commercial mix; however, this did not deliver our expectation. However, we believe that we could acquire very valuable lessons in anti-obesity market and so-called essence of the epilepsy market.

We now understand what are necessary to promote business in these areas. I would like to reflect these lessons learned for the optimal commercial mix which are being deployed during fiscal year 2015, that's what I would like to report to you today.

Regarding the pipeline candidates, I said I have made proactive investment in these eight candidates in pipeline to promote. For Halaven.

Metastatic breast cancer, second-line treatment in EU. STS, soft tissue sarcoma, for this indication, phase three study to be completed successfully.

We could achieve this successfully. For Lenvima, in addition to thyroid cancer, HCC, RCC and NSCLC, for these new types of cancers, we believe that we made a steady progress in development.

Belviq. Clinical study to confirm the efficacy of co-administration with phentermine.

And also we obtained the early phase two study results for smoking cessation. Fycompa, we made a successful phase three study completion for adjunctive PGTC.

And also two candidate compounds for AD area, we are making steady progress. And E2006, new insomnia agent, we are steadily making developments now.

Particularly this agent may be related to AD area as one of the factors leading to AD. This mechanism of this disease may be associated with the development of AD which is now drawing attention in the market.

So as agents related to AD, we'd like to securely develop this product as well. Oncology, neuroscience area, in these areas we have made a very secure progress in these franchises.

In five emerging markets. Our strategy to enter into these emerging markets using new drugs for all these emerging markets, utilizing the same brands as global brands.

For that Gliadel and other four products need to be registered and approved in these markets. Registration of products has been in line with the plan, although we have seen some delays in - particularly in the emerging markets which are unique to emerging markets.

However, we believe that we have made a secure progress in obtaining registration. However, emerging markets have seen drastic changes in the environment of business.

Now we are revisiting our business models in these areas. Having said that, this kind of remodeling or downsizing will be conducted so that we can make these businesses in five markets turned around into profitable business as soon as possible.

This is the aspiration for fiscal year 2015, the daybreak of growing Eisai. We are aiming at returning to growth trajectory.

This is what we want to achieve. Returning to growth trajectory, there are strategic intents, as follows.

There are five intents. First one is to further grow four global brands.

Pharmaceutical business in Japan needs to be recovered to growth trajectory. China, which is a driving force in growth, China and Asia as driving growth - growth driver, we need to maintain high growth in these areas.

We have to strictly control costs for balancing growth and investments. And lastly, as I said earlier, in strategic markets, targeting in fiscal year 2016, we need to move faster so that we can turn the business in these markets a profitable one.

So these are the five intents for getting onto trajectory for growth during fiscal year 2015. First, Halaven, ¥35.3 billion was the revenue for fiscal year 2014, and we'd like to eye ¥47 billion, up 33% year on year for fiscal year 2015.

In each of these regions, we are confident already in promoting the business in these areas. HER2-negative, HY-positive market in the United States shall be developed further.

In EMEA, FOPC approval has been already achieved. So we want to establish and expand the prescription in this line FOPC.

In Japan, Halaven is indicated for broader lines, HER2-negative and HER2-positive third line plus. We believe that there is a huge market potential in this segment.

Therefore, we have to develop Halaven in these areas too. In Asia, the third-line treatment option is expanding.

In these four regions, we believe that Halaven shall be further grown for fiscal year 2015. I mentioned this earlier, but oral presentation on soft tissue sarcoma phase three trial results are now allowed to be presented at ASCO 2015.

So we'd like to achieve submission for this indication as well. As for Lenvima, currently key point of Lenvima is how we can realize first line or first choice therapy will be realized for longer period as soon as possible, early, first and longer, is three key words for Lenvima.

Now you see the waterfall chart on the slide, which describes the best overall response distribution. The key point of this agent is to demonstrate 65 - as high as 65% ORR.

In this selective study, there were confirmed four cases of complete response - completely responded patients, one of whom was PR at week 24, which was transitioned to complete response at week 72. Significant improvement was seen in this particular patient.

