Kodama speaking. Thank you very much for joining Daiichi Sankyo's financial results presentation out of your very busy schedule today.

I am going to explain the correction of FY 2025 consolidated financial results and the announcement of FY 2026 first quarter consolidated financial results based on our presentation materials. Please turn to page 3.

Today, we are going to explain the correction of FY 2025 financial results, the announcement of FY 2026 first quarter financial results, FY 2026 forecast, business update, and R&D update in that order. R&D update will be explained by Akihiro Inoguchi, Head of Development Function.

We will entertain your questions at the end. Please turn to page 4.

We submitted the correction of part of the consolidated financial results for the period ending in March 2026 to the Tokyo Stock Exchange today on the 31st of July 2026. This slide shows the correction we made.

First, let me explain the background leading to the correction. After announcing the tanshin report for the period ending in March 2026 in the fourth week of July 2026, during the process to analyze FY 2026 first quarter financial results, we found unclear variance in the SG&A expense figures.

We immediately investigated the cause and confirmed booking errors in accounts payable for suppliers. We disclosed the correction of the relevant payables and related items.

This is attributable to individual processing errors. We judge that this would not undermine the effectiveness of internal control for financial reporting as a whole.

The statements of P&L and financial status are here as was announced in the timely disclosure. Now, we are checking the contents to be corrected in the security reports we submitted on June 19th, 2026.

Once this is finalized, we will submit immediately. Please turn to page 5.

Page 5 shows our main KPIs under the fifth 5-Year Business Plan. You can find the results after the correction.

We'd like to express our sincere apology for causing inconvenience and concern to shareholders and investors. We are discussing measures to prevent the recurrence, and we will continue to make efforts to strengthen our internal control.

Next, I'd like to move on to explain the FY 2026 first quarter results. Please turn to page 7.

This is a summary of FY 2026 first quarter results and FY 2026 forecast update. In the first quarter, there was a significant increase in revenue led by our mainstay products Enhertu and Datopotamab deruxtecan sales growth.

We have been able to make a very good start in FY 2026. On the other hand, operating profit decreased due to restructuring expenses related to EU Specialty Business Unit, etc.

Excluding that impact, core operating profit increased. As for FY 2026 forecast, we are revising our revenue forecast upward to ¥2.34 trillion due to the yen's depreciation and stronger than expected product sales of Enhertu in the United States.

Due to the reversal of provision for losses related to cancellation of Odawara site investments, operating profit forecast is revised upward to ¥320 billion. Please turn to page 8.

This is an overview of FY 2026 first quarter consolidated results. Revenue increased by ¥100.1 billion, or 21.1% year-on-year, to reach ¥574.7 billion.

Cost of sales increased by ¥38.5 billion from the previous year. SG&A expenses rose by ¥45.9 billion, and R&D expenditure increased by ¥9.5 billion year-on-year.

We booked CMO compensation fee of ¥1 billion as foreign exchange rate fluctuations. As a result, core operating profit increased by ¥6.3 billion, or 6.2% year-on-year, to reach ¥107.3 billion.

Operating profit, including non-core income and expenses, decreased by ¥11.6 billion, or 12.0% year-on-year, to ¥85.1 billion. Profit attributable to owners of the company decreased by ¥16.9 billion year-on-year to reach ¥68.6 billion.

As for the actual currency rates, the yen depreciated by ¥14.89 against the US dollar and by ¥21.57 against the euro year-on-year. Please turn to page 9.

From here, let me explain positive and negative factors for revenue compared to the previous year. Revenue increased by ¥100.1 billion year-on-year.

I will explain its breakdown by business unit. First, Japan Business Unit.

Sales increased for anticancer agents Enhertu and Datopotamab deruxtecan and pain treatment Tarlige, but sales of direct oral anticoagulant Lixiana declined due to nearly 20% price cut in FY 2026 NHI drug price revision. Japan business revenue decreased by ¥700 million in total.

Next, let me explain our overseas business units. Here, forex impact is excluded.

In Oncology business, sales of Enhertu and Datopotamab deruxtecan rose by ¥35.8 billion and ¥11.9 billion, respectively, due to their strong growth in the United States in particular. Revenue increased by ¥47.8 billion in total.

