Astellas Pharma Inc. (4503) Earnings Call Transcript & Summary

Today, thank you very much for joining our briefing on Astellas' Corporate Strategic Plan, CSP 2026, out of a very busy schedule. I'm delighted to serve as MC today. I am Kato, Chief Communications and IR Officer. Thank you very much for your time. Today after presentation, we will take questions. Presentation will be made by the meeting materials posted on our website. Including Q&A, we have simultaneous translation available in Japanese and English. We cannot guarantee the accuracy of simultaneous translation. Thank you for your understanding. You can choose the language from the menu on the Zoom webinar screen. If you choose the original language, you can listen to the original sound without going through the simultaneous interpretation. During the Q&A session, we will take questions from investors and analysts first. And then in the remaining 10 minutes or so, we will take questions from members of the media. And here is a cautionary statement for today. This material or presentation by representatives for the company and their answers and statement in the Q&A session includes 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 on pharmaceuticals, including compounds under development, but this information is not intended to make any representations or advertisements regarding the efficacy or effectiveness of these preparations, promote unapproved uses in any fashion or provide medical advice of any kind. Let me introduce the participants from our company: Representative Director, President and CEO, Naoki Okamura; Chief Financial Officer; Atsushi Kitamura; Chief Research and Development Officer, Tadaaki Taniguchi; Chief Commercial and Medical Affairs Officer, Claus Zieler. So we have 4 executives joining this call. So we'd like to start the presentation.