Therefore, longer treatment with Lenvima will potentially increase the efficacy which is suggested by this data. As regards safety profile, the most common adverse event was hypertension.

Serious hand and foot syndrome was observed in other agents. Well, this is very tough situation, patient cannot touch anything or cannot sit in a wheelchair if they have hand and foot syndrome.

Incidence of this syndrome was 3.4%, which was extremely low. This is the key safety profile for this Lenvima.

Lenvima has been already launched in the United States. In February, Lenvima was launched.

Through specialty pharmacy, we are distributing this drug. Since the start of prescription of Lenvima to specialty pharmacies, Lenvima could be prescribed to patients with the safe environment, including the management of AE.

And we target patient number of prescription of approximately 1,000 patients. And during the first two months since the launch, more than 350 patients have been initiated with the treatment with Lenvima.

And we feel second prescription has been already started for these patients. Steady growth after launch in the United States is now being seen.

For this fiscal year, we are aiming to launch Lenvima in more than 20 countries. In especially Japan, the drug price listing was approved at the Central Medical Council held yesterday.

Based upon the drug price comparison system, which the efficaciousness or usefulness premium of 20% was added, the highest possible price could be achieved. A March 26 approval was obtained and wide education, including medullary thyroid cancer is approved.

And we need to accelerate the procedure for launching this product so that we can deliver this Lenvima to patients as soon as possible. We are making utmost efforts in preparation.

In EU, we have obtained positive opinion from CHMP. Therefore, approval is anticipated in May this year.

Hepatocellular, renal cell, non-small cell lung cancer, and endometrial cancer, there are four potential indications, particularly RCC. We are now discussing with the FDA regarding the second-line phase indication in the United States.

As for combination study with Keytruda, the immune checkpoint inhibitor, there are - combination for Lenvima and Halaven, and protocol is already decided in the second quarter this year. Phase 1b2 study will begin for some solid tumors in combination with Lenvima.

And in combination with Halaven, for triple-negative breast cancer, it will begin. Protocol here again is already agreed.

And at long last, a small molecule drug which we can be proud of in the world in oncology immune antibody, the combination effect, is going to be explored through these trials. So we are approaching a very exciting time.

At ASCO, there are two oral presentations. We have two opportunities to present oral presentation.

In the morning of June 1, lenvatinib combination with everolimus in renal cell carcinoma in phase two will be presented. And SDS phase three study will be presented as late-breaking abstract.

And in ASCO, these two abstracts have been attracting much attention. For two consecutive years, Eisai was awarded oral presentation opportunities at ASCO.

Regarding Belviq, as I mentioned earlier, what needs to be done in obesity market has been understood, and therefore we are currently implementing laser-focused commercial mix. First of all, in obesity, pharmacotherapy target patients are being profiled, and we now understand the patient profile.

Age, gender, lifestyle, we are able to segment the market with these factors, and direct response TV and disease education will be focused on these segments. And another point that is important is that these patient segments may have economic incentives - disincentives to receive refills of the prescription as we came to know.

And therefore, one month patient pay of no more than $75 is being maintained, and 3.5 times refills we believe will be possible through such measures. On the part of the payers, smoothly, the number of payers has been increasing but the coverage, tier 2 and tier 3, these lower co-pay coverage should be expanded going forward.

That will be an important point regarding payers going forward. As for our sales force, a total of 320 sales force is deployed for Belviq.

Based on this analysis, in a focused way, on high prescribers, sales force is deployed. I would like to come back to this point later.

And once-daily formulation submission is planned this fiscal year, and expansion in these territories are also planned. Regarding Fycompa, since the launch, new prescriptions and continued prescriptions are shown in this chart.

The point of this chart is that once prescription starts, then in very adherent way, the prescription is continued. That is a very clear trend that this chart indicates.

And the current focus is to increase the brand awareness. And we will be implementing marketing mix with that focus of increasing brand awareness.

