Thank you very much for your attendance in this fiscal 2025 earnings call by Astellas Inc. I am Kato, Chief Communications and IR Officer.

I would like to serve as a moderator for today. Following our presentation today, we will move on to the Q&A session.

The presentation will be based on the presentation materials available on our website. Simultaneous interpretation in Japanese and English will be provided throughout the event, including the Q&A session.

Please note that we cannot guarantee the accuracy of it. You can select your preferred language from the menu at the top of the Zoom webinar screen.

If you select the original language, you will be able to listen to the audio in the original language without simultaneous interpretation. This is some note from us.

This material, oral presentation, and answers and the statement in the Q&A session includes the forward-looking statements based on assumptions and beliefs in light of the information currently available to management and subject to significant risks and uncertainties. Actual financial results may differ materially depending on a number of factors.

They contain information of pharmaceuticals, including compounds under development, but this information is not intended to make any advertisements nor provide medical advice of any kind. Now let me introduce you the participants from Astellas here today: Naoki Okamura, President and CEO; Clinical Research and Development Officer, Tadaaki Taniguchi; Chief Commercial and Medical Affairs Officer, Claus Zieler; CFO, Atsushi Kitamura.

These four are attending in this meeting. Now we would like to start the presentation.

Okamura-san, the floor is yours.

Hello, everyone. I am Naoki Okamura from Astellas Pharma Inc.

Thank you very much for joining our FY2025 financial results announcement meeting out of a very busy schedule today. This is a cautionary statement regarding forward-looking information.

As this was explained by Kato earlier, I'm not going to read this page. Page 3 is the agenda for today.

First, I start with FY2025 financial results. On page 4, I will give you an overview of FY2025 results.

Revenue reached over ¥2.1 trillion and core operating profit exceeded ¥550 billion, both achieved record-high results. Significant growth of strategic brands by over ¥140 billion year-on-year has driven double-digit revenue growth.

As for SG&A expenses, thanks to the robust progress of what we call SMT, sustainable margin transformation, our company-wide cost optimization initiative, SG&A ratio improved by 2.3 percentage points year-on-year. Driven by strategic brands growth and robust cost management through SMT, core operating profit rose significantly, up by 42% year-on-year.

Core operating profit margin increased by 5.5 percentage points year-on-year to reach 26%. Our pipeline also progressed substantially.

PADCEV made a significant progress in MIBC, muscle-invasive bladder cancer, development. Following POC achievement by zeteletinib in PDAC, pancreatic ductal adenocarcinoma, in FY2024, a total of three POCs were achieved in FY2025, namely zeteletinib for NSCLC, ASP2138, and ASP7317.

For zeteletinib, Phase 3 study was initiated for PDAC in the first-line settings. Promising external assets ASP546C and VR5500 were licensed in, and our pipeline expansion made progress.

On page 5, I will explain FY2025 financial results. Across revenue, core operating profit, and full operating profit, we broke records to hit all-time highs since the founding of Astellas.

Let me explain main items. Revenue exceeded the ¥2 trillion mark for the first time to reach ¥2,139.2 billion, up by 11.9% year-on-year, achieving a double-digit growth for two consecutive years.

Core operating profit substantially exceeded the ¥500 billion mark to reach ¥555.7 billion, significantly increasing by 41.6% year-on-year. The bottom half of this page shows full-basis results.

Operating profit was ¥382.6 billion and profit was ¥291.6 billion, both rose significantly year-on-year. On page 6, I will explain FY2025 financial results of our main brands.

Sales of all brands increased across the board, with strategic brand sales combined strongly growing by over ¥140 billion in total year-on-year. First, sales of five strategic brands, namely PADCEV, IZERVAY, VEOZAH, VYLOY, and XOSPATA, reached ¥480 billion in total, substantially up by ¥143.9 billion or 43% year-on-year.

PADCEV and VYLOY, in particular, drove the strong growth, increasing by more than ¥50 billion, respectively. Strategic brands have high profitability, and their growth made a great contribution to the FY2025 consolidated revenue and profit increase as a whole.

Next, I will explain individual strategic brands and XTANDI. PADCEV sales increased to ¥221.2 billion, up by ¥57.1 billion or 35% year-on-year.

Global sales growth was driven by strong first-line mUC penetration continuously. Sales expanded in all regions.

In addition, early momentum for cis-ineligible MIBC approved in November last year in the United States also contributed greatly to sales expansion. As for IZERVAY, sales rose to ¥77.6 billion, up by ¥19.3 billion or 33% year-on-year.

New patient starts, which are important metrics, steadily increased. In the recent fourth quarter between January and March, demand grew more than 10% quarter-on-quarter.

Treatment rate for complement inhibitors as a whole, including the competitor's product, rose to about 20%. Market penetration made steady progress.

With regards to VYLOY, sales reached ¥63.1 billion, substantially up by ¥50.9 billion year-on-year, significantly exceeding our initial expectations. Market penetration progressed extremely well across all regions.

High Claudin 18.2 testing rates contributed greatly to strong performance. VEOZAH and XOSPATA sales rose steadily, respectively.

XTANDI sales increased to ¥960.8 billion, up by ¥48.5 billion or 5% year-on-year, reaching projected peak sales levels 13 years after launch. Page 7 is about cost items.

With SMT initiative, we realized cost optimization of about ¥25 billion in FY2025 for SG&A expenses, R&D expenditure, and cost of sales combined. Partly due to the SMT effect, excluding US XTANDI co-promotion fees, SG&A cost ratio improved by 2.3 percentage points year-on-year.

Let me explain a specific breakdown of SG&A cost and R&D expenditure. SG&A expenses excluding forex impact rose by 2.6% year-on-year.

While we increased our revenue by more than 10%, we are able to manage SG&A expenses at the level almost similar to the previous year. Investment toward further growth of strategic brands was increased by about ¥10 billion year-on-year.

On the other hand, as an SMT progress, we realized cost optimization of about ¥11 billion through steady progress in continuous global organizational restructuring, reduction of mature products-related expenses, and streamlining IT infrastructures, etc. As a result, while fully executing investments for strategic brands, we were able to offset the increase through SMT cost optimization according to assessment.

R&D expenditure excluding forex impact decreased by 3.8% year-on-year. While clinical development costs for pipeline such as zeteletinib and ASP546C increased by about ¥5 billion, we made progress in outsourcing cost reduction through insourcing development capabilities including clinical trials, etc.

under SMT, which led to cost optimization of about ¥10 billion, we were able to fully offset the cost increase factors. In addition, with the completion of large clinical studies, development costs for strategic brands decreased by about ¥5 billion.

Page 8 shows life cycle management of strategic brands. Let me explain main achievements in FY2025.