Good afternoon, everyone. I am Okamura from Astellas' Pharma. Thank you very much for your time out of your busy schedules to attend today's announcement of Corporate Strategic Plan, or CSP 2026. This is a cautionary statement. Since Kato explained about this, so I will skip this slide. Page 3, division of Astellas is on the forefront to health care change to turn innovative science into VALUE for patients. We define VALUE written entirely in uppercase in English, as outcomes that matter to patients as the numerator and the cost to the health care system of delivering those outcomes as the denominator. This approach serves as a guiding principle for decision-making throughout the company. Page 4 explains Astellas at a glance. We achieved a record high sales revenue of JPY 2.1 trillion core OP of over JPY 550 billion (sic) [ JPY 555 billion ] and core OP margin of 26% in FY 2025. By region, more than 85% of the sales revenues from countries and regions outside Japan, making us a global life science company. We operate in more than 70 countries and regions, providing the groundbreaking new medicines to approximately 174 million patients. To create new medicines, we have invested an average of 17.2% of our revenue in R&D over the past 5 years. We have also returned value to shareholders through continuous dividend increases. These achievements form a solid foundation for realizing sustainable growth in the future. Starting on Page 5, I will explain our CSP 2026. First is about underlying concept as the foundation for the entire CSP 2026. As a sustainable growth company, Astellas' aims to achieve pipeline-led record high revenues by mid-2030s. CSP 2026 is a self-funded growth strategy, deliver profitable growth and generate cash, accelerate pipeline-led growth, allocate cash with discipline, enhance enterprise productivity. By realizing these 4 goals, we will create and deliver greater value faster for patients. In the following slides, I indicated at the top of each slide, I will first explain overview of this CSP, then profitability improvement to sustainably deliver value under value delivery and the pipeline that leads to the creation of value under value creation, then cash allocation will be explained. And finally, I will talk about the organizational structure designed to deliver business outcome. Page 6. First is an overview of CSP 2026, I will explain goals and deliverables. To achieve pipeline-led record high revenue by the mid-2030s, CSP 2026 sets 4 strategic goals. The first is deliver profitable growth and generate cash. At the core of our growth strategy in CSP 2026, 5 high-margin strategic brands, PADCEV, IZERVAY, VYLOY, VEOZAH and XOSPATA. These products are already demonstrating solid growth and will be a powerful driver of future profitability. We will maximize revenue based on these products and generate cash to support future growth investments. The second is accelerated pipeline-led growth. We expect to drive growth from FY 2029 through pipeline assets. To further accelerate and ensure this growth, we will invest in R&D in a more strategic and focused manner than ever before. Progress in our pipeline is the most important driver of Astellas' sustainable growth. The third is allocate cash with discipline. To achieve sustainable growth, a balance between growing funding and profitability is extremely important. We will maintain a high margin while ensuring sufficient growth and pursue sustainable enhancement of shareholder value -- sufficient growth investment, excuse me. The fourth is enhance enterprise productivity. Building on the ways of working, our culture foundation and corporate governance that we have transformed in the previous CSP. We will further enhance our organizational capabilities and aim to evolve into an organization that delivers the business outcomes. To ensure the execution of these strategies and clearly demonstrate their progress, we have established key deliverables to be achieved throughout CSP 2026 period. First, as an indicator of pipeline progress through continued investment in R&D and improvements in productivity, we aim to initiate at least 10 Phase III or pivotal studies by FY 2030. Of these, we expect to start at least 5 studies within the next 2 years, that is by fiscal 2027 to achieve earlier market launch. This will enable us to build a solid foundation that will strongly support our growth from fiscal 2029 onwards. As a quantitative indicator, we will generate cumulative core OP before R&D expenses of at least JPY 4.3 trillion over the 5-year CSP period. We are confident that this will enable us to secure a solid internal capital base to support our Astellas' strategy. As a key component of this, first, we will expand the sales of strategic brands more than double by fiscal 2030 compared to fiscal 2025. Next, to ensure solid profitability and sufficient investment in growth and the shareholder returns, we will achieve cumulative cost optimization of JPY 200 billion in the CSP period. And to achieve flexible yet disciplined cash allocation. We aim for a core OP margin of 50% before R&D expenses. To achieve this, we will reach a core OP margin of 30% by FY 2027. Thereafter, we're investing 20% in R&D. We will establish a cost structure that allows us to maintain a stable core OP margin of 30%. This will serve as an extremely important foundation for realizing sustainable growth model. To enhance shareholder value, we plan to continuously raise dividends during the CSP period. Specifically, we will increase the dividend by minimally JPY 2 annually. JPY 2 are set strictly at minimum levels, and we will aim for higher based on our mid- to long-term profit and cash flow plans. If we can achieve these key deliverables, we are confident that by the mid-2030s, we will undoubtedly have become a company achieving pipeline-led record high revenue. On Page 7, I will explain our revenue outlook. This chart builds upon what I have shown so far, providing even greater detail and more clearly, it illustrates the major turning point Astellas is about to face. First, we project revenue of JPY 2.2 trillion for FY '26 and FY '29 will mark the pipeline-led inflection point. That is the year when pipeline growth truly takes off. After that, the value of the pipeline will be more firmly reflected in our financial results and we aim to achieve regular high revenue by the mid-2030s. What I want to emphasize most here is the growth curve that has already begun shown here by the solid black line. This growth is being strongly driven by our high-margin strategic brands, generating ample cash even before the pipeline led inflection point. This cash will serve as the source that support Astellas' sustainable growth. But firmly redirecting the generated cash towards accelerating R&D, we expect that starting in fiscal 2029, our pipeline growth to be more clearly reflected in our financial performance. Furthermore, by reliably realizing this growth story, we are confident to be able to achieve a record high revenue by the mid-2030s. The following slides will explain the growth strategy to achieve this. Page 8. The next 3 slides are focusing on improving profitability, which is essential for continuously delivering VALUE. First, I will explain our profit outlook. Over the next 5 years, we expect to shift higher profitable P&L structure through the expansion of strategic brands. First, regarding changes in the product mix in revenue. In FY '25, strategic brands accounted for approximately 23% of revenue, and this is expected to expand to over 50% by fiscal 2030. As the product mix changes, the P&L structure will also change. In fiscal 2025, the core OP plus R&D expenses to revenue was approximately 40%, but this is expected to expand to 50% by FY 2030. In addition to the strategic brands growth, U.S. XTANDI co-promotion fee, which accounted for more than 10% of sales revenue in fiscal 2025 are expected to be virtually eliminated by fiscal 2030 due to declining sales in the U.S. This will also contribute to boosting profitability with achieving a core OP margin of 30% by FY '27. And thereafter, while investing 20% in R&D, where we'll establish a cost structure that enables us to consistently generate a core OP margin of 30%. The combined level of 50% for core OP and R&D expenses, represents an essential indicator for achieving flexible yet disciplined cash allocation. A core OP margin of 30% is not a fixed appropriate target. We will reallocate funds to R&D in response to pipeline progress, but we will maintain the total of core OP and R&D expenses at around 50%. We aim to enhance profitability by expanding strategic brands at the same time to shift to our P&L structure, that is strengthening investments for future growth, so that we can achieve sustainable growth. Page 9. I will explain the outlook for strategic brands. Our strategic brands have achieved a dramatic growth increasingly above approximately tenfold over the past 5 years and have demonstrated a solid track record of growth. Building on this, we plan to more than double sales by FY 2030 compared to FY 2025. While we expect a continued growth for each of our strategic brands, even with the existing indicators, I will explain the key growth opportunities and that will further drive this growth. First, PADCEV. We anticipate that the indication for cisplatin-eligible and cisplatin-ineligible MIBC or muscle-invasive bladder cancer will be approved in many regions and expect it to contribute to sales. Furthermore, we have initiated a Phase III study for bladder sparing MIBC. If successful, this will provide an opportunity to further accelerate the growth of PADCEV. IZERVAY. On top of initiatives to encourage early diagnosis of geographic atrophy or GA to encourage earlier referrals from general ophthalmologists to retina specialists and early initiation treatment, we aim to expand the market and increase a number of new patients. Also, we are developing a pre-filled syringe formulation. If successful, we expect this to drive further sales growth by improving convenience. VYLOY. Was just launched last fiscal year in China, the largest market for gastric cancer, and we expect it to be a major growth opportunity going forward. In addition, the Phase III LUCERNA study of the combination of VYLOY with immune checkpoint inhibitors and chemo is currently underway. If successful, we expect this to present an opportunity to expand VYLOY's sales. VEOZAH. In addition to continued growth in the U.S., our largest market, we anticipate a further regional expansion with Japan and China, in particular, presenting a new growth opportunities. We anticipate to continue to steady growth for XOSPATA. Strategic brands are not only a source of sustainable