And we are optimizing sales force. And thought leaders, key opinion leaders are very important.

And peer-to-peer education programs will be implemented more actively. This fiscal year, PGTC, primary generalized tonic-clonic seizure, approval is expected.

June 19 is PDUFA date from U.S. FDA.

This is a very difficult to treat type of epilepsy, and tonic-clonic seizures occur without any signs, and then there will be seizures and muscle relaxation and awareness/consciousness soft, and sometimes even leading to death. This is the most intractable type of epilepsy.

And Fycompa has reduced epilepsy frequency by 76.5% and seizure-free was achieved over 13 weeks period in more than 30% of the patients. So it is a very robust data indicating usefulness and efficacy.

And we believe that this is going to be a major game-changer for this brand Fycompa and real-world data should also be generated. And ¥10 billion sales is what we would like to achieve in fiscal 2015 based on this.

Next, about U.S. sales operations.

We are making transition to this operation. Neurology business unit and business unit, there are two units.

In neurology business unit, there are 90 Eisai sales force members and Fycompa, Banzel, Belviq, these three products are covered by Eisai reps. In syndicated MR reps, 230 will be covering Belviq, and there's another product from another company, and the syndicated sales force reps numbering 230 will also be deployed in neurology business unit.

With a more appropriate sales force size but with decile analysis, with a focus on high prescriber, we will be implementing the - deploying sales force in more productive fashion. In terms of access, payer response, market access, we have a very good group in neurology business unit.

In oncology business unit, we have 120 reps, at Halaven, Lenvima and Aloxi and Akynzeo, in oncology area. These are promoted by the reps.

And there is a rapid shift to this operation system. Next, Alzheimer's disease area.

This may be repetitive to earlier presentations before, but disease-modifying drugs going forward will have to be preemptive medicine, so it has to target preclinical stage before there's cognitive impairment. That will be the nature of the treatment.

Mild cognitive impairment, preclinical AD will the stages to be targeted. And therefore, in clinical trials, there are three points for success - three key factors for success.

We have to enroll patients that are the target patients accurately. To enter target patients accurately will be one of the key points.

A-beta peptide measurement will become important in this sense. PET imaging will be used and CSF, A-beta concentration and Tau protein concentration will be measured.

And MCI and preclinical patients are to be screened and to be enrolled in clinical trials. To make sure that we are able to do this will be one of the key factors, first of the key factors.

And as this scheme indicates, out of MCI patients, the change in clinical functions is very subtle. However, in highly-sensitive ray, the change in cognitive function should be detected.

Whether we have such a scale - measurement scale or not will be quite important. In our case, we have Aricept and we have conducted more than 20 double-blind studies.

And from such data, we have our own scale where, in a highly sensitive way, in early-stage patient, to detect a change in cognitive function, we have such the cognitive score, and with the permission from the authority, we would like to use - we are using this clinical endpoint to measure pharmacological efficacy. This is another key success factor.

And the third point, this may apply to all of the doctors, but the optimum dose is important to be determined. Efficacious dose to be determined as soon as possible.

And that is where the skill will be - will have to be displayed, in BAN2408 and BACE [ph] inhibitors included, Bayesian adaptive design is used, placebo arm, and different five-dose levels there or active - five active drug arms. And there will be interim analysis, predetermined timing.

Based on data from interim analysis, automatically the most potential dose will be receiving the enrollment of the cases in the future. And in comparison to fixed type of study design, in much sooner timing, optimum dose can be determined.

In BAN2401, 450-patient data analysis was completed in April and we have enough statistical power. Before the end of 2015, patient number is 650, we should be able to do so by the end of 2015.

And with interim analysis, we would like to determine the optimum dose. Once again for these three themes I would like to summarize the progress planned for this fiscal 2015.

Small molecule E2609 Stage A topline results are anticipated in terms of safety. And as for Anti-A-beta protofibrils antibody, as I've mentioned, a POC study for usefulness results are anticipated before the end of the year.

