Eisai Co., Ltd.

Now, we would like to report on the financial results for fiscal year 2024. First, let us share with you the P&L for FY 2024.

Revenue and profit both while we continue to invest resources into LEQEMBI, have achieved increase in revenue and profits. As we have already announced the forecast for FY 2024, but both revenue and profit exceeded that forecast.

If you look at this table, cost of sales increased by 0.5 percentage points. This is due to what is described above other business or one-time decrease of revenue, which increased the cost of sales ratio.

And if you turn to the expense side, R&D expenses accounted for the ratio which was reduced by 1.6 percentage points in terms of its ratio to the revenue, mainly in the United States or research laboratories outside of Japan. There were some inactive research laboratories or obsolete research laboratories were decided to be closed.

But among the themes of research or with some impairment losses absorbing those. R&D expense ratio to revenue was reduced by 1.2 percentage points.

And SG&A expenses increased by 1.2 percentage points because we continue to invest resources into LEQEMBI, particularly marketing resources were invested. In this SG&A expenses which increased expenses related to the structural reforms in the United States that was carried out during the year under review.

There was a temporary increase in expenses related to the U.S. structure reform, which are related to the termination benefits.

Such increase was absorbed to control SG&A expenses whose increase was controlled within 1.2 percentage points. Now, turning to the revenue migration.

We have three global brands three Ls: LENVIMA, Lemborexant or Dayvigo, and LEQEMBI. In total, these three global products as you see have achieved ¥426.5 billion, Y-o-Y increase was 24%.

What contributed most to the growth was increase of ¥40 billion in LEQEMBI and ¥30.8 billion in LENVIMA, and ¥12 billion increase in Dayvigo. So, in overall pharmaceutical business, revenue increased by ¥57.6 billion and at bottom half, we described one-time income changes from the previous terms, which was minus ¥9.9 billion.

But as you see on the left-hand side, we achieved 106% of the previous year by increase of ¥47.6 billion to reach ¥789.4 billion in revenue. Next, turning to the operating profit migration.

In pharmaceutical business, by proactive investment into LEQEMBI, although we continue to such proactive investment, but we could achieve the increase in OP by ¥26.3 billion in pharmaceutical business. Turning to R&D business expenses.

As I said earlier, as you see on the right. BB-1701 impairment loss was recorded but which increased the profit about ¥12.7 billion.

And payment of shared profit of Lenvima to Merck in accordance with the expansion of the Lenvima business increased as such. And the other business included upfront payment and others.

And we achieved ¥54.4 billion in operating profit, which was up 2% from a year earlier. Now let me share with you LEQEMBI situation.

This was carried in the local TV program in Boston in the United States, which featured Boston Marathon. There is a runner in blue uniform, who achieved the full marathon running and discontinued with the interview with him.

But this person participated in the LEQEMBI lecanemab clinical trial. And as you see here, he is a man from Portland in Maine.

About 100 miles away from hospital -- the hospital in Boston but he continue to visit that hospital biweekly for about 10 years. And he could run through the whole distance of the marathon after which he was interviewed.

During the clinical trial, he did not know which of the placebo or actually the drug was administered but there were various improvements in the daily activities as reported by caregivers, and after that in 2023 FDA approved the drug. And he realized that the drug he was receiving was actually LEQEMBI.

In the media coverage, he made that comment. As shown in this case, there have been various reports on improvements in the behaviors or activities of daily living.

For example, the patients are now able to go for shopping in the neighborhood or they have been able to start enjoying hobbies. These are called humanized messaging.

CDR-SB and not such a clinical endpoints but rather there have been reports on the improvements in activities of daily living. And there are also increasing number of such reports in the medical side and the SNS or social media both in Japan and United States, such number of reports are increasing in number recently.

For LEQEMBI, in Europe LEQEMBI was approved in Europe, 27 countries in Europe plus three, and in total, in 30 countries LEQEMBI has been approved. More recently, in the Middle East, LEQEMBI was approved as well.

So currently today in 44 countries it is approved and it is under regulatory review in 12 countries. In 44 countries worldwide LEQEMBI has been approved.

Therefore, LEQEMBI has achieved a global reach and making steady progress toward a truly global drug. Now, turning to the approval in Europe.

As many as 26 months have passed since submission was filed. That suggests that there are a lot of discussions and deliberations one after another and the process of correspondence under the review.

But at last, on April 15, 2025, LEQEMBI was granted approval in Europe. LEQEMBI is the first therapy in Europe that targets an underlying cause of AD.

As you see after the second bullet point, in Europe APOE4 homozygotes, which accounts for about 15% of patients with early AD. These people are not included in the patients eligible for receiving the drug in Europe.

Having said that, in US, Japan, China and Europe, so-called four major agencies have approved LEQEMBI around the world. This European regulatory approval may serve as our reference for regulatory authorities in other countries, where LEQEMBI submissions are filed and being reviewed.

As you see at the bottom, the first in launching country – the first launching countries in Europe are going to be Germany and Australia. We are aiming at getting the drug to be launched in the second half of fiscal year 2025.

We are making preparations now. Now global LEQEMBI revenue for FY 2024 was JPY 44.3 billion.

As you see this exceeded the full year forecast. In Americas, revenue was JPY 26.1 billion.

In Japan, revenue was JPY 12.7 billion, JPY 4.7 billion in China, JPY 0.7 million in others, means Israel and South Korea as well. We have started to record revenue.

So in total, JPY 44.3 billion was recorded as global revenue. For us, it has been the first full year in 2024, fiscal year 2024.

Therefore, JPY 44.3 billion as the revenue for the first full year shows that we have been able to make a steady start in building up revenue. Now turning to the growth trajectory for LEQEMBI.

How should we depict the trajectory, which is explained on this slide. We are able to divide the timing into three major periods namely; pathway establishment phase, demand stimulation phase and the demand expansion phase.

We would like to ask you to understand as such and we'd like to organize ourselves in thinking in this way. First in the pathway establishment phase, we needed to start from scratch in terms of establishing diagnosis and treatment pathway for Alzheimer's disease.