growth driving the CSP, but also they are extremely important product generating cash needed to support a future pipeline-led growth. We will work to maximize the value of our strategic brands and strive to maximize sales. On Page 10, I will explain our disciplined cost optimization. By ensuring the execution of SMT, Sustainable Margin Transformation, our company-wide cost optimization initiative, Astellas has been able to build a robust financial foundation more than ever before. Based on the proven execution of SMT, as a foundation, we also execute disciplined cost optimization under CSP 2026 as well so that we can continue to reinvest for our pipeline growth. Against the target of JPY 150 billion by FY 2027, we achieved cost optimization of about JPY 65 billion over the past two years, as planned. For JPY 85 billion, we should aim for in the remaining two years, we have already identified initiatives to that end. So we just need to deliver them from now on. From FY 2028 onwards, we will pursue further cost optimization and aim to achieve a total of JPY 200 billion cumulative cost savings over the 5 years during the CSP 2026 period. Main initiatives include business efficiency benefits from global capability center establishment, AI and digital capabilities, where we have invested, cost optimization by managing brand life cycle of XTANDI and mirabegron and operating model evolution to drive agility and productivity. We will execute these initiatives steadily by advancing disciplined cost optimization steadily, while we sustain elevated profitability, we will establish a more resilient financial foundation so that we can continue to reinvest for our pipeline growth. On Page 11, I will use 4 pages to explain our pipeline to create VALUE continuously. First, let me explain Astellas' R&D strategy once again. Aiming to achieve meaningful outcome in areas with high unmet medical needs, we are adopting R&D strategy called focus area approach. Focus area approach consists of 3 elements: biology, modality/technology and disease. We start where it matters most, understanding the biology of disease and impact on patients' lives. Next, we select optimal modality and technology fit for the biology's characteristics and apply it to patients who would benefit the most. In this way, when the 3 elements are connected strongly in a triangular fashion, this is positioned as a primary focus. By pivoting the triangle purchases, we believe we can create multiple programs with VALUE from one scientific platform. Focus area approach achievements are beginning to be clearly demonstrated during the previous CSP period as well. We position this as an important R&D foundation also under CSP 2026. On Page 12, I will explain our pipeline-led future growth. As we showed during R&D Day in March, throughout the previous CSP period, we enriched the pipeline by incorporating assets created from primary focus as well as external innovations to form multiple franchises. Under CSP 2026, to accelerate the growth of these pipeline assets, we will make R&D investments more actively, and we will aim to initiate 10 or more Phase III pivotal studies by FY 2030. Centering on the programs where POC was achieved as is shown in pink, we are anticipating the start of 5 or more Phase III or pivotal studies by FY 2027. If progress is made as expected, we assume that we can launch in FY 2029 and beyond. We're hoping that this will be pipeline-led inflection point to growth. As for programs shown in gray, we will promote development for POC judgment by FY 2027. Programs, which successfully achieved POC are expected to advance to late-stage development and initiate Phase III or pivotal studies during the CSP 2026 period. Also, with regards to follow-on programs, other than these, we will leverage the insights obtained from the development of proceeding programs, so that they will lead to early contribution to growth. Through these initiatives to accelerate growth, pipeline revenue contribution is expected to start from FY 2029. We're anticipating pipeline revenue potential of about JPY 1 trillion in the mid-2030s. So that we can address the progress of each program and uncertainties such as changes in the competitive environment, we will continue BD activities to enable agile enrichment and supplement the pipeline to ensure resilience. I will explain the details later. Page 13 is about only productivity. In order to accelerate the progress of our pipeline, R&D productivity enhancement is indispensable. At Astellas, we are strengthening internal and external collaboration, implementing an end-to-end operating model and agile ways of working and actively leveraging external innovation through partnerships. Also, we will embed AI and data-driven insights across the entire R&D to enable better decisions of higher quality. Furthermore, we will make strategic investments in new technologies and digital solutions, simplify clinical trial protocols and internalize our key clinical operations to increase speed of clinical trial execution. In addition, to build more solid pipeline, we are continuously working to strengthen disciplines of critical in-house capabilities and portfolio management. Through these efforts, we will enhance our R&D productivity and accelerate our pipeline with growth. On Page 14, let me explain our business development approach. We will actively pursue value-enhancing BD, as the core BD approach. We will proactively strengthen the pipeline through acquiring synergistic assets to enhance value. Also, we will focus on moderately derisked assets and predefined therapeutic areas, modalities for Astellas' strength to search for opportunities. In licensing of ASP546C from Evopoint and VIR-5500 from Vir Biotechnology are recent examples. We will form franchises together with our existing products and programs and further solidify our pipeline. On the other hand, we will not pursue by default, large-scale swap like rescue BD just to expand size and scale and protect near-term revenue. On Page 15, I will explain our outlook for cash allocation. We will work to fund growth and deliver sustainable shareholder value enhancement at the same time. The gray bar on the left shows the actual results over the past 5 years. We spent about JPY 4.2 trillion in total, including R&D expenditure, about JPY 1.5 trillion, strategic investments of about JPY 1.2 trillion (sic) [ JPY 0.43 trillion ] and shareholder returns of about JPY 670 billion. We utilized debt to acquire Iveric Bio, the most important strategic investments. So net cash generation and spending was about JPY 3.4 trillion. Over the coming 5 years, despite a temporary decrease in revenue with profitability enhancement due to the growth of strategic brands and cost optimization, core operating profit under R&D expenses is expected to reach over JPY 4.3 trillion on a cumulative basis, exceeding the level over the past 5 years to execute the pipeline acceleration supporting our growth from FY 2029 and the investments are expected to exceed the level over the past 5 years. The expenditure will be 20% versus revenue in principle. But in accordance with the progress of R&D, we will make additional investments by up to 5 percentage points in some fiscal years. We will allocate about JPY 850 billion to strategic investments such as investment for business development, milestones and investment for cost optimization. During the CSP 2026 period, we will be able to secure JPY 750 billion or more as a source of funding for annual dividend increase of JPY 2 or more according to our plan. Annual JPY 2 dividend increase is just a minimum. We will aim to enhance shareholder return further, including raising the dividend increase range in line with upside in profit and progressing investments. We will repay interest-bearing debt in a planned fashion, based on our approach to capital allocation, we will control gross profit, EBITDA ratio within the range of 1 to 1.5x to secure stable financial foundation. From Page 16, I will use 3 pages to explain our organization generating outcome. First, about operating model, which has evolved to bring about overall productivity enhancement. During the previous CSP period, we worked on the transformation of our operating model. We shifted the top-level management focus from the traditional regional and functional access to patient access and established an end-to-end operating model. We will empower the cross-functional asset maximization teams and strongly call for agile ways of working, which will accelerate business outcome across the entire value chain. Also, under CSP 2026, we will use this evolved operating model as a basis to build an organizational structure with higher productivity and efficiency. We will create and deliver greater value faster. On Page 17, I will explain our organizational culture, foundation supporting the execution of our strategy. At Astellas, we have operated our business with patients at the center with a high sense of ethics. Our cultural foundation, organizational values and behaviors guide our decision-making behavior and outcome creation consistently across the entire organization, so that each one of our employees will be able to take action on his or her own based on clear common understanding. We will make sure that this organization foundation takes root steadily as a basis of our strategic execution. On Page 18, let me explain corporate governance. At Astellas, the Board of Directors actively engages from the development stage of our corporate strategy, providing important suggestions. At the same time, the Board builds a strong governance structure to provide oversight and effective monitoring of the business execution by the management team through the monitoring process such as the EPM, Enterprise Priority Modeling Group. The Board ensures that management responsibilities executed to achieve revenue pipeline and financial targets. Also, the Board received feedback from shareholders and investors in a timely fashion, so that it will be appropriately reflected onto decision-making by the management team. In this way, our corporate governance is serving as an important foundation to support the disciplined execution of our corporate strategy. Last but not the least, on Page 19, here is a recap of key takeaways. During the 5 years between FY 2026 and FY 2030, we will work hard to deliver profitable growth and generate cash, accelerate pipeline-led growth, allocate cash with discipline and enhance our enterprise productivity. With CSP 2026, Astellas will establish a sustainable growth trajectory and aim to achieve record high revenues by the mid-2030s through pipeline-led growth. That's all from me. Thank you very much for listening.