And Aducanumab from Biogen, as Biogen has already announced, very exciting data is expected. And in what sense is it exciting?

A-beta hypothesis, A-beta hypothesis may no longer be a hypothesis it may be a very important cause of AD. The data that elucidates the mechanism of AD may have been obtained by Biogen through this trial.

In that sense it is a very important trial and two Phase III studies are to be started in this fiscal year as we understand. Now we have to bring the pharmaceutical business in Japan back on to recovery and growth trajectory and with new drugs we have to be on the offensive.

Aricept and Pariet, these are not considered as long term reimbursement product to compete against generics, we should treat them as new drugs. Starting from that topic, as you know, for the first time in the world Aricept obtained indication for dementia with Lewy bodies.

And clinical symptoms are very different from AD, for example, there is hallucination and there is a very large fluctuation, daily fluctuation in cognitive functions and the patients present a very different profile from AD. About 20% of dementia patients are said to be a Lewy bodies dementia, if there is 5m dementia patients then 1m is estimated to be patients with Lewy bodies dementia.

This year Aricept will be - or we would like to achieve patient numbers of 130,000 where Aricept is given for dementia with Lewy bodies. MHLW has approved indication of dementia with Lewy bodies for Aricept as a new drug and no generic can be indicated for this dementia with Lewy bodies, and this is a new drug for this indication.

There will be a reevaluation only after four years and other generics cannot be used for this indication. There is the huge wave of generics but Aricept and Pariet are new drugs in terms of these indications show on the slide and therefore we would like to ensure that we are able to achieve bottom line with the new drug positioning of Aricept and Pariet.

LENVIMA, there are many patients waiting to receive LENVIMA as we have confirmed and we expect price listing on May 20, 2015. And for Fycompa submission is anticipated in the second quarter and the preliminary consultation has already been started.

As for new drug premium in the drug price which is enjoyed by four drugs, Halaven, Lunesta, Humira and Lyrica, for these for drugs about 20% is the growth that we would like to achieve. What is very different from last year is that in the Oncology field we will initiative duet formation, what we call duet formation, the Integrated Community hhc unit that was not involved in Oncology, about half of the 1,400 Integrated Community hhc unit sales force will also be introduced in the Oncology field.

And with the existing Oncology hhc unit sales force we aim to increase the overall pie size. In FDA terms or over 300 medical reps in FDA terms will be promoting Eisai oncology products and therefore we believe that we will be able to achieve a very large SOP.

Next is China. In the past year ¥41 billion or about 30% growth was achieved and this year the target is ¥50 billion for revenue, we will be expanding the revenue to that level.

And the major characteristic of Eisai China is that it has become an independent territory since December last year, that is the positioning within the company. Between the head office and China there is a mid-term plan that is agreed and based on the mid-term business plan the local management is able to make decisions independently, including mergers and acquisitions and increase of productive capability - investment for increase of productive capability.

In order to accelerate innovation additional indication for severe AD submission was filed for Aricept and Halaven third line submission is anticipated in this fiscal year. Right now in China the major challenge is the so-called low tier market, small and medium-sized hospitals in large cities and smaller institutions in smaller cities, mid-size cities where there's not much presence of multinational corporations.

We would like to establish presence in these markets. And the lineup of generics will be important in this respect and therefore we would like to make sure that we make adequate investment in this area as well.

Now this is the summary of the regions. Japan, expansion of business with new products and oncology field enforcement, and with that to recover to a growth trajectory.

And after Aricept LOE we have to transition in the United States - correction in Americas, but all of the four global brands are now present in the Americas including LENVIMA and therefore we would like to utilize the strength of these global brands. In China, because of the reasons that I described earlier, we expect continued strong growth.

In Asia, Korea and Taiwan and Thailand are our core markets in Asia and they are showing very strong growth and affordable pricing policy is implemented to increase access to global brands in Asian markets so we expect to, we would like to achieve double-digit growth. In Europe oncology and neurology are both growing and therefore we expect double-digit growth.