But I often mention is that this is – can be emulated to the work which is – which we are removing a big rock and building a bridge over a large river in a bigger tunnel, penetrating a large mounting, one of the most difficult and the most burdensome pathway in a modern world, so which requires a pioneer-like efforts. We believe that we are the pioneer in the dementia treatment and we believe that we have dedicated ourselves to establishing the pathway.

What needs to be done more specifically, as you see after the second bullet point, you needed to create a flow of diagnosis and treatment of AD, cognitive function testing, APOE testing, amyloid beta testing, PET and CSF where needed, therefore it will be very expensive and invasive. Administration, which requires infusion – therefore, infusion needed to be attended by nurses.

For the sake of the infusion, patients had to visit infusion centers. So there was a quite a cumbersome step.

And ARIA monitoring, utilizing MRI will be conducted. So first, this flow, consisting of all these steps needs to be created and step -- each step has to be established.

And for realizing this, you needed to get the reimbursement. All these medical procedures have to be covered by reimbursement under each system of health insurance in each country in order to minimize the burden on the patients.

So doing all these are required in the pathway establishment phase. Needless to say, what is supporting each step is done by HCP.

So you needed to consider deploying and education for HCPs, which cannot be done by Eisai alone through collaboration with HCPs at medical institutions, we are conducting these efforts. At the same time, we needed to promote market introduction of LEQEMBI.

There are so-called formulary at each medical institutions and there are committees to decide adoption of the drugs. explanation of the safety and efficacy needed to be provided in order to convince the committee to adopt the drug.

And now that is the pathway establishment phase. After this, a pathway has been established.

Now turning to demand stimulation phase. You needed to establish capacity to accommodate a certain number of patients for each step in the pathway.

Then the indicated patients or patients with early AD, you need to support introduction of such patients to pathway. During this phase, efficacy and safety profile of LEQEMBI had to be established.

So that means that the administration of LEQEMBI can be promoted under safe environment. Such environment has to be in place.

As I said mentioned, a humanized message is being conveyed during this phase and accumulation and epidemic presentation of LEQEMBI real-world data by specialists are being done. And on the right-hand side, you see demand expansion phase.

What is needed here is to have coordination network with PCP, primary care physicians, nearby physicians and specialists or neurologists, there needs to be established a network between the two. That is the condition for this space.

That means the PCPs will play certain roles in diagnosis, testing and treatment. So not everything is left to specialists.

But whenever diagnosis by specialists is necessary, referral should be made. So the time for referral can be significantly reduced.

That is one of the important conditions for demand expansion phase. And the coordination between initiation introduction facilities and follow-up facilities, which is applicable to Japan.

During the first six months, initial introduction facilities are in charge of treatment for patients and another different medical institution is engaged in the follow-up treatment after that. And that is prescribed in the rules in Japan.

So we believe that we have been able to establish such system in Japan already. Second bullet point is DTC, direct-to-consumer advertisement for disease awareness.

In most cases, this awareness campaigns are conducted under the branded method. As you see below, in order to streamline pathway, there are various innovations.

For example, BBM will be utilized for confirmatory testing and change from infusion to SCAI and utilizing voice and others for conducting digital cognitive function testing. And MRI will be utilized for assisting -- AI will be utilized for assisting MRI reading.

These are becoming visible. And during this phase, these innovations shall be implemented.

So these are thought to be the condition for this expansion phase -- demand expansion phase. In FY 2025, five regions where we are rolling out this therapy.

So below, you can see which position each region is now. Europe and Asia, where recently, the LEQEMBI was approved and these regions are in the pathway establishment phase.

And in private market, LEQEMBI therapy is being provided. So in China, which is positioned in the demand stimulation phase.

In the United States, which is in between the demand stimulation phase or towards the end of the demand stimulation phase because it is in between stimulation phase and expansion phase. And for Japan, which we believe has already entered demand expansion phase.

Now turning to next fiscal year. The US is expected to enter demand expansion phase.

So for fiscal year 2026, revenue and the penetration of LEQEMBI is expected to be boosted because of this. Now LEQEMBI in the United States, what are we going to do for this fiscal year?

The top is to convey the core evidence of LEQEMBI in Alzheimer's disease, which is progressive and a fatal disease, which will continue to progress. Unfortunately, in the end, the patient will die because of this disease.

Therefore, early initiation of treatment and continuation of treatment is necessary and the discontinuation of treatment is not desirable. So such core evidence needs to be conveyed and also messages related to the improvement in the activities of daily living will be conveyed.

This is going to be the basic task that we will continue to do. In the middle of the year, national educational event is considered.

The summary or coverage of the data will be conducted on a national level. The second bullet is related to the IV maintenance dosing, changing to every four weeks.

approval of which has been already obtained. But what is the significance of this?

If you look at the right-hand side, FDA has recognized that for AD, long-term treatment is necessary and treatment should be continued. So this approval indicates that FDA has recognized such necessity of long-term treatment and the benefits of a long-term administration was confirmed.

Of course, after 18 months, streamlining administration will be achieved. That is one of the advantages.

But this shows the necessity to continue long-term treatment. That has been in a sense authorized by these regulatory authorities.

Actually, at the medical institutions, initiation treatment is being provided, have shown the effect of increasing number of patients initiating treatment. Next one is a potential IVD approval for BBM.

For confirmatory testing, it used to be done through PET, which was very expensive. CSF which was very invasive.

This could be replaced with simple blood-based testing. This is thought to be around the corner.

And for how to use this method, Alzheimer's Association of the United States is planning to publish the clinical guideline and the draft version is -- has been already circulated. So we believe that this guideline will be published soon.

And BBM may be utilized for confirmatory testing, which may be implemented by this fiscal year, which will lead to streamlining and generalizing Amyloid beta testing. Now turning to SCAI.

Currently being utilized with 360-milligram dosing for maintenance treatment, actually, the submission has been filed and not utilized yet, but the submission has been filed and inspections are completed or in the process of being inspected by the regulatory authorities. PDUFA date is scheduled for August 31 of this year towards which we believe we are making steady progress after obtaining this and then we will potentially submit for the approval of SCAI with 500-milligram dosing for initiation treatment.

We are making consultation with regulatory authorities. At the end of this fiscal year or early next fiscal year, this SCAI may be utilized for covering all the entire treatment period.