The presentation is now completed from us. So we would like to have a Q&A session. The first person asking question, that is Yamaguchi from Citigroup Securities.

Can I ask two questions?

Yes. Two questions are fine.

Okay. Then first question for me. For cost efficiency. With regards to that, I think you are making some new things announced. I understand overlapping, what's been mentioned in the past. And at this time, from JPY 200 billion and JPY 85 billion is deducted and JPY 115 billion is included. Is this understanding right?

So basic understanding is okay. And this red part, it's not something that we don't know. We are not clear about this. So what we've done. So far, it's going -- is actually the foundation to come up with this.

And overall what message this time the revenue was shown in a chart and the profit is not really shared with us. You have a series of pipeline. So for the short term, you'll have the XTANDI matter, but you can overcome in a perspective. So you have the short-term results of the profit, but in the mid of the 2030s. I think there are many things that you would like to emphasize, but XTANDI cliff, rather than that, you have important things. So -- you don't -- please don't care about their short-term profit. Is that what you say?

Probably my explanation is not really sufficient. The gray bar on the left, that is the cash before R&D expenses, and this is the graph of the accumulated cash flow. And at the very bottom, you can see the acquisition of Iveric Bio, that is under the horizontal line. The -- it is expensive, but that is from the debt, JPY 3.4 trillion has gained and also JPY 4.2 trillion is utilized together with their debt. But in the coming 5 years, of which we can show you the waveform of the sales graph and if you refer to that, you might expect the profit is going to be decreased, but it is not really so in a 5-year apple-to-apple comparison, the previous 5-year is JPY 3.4 trillion. But next 5-year is JPY 4.3 trillion is going to be raised. And with the R&D and also strategic investment, those amount is going to be allocated. And every year, we would like to increase the dividend at JPY 2. And that way, we can return the shareholders that for that purpose, the resource is now available. That is explained with this slide in detail. If you look at only the top line, you might think that we are in a difficult situation, but we have a high weight of the strategic brands and also cost optimization is advanced. With that, our profitability is going to be on the increase. So the cash raise is going to be more than the previous 5 years. That's the basic message of this slide.

I see. The single year profit, you have no plan to share that with us, right?

The focus for the next fiscal year, just like the purpose today, we are going to share that with you. But the coming 5 years, each year, revenue and also the operating profit those are not disclosed.

Next, JPMorgan, Mr. Wakao.

JPMorgan, Wakao is speaking. I also have two questions. That's about Page 7. So this is about excess revenue. You shared this chart in the past as well. And what's been expected for me is the bottom line or the profit level. That was what I was -- I had been expecting. This time, there was no specific number presented. But listen to your presentation, FY '29 OP margin, 30%, I think that is what's going to be applied. But on the other hand, R&D ratio level, considering that OP margin 30% is difficult to be achieved or the profit level might be variable, both bottom line was not shared with us from the beginning. So there might be some background reasons why bottom line is not shared. So could you share with us further ways of thinking bottom line or why you're not disclosing that?

Okay. Could you go to Slide 8. Please look at the graph on the right. What we try to do from now on is as follows. COGS and the SG&A expenses would be controlled within 50%. But doing so, core operating profit before R&D expenses, we will make the ratio to 50% against the revenue. This is what we'd like to continue. And core operating profit margin of 30% and R&D expenditure, 20%, there is a white line in between the two. For the coming few years, revenue would be on a declining trend. But on the other hand, we have very attractive pipeline assets, and we have pipeline assets approaching the late-stage development.

So against the revenue, 20% R&D, would be the ratio of R&D expenditure. Are we going to sacrifice the future growth? Or if the pipeline is promising, we can exceed 20% to invest in R&D to secure our future growth.

So we had -- we need to have such discussions in the current stage. Next, please go to Page 15. Because of this, as is shown here on the upper right, JPY 2 trillion on the expenditure, the compared to the 20% of the revenue on a cumulative basis. This number is a little bigger, up to 5 percentage points, 20% to 25% we will control the R&D expenditure, and we are planning cash allocation of JPY 2 trillion. But assuming that scenario, in some years, it may be 28% by 50 minus 22% or R&D may not make progress and R&D expenditure might be 19%. Then core operating profit ratio would be 31%. So I talked about the dotted line in the pie chart, on the expenditure and core operating profit had a dotted line in between, that line might fluctuate or shift a bit. So please assume that it may happen, but the right half in pink should be under 50%. We are going to use them with discipline. So profit and R&D would be available always at the 50% level. That's the structure we'd like to aim for.

Understood. Then based on the ratio, you developed your targets, so you are refraining from mentioning specific numbers. So regarding the timing of profits, FY '29 or '28 is my understanding correct? Against the revenue?

Kitamura speaking. Regarding your question, on your end, our intention is as follows. In the coming 5 years, this is going to be a turning point for us. Our portfolio will be shuffled and also we have very strong pipeline right now. So 10 or more pivotal studies or Phase III studies will be initiated. If the number changes, this will also change. So at a very detailed timing, how much for what? Rather on a cumulative basis for the cash flow for the 5 years, we allocate our cash fund. The revenue bottom is going to be in FY '29. Revenue and profitability and profit, there is a correlation between the two. So what is going to be the bottom, you can imagine for us, rather than the point of time in the coming 5 years, how we are going to make money to invest to create a base for the future, that's -- we think is important. So this is what we are discussing right now. And as Okamura said, revenue might decline, but we can secure earnings for the coming 5 years. So we think we can make investments.

Understood. Very clear. My second question.

Sorry. I talked about profit is going to bottom in FY '29, but I stopped a bit because of the potential change in the product mix. Revenue would bottom, but that may not mean that the profit would also bottom in the same year. XTANDI slope maybe neither and compared to assumption, it may be higher, if we begin to think about a variety of scenarios, top line shape and the profit shape would not be in sync. That is going to be the future of the coming 5 or 10 years. So how we should explain this rather than looking at the annual revenue and profits, roughly for the 5 years, we have this much capability to generate cash, and this is how we're going to allocate. That's how we are explaining. So that's the biggest reason why.

Understood. Another question. The pipeline on bottom out in the mid of 2030, the record high revenue is what you are aiming and that is a very strong and encourage message. But in pipelines, it says about JPY 1 trillion. What will contribute to what extent? Could you be a bit more specific about this?

If you look at this chart, in the mid of 2030, what is likely to be contributing those in pink. And those in distinct. There are 5 items. And with those, we are going to achieve JPY 1 trillion.

For this JPY 1 trillion. Could you be a bit more specific? Thank you very much.

It's not easy to explain in a simple way. What we want to say here is that this page, Page 12. Yes. But you see on this slide. Well, of course agility or speed when the real sense of milestone will come, that differs depending on my programs. And in the middle of 2030s that we say is during the period of this plan, it is about 10 years ahead, that is 10 years ahead. What we are doing is that for each program, for each indication. To what extent of the competition is what we are going to face, so what's the level of the sales? And what are the milestones? How many milestones to the launch? And what are the probability of success.

Considering all those factors in the mid-2030s, not the risk, not risk-adjusted total, that is the maximum potential sales, right?