As for American region, revenue declined by ¥11 billion due to revenue decrease for iron deficiency anemia treatments Venofer and Injectafer and generic injectables. Revenue for EU Specialty business increased by ¥2.2 billion as sales grew for hypercholesterolemia treatments Nilemdo, Nustendi.

In ASCA business responsible for Asia, South and Central American regions, revenue rose by ¥4.7 billion due to the growth of Enhertu in the respective countries. As for upfront payment and regulatory sales milestone, etc., related to alliance with AstraZeneca and US Merck, we booked as revenue regulatory milestone payments associated with the approval of Enhertu for breast cancer neoadjuvant and adjuvant therapies in the United States and solid tumors in Europe and the approval of Datopotamab deruxtecan for triple-negative breast cancer in the United States.

Revenue increased by ¥15.2 billion. Forex impact increased our revenue by ¥41.9 billion in total.

Slide 10 shows the factors behind the change in operating profit. As explained earlier, revenue increased ¥100.1 billion, including the impact of foreign exchange.

Next, let me explain cost of sales and expenses. Regarding cost of sales, other cost of sales increased due to higher costs associated with the increase in revenue and the recording of an inventory-related valuation loss.

Adding the foreign exchange impact of the CMO compensation, cost of sales increased by a total of ¥38.5 billion. SG&A expenses increased ¥45.9 billion, mainly due to an increase in the profit share paid to AstraZeneca.

R&D expenses increased ¥9.5 billion due to the impact of yen depreciation and increase in R&D investment associated with the development progress of the five DXd-ADCs and other programs. Non-core expenses increased by a total of ¥17.2 billion, reflecting an increase due to EU Specialty Business Unit restructuring expenses and others offset by a decrease due to the reversal of the provision related to the cancellation of investment at Odawara plant.

The forex impact on expenses was an increase of ¥12.7 billion in cost of sales, ¥10.9 billion in SG&A expenses, and ¥8.6 billion in R&D expenses for a total of ¥32.2 billion. Including the impact of forex, operating profit decreased by ¥11.6 billion.

Regarding our efforts toward achieving operational excellence, which underpins the strategy of the sixth 5-Year Business Plan, we are advancing company-wide identification of areas with room for improvement, centered on the use of AI and optimization of procurement and outsourcing costs, and will implement measures sequentially starting with the highest priority areas. Next, I will explain the change in profit attributable to the owners of the company.

As explained earlier, operating profit decreased ¥11.6 billion. Financial income and expenses had a negative impact of ¥2.5 billion.

Income taxes increased ¥2.8 billion due to a higher effective tax rate compared year-on-year. As a result, profit attributable to owners of the company decreased ¥16.9 billion year-on-year to ¥68.6 billion.

Next, I will discuss the revision of the FY 2026 consolidated earnings forecast. Please turn to slide 13.

The foreign exchange rate assumptions from the second quarter onward are ¥155 to the US dollar and ¥180 to the euro. The impact of the yen's depreciation since the forecast announced in May is estimated to be an increase of approximately ¥40 billion in revenue and approximately ¥2 billion in operating profit.

Compared with the forecast announced in May, revenue reflects a revision to the Enhertu sales plan for the ASCA Business Unit, offset by the impact of yen depreciation, sales expansion led by Enhertu in the US, and expanded sales of Nilemdo, Nustendi in the EU Specialty unit, and is revised upward by ¥60 billion from the May forecast to ¥2.34 trillion. Cost of sales is expected to increase by ¥20 billion, reflecting the upward revision to the revenue forecast, higher costs due to foreign exchange, and the recording of an inventory-related valuation loss.

SG&A expenses are expected to increase by ¥40 billion due to the impact of forex and an increase in the profit share associated with higher Enhertu sales. R&D expenses, although affected by an increase due to foreign exchange, are maintained at ¥500 billion, the same as the May forecast, reflecting the timing shift of certain expenses and the refinement of medical affairs expenses.

As a result, core operating profit is maintained at ¥360 billion, the same as the May forecast. Operating profit is set at ¥320 billion, reflecting an expected full-year decrease of ¥5 billion in non-core expense resulting from the recording in the first quarter of the reversal of the provision related to the cancellation of investment at the Odawara plant as a reduction in non-core expenses.