That is the expectation for fiscal 2015. Now as for expenses, gross profit increased by 2% and in neurology and oncology there will be concentrated R&D investments.

And as for other pipelines we may use partnership or licensing out potentially. So we will be thoroughly focusing on these oncology and neurology areas in R&D expenses.

As for SG&A expenses the US business remodeling and downsizing and various restructuring - or structural reform, and it's going to be a laser-focused commercial mix. And there is also reevaluation of investments in strategic markets.

And fundamental cost structure reform through elimination and combination of operations. And through these there will be cost management, a very stringent cost management, and operating profit of ¥46 billion, a 62% increase year-on-year, is to be achieved through these measures.

Now as for our balance sheet. At Eisai the balance sheet is such that, and what we would like to describe using this chart, is that we have a very robust and compelling balance sheet.

We have a strong financial standing and based on that proactive investment for growth is to be made to grow global brands and to accelerate development and to pursue M&A and partnership. And we are able to do this while simultaneously maintaining stable dividend.

That is what we are able to do with the strong balance sheet. As for the security or safety of balance sheet the KPI is net DER which is 0.06, and the net debt/EBITDA is 0.5 years and therefore within a half a year we are able to repay all of the interest-bearing debt, therefore we are virtually debt free.

Debt capacity is around ¥200 billion with this strong balance sheet we would like to make proactive growth investment, or it is very possible to make proactive growth investment. Optimum capital structure, that should be the basis for optimum dividend payout, that is the focus, and therefore the KPI that will be used is dividend on equity, DOE.

And the base for that is equity and it is currently 56.8% shareholder equity ratio and shareholder equity is ¥600 billion, a very high level, and by maintaining 8% DOE we would like to make sure that we maintain ¥150 in a stable fashion. Now on the cash flow basis, in the past year ¥60.4 billion of free cash flow was generated and ¥42.4 billion is the total dividend and therefore free cash flow is above the dividend total amount and we are still able to make investments.

And free cash flow, in my view, is to be observed not in a single year basis but over multiple basis to determine its balance with the dividend. And when we look at the three year free cash flow of ¥194.6 billion and total dividend paid over the three year period is ¥128.4 billion this shows we have ample capacity to pay dividends accounting-wise and financial balance sheet-wise we have ability to maintain ¥150 annual dividend.

In this fiscal year, as I mentioned earlier, cash global imbalance was rectified and we were able to reduce tax expenses through this. And we believe that this is part of the management therefore to enhance shareholder value and such management efforts will be continued going forward including one-time measures.

On the other hand, or at the same time, thanks to your support our share price is quite firm and at a high level. We are very appreciative and we are very thankful.

And we also feel that we have to be responsible vis-a-vis this high share price and therefore the management has to make efforts to continue to achieve a strong performance and the high share price does not mean that we can be lax in our financial discipline. We have no plans whatsoever of equity financing that may lead to dilution in the high share price thus a low dividend is such a wrong logic.

It's not something that we subscribe to and therefore we have to maintain financial discipline and we are renewing our determination to do so. Now lastly I would like to share with you the forecast for fiscal 2015.

Revenue is an increase of 1.5% at ¥556.5 billion, that is what we forecast and we would like to achieve growth. And in the United States ALOXI LOE is expected but that will be the last of the major LOEs in Americas.

Americas will be reborn into New Americas and so we are in the transition phase in Americas. But in other regions the plan is that revenue will be growing.

As for cost of sales, 35.2% and this is more-or-less the same as the year before in terms of COGS. And the gross profit is to increase by 2% with the stringent cost management, R&D expenses, 96 year-on-year, SG&A expenses 97 year-on-year.