Updates since the last financial results announcement are shown in blue, including the achievements in April 2026. Strong development progress was made toward maximization of our strategic brands' value, notably for PADCEV.

I will explain the latest status of PADCEV on the next page. Regarding VEOZAH, in Phase 2 study in China, primary endpoint was met in April this year.

Based on the study results, we are planning to file a submission in China. On page 9, I will explain the latest status of PADCEV development in MIBC.

In addition to development in the perioperative settings we have worked on so far, we also started development for bladder-sparing MIBC to potentially maximize PADCEV's impact. As for cis-eligible MIBC shown on the left, we presented the latest data from EV-304 study at ASCO GU in February.

As is shown in the figure, perioperative PADCEV and pembrolizumab significantly improved EFS, event-free survival, a primary endpoint, compared to neoadjuvant chemotherapy. Also, OS, overall survival, and pCR, pathological complete response, improved significantly as well.

Based on the study results, we took procedures for an additional indication globally. Regulatory applications were accepted in Europe in March, in the United States in April this year.

In US, we were granted Priority Review designation with PDUFA date set for the 17th of August 2026. Next, let me explain the right-hand side, development for bladder-sparing MIBC as an opportunity to further growth.

It is known that about 30% of MIBC patients are ineligible for or refuse radical cystectomy, or RC. These patients will not be eligible for EV-303 or EV-304 studies.

There are high unmet medical needs for treatment option that delays or avoids RC and preserves the bladder. Based on the extremely favorable data obtained consistently from clinical studies in MIBC by now, we initiated development of PADCEV for bladder-sparing MIBC.

EV-209 is a single-arm Phase 2 study initiated in April. The study enrolls MIBC patients who are eligible for but select not to undergo RC to evaluate the efficacy and safety of PADCEV and pembrolizumab combination.

PADCEV is administered in nine cycles, the same duration of treatment with MIBC studies so far. Primary endpoint are clinical complete response, CCR, and bladder-intact event-free survival, BI-EFS, at 2 years.

In addition, EV-309, as a registrational Phase 3 study, is under preparation in parallel. We are planning to start this study in the first half of FY2026.

Also, in China, regulatory application is under preparation based on EV-303 and EV-304 studies. Bladder-sparing treatment and China are not factored into our current peak sales forecast for PADCEV, if successful, there can be further upside potential.

On page 10, regarding focus area approach, I will explain main achievements in FY2025. Achievements made in April 2026 are also included in here.

Over the past 1 year, our pipeline made a significant progress and expansion, with three POCs achieved, one Phase 3 study initiated, three clinical entries, and two promising external assets in-licensed. ASP2138 in immuno-oncology achieved POC in gastric and GEJ, gastroesophageal junction adenocarcinoma.

Preparation is now underway for rapid initiation of Phase 3 study. Furthermore, as a follow-on program, we licensed in VR5500 from Vir Biotechnology.

ASP2998 made clinical entry to expand our portfolio. Zeteletinib in TPD, targeted protein degradation, achieved multiple important progresses.

In PDAC, where POC was achieved at the end of FY2024, Phase 3 study was initiated in the first-line settings. Furthermore, POC was achieved also in NSCLC.

Phase 3 study is now under preparation. In addition, ASP5834, a pan-KRAS degrader, also made the clinical entry.

Pipeline expansion is making steady progress. As for AT845 in genetic regulation, additional analysis is ongoing for POC judgment.

ASP2957 also made the clinical entry. New programs, including ASP2998 in immuno-oncology, will be explained in detail on the next page.

ASP7317 in blindness and regeneration achieved POC in patients with severe vision impairment due to GA, geographic atrophy. The next study plan is now under discussion with the regulatory authorities.

Also, we licensed in ASP546C from Evopoint to further solidify our leadership position in the Claudin 18.2 space. On page 11, I will explain new clinical programs.

Next-generation innovative programs have advanced into clinical development. ASP2998 is a program which leverages a platform called immunostimulatory ADC, or ISAC, generated from joint research with Sutro.

Trop2-directed monoclonal antibody is conjugated with two payloads: cytotoxic topoisomerase 1 inhibitor and immunomodulator STING agonist. In non-clinical studies in mouse model, superior efficacy was demonstrated versus the existing Trop2-directed ADCs.

From now on, efficacy and safety will be confirmed in human in clinical studies. ASP2957 has been created as a gene therapy for XLMTM, X-linked myotubular myopathy, like AT132.

It uses a novel muscle-targeted AAV capsid. High muscle specificity and reduced liver targeting was demonstrated in non-clinical studies.

This enables clinical study initiation at a dose level about 100-fold lower compared to AT132. With the progress of ASP2957, we decided on a strategic halt for AT132.

Moving forward, we will focus on the development of ASP2957 as a gene therapy for XLMTM. ASP2246 is a program to aim for recovery from motor dysfunction associated with ischemic stroke by using an approach called direct reprogramming.

Messenger RNA encoding human NeuroD1 is encapsulated in novel LNP, lipid nanoparticles, to enhance efficiency of delivery into cells. Messenger RNA encoding human NeuroD1 promotes conversion of brain astrocytes into neurons and induces neuronal regeneration.

In a non-clinical study using a monkey model, improved motor dysfunction was demonstrated with intracerebral infusion of ASP2246. Phase 1/2 study enrollment has been initiated by now.

FSD, first subject dosed, is anticipated for the first quarter of FY2026. You can find non-clinical study data of these programs summarized on page 37 in the appendix, please refer to it.

From here, I will explain FY2026 outlook. On page 13, I will explain an overview of FY2026 outlook.

In FY2026, our performance is forecasted to reach record-high results. Revenue is expected to expand over ¥2.2 trillion, driven by growth of strategic brands by over ¥130 billion year-on-year, according to forecast.

Due to this significant growth, we are expecting a revenue increase. Regarding cost items, we will continue SMT initiative to achieve about ¥40 billion cost optimization.

SG&A ratio is expected to improve by 2.3 percentage points year-on-year. We plan to increase investment in R&D in line with the growing number of new Phase 3 trials.

Core OP is expected to increase by 12% to over ¥600 billion, and the core OP margin is projected to rise to 27.9%. In our pipeline regarding PADCEV for MIBC, we plan to conduct multiple filings and regulatory decisions, as well as initiate new Phase 3 trials.

We also plan to initiate the Phase 3 trials for zeteletinib and ASP2138. Regarding shareholder returns, we forecast dividend per share at ¥80, up ¥2.

On page 14, I will explain the full-year forecast for FY2026. For FY2026, we anticipate revenue of over ¥2.2 trillion and a core OP of over ¥600 billion, surpassing the record high achieved in FY2025.