Profit before income taxes is set at ¥334 billion, reflecting the revision to operating profit. Profit attributable to owners of the parent is set at ¥251 billion, reflecting an anticipated revision to the deductible amount of R&D expenses for tax purposes.

Next, I will discuss the business update in slide 15. The slide shows the sales status of Enhertu.

Global product sales in the fiscal quarter FY 2026 increased ¥64 billion year-on-year to ¥219.2 billion. In the US, we obtained two new indications simultaneously in May: neoadjuvant and adjuvant treatment of HER2-positive breast cancer.

In terms of sales growth, in addition to maintaining the number one new patient share in existing indications, such as breast cancer, gastric cancer, and lung cancer in major countries and regions, as we have to date, new patient share is steadily expanding in first-line treatment of HER2-positive breast cancer in the US with more than one in three eligible patients now receiving treatment with Enhertu. In addition, since beginning promotion as the only anti-HER2 ADC treatment for multiple HER2-positive solid tumors, prescriptions have steadily expanded due to very high unmet need, and this has come to drive sales growth in the US.

The solid tumor indication received approval in Japan this past March and is steadily gaining market penetration. It also received approval in Europe in June this year, where promotion has begun.

For some of the cancer types, including among the multiple HER2-positive solid tumors, multiple Phase 3 trials are currently ongoing, and we expect these to contribute to future sales growth of Enhertu. Regarding the NCCN guidelines, Enhertu has been newly listed for neoadjuvant treatment of HER2-positive breast cancer.

Next, I will discuss Datopotamab deruxtecan. Please turn to slide 16.

Global product sales in the fiscal quarter of FY 2026 increased ¥15.3 billion year-on-year to ¥20.6 billion. Since launch, approximately 7,00 0 patients globally have been treated cumulatively, and market penetration is progressing steadily.

New indications include hormone receptor-positive, HER2-negative breast cancer in Brazil in March, first-line treatment for triple-negative breast cancer as the first anti-Trop-2 ADC treatment for this indication in the US and Brazil in May, and this past week approval for EGFR-mutated NSCLC in Brazil, where promotion has begun. In addition, as announced in today's news press release, we have received approval for the first-line triple-negative breast cancer in Europe.

Sales continue to expand steadily in the existing indications of hormone receptor-positive, HER2-negative breast cancer and EGFR-mutated NSCLC, and in particular Datopotamab deruxtecan maintains the number one patient share in third-line and later EGFR-mutated NSCLC, driving sales growth in the US. For triple-negative breast cancer, for which promotion began in the US in May, we have already confirmed an increase in new patient prescriptions.

In this first quarter, Enhertu and Datopotamab deruxtecan together obtained three new indications, all of which are for breast cancer. We are now able to offer treatment options across a broad range of treatment lines from early stage to metastatic disease, and in the metastatic setting, we can now offer treatment options to more than 90% of patients.

We are confident that this has further strengthened our leadership in the breast cancer field. We will continue to pursue further market penetration in existing regions and expand into new launch countries/regions while pursuing new indications in order to deliver Enhertu and Datopotamab deruxtecan to as many patients as possible who need them.

This concludes the business update. I will now hand over to Inoguchi, Head of R&D Division, for the R&D update.

Inoguchi speaking. I am going to talk about R&D update.

Please turn to page 18. First, I will explain our research policy under the sixth 5-Year Business Plan.

We define breakthrough generating technology, or BGT, as Daiichi Sankyo's proprietary innovative technology to deliver more innovative medicines to patients faster. DXd-ADC is our first BGT.

Under the fifth 5-Year Business Plan, we positioned five DXd-ADCs—Enhertu, Datopotamab deruxtecan, HER3-DXd, I-DXd, and R-DXd—as important assets and focused on their development. Including DS-3939 and DS-3790, we have seven DXd-ADCs.

Also during the sixth 5-Year Business Plan period, these assets will continue to drive our growth. On the other hand, during the fifth 5-Year Business Plan, out of the development candidates which we called next wave, we also identified what could be the core technologies in the future.

Based on our science and technology in the coming 5 years, we will identify multiple technology platforms which could become next BGTs, and we will nurture them into innovative drugs with which we can contribute to patients. We will use future financial results presentations and other occasions to share the progress, please count on us.

Next, I will give you an update on each product. From page 19, I will use two pages to report the progress of Enhertu.