Through such management operating profit is to be up 62% and profit for the period 62% or ¥27 billion, that is the forecast for this fiscal 2015 at the moment. In fiscal 2014 the tax expenses were decreased but excluding that, profit for the period excluding that one-time factor was increased in fiscal 2014, so topline and net profit and operating profit, in all of these lines, we believe that we will be able to show growth, we will be recovering to growth.

The management is very dissatisfied about the NP and OP which is at - and the ROE of 4.5, and I believe that ROE is a major proxy variable for shareholder value over medium to long term as the return on equity should be at a level higher than capital cost, at a level higher than 8%. And we believe that it's crucial to maintain that level and in fiscal 2015 there will be management efforts and various management options will be explored including M&A and partnering and fixed asset monetization and business portfolio review, such one-time events included.

We will be looking at all possible management options to improve our ROE and bottom line. Last year capital imbalance was rectified to ensure that we have a net profit level and inclusive of that major efforts will be focused on this area.

And at today's Board meeting ¥150 annual dividend was approved and resolved. As I've mentioned earlier, accounting-wise and balance sheet-wise there is no concern whatsoever in maintaining ¥150 dividend level and we would like to make sure that we maintain this dividend level and we recover to a growth trajectory to improve ROE and make that sure that we pay our dividend.

And we would like to continue to maximize shareholder value through these efforts. Thank you.

As for Halaven, as I have said, we are implementing the duet formation, core oncology, for example core oncology cancer centers or large sized institutes, there are surrounding clinics or general clinics, there are targets, potential target patients how are being seen as such clinics around the core centers. So we are targeting them to expand the patients.

We have not deployed the business in HER2-negative/HER2-positive third line plus during fiscal year 2014 and we believe that there is a huge potential in HER2-positive third line plus segment. Mr.

Kai, could you please elaborate on this, if you have any supplementary comment.

I am in charge of Oncology business unit, my name is Kai, I am in Japan business unit. Regarding HER2-positive, as Naito-san mentioned, during 2014 there were two new agents launched in the market and then therefore Halaven patients, patients on Halaven have decreased temporarily because of the impact of the new entries, but now are returning to the prescription again.

Regarding HER2-negative patients, now we have a duet formation of MRs and 130 sales force could not cover all the potential targets and Integrated Community hhc unit, they are covering wider areas therefore they can share information in their territory with Oncology unit as well. With that we will be able to identify patients where we have not been able to deliver benefits of Halaven.

About Lunesta, benzodiazepine treatment agents have been used for insomnia, it's the mainstream we need to switch and Lunesta is also mentioned clearly in the guidelines therefore we'd like to aim for further switch. Aricept, DLB patients there are 1m patients who have DLB, we are only delivering the benefits of this drug to only a fraction of this.

If [indiscernible] targeted at 80% I believe that we can securely target these unserviced patients of DLB.

Next question please.

Seki from Barclays. I have a simple question.

First LENVIMA mRCC, Phase II data, with only Phase II data possibility of submission may exist and end of Phase II data was favorable?

Lenvatinib global lead Cheung will respond to that question.

Ivan Cheung from Eisai Global Oncology Business Unit. We have had a very productive discussion with the US FDA, actually not end of Phase II meeting, it's a pre-sNDA meeting, that's what we requested.

So we discussed two things with the authority, one is to explain and for them to understand our data. Number two is talk about any potential pathway to utilize the Phase II data for potential submission.

Of course there are still a few more steps we have to follow through, it's Eisai's strong intention to seek submission with the Phase II data. And I think you saw the Phase II data today because it's open on the internet from ASCO and I would just like to point out three things for you, of course you will see the detailed data at ASCO.

Number one the everolimus data is quite similar to the Phase III everolimus approved study. As you know everolimus is the standard of care in second line mRCC today.

So that's point number one. Point number two is, PFS is an accepted endpoint by the FDA and PFS is the endpoint of our randomized Phase II.

And the third point is, as you know, today in second line the standard of care everolimus and sunitinib do not have overall survival data. And you saw the data in terms of overall survival eight month extension for the combination regimen.