So far up to 36 months long-term data is provided, but 48 months is being prepared. So going forward, there will be conferences such as AAIC and CDAT, such longer-term benefit or advantages will be shown on such occasions.

Next, targeted DTC and the PCPs will be explained in the following slides. This shows the new formulation and administration method, IV maintenance dosing currently under discussion with authorities in Japan and China.

And for SCAI initiation in Japan and China, preparations are being made for submission. And the formulation as you see in the picture on the right-hand side, the cutting-edge technology provided by Terumo, least painful this very safe pen-type auto injector will be used which we believe will become the key factor for changing the treatment.

Targeted to DTC. Why do we call it targeted?

In this case, what we mean by targeted, for those patients who have been diagnosed with early AD. Actually after getting diagnosis until starting the treatment, it still takes several months.

In the meantime, what kind of a drug LEQEMBI needs to be understood by the patients who are diagnosed with RA through addressable TV with a secure target, so that we will be able to contribute to shortening the time until the initiation of the treatment. For -- as a pulling factor, we may ask the patient through this campaign to be interested in getting the treatment with LEQEMBI.

And we have seen a certain effect so far and we'd like to continue on this next fiscal year onwards. Now turning to BBM.

Please look at the right-hand side. Currently, the number of Triage tests which are utilized for prescreening, after the full approval was granted in the United States.

As you can see here, the number of Triage tests is dramatically increasing in the testing of pTau 217, not seeing the accumulated amyloid beta, not doing these tests, but more simple and easy blood-based test can be conducted, which is soon to be seen and implemented. As for approach towards PCPs earlier, please recall the timing, one of the conditions of expansion phase.

Currently, about 80% of the patients -- 80% of MCI patients are currently under the care of PCPs, but they are not diagnosed with MCI. Therefore, we have to make sure that they are diagnosed, so that care can be sought by these patients.

This fiscal year neurology account specialists, the main component of our sales force, around 2,000 exist in the US and rather around 2,000 high-potential PCPs in the US have been identified and NAS will be targeting these PCPs. Exactly what are they going to do?

PCPs and neighboring specialist institutions, oftentimes, these are called IDNs and very large in scale and help building a coordination between PCPs and specialist institutions. PCPs can contribute to identify patients with MCI and mild AD using cognitive testing to diagnose them or use confirmatory BBM testing to identify such patients.

And then if these patients are referred to specialists, the referral scheme should be built. So referral will be quick.

Depending on the situation, PCPs themselves may give treatment with SCAI. Through these AD diagnosis and treatments should become generally available, and that is the major focus in this approach.

Turning to Japan, demand expansion phase is the phase in Japan. Actually, when we look at monthly sales for April, it is already above ¥2 billion.

Demand is strongly expanding in Japan. I would like to further analyze that.

What is included in this red band. As the basis, there is history of AD research.

In Japan, Aricept was launched in 1999. It is about a quarter century ago.

Since then, even during the COVID pandemic, there is a Japan Alzheimer's disease Academy, and this was held without missing any session even during the COVID pandemic, 80 researchers, doctors and technicians, nurses and recently, even patients are participating and multifaceted continuous discussions are underway. I believe this is a very strong foundation.

On top of that, as shown on the left, at the time of the initiation, I was afraid that this is going to have a suppressive effect, all case surveillance and clinical institutions requirements under optimal clinical use guidelines. But on the contrary, these have to be satisfied.

So long as these are satisfied, it can be a pathway as such model was clearly indicated. As a result, nationwide, I believe there was good progress in pathway establishment.

Currently, number of patients who have been treated for more than six months is increasing. In -- initial introduction facilities and follow-up facilities are cooperating, and there is a good cycle between these two types of facilities based on trust relationship.

Referral is made, diagnosis is given and care is provided. And then patients eventually come back to follow-up facilities.

Follow-up facilities are encouraged to refer patients to initial introduction facilities, and we see this virtuous cycle. Large number of patients are receiving treatment and the safety information is provided as a result.

And including humanized message, the value of receiving care is communicated amongst 5 regions. Japan was the first to enter into demand expansion phase.

This is the forecast for fiscal 2025. forecasted revenue, ¥76.5 billion, ¥40 billion in the United States, about 50% increase, ¥24 billion in Japan, 1.9 times, ¥9.5 billion in China and EU, mainly in EU and some of the Asia included ¥3 billion.

Total of ¥76.5 billion is the revenue forecast for LEQEMBI globally. The basis of this was, as I mentioned earlier, pathway establishment phase, demand stimulation phase, demand expansion phase.

Based on that analysis, this forecast is made. This is the last slide on LEQEMBI.

LEQEMBI has the potential to expand A-beta treatment for patients around the world. First, looking at drugs in the second full fiscal year, US$500 million, or in excess of US$ 500 million, will be a blockbuster drug, and LEQEMBI will satisfy that criterion this fiscal year.

In terms of global approvals, currently, including major agencies, 44 countries have given approvals. On the left side, efficacy and safety, these are established.

Data is enriched. As for the administration method, maintenance administration with half dosing and SCAI, we have seen progress.

As shown at the very bottom, preclinical AD, this is a high-potential indication where the treatment stage will be brought earlier by one stage. We are steadily accumulating findings and knowledge to prepare the submission, and in agreement with the authorities, preparations are underway.

I believe that LEQEMBI has the potential to further expand A-beta treatment. Now, briefly, I would like to share with you the following themes in neurology.

In particular, I would like to give an update on E2814 antibody. The left side shows a study on DIAD these are familial hereditary Alzheimer's disease population targeting study, which is a Phase 1 study.

Looking at tau pathology, it has become clear that we should be looking at these two tau pathologies. Early tau pathology by using p-Tau217 and to use MTBR-tau243 for late-tau pathology, it was confirmed that both are reduced.

Sporadic early AD, as shown on the right, targeting Phase 2 study, is also starting in combination with LEQEMBI, 18 months of administration is how the study is designed. The features are shown in the middle of the box.

Eisai has data from Clarity AD and other clinical studies. Based on this data, we have a biomarker algorithm.

Based on that biomarker algorithm, accurately, we are able to screen patients to be entered into the study. MTBR-tau243 and tau PET are used to confirm the therapeutic hypothesis in sporadic AD.