In May this year, as an indication expansion to HER2-positive early breast cancer, Enhertu obtained two approvals in the neoadjuvant and adjuvant settings in the United States. In the neoadjuvant settings, based on DESTINY-Breast11 study data, four cycles of Enhertu followed by four cycles of THP—docetaxel, trastuzumab, and pertuzumab—can be administered to patients with HER2-positive stage II or stage III breast cancer.

In China, the same indication was approved in March this year. In the adjuvant settings, based on DESTINY-Breast05 study data, 14 cycles of Enhertu can be administered to breast cancer patients with residual invasive disease following neoadjuvant chemotherapy including anti-HER2 therapy.

Based on these approvals in the United States for HER2-positive breast cancer, we can offer Enhertu as a treatment option to cover treatment lines from early stage to metastatic stage. We are very pleased to be able to contribute to more patients with HER2-positive breast cancer.

Page 20 shows regulatory updates for Enhertu in a tumor-agnostic indication. Based on the results of DESTINY-PanTumor02 and other studies, approval was granted in June this year for HER2-positive solid tumors in Europe.

Accordingly, we obtained tumor-agnostic approval across the three major markets in Japan, US, and Europe. Also in China, based on the results of DESTINY-PanTumor03 as a bridging study, etc., the application is now under review.

On page 21, I will explain the progress of Datopotamab deruxtecan. According to TROPION-Breast02 study data, Datopotamab deruxtecan improved median PFS by 5.3 months and median OS by 5 months compared to chemotherapy and demonstrated a statistically significant, clinically meaningful benefit.

Based on the study results, in May this year in the United States, Datopotamab deruxtecan was approved for patients with first-line metastatic or unresectable TNBC who are not candidates for PD-1/PD-L1 inhibitor therapy. As an update, as Kodama mentioned in the business update, the same indication was also approved in Europe as well.

Regulatory submissions for the same indication are now under review in Japan and China. On page 22, I will share new Phase 3 studies.

TROPION-Urothelial04 is an adjuvant study for MIUC, muscle-invasive urothelial carcinoma post-surgery, to investigate Datopotamab deruxtecan plus rilvegostomig compared to standard of care. In the first-line urothelial carcinoma cohort of the preceding TROPION-PanTumor03 study, Datopotamab deruxtecan plus rilvegostomig delivered favorable results: an ORR of 68.2% and 12-month PFS rate of 73.5%.

We will continue the study so that this combination therapy as a treatment option can contribute to address high unmet medical needs in urothelial carcinoma. Slide 23 introduces a new project entering a Phase 1 trial.

DS-1025 is a novel ADC that targets CD25-positive regulatory T cells, activating antitumor immunity by eliminating regulatory T cells within the tumor. It applies DXd-ADC technology to an anti-CD25 antibody and carries a cytotoxic payload optimized for immuno-oncology.

In preclinical studies, we have confirmed a reduction in intratumoral regulatory T cells, activation of cytotoxic T cells, and antitumor efficacy. We plan to begin a first-in-human trial in solid tumors in the first half of this fiscal year.

Slide 24 shows progress on our next wave products. Mimmrix, an MMR vaccine for the prevention of measles, mumps, and rubella, received approval in Japan this May.

Vanflyta received approval in China this past June for first-line treatment of FLT3-ITD mutated AML. Finally, the news flow going forward.

Please turn to slide 25. For Enhertu's DESTINY-Breast09 trial, we expect to receive regulatory decisions in Europe in the first half of this fiscal year.

For I-DXd, we expect to receive a regulatory decision from the US FDA on the Ideate-Lung01 trial in the second half of this fiscal year. Regarding the expected timing for obtaining key data in the near future, the expected timing for Enhertu's DESTINY-Lung04 trial and Datopotamab deruxtecan's TROPION-Lung15 and AVANZAR trials remains unchanged from before.

On the other hand, the expected timing for TROPION-Lung07 data is now FY 2027. As for major planned conference presentations at ESMO, we plan to present the first data from the melanoma cohort of the Har-Tina PanTumor01 trial, an update on the Ideate-Lung01 trial, an update on the Phase 2 dose optimization part of the REJOICE-Ovarian01 study, and data from the bevacizumab combination cohort of the dose escalation part of the REJOICE-Ovarian02 study.