First, for forex rates, we are assuming ¥150 to US dollar and ¥180 to euro for FY2026. We forecast revenue of ¥2.22 trillion, an increase of ¥80.8 billion year-on-year.

Although we anticipate a decline in sales of XTANDI, we expect to secure overall revenue growth driven by a strong performance of strategic brands. We forecast SG&A expenses of ¥800 billion, down ¥60.3 billion year-on-year.

Of this amount, XTANDI co-promotion expenses in the US are expected to decrease in line with the decline in its US sales. Excluding co-promotion expenses, SG&A is projected to be ¥584 billion, down ¥28.1 billion year-on-year.

The cost optimization through SMT is estimated to about ¥40 billion. The majority of this relates to SG&A optimization and is expected to contribute to the reduction in SG&A.

R&D expenses are projected to be ¥355 billion, up ¥42.2 billion year-on-year. This increase is primarily due to the higher clinical development costs, including initiation of Phase 3 studies.

To further solidify our mid- to long-term growth, we will accelerate investment in promising pipeline candidates such as zeteletinib, ASP2138, ASP546C, and VR5500, in addition to the life cycle management of PADCEV and VYLOY. As development progress, we expect to continue investing at this level or higher.

As a result, the forecast is core OP of ¥620 billion, up ¥64.3 billion year-on-year, representing double-digit growth of 12%. We anticipate the growth in strategic brands and cost optimization through SMT will contribute significantly to this profit increase.

We expect the core OP margin to be 27.9%, up 2 percentage points year-on-year. Next is full-basis operating profit.

As a major adjustment item excluded from the core basis, we anticipate amortization of intangible assets of about ¥140 billion. Additionally, we have factored in about ¥80 billion in other expenses.

This includes impairment loss risks of about ¥40 billion and the costs associated with organizational restructuring. As a result, we forecast operating profit of ¥395 billion, an increase of ¥12.4 billion year-on-year.

Page 15, the explanation, the outlook for our main brands of FY2026. The strategic brands will continue to drive growth in consolidated revenue and profit, with particular contributions expected from PADCEV, IZERVAY, and VYLOY.

We anticipate double-digit growth for each of these brands, with total sales expected to exceed the ¥600 billion mark and reaching ¥610 billion, year-on-year increase of about ¥130 billion or 27%. PADCEV, we expect continued strong growth driven by a further market penetration of first-line mUC.

In particular, we anticipate growth in the EU where reimbursement is progressing. In the US, in addition to the full-year contribution from cisplatin-ineligible MIBC, we anticipate sales contributions from the cisplatin-eligible MIBC indication for which the filing was recently accepted starting during the current fiscal year.

IZERVAY is expected to see steady sales growth building on the sales infrastructure expanded last fiscal year. We will further strengthen promotional activities and through DTC initiatives.

We will aim to expand the complement inhibitor market and increase the number of new patients. VYLOY, we anticipate continued solid growth across all regions driven by further increase in testing rates and expansion of the patient base and market share.

We expect steady growth for both VEOZAH and XOSPATA. XTANDI, the negative impact of price reduction associated with the IRA, which takes effect in January 2027 in the US, is expected to become apparent starting in the fourth quarter.

In addition, combined with the impact of patent expiration in certain countries, global sales expected to decrease by about ¥50 billion year-on-year. Please note that starting in fiscal year 2026, we have discontinued the disclosure of sales forecasts for individual products.

We believe it is important to grow our five strategic brands as one whole, and we hope to engage in dialogue focused on that mid- to long-term growth trajectory rather than being preoccupied with short-term fluctuations in individual products. Regarding XTANDI and mirabegron, we anticipate that they will be significantly affected by external factors such as patent situations in the future.

As an exception, we are disclosing their sales forecasts for your better understanding of our assumptions and outlook going forward. Through timely and appropriate information disclosure and communication, we will continue to strive to enhance our mid- to long-term corporate value by engaging in constructive dialogue with investors.

Page 16, about the life cycle management of the strategic brands, I will explain the major events expected in FY2026. We're expecting multiple regulatory events across strategic brands.

For PADCEV, we expect regulatory decisions on the EU and Japanese filing based on EV-303 study for cisplatin-ineligible MIBC in the first and second halves of the fiscal year, respectively. In addition, we expect Japanese filing based on the EV-304 study for cisplatin-eligible MIBC in the first quarter, with regulatory decisions for the US and EU submissions anticipated in the second quarter and the second half of the fiscal year, respectively.

Furthermore, we plan to file in China based on both the EV-303 and 304 studies in the first quarter. We also plan to initiate the Phase 3 EV-309 study for bladder-sparing therapy in the first half of the fiscal year.

IZERVAY, we plan to file in China in the first quarter. There are currently no approved treatments in China for geographic atrophy, a serious condition, and following constructive discussions with the authorities, we plan to file based on data from overseas clinical trials.

VEOZAH, we expect study data readout from the STARLIGHT 3 trial, which evaluates long-term safety in Japanese women, to become available in the first quarter, and we plan to file in Japan in the second quarter based on those results. We also plan to file in China in the third quarter.

On page 17, this is an outline of the key pipeline events expected in FY2026. We plan to initiate Phase 3 trials for ASP2138 in first-line gastric cancer and for zeteletinib in second-line or later non-small cell lung cancer in the first half of the fiscal year.

We are also considering announcing additional data for each of these studies within the current fiscal year. Details will be provided once announcements are officially confirmed.

Although this is an event that has already been achieved, we initiated a global Phase 1b/2 study of ASP546C led by Astellas in April. ASP7317, we will present additional data from Phase 1b trial at ARVO, Association for Research in Vision and Ophthalmology, in May.

For AT845, we are currently conducting additional analysis for POC judgment and expect to reach a decision in the first half of the fiscal year. Finally, I would like to review Corporate Strategic Plan for CSP2021.

On page 19, I will explain the transformation of our organizational culture and operating model that we undertook during the CSP2021 period. As on a foundation to continuously generate innovations, we have implemented various initiatives related to human resources and organizational structure and have embedded them across the company.

In fostering organizational culture, we established organizational health goals at the start of the CSP2021 and advancing efforts company-wide. As reported in previous sustainability meetings, we have achieved many results directly linked to our business over the past fiscal years, past 5 years, excuse me.

Furthermore, in April 2025, we simplified and consolidated our culture foundation to define organizational values and behavior. By ensuring that every employee acts based on a clear, shared understanding, we aim to strengthen collaboration and create and deliver greater value to patients more quickly.

We have also significantly transformed our operating models. Under the new structure launched in April 2025, we shifted the top-level management focus from region or function to a patient access and introduced an end-to-end business model.