That is the objective. We also plan to achieve LPI, before the end of this fiscal year.

Another topic is what we've shared with you on other occasions. DAYVIGO is an antagonist.

On the other side, on the flip side, there is an agonist, daily excessive sleepiness, falling asleep or falling unconscious which is narcolepsy type 1. The development for that is steadily underway.

As shown in the middle of the page, this compound was found from the library of 250,000 compounds. We identified this as one true agonist.

Then there was further synthetic development to improve activity by 10,000-fold. This is similar to the drug discovery history of ARICEPT.

We were able to find this compound, which is quite lucky, and inclusive of my memory of ARICEPT, I have much hope for this. Once-daily administration may be possible.

Given in the morning, it can fight sleepiness during the day, but during the night, it will allow sleep. We plan to obtain top-line results from the PON study in the first half of fiscal 2025.

Now, revenue driver: LENVIMA. LENVIMA is celebrating its 10th anniversary and has been administered to more than 500,000 patients since launch.

This fiscal year, global revenue is in excess of JPY328 billion achieving double-digit growth in major drivers Americas, year-on-year growth was 28%. What is, noteworthy, is that amongst these four cancer types, all cancer types growth was achieved.

All these cancer types are seeing new competition entering into the market. 10 years ago, the first cancer type was thyroid cancer and then HCC followed.

In these two cancer types, the indication is monotherapy not in combination, but in monotherapy despite a very fierce competition in monotherapy setting, growth is achieved steadily. This shows the power of this drug, I believe.

As for RCC in combination with Merck’s belzutifan in triplet and doublet combination, studies are underway to obtain indication and HCC in combination with TACE is shown at the bottom of the page. This shows a full-scale time line.

But there will be interim analysis depending on the results, it may be possible to shorten the time line. Now, turning to structural reform.

Earlier on the occasion of the information meeting, medium-term target for fiscal 2027 was presented, JPY30 billion SG&A improvement target was also included and the details of that is shown already in Americas, basically there can be an Lenvima, two brand structure exists. Regarding Lenvima many large scale, many reps are not required anymore in large scale.

Depending on the stage of each drug, we have streamlined -- regarding LEQEMBI to a certain degree, market introduction phase has been completed. So staff that were necessary to achieve access -- we are now in the Phase to downsize.

In addition, neurology, oncology may have duplicate functions, which can be eliminated. And we have also streamlined in administrative department.

America's structural reform is almost complete towards fiscal 2025 it will be effective that is the expectation. And then we will be focusing on structural reform in Europe, we have already begun our efforts this fiscal year.

Towards the end of this fiscal year, we expect to complete the structural reform in Europe. These two regions will be, therefore, undergoing or have under undergone structural reform.

And as a result, we expect to achieve the financial benefit as shown at the bottom of this page. In China, in EAGS we are also conducting organizational transformation.

In commercial area there is structural reform, but not limited to that in R&D, we are also pursuing, streamlining DHBL as shown at the left top, Deep Human Biology Learning based on human biology, research and development is carried out. That is why the R&D organization is named as such.

Please understand that we are now in the second phase. And the core of that is the technology to profile a molecule using cutting-edge technologies and translational research organization.

Mr. Horiye [ph] gave a presentation on previous occasion.

He is also in attendance today, and discovery and clinical will be bridged with the translational research. So that development can be quickened.

R&D streamlining is pursued mainly through these efforts. DHBL top leadership now include younger leaders.

The bottom is stable supply of major products and reduction of cost. We have to also consider a geopolitical situation of late.

This importance is growing as a result. LEQEMBI supply chain was improved in the United States as well the supply chain was enhanced.

Regarding Dayvigo since it is in an expansion phase. And it's not directly impacted by geopolitical factors but drug substance and drug products will be produced utilizing overseas plants to improve supply chain and to achieve a reduction in cost of sales.

Now I'm coming to almost the end of my presentation. This shows resources invested into anti-A-beta antibody drugs over past five years.

Since fiscal 2021 to this fiscal year in five years cumulatively around ¥370 billion was invested in R&D and SG&A. In fiscal 2021, this was the final year of aducanumab resource investment was double the usual level as shown at the bottom.

And as I described earlier, Alzheimer's disease is the most difficult disease in the contemporary society and Eisai has introduced drugs that target the underlying causes to achieve global contribution. That is our raison d'être and our mission.

And in order to fulfill our mission, we invested resources. And that is what we have been doing.

Naturally, this will impact operating PL. The trajectory of operating profit is shown in line at the bottom.

Fiscal 2026 projection is that we will have a balanced or breakeven operating income situation. That is the expectation.

And finally two more pages. This is the PL for this fiscal year.

First please look at cost of sales. 1.7 percentage points increase of cost of sales.

And what is included there is IRA related to Lenvima Inflation Reduction Act related expenses for Lenvima and drug price revision in Japan, especially, Dayvigo and Halaven were subject to drug price revision. And onetime revenue, which is above that -- with onetime revenue declined and there was also an impact from product mix.

Because of these four factors, cost of sales increased. However, please look at R&D expenses.

It decreased by 0.6 percentage points and this is mainly because LEQEMBI R&D expense has passed the peak stage. SG&A also declined -- is forecasted to decline by 1.6 percentage point.

US structural reform effect is the main factor. In SG&A in Europe, due to various reforms there will be expenditures.

These are included in the forecast of SG&A expenses. And still the forecast is that it will decline.

The profit for the year also is forecasted to decline. But in the previous fiscal year there was a reduction in capital in the United States.

As a result there was a tax effect in the previous year, but it will be back to a normal tax rate in fiscal 2025. And that is the reason.

This is the final slide, conclusion. In fiscal 2024, we proactively allocated resources to LEQEMBI business.

And as I briefly mentioned, we have a subsequent pipeline in the neurology area. And we achieved revenue and profit growth driven by the expansion of major global products.

After 26 months since the submission in Europe and after much interaction LEQEMBI approval was obtained in Europe. Now we have, in all major regions, launched LEQEMBI and in Japan has entered into demand expansion phase.

Next fiscal year, we expect U.S. to enter into the demand expansion phase.

In fiscal '26, we expect LEQEMBI business to turn profitable. In fiscal '25, we will maintain investment of resources to maximize LEQEMBI, but we will also carry out organizational transformations in regions, accelerate innovation creation and strengthen the global supply chain.