Yes. Based upon the current risk that we see, the sales is discounted and accumulate them. Then for each milestone, the risk is derisked little by little. So our forecast or the perspective of the sales is going to be increased. If we achieve all of them, we can achieve over JPY 1 trillion. So that's a waterfall chart type of things. And for those, what is the probability and what is likely to be considering that in the mid of 2030s, JPY 1 trillion is the number that we come up with. If everything is success, JPY 1 trillion, it is not really so. Potential is bigger. But considering the risks and opportunities as target, we said about JPY 1 trillion. If we achieve that, then in 2030s, the record high revenue that is likely to be achievable. That's one thing. And if you look at these programs, ultra rare genetic therapy or genetic regulation or the cancer treatment with a large number of the patients, if you compare them, the potential is different, of course. And which has the highest potential. Relatively speaking, then we can say that cancer program has more or higher level of the contribution. That is a very rational way of thinking. So the focus over each program, we are now reached program sales. We are not disclosing that. Now each program characteristics and also targeted patients and clinical trials, such information are available in the appendix. So first, I would like you to read it. Well, this time, almost all the slides are something that we've already shown you, not really brand new for you. So I would like you to refer to such slide. And if you come up with further questions, please contact the IR team.

Next, BofA securities, Mamegano, please.

BofA Securities, Mamegano is my name. Thank you very much for this opportunity. There's one thing I would like to double check with you. Core operating profit, margin and R&D ratio, 50%. That's the number. Specific profit level is not really disclosed. But in this current plan, basically, you develop your the product that is developed in your country -- in company, excuse me. That is because the licensing agreement like license out with doing so, you might be able to get further fund for the R&D, but that is not a part of your plan.

Thank you very much for your question. Within the numbers showing this time, R&D compression leading to the reduction of the profit for the future. That is not included. This is a number that we do the all in-house development. But that does not mean that we are not considering that at all. Of course, the partnership with the other company. If that leads to the further enhancement of the product value, then we are going to pursue for such kind of a transaction. And financial engineering and risk to a certain extent to reduce the return to the future, that might be the part of the consideration, but the numbers here at this time are basically the in-house development assumption. Please do understand in that way.

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

Ueda speaking from Goldman Sachs Securities. My first question, I have a question about strategic investments. And the field of BD and also size of the deal. I have a question on those topics. According to your slide, moderately derisked assets, are you assuming that after confirming POC and also the modalities and technologies where you have strength. What kind of areas are you assuming? Looking at the current pipeline, many of these could be in oncology field. I'd like to hear what you're thinking. And also, the size of investments. I assume that you have a lot of flexibility if there is a big opportunity, you may spend a lot. So I'd like to hear your view here.

Thank you for the question. How should I explain where to start with? First, rescue-type BD, we are not going to pursue rescue-type BD. We often receive a question on this. Because of the way we form, if there is a bottom or we can purchase something from outside to flatten. That's one of the FAQ, but we don't -- there aren't many such deals and the price can be higher, it can be very competitive, paying cash today and we can get the cash flow of the similar amount. By getting such money by Astellas, there may be almost no value we can generate further according to understanding. We're not going to do this. But instead, the pipeline we have right now, technology-wise, it could be reinforced or when we deliver this to patients, we can expect synergy, for example, and we are going to use our money in those areas. Everything to be paid upfront like a company or asset acquisition. But -- no, but Evopoint deal, [ Vir biotechnology ] deal, were of this kind of a nature, we'd consider a deal structure. We may form a licensing agreement or collaboration agreement to share risks. We'd consider such possibilities. That's the message we wanted to show today. If you go to the next page, strategic investments, a variety of things are included in here. So everything may not be BD. But overall, JPY 850 billion in total for the 5 years. In addition to BD, CapEx would also be included. Including those elements, roughly speaking, JPY 100 per year, doing deals one after another in a deal with each size exceeding JPY 100 billion. We're not planning to do so. Did that answer your question?

I have my second question. The current -- the progress of the current projects under development, how I should understand? Compared -- for the previous CSP technology platforms were considered, I got the impression that you had that on your mind, but after this CSP period in 2030, for example, technology platforms can be built. Is that the image you're assuming? And also, Rx+ was another initiative you had in the previous CSP period. So this would be linked to, VALUE generation and VALUE creation. But at this time, there are many pharmaceutical aspects. In 2030, what is going to be the platform for your company and also the portfolio as a whole for Astellas?

Thank you for your question. I would explain broadly. And then Taniguchi can add if necessary. Page 12. If you look at this stage, technology platform, from the same primary focus as the same technology platform for the exit. The therapeutic areas for the product, and the target patients, this and this might be related. So this is going to be a good combination. Sorry. It may be difficult to understand because it's busy and complicated, but primary focus starts from technology and biology. So the exit might be unclear, but it should lead to the exit and we should have focused franchises. That's what we wanted to show here. So not all the technology platforms are on the mature phase. However, in the past 5 years, for example, the protein degrader and such kind of platform is good enough so that we can compete globally. It took more than 10 years. But for the cell therapy as well, finally, we can go into the later phase of the clinical development. And genetic therapy. You might think that you haven't achieved even one POC. However, AT132, we had placed the difficulties, but that was a good learning because they linked to the next overcoming the issues with using different capsid or the transamin. So we made really the progress. So, for example, bispecific 2138 (sic) ASP2138 and such, technology platforms are probably going to be the core of Astellas. And those are now used in a dispersed manner here and there, but rather in specific tumor types, some technologies are concentratedly used so that the franchise is generated. That is what we hope. You asked about Rx+ so let me make a comment about it a little bit. When I started Rx+, we had 2 objectives. One is that at the time of disruptive technology reform is taking place. If you just stick to the existing business, you cannot catch up with the new technologies. So you need to have high sensitivity for the new technology as well. That's one thing and prescription -- prescribing drug, that is a very powerful means. But the patients have a long journey, and such kind of product can contribute only the part of such a patient journey. So for us, if it is possible, we would like to contribute to the wider area of this patient journey. That's why we would like to combine our new technology and our knowledge. We are not ignoring such kind of concept now and toward the future. Of course, we are going to maintain it. However, currently our sales portion is going to be reduced, then R&D is -- R&D fund is more required. In such a situation rather than Rx+, our main business, that is the prescription drug development, and that is where we would like to put more resources on. That is our representation of the intention.

Next, UBS Securities, Mr. Seki please.

UBS, Seki is my name. Page 15, that is about the capital allocation. In what situation, the share buyback is going to take place. How you think about it? For example, R&D, it becomes -- goes quite well. In the coming 5 years, R&D cost is necessary, and if JPY 750 billion is used up, you don't have extra cash in that case or pipeline. If that doesn't go well, then in that case, R&D cost is not used, that's why the execution is going to be available. In that case, you have to think about BD. So there is no high possibility of this. How should we view about this?