With empowering cross-functional teams organized around programs and brands and strongly promoting agile ways of working, we have enabled clear and rapid decision-making, thereby improving productivity and efficiency. Page 20, the review of performance goals in CSP2021.

Overall, we believe we have succeeded in establishing a foundation to overcome XTANDI exclusivity and deliver sustainable growth beyond it, which was our original objective. Regarding Performance Goal 1, revenue, thanks to newly launched products such as VEOZAH, IZERVAY, VYLOY, and acceleration of life cycle management centered on PADCEV, the total sales of the strategic brands and XTANDI exceeded ¥1.4 trillion.

Performance Goal 2, pipeline value, we faced a situation where programs already underway at the start of CSP2021 did not progress as anticipated. However, as explained at the R&D Day in March, we thoroughly focused on our strengths and discipline, improving productivity through the transformation of our R&D organization, and by accelerating the development of priority programs, we achieved significant progress and expansion of the pipeline, including the achievement of a total of four POC.

About Performance Goal 3, core operating margin, while we made investments associated with the launch of multiple new products, the SMT initiative progressed well, achieving cumulative cost optimization of ¥65 billion over 2 years. As a result, the core OP margin for FY2025 reached 26%, up 4 percentage points compared to FY2020.

Page 21, to ensure the reliable execution of CSP2021, we set three enterprise priorities closely linked to our performance goals and launched full-scale implementation in FY2024. Growth strategy aims to maximize the potential of strategic brands.

Bold ambition aims to increase pipeline value, and sustainable margin transformation aims for company-wide cost optimization. The following slides will explain the results of each.

Page 22, I will explain the result of maximizing the potential of strategic brands. In addition to PADCEV and XOSPATA, which were already on the market at the start of CSP2021, we successfully launched VEOZAH, IZERVAY, and VYLOY during the period of CSP2021, establishing a diverse, high-margin portfolio of strategic brands.

Furthermore, we obtained approvals for PADCEV as first-line treatment for mUC and for the additional indication of MIBC, which serve as key growth drivers, thereby further strengthening our growth foundation. As a result, our strategic brands expanded robustly, achieving a remarkable growth of 10-fold over 5 years.

Since the majority of strategic brands are fully owned and high-margin brands, they have strongly elevated Astellas' overall revenue and profit growth during the CSP2021 period. The solid track record built over the past 5 years has further increased the certainty over our future growth.

We will carry this growth momentum forward into the next corporate strategic plan. On page 23, I will explain the increase of pipeline value.

We accelerated the development of flagship programs in each Primary Focus area and achieved four POC from three assets. Furthermore, we strategically and systematically generated follow-on programs and incorporated external innovation based on our Focus Area Approach, thereby expanding our pipeline.

As a result, we have established franchises in multiple therapeutic areas, such as prostate cancer, Claudin 18.2-targeted therapies, and retinal diseases, where we have cultivated strength through the development and sales of main products, thereby building a foundation for sustainable growth. Page 24, I will explain the outcome of the SMT.

Since launching the SMT in FY2024, we have achieved cumulative cost optimization of ¥65 billion over 2 years. Furthermore, cost optimization measures for FY2026 and 2027 have already been identified, and we are now at the stage of ensuring their reliable execution.

We are fully on track to achieve total cost optimization target of ¥150 billion. In addition, the SG&A ratio improved by a total of more than 5 percentage points over the 2-year period from FY2024 to 2025, and we are gaining clear traction toward improving profitability.

Moving forward, we will continue to advance cost optimization through SMT to establish a highly profitable financial structure. Page 25, I will explain the revenue and core OP growth over CSP2021 period.

Revenue expanded 1.7-fold over the 5 years, driven by the strong growth of strategic brands. Core OP expanded 2.2-fold over 5 years, driven not only by the revenue growth, but also by significant contributions from cost optimization through SMT starting in FY2024.

The core OP margin also improved significantly. Page 26, today's key takeaways.

Our strategic brands delivered exceptional growth, raising confidence for future expansion. Furthermore, we have established a robust pipeline and built foundation towards post-XTANDI loss of exclusivity growth.

Additionally, through SMT cost optimization, we have made significant progress toward a resilient cost structure. Over the 5-year period of CSP2021, we are now fully prepared to overcome the XTANDI's loss of exclusivity and to continue to grow.

In our next corporate strategic plan, we aim to demonstrate how we will achieve sustainable growth by building on the foundation we have established to date. At the end, I would like to remind you of the briefing session for CSP2026.

It will be held on May 26, and we hope you will be able to attend. That concludes my presentation.

Thank you for your attention.

That's all as our presentation. We now would like to entertain questions from the audience.

If you have questions, please press the raise hand button at the bottom of your Zoom screen. If you're joining from your smartphone, please tap details, then raise hand will be shown, please press raise hand.

I will name you one by one. If your name is called, please unmute yourself on your own screen, mention your name and affiliation, and ask questions.

That as many people as possible can ask questions, each person can ask up to two questions. Thank you very much for your understanding and cooperation.

We'd like to take questions. First, Citigroup Securities, Mr.

Yamaguchi, please.

Yamaguchi from Citigroup. Can you hear me?

Yes, we can hear you. Thank you very much.

Hello. Thank you.

Thank you very much. My first question is as follows.

As you explained during your presentation for strategic brands, in particular, you would share some forecast for some of the products, but not for strategic brands. External parties cannot see the forecast.

It may be seen as restating, but what are you going to do about the individual trends of each product? The disclosure of individual product information is not going to happen.

What's the reason why? Could you explain once again?

The results will be explained for each product as we have been doing up until now. In the process of the growth of new products, there are uncertainties for each product.

There is an increase or decrease for individual products. Focusing on such a fluctuation is not very constructive in our view.

Based on that, what kind of action we are going to take, and how that's going to be reflected onto the actual results, that's something we want analysts and investors to see. This product is expected to have this much revenue or sales in this particular region, rather than having such discussions, what you are hoping to discuss are the situation of five strategic brands as a whole.

In the mid- to long-term, we are going to capture the development and the growth of the products. It may not be the right expression, but you can demonstrate your capabilities, I'm looking forward to future interaction.

Once again, on the May 26 at 4:00 PM, you're going to explain the next CSP. You're not going to talk about individual products very much.

Between 4:00 and 5:30 PM, are you going to share the presentation materials on the same day or the previous day? It will change how we can prepare.

After the closure of the market, we are preparing to disclose the documents after the close of the market, like at 3:00, like today.

Thank you very much.

Next, JPMorgan Securities, Mr. Wakao, please.

Wakao from JPMorgan speaking. Thank you very much.