Slide 26 onwards is appendix, please review it at your leisure time. That concludes my presentation.

Thank you.

From here on, we are moving on to a Q&A session. First, Mr.

Yamaguchi from Citigroup Securities, please.

Can you hear me?

Yes, we can hear you.

Yamaguchi from Citigroup Securities. Thank you very much.

My first question goes to Kodama. Regarding the change of your results forecast, sales revenue are increasing, and inventory assets related processing was also included.

Could you elaborate on this point, the details and the value or the amount? This is just for Q1, could you explain this portion, please?

Thank you for your question. Regarding the revision of our forecast and inventory assets and also the valuation loss included in the COGS, thank you for your question.

As in the Q1, this is being booked, and these are the main items. Regarding the multiple products, we had some errors in the manufacturing, and some which did not meet specifications, we had valuation losses for these products, and also the losses for disposal.

This is the upper side of the billion yen level as a size.

Thank you. Understood.

My second question is to Kela-san. I-DXd, I think the October 10th was the PDUFA, and of course until then you don't know whether it's approved, but if it's approved, I think you'll be starting for the first time co-promotion with Merck.

Could you share with us, give us a comment, what is the preparation status now?

Thank you for your question. Correct, the PDUFA date is in October.

The first indication will be for small cell lung cancer. This is a group of patients with a very high unmet need.

The work that we're doing with Merck today is to work and educate the key opinion leaders, those physicians who really set the guidelines for how to treat small cell lung cancer. Based on what we're hearing, those physicians are very excited to have a new drug in their hands.

We believe they will embrace this drug quickly. We hope to bring this drug to these physicians and the patients as soon as possible.

Right now we're working to really educate the key opinion leaders about the mechanism of action, the clinical trial, and how best to use this drug. Thank you.

Thank you very much. Next, UBS Securities, Mr.

Sakai, please.

Sakai from UBS. Thank you for the presentation.

My first question goes to Kodama-san. Correction of the results in the past, why in May you didn't identify this issue in the analysis, but why in the fourth week of July?

I have doubt about the effectiveness of internal control. Why you process this as an individual event?

There's a decrease of expenses by ¥29 billion in the current quarter. You increased the SG&A by ¥15 billion to ¥535 billion.

Usually when you develop the budget, you compare to the previous year. Why there is an increase by ¥200 billion in this line?

Is this really the operational excellence? I'd like to ask you.

Seki-san, thank you for your question. Regarding the correction of the FY 2025 financial results, the process to identify this problem is as follows.

Last week, we were analyzing the results for the first quarter of FY 2026, and we are analyzing the increase or decrease compared to the previous fiscal year. There was some decrease in expenses which we couldn't fully explain, we investigated that figure and identified this problem.

Why not in the fourth quarter? Why we are not able to identify this issue in the fourth quarter?

We also feel that way, this is a lesson we learned. Based on the size of expenses and a mistake this time, and also the amount for the item was quite large with the error, unfortunately in our analysis we couldn't discover this problem.

There were various figures being included or excluded, and we couldn't identify this in reality.

One more question is to compare to the previous fiscal year, the increase in the current fiscal year? It seems that there's an increase by ¥100 billion because of ¥535 billion after revision.

¥434.2 billion after revision. ¥434.2 billion, which line is this figure in the supplementary material, quarterly data?

Let me check the figure. In the supplementary material, page 15, on the dot 10, quarterly data.

This is on page 15 in the supplementary material, and this is the quarterly data. You're talking about page 15, right?

Allow me to check the figures, and we will try to explain to you. Sorry for that, and

thank you very much. My second question goes to Inoguchi-san.

TL07 study, top-line results is postponed to be available in FY 2027. Previously it was supposed to be available, in the second half of FY 2026.

Could you give us more details what's going on?

Thank you for your question. Regarding TL07 top-line available timing, I'd like to explain the background reasons.

Regarding this study, in the primary endpoint, biomarkers are going to be used, and as we incorporate this biomarker, we revisited the schedule, and then we found that the top-line results will be available in the next fiscal year. That is a process.

Thank you very much.

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

Ueda from Goldman Sachs Securities. My first question, regarding the COGS, ADC forecast and outlook is being revised, I have a question.