Thank you for the question. In order to prevent misunderstanding, let me explain. This graph is not stock rather flow graph. This is not a snapshot. This is a flow accumulation for 5 years calculated. In the beginning, JPY 4.3 trillion, that is overall height, and if it comes higher, of course, we're going to have excessive cash, then how we're going to use it. That might be the dividend, that might be used for share buyback. There's a high possibility that, that is going to be useful with the shareholder return. R&D expenses here it is JPY 2 trillion. As has been mentioned, this is divided into 2 parts as you see. The 20% is what basically we want to use. And the 20% might not be sufficient in some cases. So every year, about 5 percentage points as a maximum, we might use a little over 20% that is included. That's why -- so it's within 20%, that's because sales has increased. R&D is efficient. So the -- with less resource, you can do the same thing. There are various reasons, but anyhow, you can get the cash. And also, in-house pipeline is really successful. So you don't need to do BD. So that is the next box that is a strategic investment that is JPY 850 billion, you might not be able to use that.

So the size of the box compared to the current outlook and the cumulative number for the coming 5 years, are they going to match completely?

The size of the box may shrink or be bigger as a result, putting cash on the financial statements without any reason it would not happen for Astellas. So in that case, we would make sure of the shareholder return. Kitamura-san anything to add?

Yes, this is for the coming 5 years, and this is the range? More than JPY 4.3 trillion core operating profit before R&D expenses, we are going to create that money, and we think we can do it. And our in-house pipeline to advance them forward, we can generate from our cash flow, the money we require to do so. Depending on the progress, strategic investments may not be utilized fully, then we'd be flexible in our judgment. It doesn't mean -- it does not mean that we are not going to do anything, but we will monitor the situation every day so that we can leverage the information.

Okay. Number two, I have a question on the next page, Page 16, asset maximization team. You have -- instead of the regional or functional access, you shift to the patient access. Then globally, many things can occur and you are reducing your cost. So you can be a leaner association -- a leaner organization with fewer headcount. But under this structure, one size fits all, for example, marketing materials in Taiwan could be created in Boston with GenAI. It may happen. So the granularity and meticulousness that can be one of the challenges you may face. What do you think?

Just by chance, there was a mention of the marketing materials role. So Claus may want to say something. One size fits all, rather, AI is going to play a major role in an era where what we couldn't consider on our own, the individual's preference or regulations in other respective countries would be reflected by AI to customize in the output. I'm expecting such an era to come. Before thinking about a lot of things to optimize and minor adjustments could not be made, but AI can do that. So I think we are going to move into that direction. And if you globalize, there are 2 possible directions. One, taking all the things into consideration too much, there are many things which are not useful in most of the cases or you may eliminate so many things. And you just have something just fundamental out of the basics where you don't feel any affluence or enrichness. But rather, we have the global capability center to consolidate our capabilities there, then higher efficiency, but effective work can be done. So we are not going into those 2 extreme directions, but rather we'd identify the best possible way and a slight difference can be reflected by AI in the output, and we'd like to continue to do our work in that way. Did I answer your question? Then that's all. But rather, if you want to hear about the marketing materials, I would ask Claus to add.

This is a great opportunity. So maybe I'd like to hear Claus' comments briefly.

Can I just check whether you can hear me?

Yes, we can hear you. Yes, we can hear you, Claus.

Well, let me answer your question on the marketing material. And thank you, Naoki. So we already started 3 or 4 years ago to build the internal processes to automate material content. We call it the content factory. And that usage of that internal engine to create content across the world, for countries across the world has steadily increased since we started building that. I think we're now at the point where we not only have a centralized process that saves us agency fees, essentially, but we can also start using AI to create some content. Just as an example, we very recently on the medical affairs side, we created our first abstract using AI, and that saved a significant amount of time, as you can imagine, from doing it 100% through the human capabilities. Of course, we always have a human that then proofreads and make sure that AI did not make any mistakes. But the efficiency gain and the time gain that we are already deriving from deploying both the standardized process internally, but then also the AI engine on top of that is starting to be very, very significant, and that will contribute to part of the cost discipline that you saw on some of the presentation slides previously.

Next, Morgan Stanley MUFG. Muraoka-san, please.

Morgan Stanley, Muraoka is my name. CSP, this is for 5 years. I know about that. But in the coming 2 to 3 years, the shareholders, how they deal with Astellas. With that perspective, I'm asking this question. Sales is going to be on the decline. Just like you mentioned, R&D is probably going to be an increase. And of course, the dividend is going to be constantly raised, as you mentioned. And pipeline, new drug news is going to be increased. Then now shareholders rather than looking at the performance, looking at those what I mentioned. Is that what you mentioned? What you meant?

Not thinking about the -- you don't need to think about the revenue or profit, I'm not saying that, as has been mentioned. Based upon innovation, continuously grow. That is what we would like to realize and the cost of goods and SG&A added, then it's going to be 50% and the R&D investment continuously 20% so that you can come up with 30% profit. Astellas is working towards that goal. As the investors, I would like you to always look at us from that perspective in a criticized eyes -- criticizing eyes. We would like to make an effort that we are not making such -- we are not considered we're not making that. The remaining 2 years for JPY 150 billion and the 3 years in total, JPY 100 billion. That's what we want to do. And these are the things that what we are aiming at. We have the XTANDI matter. And after that, finally, we are going to be in a phase where we can really observe the growth. BD is taking place here and there, and getting asset from something different and combine those, it's not such a status. Of course, partnership with various companies are taking place. But basically, based upon the in-house technology, multiple programs are going to go into the clinical phase. We are in such a phase now. So for me, the progress of pipeline, how they contribute to the patients, those are better to be focused on so that you can enjoy looking at Astellas now and to the future. That's my personal opinion. Kitamura-san.

Thank you. There are some parts difficult to answer, but this JPY 4.3 trillion, that is the operating -- core operating profit total before R&D expenses. To put it simple, yearly, JPY 800 billion to JPY 900 billion of the core before R&D expenses, that has a certain level of thickness in terms of profit. So I would like to make use of it for the investment into R&D. With that, we can see the progress of the pipeline in that way. I think that is very important and JPY 800 billion to JPY 900 billion profit before R&D expenses. And in order to realize that, there are 2 important things. One, that is the strategic brands, they are going to make a steady growth twofold in the coming 5 years. And are we on track of that? That's one thing. And the cost optimization and also addition -- additional initiatives in the coming 5 years, JPY 200 billion. So if you look at this, I think that will be sufficient. Understood.