I have a question about XTANDI and the five strategic brands, the results in the fourth quarter and also the outlook for the current fiscal year. As for XTANDI, you can just talk about the actual results.

Fourth quarter was a little bit weak in the United States. I'd like to know why.

Five strategic brands, PADCEV was doing very well. What's going to happen this year, particularly in MIBC?

How we should look at the situation? I'd like to hear your view.

IZERVAY as well, the plan was not achieved, but in principle, it's going to grow continuously in the current fiscal year. I'd like to know more details.

Thank you very much.

Thank you very much. Thank you.

I make summarized comments briefly, and because Claus is here, the rest is going to be explained by him. As has been mentioned, XTANDI, in the first quarter, the business is a bit weak, and we did our own analysis, and of course, the countermeasures for that plan to be executed.

As for XTANDI, in 2027 January, in line with IRA, the price is going to be revised. In the history of XTANDI, it's going to be the year of the reduction, and that impact was already explained within my presentation.

Just like you mentioned, in FY2025, the track record is that PADCEV and VYLOY, monetary value-wise, their growth level is outstanding. VYLOY, that was just launched in the market, growth rate is over our expectation.

What is going to happen in FY2026? We are not going to share with the individual products' situation, I don't know if it is right to talk about it.

However, for PADCEV, for the first-line, other than the United States is going to grow further, and the US market, as a trigger for MIBC market as well, we expect that the sales is going to contribute. IZERVAY as well, 2025 is a little bit on the resting situation.

However, in this a couple of months, looking at the track record of that period, still there is a room of the growth. That's why we didn't revise our sales forecast.

It has to grow further. We are having such a very expectation.

Claus, do you have any additional comment?

Maybe just briefly to the three brands you asked about: XTANDI, PADCEV, and IZERVAY. I think the fourth quarter is indeed a little bit weaker, but we see the entire market being weaker in the ARPI.

I think it's probably a mix of a market effect and turbulent competitive and market dynamics for XTANDI in that particular quarter. We've grown very, very well over the year, and we've now reached the peak sales for XTANDI, I think that's a very strong contribution to our growth rate.

Let me turn to PADCEV, cuz PADCEV, I think we need to distinguish between US growth, where we have the 303, the cis-ineligible MIBC indication already approved. On approval, as always with PADCEV, we see the market responding very, very quickly and uptake goes up.

However, please let me also remind you that uptake usually plateaus after about 6 months. We're expecting that also to happen.

US growth is very strong right now, but we do expect the plateau to come in end of Q1 or Q2. Whereas Europe and the other ex-US countries do not have MIBC in any noticeable fashion in FY2026.

Here we expect a strong growth to be driven by reimbursements coming through on the first-line metastatic indication. You get a very different dynamic in the two parts of the world, but overall, I think PADCEV will continue its strong growth trajectory.

Now let me talk about IZERVAY. You do remember about a year ago when the foundation funding dried up, the new patient starts for the entire market, both in geographic atrophy, but also in wet AMD, went down significantly.

It has affected sort of the base from which we have regrown, as Naoki said. We have regrown from that lower base since then, but we've done it in a very consistent and very successful fashion.

It's about 11% quarter-on-quarter that we've grown since that rebasing. I also would like to draw the comparison to other products in the intravitreal space.

If you look at, let's say, EYLEA, Vabysmo, Syfovre, they've actually all decreased in sales. EYLEA by 27%, Vabysmo by 10%, Syfovre by 4%, and we actually have grown more than 30%.

I think in a very difficult market environment, IZERVAY has really produced a very, very impressive performance of consistently growing from that lower base. We do expect that to continue as the complement inhibitor class also grows.

Thank you very much for the details. As a follow-up, MIBC has a good market penetration, but it could reach a plateau quickly.

That's understandable. As for 304 to get the approval, a similar thing can happen.

Is that factored into the forecast if the uptake is so fast? Overall, there can be a further increase by PADCEV.

We do expect the 304 approval by the PDUFA date, as stated previously. That would indeed then produce another uplift on PADCEV.

Thank you very much. My second question.

In the past 5 years, XTANDI cliff is to be exceeded, and you have a platform to increase your product. You have improved pipeline as well.

I have a question to you: large-sized M&A possibility, how much leverage are you going to use? I think that's in the appendix, but in principle, according to the pipeline which is shared with us, you would exceed XTANDI cliff to grow.

Is that your assumption? Is my understanding correct?

Depending on the status of the products under development, you may need an M&A deal as a base case scenario. You would use your own pipeline to grow.

Can I understand that way?

Thank you for your question. Up until now, as we said a few times by now, this is an illustrative XTANDI figure.

XTANDI will decline, strategic products will increase, we would have programs from Focus Area Approach to be added in a chart like this. In 2026, a peak is expected for sales.

Then we have during the course of CSP2026, revenue may decline, and then we go back to a growth trend once again. Your view and our view may not be so different.

Then if there's going to be a dip, a large M&A deal is going to be used to prevent the dip, to minimize the dip, or to make it flat? If that's your question, we are not going to do such an M&A.

That's my response. This is the so-called rescue BD to rescue us from the dip or decline.

We have no intention to do such a thing because such a deal would have a increasing price because everybody wants such an asset or transaction. After we get something, if there is a small room for us to get the value, it's not going to very good cash flow for deal.

This is just the exchange for cash. There aren't many elements to force us to do something like this.

If we don't do a rescue deal, then are we going to pause BD? You may interpret that way in an extreme fashion, but as we have been doing before, our franchises and the existing primary focuses to be reinforced by technologies and attractive assets, we are going to pursue such opportunities very actively.

Everybody talks about M&A very easily, but in the world of pharma, sharing the risks with the owners, there are many ways to do so. Back-end licensing agreement is one way, or milestone payments to be linked with regulatory outcome.

By doing so, a huge amount of payment is made at the beginning, but nothing happens. We can prevent such a situation.

Of course, we are making such efforts. Still, having said so, how attractive our pipeline is right now, because of this world, failures could occur.

So 2030 and beyond, the growth we want to achieve could not be envisioned. In that case, we should be able to use flexibility.

Under Kitamura, we try to repay the debts as soon as possible. Gross leverage ratio, EBITDA one time up to 1.5 times, as we declared, we think we're already sufficiently within this range.

If necessary, large-size BD can be done because we have such extra financial capabilities. EBITDA is growing bigger than before, the money we earn would be returned to shareholders partially, but also we'd like to make R&D investments for future growth.

Also, various investments will be made by using such a money. For the details, on the 26th of May, we will announce CSP2026.

We will try to talk about our plan as much as possible, and you can ask further questions during that meeting. That's all the information I can share today.

Thank you very much. That's all.