At Odawara site, you cancelled investments and there is a reversal of the cost, and what about the CMO compensation fees in the first quarter? It was not emerging so much.

What is going to be a schedule for this, and what about the possibility of potential fluctuations about the reversal of provision for losses related to cancellation of Odawara site investments?

Regarding the COGS, the reversal of provision for losses related to cancellation of Odawara site investment, we'd like to know the reason why and also the future outlook of our CMO compensation fees. First, the reversal of provision of losses related to cancellation of Odawara site investments at the end of last fiscal year in our outlook back then, we booked a provision.

We had discussions with suppliers and also based on that, we booked the reversal of provision of losses related to Odawara site investment cancellation. We refined the figures after the discussions.

That's the background. Next, CMO compensation fee provision, ¥1 billion is being booked.

We booked in the previous fiscal year the provision, and because of the forex fluctuation, that's now factored in. And ¥80 billion is the guidance for FY 2026.

This year, later this year, from the end of this year to the beginning of next year in FY 2028 manufacturing orders will be coming firm. The amount is going to be finalized in that process.

Regarding the booking, it's going to be in the third quarter or beyond according to a current outlook. Regarding the amount, ¥80 billion is the guidance, and there is no element to change this forecast.

Thank you very much. The second question also goes to, I think, Kodama-san, regarding the SG&A expenses outlook in your plan.

Other than profit share, regarding the other SG&A expenses, there is strategic investment expenditures mentioned. As of the first quarter, how much is this?

In the full-year basis, what would be the size of the amount? In the next year and onward, I don't think something to be continuing.

Therefore, do you consider or is it okay for us to consider this as just one-time expense?

Thank you for your question. SG&A expenses in the consolidated earnings forecast, and that is regarding the strategic and human resource-related investment.

Regarding the contents, the question was asked. Regarding DX and IT within the operational excellence, we stayed the effective use of AI and also within the recent involvement of talent, the human capital, we have been investing more into our employees, and we are also investing in terms of education toward the reskilling of our personnel, to be engaged in highly advanced work.

In the future, with AI investment and operational excellences, we'd like to generate the benefit. In this fiscal year, we started to make the investments in advance.

I believe that this kind of investment will be necessary on a continued basis, but at the same time, we need to enhance efficiency and saving the cost. Therefore, in the future, we'd like to see a offset.

Currently it is conducted as advanced investment, and we don't plan to expand this in the scale from the next year onward. This will not be ending in this fiscal year only, and our target is to produce the effect from this next fiscal year and onward.

Thank you very much. Thank you.

That's all for me.

Next, JPMorgan Securities, Mr. Wakao, please.

Wakao from JPMorgan speaking. Thank you for this opportunity.

My first question, on page 13, I have a question to Kodama-san. As Yamaguchi-san said, the valuation loss for inventory assets, which products are tied to this, and what about the amount?

Also the corporate tax, revision of the tax deduction for R&D expenses. The profit forecast was revised upward up to the operating profit, but because of this, there is a downward revision.

I'd like to know the background.

Thank you for your question. First, about the valuation loss for inventory assets, and you'd like to know the breakdown by product.

Number two is corporate tax, and the tax rate was worsening, and why negative. You'd like to know the reason why.

First, the inventory assets, regarding the products, it's not being disclosed. We have our own manufacturing, but also we are using CMO to manufacture on our own, and some non-compliance to quality occurred.

That's why we are booking valuation losses. It's the upper side of the two-digit in okuyen.

Second question is about corporate tax. Regarding the R&D expense deduction, there are different things under different tax systems in different countries.

We have this mainly in Japan and the United States. In the group, Daiichi Sankyo Japan and DSI in our group, the corporate tax, the size of the profit for individual companies would determine the slot to be able to be eligible for R&D deduction.

Comparing this fiscal year and the previous fiscal year, the profit in Japan, and if you look at the size of profit in Japan because of intercompany transactions, it's smaller slightly. Because of this, the profit mix would result in the less deductions.

On this point, we explain we couldn't incorporate this fully in a full-year forecast, and where we will have profits during the fiscal year. There is a slight difference compared to the initial forecast.

That's why this is occurring.

Sorry, it may be difficult to understand. Thank you very much.