Now next question, Page 7. Yes, this chart, this might be a bit toward the future, but the strategic brands, in this case, 2030 to '31, gradually, it is on the decrease. But I think LOE is a bit ahead of this time point. But around 2030 and '31, it seems that it's going to -- the strategic brands are going to be picked out. Is this an image? What's -- any reason for this? This is just an image description. Understood.

Next, Nomura Securities, Matsubara-san, please.

Matsubara from Nomura Securities. I also have 2 questions. First, shareholder returns policy, as has been mentioned, XTANDI LOE. But still, you would increase the dividend at least by JPY 2. And you generate cash with the growth of strategic products and cost reductions. But the main products did not grow -- may not grow as you expect, you may use a lot of R&D, but still can we expect the JPY 2 annual dividend increase?

JPY 2 dividend increase, I think, is a minimum. This is our commitment even as of now today. Still, in this business, we don't know what could happen. Against our own will regulations may change. suddenly, we cannot avoid such a situation. For R&D, even if we are confident because of some reason, we may not be successful, success is not guaranteed. Anything can happen. So it's a completely different shape, but are we going to raise the dividend? If that situation comes, then once again, we would like -- we have to discuss it with the shareholders. But even if there is a slight decrease in revenue, are we going to stop the dividend increase so that such a discussion will not occur? We are considering our cash allocation plan. So that's our current status.

My next question is about SMT. The range of cost reduction effectiveness has been shown. Any lower limit for the JPY 200 billion? If you can achieve JPY 200 billion, that would be great. And SMT is not going to end as you explained in the earnings calls. Are you going to exceed JPY 200 billion as a possibility, the range for JPY 200 billion and the upper limit or the lower limit?

JPY 200 billion is the commitment we are going to achieve. We have 5 years to cover. So SMT learnings would be leveraged. And also the global capability center, we have built, we'd like to leverage these to work on this. And AI technologies, as was mentioned, are advancing a lot. So JPY 200 billion in the 5 years are our commitment we are going to realize. Any upside, it will be considered as we do this. When we started SMT, we were talking about JPY 120 billion to JPY 150 billion. We achieved JPY 150 billion already. So we do have know-how already. So this is the number we are going to achieve. You can perceive this as such.

Next, Sanford C. Bernstein, Ms. Sogi, please.

First of all, I have a question about the pipeline. Of course, in 2029 and beyond, your pipeline would begin to contribute to regrowth. You have multiple pipelines. On the other hand, setidegrasib, the RAS protein degrader is the program with the biggest progress. On the other hand, KRAS treatment competition, the situation can change because of the competition rapidly. Revolution Medicines' RAS-activated RAS inhibitor data I'm talking about. According to their data, KRAS mutation -- regardless of the KRAS mutation, activated RAS can be inhibited broadly. And in PDAC, patients who are treated in PDAC, there seems to be a very good data by the competitor. What happens -- what should happen for setidegrasib in the changing competitive environment to proceed with the clinical trials with confidence by Astellas.

Thank you for your question. I'm a lay person, but I would like to respond and then Taniguchi is going to add. First of all, safety profile. If this could be the drug usable for first line or not. Second, duration of therapy, how long the efficacy can be maintained? Lastly, but not least, resistance mechanism, meaning if it's an inhibitor, of course, resistance happens when all the targeted proteins are degraded and what mechanism of resistance will be raised. So those 3, well, are the points that are nonspecialist idea. Taniguchi-san, any comment, please?

Thank you very much. Let me explain. Okamura made an explanation and that is extremely important point. First, this as a characteristic of this setidegrasib. This is for KRAS G12D. This is happening or emerged or expressed in the 40% of the PDAC and 5% in lung cancer. Looking at the data, compared to Revolution Medicine product, safety profile is likely to be really good. And one of the characteristics is that this is IV administration. So especially for PDAC patients, the oral administration is difficult. So this IV administration is good for the compliance to continue the administration. And listen to the specialist comment [ KRAS ] better than pan-KRAS, this is KRAS specific. If it's highly selective, such drug is more favorably accepted in other line. In that perspective, against the Revolution Medicine setidegrasib has the competitive edge. But of course, currently Phase III study is going. So we have to see that data with that the profile is elucidated. The characteristics and also superior points are going to be elucidated further. And only after that, I would like to go into more details.

Thank you very much, I'm looking forward to it. Next question. The new business model that you showed this time or operational model showed this time, how you are going to raise the value cost, speed and the probability success of programs, I think those are the access that you can look at. So this new approach -- how this new approach contribute to these different types of access? It might be difficult, but would you please explain that as much as possible?

If I say that, other CXO here with me might get angry. But so for Astellas, historically, as you know, the regional access is the highest access and Japan and Europe, The United States and Asia, they are the kings and they had a freedom. But in that case, there is no best practice sharing and there are no synergy. That's why we decided to have the functional access for the top level focus. But in that case, that is a function-wise gathering. That's why it is easier to have a better plan and a synergy. But in that case, function and function in lineup in the value chain, that is not really making a good mindset for cooperating each other. For example, researchers would like to bring the products to the development as early as possible. The development side consider the getting approval is their job. So they accept only those likely to be approved. So they go back and forth there. The functional access was the priority, but each has the project team with different representatives. And their team members discuss for the sake of the project and come up with the conclusion. And after that, they go back to their original function, and that is communicated to the boss of the boss of the boss. Then there are some orders given from top level. And with all those opinions, they have to come back to the project team meetings again. In that case, that was -- all the contents available at the time was far from originally discussed. So you have to start from zero once again. We wanted to avoid this. So we decided to have the cross-functional team as a project. From the phase of R&D until the very end of the end of the life cycle, one team is going to take responsibility end to end, although the members might be changed little by little. So far, to his or her own convenience, the member consider that we want to progress this further or not. But we can avoid that kind of approach with this system because has -- team is delegated. The decision-making is going to be quick and those in the very near to the field makes a decision. So if things happened, the change direction is very easy to do. So as an organization, it's going to be quite lean. However, more than that, the quality of decision-making is going to be higher. It's going to be speeded up. And if we need to change the direction, you can do that his or her own responsibility. So we can make a quick decision. So we don't need to spend 6 months for decision-making. So we have this VALUE in upper case in English, realizing that is mentioned. So a bigger VALUE is created earlier. That is possible to be made with this business model. That's my decision.

I have an additional question on governance and accountability. So what is the role in this asset maximization team?