Thank you.

My name is Hashiguchi. I'm from Daiwa Securities.

Regarding the LEQEMBI revenue in the United States. According to the information meeting held towards the end of March, Mr.

Iike said that you wanted to aim at more than double and Mr. Haruna as well said that he was -- you were confident in achieving more than double.

So 153% on a yen-denominated term considering the ForEx, and it's only increasing by 1.6 times. And during the past 1.5 months, what happened changing your forecast from doubling the revenue or made a downward revision?

Could you please give us the background or reason for this?

Utilizing the slide, we suggested the slide. Could you please show the slide?

Here, the U.S. is now approaching the end of demand stimulation phase.

That is how we see the current U.S. situation now.

Now that is the biggest reason. So boosting or doubling the revenue is not something, which has become reachable yet.

But for fiscal year 2026, as I explained in details today, the U.S. is expected to enter demand expansion phase as well.

So by following this growth trajectory, we are confident. Actually, in April, revenue in the United States and the number of vials shipped out have shown steady growth and expansion.

Therefore, we believe that the U.S. market is immediately before entering into the demand expansion phase.

That is the reason for the numbers that has been downwardly revised from the previous ones.

What happened recently? You may now think that there needs to be further efforts that should be done in order to expand the demand.

Are there any such efforts to be taken? If so, please share them with us.

Thank you for your question. As we have shown here, below the demand expansion phase, as you see, BBM, SC-AI or utilization of digital technology, these are starting to be implemented.

So implementing all these will be necessary for expanding the demand. And many patients are seeing PCPs and the PCPs need to be activated by means of participating into the treatment and diagnosis.

Otherwise, the U.S. cannot enter securely this demand expansion phase.

That was our analysis. Thank you very much.

Wakao from JPMorgan. Regarding the U.S.

LEQEMBI, I also have a question. According to what you have just mentioned, I understand why you have the forecast for this fiscal year, but I would like to understand the competitive situation.

Is Kisuma [ph] a threat? Or is it going to become a threat?

Biogen's briefing session sounded as though it is not impacting much. That is my impression.

But looking at the sales of Cassella [ph] in comparison to your quarter sales, Cassella sales is stronger. So I'm concerned that it may become a threat to Eisai.

I believe the benefit for Eisai is the long-term administration possibility. But looking at the current market environment, won't the shares be taken by Cassella because of convenience?

I would like to answer in general terms. And then I would like to have people who are responsible for commercial business in the US and Japan respond to your question.

Earlier about Europe, -- so I talked about Europe. And as for the review in Europe of [indiscernible], this is on the website -- official website of EMA.

And I believe that everything is told there. It's vague recollection, so please bear with me.

But ApoE4 noncarrier population, even in non-ApoE4 carrier -- so in ApoE4 noncarrier population, it was not found to be clinically meaningful. Data showing long-term usefulness was also lacking.

I believe the comments to that effect are found. This is a public domain information.

So please refer to that yourselves. The basic for us is that a Alzheimer's disease is a progressive disease and a fatal disease.

It is a progressive disease and the cause of the progressiveness or pathology that causes progressiveness is protofibril. LEQEMBI targets protofibril that accelerates the neurodegeneration.

It is the only antibody that has affinity to protofibril. And low Tau population, early treatment has shown a remarkable efficacy in clinical trials.

And as shown in maintenance dosing, there is also usefulness in long-term administration. We have data that shows sustained effect.

I believe that is the basic regarding the usefulness of LEQEMBI. And if we may, regarding the US, Mr.

Haruna and regarding Japan, Mr. Yusa will discuss the commercial aspect.

Thank you for your question. I'm Haruna, responsible for the LEQEMBI in the US and let me answer the situation regarding the United States.

The impact from a competitive product, we feel is limited even now. As Mr.

Naito, CEO, explained, LEQEMBI growth is continuing. And in April, monthly revenue was a record high.

And in May, growth is continued as we have seen in early part of May. And what we are most paying attention to is prescribers, more than prescribers -- more than 70% of prescribers are prescribing only LEQEMBI in the United States.

It shows how much more LEQEMBI is chosen in the United States even today. Convenience was also included in the question.

But according to what we hear about consenting process in a clinical setting, it may be convenient that it's a one-time administration, but a low incidence of ARIA, if that is understood well, LEQEMBI by far is chosen. And there is also experience of the physicians, which also the patients are interested in.

LEQEMBI has a long-term experience. There is long-term experience of LEQEMBI.

And I think this is a compelling reason for LEQEMBI to be chosen. As Mr.

Naito CEO mentioned, AD is fatal. It's a long-term chronic disease.

And therefore, long-term treatment and early treatment through LEQEMBI, I'm sure will be selected as a gold standard drug. And therefore, I believe that LEQEMBI will continue to travel on the growth trajectory.

Thank you for your question. I am Katsuya responsible for Japan business.

Let me share with you the situation in Japan. As I mentioned regarding the US by my colleague, the impact from competitor -- competition in Japan is also very limited.

This is a progressive disease, and it's a fatal disease. As such, for AD treatment, when consenting patients, when amyloid beta has turned negative after 1 year and administration will be stopped if such explanation is given by physicians, oftentimes, patients and families become concerned and continuous treatment is possible with LEQEMBI.

In the end, oftentimes, LEQEMBI is selected as a result. For more than 1 year, LEQEMBI has been administered and the experience of using LEQEMBI for more than 1 year is very -- is having an impact when LEQEMBI is chosen by doctors, patients and families.

Doctors are more familiar with the use of the drug and patients may ask that question. And after that question, oftentimes, more often, LEQEMBI is chosen as we are told.

There is also optimum clinical optimum treatment guideline in Japan. MMSE score is different.

29 and 30 in MMSE score, only LEQEMBI is possible to be used. So MCI and earlier more mild patients may come to seek treatment and only LEQEMBI can be given for MMSE score of 29 to 30 patients.

And regarding the frequency of visit, biweekly visit actually is felt as beneficial by patients and families. And there is also actual evidence that going out is beneficial for dementia patients.