Thank you.

Next, UBS Securities, Seki-san, please. UBS

Seki is my name. Thank you very much for your explanation.

First question is about dividend. This time, ¥80 increased with ¥2.

In the past two times, the increase is every ¥4, but this time, for ¥2 increase. I believe that you had a lot of discussions about the situation.

I believe that discussion was quite difficult, but you have 4, 4, and this time, 2. I think that itself includes some message, not about the CSP, but this ¥2 increase, what's your intention, what's the message?

Kitamura is going to explain.

Thank you for your question. I'm Kitamura, CFO.

This dividend, as Okamura explained, investment for the growth and also return to the shareholders, those are continued. That is our policy for capital allocation.

There is no change whatsoever on net. For dividend, rather than single year performance, mid- to long-term performance, cash flow forecast, against that or based upon that, the stable dividend is provided.

That is our decision. So ¥2 per year, and the performance was good, dividend is increased.

It's not something like that. We have a sustainable plan.

This time, ¥2. In the past, ¥4 increase.

Rather than talking about a single year, again, mid- to long-term perspective is necessary, and based upon that, we decided to increase ¥2. For details, around the end of May, when we make a presentation at CSP, next CSP, we would like to give further explanation.

Currently, margin is good, cash flow is good, financial performance is strong, and just like Okamura mentioned, when we're to do something, and we are fully prepared, we'd like to be flexible to think about capital allocation. That's all.

Thank you very much. The second question is about pipeline.

Last week, AACR took place, and KRAS competitor's data, Revolution Medicines, good data was shared, not only data, but also 055, the non-clinical data was also good. Based upon such data, your franchise KRAS project, your ways to look at is not different, the area is still the therapeutic area worth investing.

I am going to make answer first of all, and followed by Taniguchi. We consider that KRAS is quite an important target.

Their success means that KRAS is definitely a target that we should more focus on. Their success is proving it, the difference of mechanism of action.

That data is a very earlier phase, so as the benefit due to the difference of mechanism of action is available in our product. At the very end, when the late-phase data becomes available, that is a time we can say which wins or lose.

I think, as has been mentioned, thanks to their success, that became our confidence of targeting the KRAS. Thank you.

Taniguchi speaking. As has been explained by Okamura, Revolution Medicine data, pan-RAS inhibitor by Revolution, and that data is disclosed, and this is really good data.

We have the KRAS target project, the KRAS itself is quite promising. That's what we've learned, including PDAC, NC, NSCLC.

KRAS is suggested to be really good target for the treatment. Zeteletinib that we have, the first line of PDAC Phase 3 has just started regarding this indication.

We are a bit ahead compared to Revolution Medicine, and our KRAS G12D-targeting zeteletinib, not only efficacy, but safety as well, the preferable result is available. It is easier to combine with the chemotherapy that is a current standard of medicine.

In the case of PDAC, in severe patients, it's difficult to administer the drugs orally, IV infusion zeteletinib can be used for such patients as well. That's our expectation.

As for the data, we disclosed some of the data already, and based on our data as well, KRAS target is going to be important into the future for important PDAC and lung cancer targets. That's all from me.

Thank you very much.

Thank you very much.

Next, Goldman Sachs Securities, Mr. Ueda, please.

I'm Ueda from Goldman Sachs Securities. My first question, your initiatives in SMT, I'd like to know more details.

¥40 billion reduction is going to be incorporated into a plan for the current fiscal year. What kind of items are going to be the major ones?

In 2027, your measures as were shown here, some are already identified, what you're planning to do specifically? Is there anything you have already decided?

What about the certainty of these measures to be implemented

as we said? Are we going to do something which is already identified, we will just work on it, but still in areas like this, if we do something like this, we may not be able to realize the effect as we planned or it may take more time as we were planning.

The value could be diluted, there can be such risks. Now that everything is already identified, we just need to do and work on that?

No. We have to pursue further opportunities for SMT continuously.

Kitamura-san can talk about the further details as far as we can share.

In 2026, we are expecting additional ¥40 billion. By FY2025, we worked on various measures, and we'd like to harvest the benefits there.

Specifically, as we have global operations. In order to increase the productivity, in FY2025, we made huge investments creating new bases to concentrate our operations there to come up with a scale and implemented automation.

We took such a major action, and we'd like to harvest the effectiveness there, it will generate a certain level of huge benefits. Creating necessary capabilities in-house, that's also one of the measures we are working on.

Also, capabilities integration, including integration with vendors, are also ongoing. Sales promotion-related back office or material development, and there can be a lot of synergy.

We are going to harvest the results. Those are the main things we are considering for FY2026.

What about 2027? We've explained in the future, SMT is not a single-year initiative, but it's a multi-year initiative.

In the first year, we worked on lower-hanging fruits, easier to realize, to prepare for the mid- to longer-term in 2027. That is going to be the final year.

Action which requires a longer time, and we're going to harvest the results from longer-term projects such as supply chain. Larger-scale projects with longer lead time would be realized in 2027.

That's what we are expecting.

Understood. Thank you very much.

My second question, in the United States, I'd like to ask you about the business environment in the States. Pharmaceutical duties and MFN, do you have anything you can share in terms of the negotiation with US government and also MFN and the tariff?

How do you see the potential risks in your plan? Is that going to be fully manageable in your plan?

I'd like to ask you this question. Thank you.

Thank you for your question. Needless to say, receiving a letter and based on that, negotiation with the authorities by some companies, you know those company names and what was the result.

We heard such a rumor, and the first round seems to come to an end. We haven't received a letter from US government, but still, we try to open a channel to discuss with the government authorities.

Looking at the components of the agreement, we can learn what kind of factors are incorporated, and for each factor, what can we do, what we cannot do, those are, of course, we've already considered and discussed. Tariff or MFN, there are some rumors or stories are ongoing, but we don't know any specifics.

We have prepared ourselves, but that's not really quantified so that it could be incorporated into the Corporate Strategic Plan. Of course, we do a certain level of risk analysis.

We have incoming products from Focus Area Approach, and once they come to the market, what kind of price environment we will face around that time. For that purpose, we have to have a very sensitive antenna.

From marketing access perspective, what can we do, and what kind of preparation we need to do, those are all under the consideration. This might be the repetition, but regulations and rules, those are not something we can set by ourselves.

The rules and regulations are decided by somebody else, and we basically have to follow that. In order to follow that, we do whatever we can do in a maximum way, and the rules are likely to be changed.

If there are some countermeasures conceivable, then we would do so. That's probably the only way we can do for this type of issue.

Is this a big problem? Yes, it is likely to become a big problem, but nothing can be started just being move or make an action only with the partial information.