So these are three key points and going forward as we have more clarity with the authority we'll give you an update. Thank you.

Just one simple question. For fiscal year 2014 [indiscernible] Biogen's one-time payment should have been accounted for fiscal year 2014.

The guidance you have given us last year you did not explain this clearly but for this ¥40 billion operating profit forecast includes this payment for Biogen?

Mr. Hayashi, responsible for planning will address your question.

Partially it's included in the forecast, that's not disclosed though. Thank you.

Akahane from Tokai Tokyo. I have two questions.

It may be repetitive but about dividend. Free cash flow is ¥60 billion, that was mentioned earlier in the presentation, and looking at the past three years ¥12.8 billion free cash flow was achieved and this year free cash flow will be somewhat declining and I do not know about the details of the investment but can I take it that it is a commitment that ¥150 dividend will be maintained?

About 037 there is an option right and when domestic development progresses option right may be exercised and what is the timing that option may be exercised?

Suzuki who is responsible for business development will respond.

Thank you. Suzuki from Business Development.

Thank you for the question. About 037 Phase II and associated clinical study report BAN2401, likewise once they are obtained the plan is to exercise option.

So the intent is that option will be exercised and the remaining issue is the timing. We believe we are not able to reach a conclusion yet; we will have to look at the data.

Thank you.

Other questions?

[Indiscernible] Pharmaceutical business in Japan. Drug price revision had a negative impact of ¥16 billion on revenue?

I'm referring to Slide 4, ¥16 billion impact due to the drug price revision, that is the impact on the operating profit, revenue is on the previous page. Due to the erosion by generics what was the impact on the revenue by generic erosion?

In principal these numbers are not to be disclosed, but approximately, are we able to share with them approximate number EJ or Eisai Japan? Matsumae-san will respond to you.

Thank you for your question. My name is Matsumae, I'm from EJ.

As for your question, impact due to the drug price revision last year, as our CEO explained in the presentation ¥16 billion was the impact.

What about the generics erosion?

¥19.3 billion was the impact by the drug price revision and due to the replacement with [indiscernible], so you can subtract the impact due to drug price revision from the number that I have just given you, the difference will be the impact of [indiscernible] replacement by generics.

Thank you. Any other questions?

Are there questions from participants on the phone? We have a request for one question.

Telephone participation by, I understand, Muraoka-san from Morgan Stanley. Please ask your question.

This is Muraoka from Morgan Stanley. Can you hear me?

Yes.

[Indiscernible] It is related to [indiscernible] question, in the first half operating profit, ¥10 billion and ¥36 billion in the first half and the second half respectively. So are there factors that are concentrated in the second half?

One-time factors. Mr.

Hayashi will respond.

Part of the reason is, as you've mentioned, but global product sales plan including LENVIMA will be increasing from the first, to second, to the third quarter and therefore the numbers will accordingly be changing. In the second half, ALOXI LOE, despite the ALOXI LOE, global brand sales will continue to grow from the first the fourth quarter, that is the plan.

Next question.

In this fiscal year, in the budget, BIIB037 opt-in expense, in what way is that taken into account? Or is it not taken into account?

It is taken into account in one way?

Mr. Hayashi will respond.

Last time about the timing we have discussed as some length and as Ms. Suzuki mentioned earlier if option is exercised, if one-time payment occurs or not, it is based on a number of conditions.

And if certain conditions are met then, only then, Eisai will have to make payment. But right now we are not able to say anything definitive.

To put it simply, BAN2401 and BIIB037 are mirrors and if both are to progress in the development such one-time payment will not occur which means that is in this fiscal year in the budget such expense occurrence is not taken into consideration.

That is correct. Thank you.

Are there any questions in this hall? Are there questions in the hall?

If not, it's now already time to close the briefing meeting. Now with this I would like to conclude the financial results briefing meeting for fiscal year 2014.

Thank you very much for taking time out of your business schedule to take part in this meeting.