In a cross-functional team, there is the empowerment, they are accountable. In terms of the governance end to end without anyone's involvement, they are not allowed to do freely. There is stage gate in R&D. So good governance is functioning there. And also, we had the function-based organization before. Resources are allocated to projects. So it was like a vendor and the capabilities from the vendors may not be at the level being required. They have a team based on the patient access and then the team may's not work. So teams to the capability offering function. With this capability, we cannot change our objectives, so please change. They are able to say so now. We have a cross-functional team we are building. I often say this. This is to build a house with many people from different disciplines. Carpenters cannot use a saw or they cannot put down the nails. No, that is not going to happen.

We have less than 10 minutes to go. And we also would like to take questions from members of the media. Anyone who would like to ask a question from the media? Nikkan Kogyo Shimbun, [ Yasakawa-san ] please.

Can you hear me?

Yes, we can hear you. Thank you.

I'm [ Yasakawa ] from Nikkan Kogyo Shimbun newspaper. I have a question about the details in R&D. Your pipeline is the topic of my question, antibodies, new modalities for bio are increasing. What is going to be the proportion of small molecules. I would like to get an image. ASP3082 is one of the products you are growing for the next generation. Across the board, what is going to be the proportion of small molecules? What about your resources for small molecules for the future?

Thank you for your question. In terms of the balance across the board, it's difficult to say based on what we're talking about the balance. Antibodies and engineered antibodies, such as bispecifics and ADCs and gene therapies and cell therapies. And their weight is going to go up for sure, mostly. And according to our outlook, the so-called small molecules or engineered small molecules, as we call, as you pointed out, targeted protein degradation. In the new pipeline we're beginning to see, it's going to be the only modality. But still, but I'm not saying that there's going to be no drug discovery for small molecules. But compared to small molecules, biologics, will have a higher proportion into the future. But until TPD is going to be successful, whereas small molecules will be going, there's no place they can go to. Some had such a pessimistic view internally. This may be the viewpoint outside of the company, but targeted protein degradation achieved a POC. We have follow-on programs as well. So for the future, for a company, this can be an important modality for our company.

One more question regarding the cost optimization. This may be overlapping with the previous questions, but you implemented SMT in the coming 5 years, as effectiveness, you have a number you're going to achieve. Compared to the previous 2 years, the amount is very big. In FY '26 and '27, you have large numbers. In the mid- to long term, you're going to work on, but for the short-term wins, I think you're including such figures as well. For example, the optimization of the head count might be included in this?

Thank you. First, the remaining part of SMT, meaning the JPY 85 billion in the coming 2 years, there are already plans, and we are going to execute them. That's our commitment. And the remaining JPY 115 billion in order to achieve JPY 200 billion, that is additional 3 years. So rather than the increase of the reduction level, this is the asset base that we are going to follow. With SMT, we generate asset, and we are going to make use of that so that we will get further the contribution in AI technology is definitely going to change the ways of working. So that is also where we are going to make investments so that we can gain the benefit. So in the coming 5 years, the unprecedented reduction is what we are aiming at. That is not really so. We are going to be more down to the earth and we go one by one steadily.

Next, [ Nikkei ] business, [ Hashimoto-san ], please.

Nikkei BP, Hashimoto is my name. Page 12, that is about pipeline chart. I want to ask you a question. Here, it says for primary focus underneath value-enhancing BD, that's what it says. According to your explanation, primary focus itself is going to be revisited. The items might be increased. But this is value-enhancing BD. And the slide 2 page after that you are going to do whether you can expect synergy. So the rescue BD is not something you are going to pursue for. So with this primary focus basically fixed, and it's not really increasing this to 5 or 6, rather for each primary focus, you're going to continuously discover the drug. Is that your intention?

Thank you for your question. I'm going to explain first and after that, Taniguchi is going to make a supplementary comment. Primary focus itself needs to be refreshed from time to time. We have this full primary focus and some near to POC or POC is already established. So you might think that this is sufficient. But it's not really so. For the science, there's a phase of maturity and each science has a limitation. So for us, for earlier research, something likely to be the next primary focus. We have to make a continuous effort to find that next likely to be primary focus. But can we have 10 or 20 primary focus? In our size, if we do that, we can make a concentrated investment. So spontaneously, we can see the number. It's going to be the bell shape, but it's not going to be an overwhelming number. We have a good primary focus now. That doesn't mean that we are going to stop seeking for the -- another primary focus. As depending on situations, BD might be one inflecting point to find another primary focus. Taniguchi-san?

Thank you Okamura for the explanation. Science is progressing day by day. The immuno-oncology, targeting protein and also the cell therapy, regenerative therapy, those are the focus currently However, now and toward the future, again, science is definitely believed to be progressed. So new technology, new science, whenever those are available or emerged as early as possible, we would like to update them so that ultimately, they can be changed -- transformed to the value of the patients. So we always would like to prepare for that.

Regarding the number wise, the size-wise, Okumura-san mentioned about the size, how many is likely to be most optimal?

So for primary focus and primary focus candidate, the maximum number of that is 5 so far. Up until 5, we can manage it. If it's 6, of course, that depends on the stages, depending on the therapeutic areas. That 5 I think -- 6 I think that's the maximum. If it's over that, managing is going to be difficult. We don't want to do the thinner and wider. We don't want to do that.

Thank very much. We are running over, but we'd like to take the next question or the last question. Bloomberg, [ Hasebe-san ] please.

Hasebe from Bloomberg. I have a question on Page 7. Revenue outlook is shown here. And are you expecting a decrease? How much is going to be the decrease, just a slight decrease or for profit as well in the coming 5 years? What is your outlook? And how should I understand?

First of all, XTANDI, it's around JPY 900 billion right now as an annual business. XTANDI is a small molecule. So after LOE, generics, we replace XTANDI, so in the end, JPY 900 billion is going to be a very small number in the end. As for profit, XTANDI in the United States, we have a co-promotion agreement with Pfizer. 50% of the revenue are paid to Pfizer in the United States. In the rest of the world, we have a royalty we paid to Pfizer in accordance with the amount of sales. So analysts, I think, have their respective models. So you can take these numbers into consideration as well as the speed. And LOE, as you can see in this diagram, it's not going to happen all at once in the world. In small countries, LOE will be seen in small countries, 27 in U.S., 28 in Europe and 29 in Japan and other countries. So generics, we replace XTANDI in various countries one after another, then you can understand the revenue and profit image more clearly based on this.

Is that all your question?

Yes, I'm fine. Thank you very much.

Then we are running over a bit. But many people attended to our meeting. Thank you very much. With this, we'd like to close today's briefing session. Thank you once again for joining us today.