But patients who have difficulty visiting clinics every 2 weeks, then from the beginning, LEQEMBI will not be selected. So we believe the impact on LEQEMBI sales is minuscule.

And as Mr. Naito CEO mentioned, April this year, we had ¥2 billion revenue or on a daily basis, close to ¥100 million sales.

That is the pace we started out this fiscal year. So we are very confident of achieving the number of ¥2 billion for Japan.

That's clear. Thank you.

Long-term administration, which is a strength is clearly understood by physicians and patients, I can see that. And is it correct to understand that you are steadily decreasing cost of sales?

Yes. If details are necessary, please touch a person responsible later -- or should that be responded to now?

Yes, we are making steady progress in reducing cost of sales. Please rest assured.

My name is Sakai from UBS Securities. Regarding the graph on page 23.

Honestly speaking ¥370 billion has been invested I'm surprised and I think there has been no other companies in Japan who make such a big investment. But during the time you have continued to run on stand-alone products in loss-making started and dragged down the business as a whole of the Eisai, and it has been affecting the valuation of the investors and stakeholders.

And that has affected this stock price and this is actually the image diagram. But for example in 5 to 10 years from today do you think that they will be able to obtain the return exceeding the amount that has been invested?

So could you please give us a take as CEO?

In the meantime, we have fully dedicated ourselves to be held accountable for what we have been doing, perhaps all of which have not been understood by the market or there may have been some over expectation and too high expectation may have been invited. And last year, we had to make a significant downward revision to the forecast, which was quite embarrassing for me.

And we haven't been able to gain a satisfactory confidence from the markets. We are very sorry for that.

But regarding the accountability or explaining to the market at every potential occasions we have made all our efforts in trying to explain. And what we have drawn here at the bottom these efforts required us to put a lot of resources under partnership model through collaboration with Biogen we have been able to achieve these globally.

But both of us in the dotted line for extension to achieve the balanced profit and loss and reaching the breakeven point in fiscal year 2026, we are committed to achieve that. Actually, in R&D expenses -- already in FY 2025, R&D expenses invested in LEQEMBI have already started to reduce and SG&A will probably peak out in FY 2025.

So the expenses, I'm sure will be reduced going forward. So we will be able to commit ourselves to achieving the breakeven point or turning this business into profitable business in FY 2026.

Thank you very much for your answer. And you are making in reforms in Europe.

So after getting approval and immediately after getting approval, you started the reform. I was not comfortable in hearing that.

And it is only symbolic with minimum you would like to achieve the contribution to profit. But you needed to negotiate for the reimbursement.

I don't think that the very price will be granted in Europe like you did in the United States. So having considered all these have been made that decision to do the structural reform.

Thank you for your question. In order to get reimbursement approval in each country in Europe at the longest it may take three years.

As I said earlier in Germany and Austria for the first six months the free pricing will be applied in launching. So we believe that in these two markets we will be able to launch first in Europe.

After that you needed to -- we needed to start negotiation of pricing and reimbursement. There are uncertainties in that.

And also there are somewhat geopolitical. Around the end of last week there was an announcement in the United States.

Looking at all these movements, we needed to manage well the development in Europe. For Lenvima in Europe as well, we believe that the phase that required us to invest a lot of our marketing power has ended.

So in that sense we would like to pursue optimization.

Understood. Thank you very much.

I'm Ueda from Goldman Sachs. Company-wide expenses and your plan for that is my question.

Going forward, research and development cost, you have shown slide earlier, which suggested peaking out of Alzheimer's disease spending, is it going to pick up this fiscal year? And you have also mentioned that SG&A may be peaking out and by optimizing sales organization without increasing expenses.

Do you expect to increase revenue and profit? It seems that optimization is underway for both aspects this fiscal year.

But what is the outlook going forward?

In fiscal 2026, ROE of 8% is the target. Operating profit level for that is more than -- around JPY83 billion or JPY85 billion, I believe that is the range of operating profit required.

Towards that we should make steady progress and we are on that trajectory.

Understood. Thank you.

This is Yamaguchi from Citi speaking. Can you hear me?

Yes, we can.

You, did not mention assumptions for the financial results, it will be difficult to set assumptions but what is your evaluation of the impact of ForEx rates?

Mr. Iike is going to respond.

Thank you very much for your question Mr. Yamaguchi.

The tariff policy of the United States is making headlines in use widely. As you know, the pharmaceutical industry has not been subject to tariff.

And in response to that is not yet still certain. So the guidance for fiscal year at 2025 has not incorporated the potential by tariff yet.

But in the United States mainly LEQEMBI and Lenvima, we are trying to control inventory and also improve the supply chain. We have been taking measures, so whatever measures we are able to take now.

And also in China and the US tariff retaliation is being discussed. In China, as well management of the inventory, as well as improvement of supply chain are being done, therefore, we do not think that there will be any impact by tariffs on China.

Thank you very much.

Thank you for taking my question I’m Muraoka from Morgan Stanley. About cost of sales in the budget for this fiscal year, I mentioned several reasons that sales cost ratio to increase.

But I'm not still fully convinced, Lenvima, Dayvigo onetime income. These are almost zero sales cost items that may see fluctuation in revenue.

But JPY15 billion increase in cost of sales, it appears only to be linked to LEQEMBI. So, my question is Eisai AI launch is scheduled.

And so dose is different, volume device is different, I felt looking at these numbers that this is affecting the cost of sales number. Is this wide off the mark?

Or is this close to the actual status?

I usually do not provide right on the mark answer, but the reason -- main reason is IRA, Inflation Reduction Act and Lenvima will be impacted by the increase in expense. And that is the reason of increase in cost of sales, the biggest reason.

The next is drug price provision and reduction of onetime income and change in product mix. These are factors equally impacting.

I hope this answer -- satisfies your question.

I'm sorry, I am persistent in asking about Lenvima IRA -- due to IRA increase in cost? Is it -- I thought this was a net sales.

So, it will be neutral or revenue may decline. But for cost, I think it's neutral.

Am I mistaken?

Then, Mr. Yasuno, can you answer or Mr.

Kosaka -- Mr. Kosaka will address the question.

Can you answer Mr. Kosaka.

I'm responsible for supply chain strategy. This is Kosaka speaking.