Because we have patients, the patients are around the world. We cannot make a decision.

We think about only US patients and not ignoring other countries' patients. We always would like to think about delivering a value in a uniform manner throughout the world.

I think that's probably what we can do. Did I answer your question?

Thank you very much. That's all from me.

Thank you very much. Next, Nomura Securities, Matsubara-san, please.

Matsubara from Nomura speaking. Thank you for the explanation.

I have two questions as well. The first one is a question related Ueda-san, follow-up question about SMT.

You might say that please wait up until CSP2026 announcement. There are some areas you can do the cost reduction in FY2027 afterwards.

Cost reduction through SMT possible to be expected?

Kitamura-san?

Thank you very much. Partly, this is personal opinion.

Cost optimization and journey of that, that is going to be continued. If you are to ask me, "Have you completed that?"

That's one way to look at it, but at the same time, technology is being advancing day by day. In my eyes, my personal perspective, cost optimization never ends.

However, cost cut is not only the way, not only pursuing the numbers just in front of us. What is important is to continue to deal with that from mid- to long-term perspective.

For that purpose, you need a certain mechanism. When you say cost, you tend to talk about only input, but maximizing output is also important.

The bigger value is going to be delivered to the patients as early as possible. We are doing that.

We need to increase the productivity. Your question, are we going to do this 2027, FY2027 afterwards?

Of course, we will do that. What about approaches?

We have a conventional approaches that is based upon the sustainable margin transformation, or SMT, with a 4-year plan and execute those plan, and PDCA is turned around. It will continue the same thing.

Myself, this approach itself has to be evolved. Rather than doing the same type of SMT for the next 4 years, rather, we are going to accelerate that so that we can boldly work on this.

Such details are going to be further explained, possible to be explained at the time of CSP presentation. Thank you.

I'm looking forward to that. My second question is about XOSPATA.

In PASSHIA study, primary endpoint was not achieved. Peak sales assumption is ¥100 to ¥200 billion, no change?

What's your view on the peak sales?

Thank you for your question. Unfortunately, primary endpoint was not met regarding this indication for us, in principle.

We're not going to pursue this indication globally anymore. As for the change in the sales forecast and what is going to be happening into the future, Claus Zieler is going to add.

Claus-san?

XOSPATA is on a stable growth path. It's not a very fast growth path, but it's a stable growth path.

We do expect that continue, and even in the PASSHIA study, there are some elements which are actually quite interesting for doctors to study. Our reputation for XOSPATA, or gilteritinib, as a FLT3 inhibitor is very much intact, even with a lot of first-line competition coming into this market.

We expect this agent to continue on that slow single-digit growth path that we've had in the past. Then

for the future, in subgroup with gene mutations, administering this to those patients or in combination with chemotherapy, primary endpoint was not met, but this XOSPATA could be utilized in different types of patients. Is my understanding correct?

Taniguchi-san, anything to add from you?

May I? As for XOSPATA PASSHIA study, primary endpoint was not met.

An analysis is now underway. Of course, subgroup analysis are included as well.

From various angles, analysis is being performed. As soon as we get the results, we are hoping to share with you.

In which segments we are going to go for or not going for, we are hoping to have such an opportunity so that we can explain.

Understood. Thank you very much.

Thank you very much. Next, Morgan Stanley MUFG Securities, Mr.

Muraoka, please.

Thank you very much. Morgan Stanley, Muraoka speaking.

Most of the topics already covered, but XTANDI, quarterly results or quarterly figures, hopefully, will be explained. Today, it doesn't make sense to talk about the details of each product.

My question is according to forecast for FY2026, in the initial 9 months, it may flat or increase, but in the fourth quarter, there can be a big decrease year-on-year. Is that your image, perhaps?

If you can share such an image, I'd like to hear. Thank you.

Thank you very much. XTANDI as a whole, discussing the figures for XTANDI as a whole, it can be dangerous.

We have to discuss US and ex-US separately. As for US, as you said, in the fourth quarter, IRA will kick in, how much is a different question, but it's clear that it's going to be in the negative column.

In other countries outside of the United States, there was the pace of growth. Up until now, it's going to slow, needless to say, because more than 10 years have passed since the launch.

If it's going to grow at the same pace as before, no, that's not going to happen. We have EMBARK data and other data we can use.

We still have room in the market where we can grow or we should grow. That's my basic principle.

Claus, anything to add?

No, only to add that, of course, ex-US, the exclusivity is much longer: 2028 in Europe, but in Japan, in Australia, in Russia, and some other markets, we have quite a long patent life. This is not just one patent exclusivity that we lose.

It's really country by country over many, many years, about over four years in total. That's the only thing I wanted to add.

Thank you very much. One more question to you: core OP margin 30% has been discussed quite often by now.

I may ask a question about CSP, I hesitated a bit, but 30% core operating profit margin is something you are very particular about in pursuing. If that's the case, how you're going to work on this?

It's difficult to imagine because of the cliff. How you're going to achieve?

Where are you going to achieve this? There can be a decline, and then you go up again.

What's your philosophy and how much you want to be particular about this?

In a word, please look forward to May 26. I would like to make some comment here just a little bit before that day.

I think in the past, I mentioned about it. We are this size of a pharmaceutical company, and with the innovation, we try to contribute to the society.

This is our style. As such biopharma company, cost of goods 25%, SG&A 25%, and the cost is reduced a little bit, and SG&A might be increased a little bit and vice versa might happen.

Anyhow, adding up these two, 50% is a level that would like to manage. Before the deduction of R&D, the profit is 50%.

Out of that, the 20% of sales is allocated to R&D because that leads to the continuous delivery of innovation. That's my way of thinking.

Based upon that, we come up with the number of 30%. The sales is reduced, you cannot do in that way.

I understand you would say in that way. Further details are going to be described on May 26.

Understood. Thank you very much.

One brief question: Myrbetriq, the actual January to March, $180 million, it's increased to that extent. What's the background of that?

I just got a little bit confused.

I can explain about this, but Kitamura can explain in a thorough manner. As Myrbetriq with the generic companies, we come to the settlement.

In line with that, other settlements took place, and partially, the royalty aspects are agreed, including that royalty as well, in the fourth quarter and afterwards, some adjustment is applied. That was the situation, and that will continue.

Please look at the number of Myrbetriq as a precondition. Some others, one-time factor are also added that leads to the increase in the fourth quarter.

Rather than one-time, precisely speaking, the transaction not included till the third quarter is now included, and agreed patent period during that period, this will continue. That's the way to look at.

So '26 Myrbetriq number is disclosed, and as the number is not that low. That's because of the inclusion of royalty adjustment.

Understood. Thank you very much.

Thank you.