I have a follow-up question. Talking about inventory assets, I understand that you do not identify each specific item, but is it ADC-related ones?

Because last year, I think there was also a valuation loss recorded regarding ADC-related assets. Therefore, I am concerned whether or not there is any structural-related issues going on.

ADC is included, although it's not everything, but partly it includes the items relating to ADC.

Thank you. My second question is to Inoguchi-san.

AVANZAR study, within this year, I think we will see some results. Originally my understanding is that the PFS final analysis will be planned, and the intermediate analysis will be conducted, and then after that, awaiting for the final analysis results, you together with AstraZeneca will try to make a filing for approval.

If the OS at the final analysis timing that endpoint is met, that would be fine, but probably it's not matured yet at that timing. Therefore, with PFS data only, are you confident that you'll be able to make filing for approval given the current environmental changes?

I have a slight question whether or not it is possible to make filing for approval with only PFS data.

Thank you for your question. Regarding AVANZAR study data, regarding that data assessment, I think the question was made.

As PFS is one of the endpoints, and we are planning to get the study results, and that's unchanged. Depending upon the OS data readout, I think we will make a comprehensive decision.

Without having OS data, wouldn't it be working?

I think we cannot make any comments on that particular point at this point in time. Basically, we look at PFS and OS data from a comprehensive viewpoint, and consulting with the authorities, we will discuss whether or not we will be able to move on to the filing for approval.

I see. Thank you very much.

That's all.

Next, Morgan Stanley MUFG Securities, Mr. Muraoka, please.

Thank you very much. Muraoka from Morgan Stanley speaking.

First, I have a question to Kodama-san. As for revenues and sales per product, you revised the sales forecast for Enhertu in ASCA region.

There is a decrease by ¥13 billion for Enhertu in ASCA. Given the forex rate, there is a substantial decrease in ASCA region as a whole.

Revenue declined. What's happening there?

I couldn't understand fully. The first quarter results are not too bad.

What is going to happen into the future?

Thank you for your question. Enhertu sales forecast in the ASCA region is now revised downward, and you'd like to know more about it.

In ASCA region, China, Brazil are the main countries in terms of sales. In China, competition is intensifying.

Local ADCs just sold in China, we have to compete. There is such a competition, and the impact was larger than we anticipated.

As for Brazil, there are various factors. A particularly big factor behind is as follows: there is a treatment network and hospital network where Enhertu is prescribed a lot, but hospital network itself had a worsening financial situation, it seems.

Treatment is not making a lot of progress, and purchasing the products for treatment are now becoming stagnant, as I'm hearing. How much this impact is going to be prolonged, it's difficult to predict.

Looking at the current situation, we are factoring in this impact on a full-year basis. These are the two major reasons.

Can I assume that you were conservative in factoring this into your forecast, or is this really a very difficult issues? It's difficult to say.

Regarding Brazil, if the environment is going to change, it's going to increase. In that sense, I hope we can be conservative, but honestly speaking, we can not really know.

In China, this may be a structural factor.

Understood. Another question is to Inoguchi-san.

R-DXd, this time at ESMO, REJOICE-Ovarian01 additional data will be presented. With those data, then are you going to enter into the preparation of filing for approval?

Because for R-DXd, we haven't heard much about your preparation for filing, what's necessary for you to start preparation for filing?

Thank you for your question. For R-DXd data, Phase 2 dose optimization part will be presented at ESMO.

As this Phase 2 study will be providing us the data that will be a key data for us to proceed our development moving forward. At the same time, regarding our filing strategy, that's under review now.

Therefore, at that time that we'll be able to share, we'd like to talk more about the details of our strategy.

Is it better for us to wait until we will be able to hear from you the filing strategy?

At this point in time, we are still reviewing, including the filing strategy.

I see. Thank you very much.

Next, Bernstein Securities, Ms. Sogi, please.

Thank you very much. First, I have a question to Kodama-san.

Guidance update, SG&A expenses, strategic investments are one of the factors for the rising cost. Cost itself were increasing, or is this because of the forex impact, or you have to do more?

You booked a restructuring cost in Europe. This means the head count is reduced the next fiscal year and beyond.

It be a good impact on your cost. This positive impact will emerge when, and what is going to be the size and the level on an annual basis?