As for Lenvima, IRA impact insists in the United States. On the other hand, gross to net price, when we look at that in the end the sales cost ratio.

There is some reason.

I see. Thank you.

And I have a related question. This morning in Nikkei, there was a report about the US that DPI production of can may be partially transferred to the United States.

But I think the cost of that will be borne by Biogen and not by Eisai. That's my understanding.

Is that correct?

Mr. Kosaka once again will respond.

Thank you for your question. Once again, this is Kosaka speaking.

So your question is about expense or investment or investment and increase in manufacturing costs that can be held, but who is going to bear that cost? That is the question.

Thank you for the clarification. Drug substance site launch does not require investment.

Existing line will be used. And there is no increase in cost of sales with this launch of the new line.

I see. Thank you.

Hi, can you hear me?

Yes, we can hear you.

Okay, perfect. I also want to follow up on LEQEMBI.

I noticed the working capital, the inventory on LEQEMBI has increased a little bit. Just wanted to see if it's because of deliberate inventory planning for example inventory building ahead of the possible tariffs?

Or is it because of a weaker sales than you have anticipated? Thank you.

Regarding you question about the inventory, Mr. Shomon is going to respond.

Mr. Shomon or Mr.

Kosaka -- excuse me Mr. Kosaka is going to respond.

Thank you very much for your question. My name is Kosaka.

I'm going to answer your question. Regarding the inventory in biologics from production start until the completion, it takes longer time for production.

So, in order to prepare for the expected expansion of the demand, the production is ongoing steadily. For the medium to longer term, the cost in line with the expansion of the revenue, the secure management of inventory is expected.

Therefore there is no concern. Thank you for your question.

Thank you. I am Wada from SMBC Nikko Securities.

Can you hear me.

Yes, we can.

Thank you. I have a question from a very different perspective.

GLP-1 in obesity treatment may -- are used in a Phase III clinical trial for Alzheimer's disease. And is it plus or minus or neutral?

Novo Nordisk Ugo Alzheimer's Phase III study, I think is expected to be completed in September. Is this going to have a positive negative or neutral impact on the revenue and profit of LEQEMBI?

Could you also discuss positioning?

Mr. Ido, can you answer?

This is Ido responsible for DHBL. As you pointed out GLP-1

This is Ido speaking. I'm responsible for DHBL.

As you pointed out, GLP-1 AD study is underway. But currently, clear elucidation of biology is not obtained and the protofibril, this is the toxic species that is captured by our product.

And as such, understanding does not exist for GLP-1. So currently, we don't consider it to be a threat.

Mr. Hori [ph], would you like to add?

Yes, I'm responsible for translational. My name is Hori.

First looking at mechanism of action, it is completely different. There can be targets clearly toxic protofibril and there's a wealth of evidence of human biology has been confirmed.

And therefore, we consider that there will be absolutely no impact.

Thank you. The way it is used, Wegovy Phase 3, the standard of care such as LEQEMBI will be continued and Wegovy is added on top.

So basically, do you think that Wegovy will be used in combination?

This is not yet approved. So it is difficult to comment on that.

I see. Thank you.

Thank you very much. Regarding LEQEMBI, I have two questions.

My first question, earlier in January maintenance dosing, were approved. And infusion capacity was to be expanded as you have continued to mention.

And up until the end of April, has there been any impact of such efforts onto the revenue?

Mr. Haruna is going to respond.

Thank you very much for your question. I am in-charge of US business.

My name is Haruna. Let me respond.

At the end of January, IV maintenance treatment was approved. IV maintenance treatment is used by -- introduced by increasing number of medical institutions and HCPs and patients have now come to understand better the benefits of long-term administration or treatment of LEQEMBI.

And at the medical institutions where the maintenance therapy is being conducted, it's seen the increasing number of patients who initiate treatment. And as you pointed out the infusion chairs, I believe that the -- that issue or challenge has been resolved.

And the record high sales and shipment for the months of April was achieved as we mentioned earlier.

Thank you very much. Maybe this is a follow-up question for Mr.

Haruna. And the demand expansion phase, when involvement by PCPs is expected or with SCAI [ph], the PCPs will be able to prescribe, which may lead to the future further growth but according to market research or your discussion with PCPs in the field, you say that PCPs are going to start prescription of the SCAI or what kind of hurdles or challenges do they feel in doing that?

Haruna is going to respond.

In the demand expansion phase, PCP's involvement is considered to be very important. If I may share with you some examples, in the East of the United States, the largest IDN currently about 600 patients are being prescribed LEQEMBI.

And what is the reason for that? PCPs and neurologists are collaborating very closely.

Therefore, as a result, there has been increasing number of referrals and the time to referral is shortened -- being shortened. And therefore, that has led to the expansion of prescription.

Therefore, participation or involvement of PCPs is very important in the demand expansion phase. We believe that this is going to be the key factor.

As you said in your question, PCPs, if they are going to start the prescription of the LEQEMBI. Among PCPs, what is important for them is that they are not able to diagnose, particularly the testing on the Amyloid beta is not something easily done by themselves.

But BBM for confirmatory testing being potentially approved and reimbursed by the end of this fiscal year. And together with SC-AI, which will allow PCPs to start prescribing on themselves.

And LEQEMBI of Eisai has such a uniqueness, which is considered to make significant contribution to that. Based upon our market research, PCPs who think that they are willing to start the prescription of LEQEMBI.

And we mentioned that there are high potential, about 2,000 high potential PCPs today, but these are the physicians.

So how could you -- thank you very much for your answer. Could you please explain how you are identifying high potential PCPs?

Well, let me, Haruna continue to respond. I would like to refrain from disclosing details on the PCPs, high potential PCPs.

But based upon the claim data and diagnosis and triage for Amyloid beta is being done already. And there are a certain number of PCPs who are willing to be involved in the diagnosis and treatment and not only the quantity, but also the number of such PCPs.

BBM and cutting-edge treatment where they are willing to participate in those cutting-edge treatment, we have confirmed such high potential PCPs based upon the claims data. Now we'd like to open the floor for -- from the media people.

Please raise your hand if you have any questions.

My name is [indiscernible] from Nikkei. US market is quite uncertain.

And how do you plan to respond earlier regarding tariff, there was already a question and answer about reduction of drug price. How do you understand the impact from most favored nation?