Next, Macquarie Capital Securities, Tony Ren-san, please.

Yes. Perfect.

Thank you for taking my questions. I have two, the first one is about your intangible assets on slide number 35.

You commented that you had some impairments for your gene therapy. It appears to me that the value for some very successful products such as VYLOY and IZERVAY have also decreased a little bit.

Could you comment, is it because of impairment or is it because of normal amortization? That's my first question.

Thank you for your question. I think the intangible asset is a combination of amortization, especially that is more like moved to the sales right in the market.

A product-related intangible asset is classified from the in-process R&D to the sales right, others. Sales right, yes, they will be amortized over years.

It's kind of very healthy transactions. Now the impairment loss are sometimes bigger in the in-process R&D, because in-process R&D amount stays with it and up until the product will qualify to the market.

If we fail to qualify the market, we need to write off the asset, 100%. Now we did have the impairment loss recorded in AT132.

That's the gene therapy product asset, but we have the new asset in the clinical trial. We shift our focus from 132 to the 2957, thank you, as Naoki already mentioned.

I see that the different move in intangible asset, but overall, this time, we make the progress so that we shift the focus from one project to new project, and also the amortization start and move as we planned because product is in market. I hope I answer your questions.

Yes, it's very clear. Thank you very much, Kitamura-san.

My second question is about your clinical collaboration partner, Kelonia. Obviously, Eli Lilly acquired Kelonia.

You have been operating with Kelonia for over in vivo CAR-T cell therapy since early 2024, it's about 2 years now. Have you guys considered acquiring Kelonia?

Was it because you did not want to compete against Eli Lilly, or was it because CAR-T or blood cancer is not part of your key priorities? How does your collaboration with Kelonia change after the Eli Lilly acquisition?

Thank you for the question. Probably that question should be answered in a very scientific aspect, I would like Tadaaki to answer this.

Thank you. Our Kelonia collaboration is actually have one project.

As you mentioned that in vivo CAR-T platform, we worked together in a preclinical program. Our decision is that we not pursuing that project moving forward to the further.

We terminated that project. That's where we are now.

I don't think we have any impact that the Lilly is going to acquire the Kelonia. Of course, we have still connection with them, but we don't have any significant project working with them now.

Okay. Did you guys have the discussion over possibly acquiring Kelonia?

No, obviously, we have no intention to do that.

Okay. Thank you very much.

Thank you very much. Thank you.

Thank you very much. Next, Sanford C.

Bernstein, Ms. Sogi, please.

Thank you very much. First, about KRAS, I have a question to you.

Revolution Medicines, pan-KRAS, pan-RAS, daraxonrasib, Phase 3 results were announced for second line plus for PDAC. As for the first line, they have a PDAC program, monotherapy combination.

Your zeteletinib, KRAS G12D, and competitor is going to be earlier. Because of the pan-RAS for Revolution Medicines, this one may be more effective or similarly effective.

KRAS G12D-specific target is your product, this can be a disadvantage for your product. Pan-RAS versus KRAS G12D-specific, in terms of efficacy, what kind of scenario are you hoping to see?

It's too early to say specifics to explain the differences, but Taniguchi is going to explain as much as he can.

Thank you very much for your question. Revolution's pan-RAS, it's pan-RAS, it's not just limited to KRAS, but RAS-ON inhibitor more broadly.

Because of this, the target patient population is broader, according to understanding. Maybe because of that, we don't know clearly, but I saw their data.

For example, skin-related adverse events and GI-related adverse events seemed to be high in the incidence, according to our impression. When this is brought to the clinic, what's going to happen?

Regarding our zeteletinib, not just efficacy, but safety, relatively speaking, is also favorable, according to understanding. We just started PDAC first-line study.

Chemotherapy combination is going to be the main regimen in the study we are planning to execute. When I discuss with the doctors, the appearance might be different from doctor to doctor, but in the targeted population by the drug and a drug with broader coverage, which one to use first, as far as we have heard from the doctors, more targeted product is the one they would like to use.

Such responses are more frequent, once the Phase 1 data is going to be available, they would decide.

One more question. ASP2998, Trop2-targeting ISAC, that is a new type of ADC.

Regarding a linker within the cancer cells, selectively, it is cleaved or outside? Especially regarding STING agonist, outside of the cancer cells, when it's released, it comes into the cancer cells for the action?

Is it already confirmed? Also, this linker is cleaved only within the cancer cells?

For that, I think that has to be the patient selection strategy considering the Trop2 ADC development so far. With this regards, what is your strategy?

Taniguchi is going to explain.

Thank you very much. That is a very scientific question.

2998, as has been mentioned, STING agonist and also topo 1 are used as dual payload targeting Trop2. This is such ADC.

Target is cleaved around the target. The design is in that way, according to my understanding.

One of the characteristics of this drug is Trop2 target, not only ADC, but because of the existence of STING, the peritumor or tumor microenvironment, then activity is promoted to enhance the antitumor action. That is a concept of the design.

Looking at the preclinical data, compared to the conventional ADC targeting Trop, efficacy is superior, so that is where we have higher expectation. What is the focus of STING?

If we learn about that, we can share that with you, but so far, I don't remember that data, I bring it back, and if I identify some information, I would like to share that.

Thank you very much.

There are some more waiting for asking questions, but because of the time, next is the last question. Nikkei Newspaper, Ozaki-san, please.

Ozaki from Nikkei Newspaper. Can you hear me?

Yes, please.

Thank you. This might be a little bit different question.

The current Middle East situation, I just wonder if that has impact onto your business? Not the previous time, but for this time, does it have any impact?

Thank you for your question. The Middle East, the countries where we have footprint and having operations, of course, the employee safety is the priority.

At the same time, it's the area of the war. Because it's the area of war, there are patients who are still requiring our product, we definitely would like to make sure the delivery of the products to them.

The Hormuz Strait is now closed, and because of that, the various type of the oil-related materials are a bit delayed in terms of the delivery, and with that impact perspective. Far, we can say that there is no big impact on us, and we are not thinking that will have a bigger impact.

Our product is one of the component of the all over the medicine or healthcare. As has been mentioned, if there are some more problems happen for the materials, for example, the infusion bag issue or cylinder for the injections, if there are some problems in terms of the supply of those, there might be the question or problems incurred.

We always would like to continue to pay attention. As has been mentioned, the topic of the US administration, we are not going to be reactive for each individual events.

Of course, we do our preparation. We do not consider that the business is going to be all of a sudden better or the worse just one thing, we would like to be prepared all the time.

Understood. Thank you very much.

Thank you very much.

Thank you for many questions. Time has come, with this, we'd like to close today's meeting here.

Thank you very much for joining us once again.