Thank you for your question. The first question is other SG&A cost, and the reason behind for the increase may include forex impact according to your view.

One more point is the restructuring in Europe.

What about the impact on next fiscal year and beyond, and when we can see its effect?

Regarding the SG&A expenses and the forex impact, thank you for your question. I couldn't explain that point earlier.

There is the forex impact fully reflected here. There is an increase in reality, both are the factors behind.

Regarding the second point, restructuring in Europe and its impact, we will be beginning to see its effect later in the fiscal year. As for the size of the impact in value, we don't have anything clear at hand right now.

Once it's clear, we will share with you. It's going to be fully seen next fiscal year and beyond.

Cardiovascular business in Europe is going to shrink, and organization is being shrunk accordingly. Thank you.

Your understanding is correct. We want to take measures earlier under these circumstances.

That's why.

Another question is a question to Inoguchi-san. 07, 08, TL07, 08.

First about 07, it is a three-arm study, and Datopotamab deruxtecan, Keytruda plus platinum, or doublet, Datopotamab deruxtecan plus Keytruda. These are included as experimental arms.

Therefore, regardless of first-line PD-L1 status, this is going to be the largest indication, I think. Triplet and doublet, both regimens may be approved as a result of this TL07.

Is this understanding correct?

Thank you for your question. Regarding TL07, as you said, there are two arms, a doublet and triplet, and it depends on the results, but if both showing positive results, then both will be available for treatment in our view.

Thank you very much. Regarding 08, regarding 08 study, Trop-2 QCS patient stratification analysis is not a part of primary endpoint, but I think it is one of the key secondary endpoints.

What I think a bit strange is that you have once explained about it as to the reason of not including it in the primary endpoint because Keytruda is quite effective in PD-L1 high population. Efficacy of Keytruda, regardless of that, on top I think Datopotamab deruxtecan is added.

Therefore, evaluating the efficacy, I think whether or not Datopotamab deruxtecan Keytruda is effective at baseline, I don't think it's much impacting. If it's effective, then there'll be even more difficult to gain any upside.

Once again allow me to ask you this question in this 08. Could you explain once more what is the reason that this is positioned as a part of a key secondary endpoint?

Thank you for your question. Regarding inclusion of biomarkers in TL08 study, that's included as a secondary endpoint, you are right.

There could be various different views on this point, but in high PD-L1 expressing subpopulation, pembro's treatment is SOC, and as a study design, we have a pembrolizumab arm and pembro plus Datopotamab deruxtecan combination. Those two are compared, this is add-on study.

From that viewpoint, as a primary endpoint in ITT, whether we will be able to expect a positive result, that is one of the background factor.

I see. I am not fully convinced, but understand.

Thank you very much.

Next, Daiwa Securities, Mr. Hashiguchi, please.

Hashiguchi speaking. Thank you very much.

I have a question to Inoguchi-san. DS-1025 originality is the topic of my question.

CD25 is the target. Regulatory T cells will be depleted.

Several companies have been developing such a drug, and some came up with ADCs to take the challenge. ADCC activity can be reinforced to give it a try by some other companies.

Your drug discovery concept, where is it differentiated? As for payload, DXd-ADC technology is being applied, but it's optimized for immuno-oncology.

What's common vis-à-vis the conventional DXd-ADC, and what's different? Other compounds under development using a payload like this,

thank you. Your question is about 10 DS-1025.

First, regarding this compound, conventional DXd-ADC is not being used. As I explained, our DXd-ADC technology is the platform and foundation, but this is an ADC optimized by targeting the immune cells.

Regarding the detailed information about payloads and others, we are sorry to say that we are refraining from sharing. As for CD25 Treg, it's one of the important markers for Treg.

DS-1025 would deplete immunosuppressive Treg cells in the tumor microenvironment. That's how this compound is being created with that objective.

That's all.

Based on that concept, other companies' products might have been developed. What kind of differentiation you're expecting from 1025?

I cannot elaborate on the detail in specifics, but we have built DXd-ADC technologies. We have experiences and the insights, and that's a differentiating factor compared to other companies.

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

There are some other people raising their hands, but we have passed the scheduled closing time. Therefore, with this, we'd like to conclude the earnings call.

If you have more questions, please contact our IR unit. Thank you for your participation today.

Thank you.