And you've mentioned organizational reform in Europe. But depending on the situation in the US, as the management, is it possible to make a decision to focus more on Europe?

First, Mr. Yasuno will respond to that question.

Thank you for your question. I'm Yasuno responsible for Americas business.

As you are aware of, on Monday, President Trump signed executive order delivering most favored nation prescription drug pricing to American patients. President Trump signed that executive order.

Within 30 days, it is expected that the government will be communicating to pharmaceutical companies, the target price based on MFN, most favored nation. However, other than that, in what way for what products will the price be indicated?

What countries will be the reference countries, which will be in the scope, Medicare, Medicaid, commercial insurance? Once a target price is set, then in actual transaction, what level of price is going to be adjusted, specifics are quite uncertain.

Furthermore, it also says that there will be rules making, but how rules will be made is also quite uncertain. Furthermore, if this MFN is to be applied broadly, new legislation may be necessary and that would require approval by the Congress.

So given that situation, and currently, the LEQEMBI list price is at the same level in Europe, Asia and Japan as in the U.S. As for Lenvima, in the United States, under Medicare Part D, D as in dog, there is sales under the first Trump administration, but there was also an attempt for MFN, Medicare Part D was not included in the scope.

LEQEMBI and Lenvima also are used in very small part in Medicaid. In any event, we will -- through continuous engagement with the Trump administration, we would like to understand better the details of the program, and we will implement necessary measures.

Once the situation become clear or if impact becomes clear, when necessary, we will provide update. Turning to Europe.

I believe uncertainty is becoming greater. In Europe as well, after the announcement of the tariffs, EU is worried that industries in EU may be hollowed out and competition -- competitiveness may become weaker.

European policymakers, I believe, became most concerned about these. Industrial policies may be adopted in -- or positive industrial policies may start to be adopted in life industry.

I believe there are such potential signs. FPA industry association in Europe is taking such an approach to EU authorities or to member states.

In the midst of this, in the executive order, it also mentioned the need to increase price in EU, OECD GDP per capita drug spending, I forgot the details, but the ratio was mentioned. And it calls for increase in price in Europe.

Otherwise, it's a free ride situation on the U.S. and EU is enjoying innovation, taking a free ride.

How -- what responses will be taken, including by EU is what we are paying very close attention to. On the part of the industry in EU industry is seeking a change in industrial policy and is approaching the authorities.

My name is Shimoyama [ph], nonfiction writer. Could you please explain this in easy-to-understand manner?

LEQEMBI approval in the United States, accelerated approval was in January 2023. And since then, you have established a pathway and sales force.

And in September, approval was granted in Japan. So there was a time lead of 8 months between the U.S.

and Japan. Having said that, why the penetration of LEQEMBI treatment in the United States was slower than that in Japan.

Could you please explain in easy-to-understand manner?

Mr. Shimoyama thank you for your question.

Accelerated approval and the traditional approval are different in terms of the scope of activities which are allowed. Therefore, many medical institutions under the accelerated approval, passage of the drug through the formulary cannot be done.

Therefore, investment resources in order to establish pathway was not also possible under the accelerated approval. ADUHELM was -- which was a predecessor to LEQEMBI was an example.

And therefore, there was a concern that such example may be reproduced. So, pathway establishment was started on a full-fledged manner was after the full approval was obtained in July.

And as you know, in the United States, the health systems or medical services are very different from a state to another. Florida, California or Midwest have very different systems.

Therefore uniform pathway model cannot be applicable. For example infusion can be done at some in-house chain or ambulatory infusion center or outside dedicated infusion sites may be utilized by other medical institutions.

Therefore when it comes to establishing the pathway, the style of pathway can be very different from one to another and based upon the situation in each area. Therefore it might have been a very challenging task.

But as has been mentioned earlier, currently over 500 patients are being treated or diagnosed and treated by an IDN or hospital groups, but actually there are many other such examples where a pathway has been established. Therefore we have a very promising prospect.

And when we can have PCPs getting involved in other diseases for example DM, diabetes mellitus, with the introduction of the blood-based testing and diagnosis, PCPs started to be engaged in the treatment very rapidly. So, such situation is about to come for AD.

I have another question about E2086. I think this is what you are repeating what you experienced in the selecting the compound from the library of 250,000 compounds and 10,000 times more potency.

But compared to 1980s and 2020s today, what is different? Or do you think that in principle, similar?

In the days of Mr. Sugimoto, I could feel that they relied on intuition.

But I think that rather than intuition alone, do you think that there are other methods that you could apply in 2020?

Mr. Ido, I will talk about that intuition thing later, but -- thank you very much.

My name is Ito. I am in charge of DHBL.

Let me respond. As we mentioned, through high throughput screening, very interesting thing, which was not mentioned.

The -- our essence of the medicinal chemistry was embodied and materialized into this project. And in the process, we combined characteristic unique screening combination with AI was also applied a lot, particularly when it comes to sleep platform.

In the development of Lemborexant, we established that platform. The brain wave analysis required a lot of manpower.

Therefore, it was not available readily for screenings, but in-house work was done within -- in combining this technology with AI and the chemists as well, this 3D complex structure, the asymmetric points were hopped at dozens or hundreds of positions or sites. Through these complex processes, we were able to find this final compound, in which we have a lot of pride or confidence in.

I think this is the same in the days of Mr. Sugimoto and Aricept, he was the one who was very lucky.

So -- so, what kind of person will be able to receive such a fortunate moment? I think that Mr.

Shimoyama, you have written that in your books. I would like to ask you to write another book, featuring on that point.

Through days and nights, scientists are always making efforts, but there are some scientists who can encounter happy moments or luck, while others never have such luck. I have been thinking about what kind of scientists would have such fortune.

Over the past 30 years, and the collective knowledge held by the group led by Mr. Sugimoto, that kind of collective knowledge, consisting of individual knowledge.

The level of collective knowledge is high with such a group -- I think that such serendipity or fortunate moments may come. In this kind of hope, strong leaders may be available, but the entire group may be motivated very highly.

So, I hope that Susumu Shimoyama's next new book may utilize this as a hint, for what type of scientists' serendipity may come. Yes, I will keep watching it.

Thank you.