Daiichi Sankyo Company, Limited (4568) Earnings Call Transcript & Summary

Now we would like to start the presentation of Daiichi Sankyo's new 5-year business plan. I am Junichi Onuma from the Corporate Communications Department, and I'm delighted to serve as the emcee today. Thank you for your time. Today, our President and CEO, Sunao Manabe, will make the presentation. And following the presentation, we will have time to take your questions. Please note that the Q&A session will be recorded. Thank you for your understanding. Now I'd like to hand it over to CEO, Manabe-san.

Hello, colleagues. My name is Sunao Manabe, and I am the President and CEO of Daiichi Sankyo. I'm here to present our new 5-year business plan today. Thank you for joining the session. I will use the deck that is now posted on our corporate website. Please see Slide 3. Today, I present Daiichi Sankyo's environment social and governance, or ESG, management. Our 2030 vision recap of our previous 5-year business plan and then our new 5-year business plan. Please see Slide 4. I would like to start the presentation by stating that we will focus even more on ESG management going forward. In today's society, the importance of providing value that leads to a sustainable society has been widely recognized and the importance of ESG activities have been increasing year by year. In the past, we were able to explain most of the value for a company by the financial value captured through financial statements. But as you all know, corporate value can no longer be estimated just by financial value. In other words, the importance of nonfinancial value that cannot be read solely through financial statements is widely recognized. For Daiichi Sankyo, we define no financial value and the value of our innovative R&D pipeline, the value created through contribution to our stakeholders, investors, employees and other stakeholders and society and natural environment. There is a growing need for us to provide value at all levels, financial and nonfinancial. In this context, we define ESG management as management based on the long-term prospective that enhances both financial and nonfinancial value by reflecting ESG elements in business strategies. We believe that such a long-term focus on management translates into sustainable growth of both our company and society. Through the COVID-19 experience, I have reaffirmed that ESG management is essential for ensuring sustainable growth. This slide describes our value-creation process and our ESG management. Our purpose is to contribute to the enrichment of quality of life around the world and by accomplishing the mission, creation of innovative pharmaceuticals and provision of pharmaceuticals, addressing diverse medical needs. We deliver value for sustainable society. Society expects us to address unmet medical needs and supply high-quality pharmaceutical products among other values. In order to meet this expectation, we invest a variety of internal and external management resources and create value for each stakeholder and society with science and technology as our greatest competitive advantage. This value creation process is designed for ESG management. And therefore, by circulating the process, we should achieve both sustainable growth of the company and our society as a whole. We have identified the key issues that need to be addressed for sustainable growth and selected them as materiality. I will explain the detail in the following slide. Please see Slide 5. From the perspective of both importance of the impact on our mid- to long-term corporate value and the expectations of society, including various stakeholders, we have identified the key issues for fulfilling our purpose. Through discussions with internal and external members at Board meetings, we have identified 8 materiality and organized them into materiality related to the business and materiality related to business infrastructure. Although we have identified 4 materiality as related to our business creating innovative pharmaceuticals, the most important materiality in our sustainable growth strategy for establishing a competitive advantage. In addition, we have identified 4 materiality related to our business infrastructure and have recognized that conservation of the global environment and measures against climate change, which are the foundation of life activities and the basis for living, are extremely important for us to operate sustainably and to grow our business. We also recorded that demands from society are high in this area, and we are actively engaged in environmental management. We believe that the value we provide to our stakeholders and society through our value creation process is linked to SDGs' goal #3, health and welfare for all, which is one of the United Nation's sustainable development goals. In addition, we believe that our efforts around materiality will also contribute to the various SDGs shown on this slide. In addition, although not included in today's presentation due to time limitation, we have established KPIs for each materiality, and both of them on our corporate website today. We'll set up another opportunity for discussion of these KPIs later this year. Please see Page 6. Next is our 2030 vision. This session describes the future external environment that we assume when we aim for sustainable growth through ESG management, the role that we play there. Please see Slide 7. There are a variety of life journeys driving an individual's lifetime. Recently, wearable devices and similar type of devices are widely used, making it easier for people to grasp and manage their own health conditions. Such technologies are likely to become increasingly prevalent in the future. By acknowledging and diagnosing individual health care data and medical data, together with big data on the DX platform using digital technology, we predict that an era where people be able to receive recommendation for health care solutions based on their individual health status. Our digital transformation progresses a variety of health care solution will be provided by different emerging industries, such as companies that have strength in IT and digital technology. Pharmaceutical companies are forming alliances with such companies will provide additional value that contribute to the personal health management. Our target is to be a company that contribute to the enrichment of quality of life around the world by providing optimal modalities created through our science and technology, including messenger RNA, gene therapy, cell therapy and digital as one of the treatment solutions. Based on the above environmental awareness and the values we aim to provide, the next slide shows our 2030 vision, a company that we want to be in 10 years from now. Please see Slide 8. Our 2030 vision is to be an innovative global health care company, contributing to the sustainable development of society. To realize our purpose, we aim to address the social issues that we are expected by society to solve through our business activities, such as the creation of innovative pharmaceuticals and the efforts for achieving the SDGs. We challenge ourselves to continuously provide innovative solutions based on our strength, science and technology. Please see Slide 10. This is a recap of the previous 5-year business plan. I will present the major progress made in each of the 6 strategic targets and then shareholder returns. In the previous 5-year business plan, we have made significant progress especially in establishing our oncology business. Please see Slide 11. Summary of progress for 1 of the 6 strategic targets. Establish oncology business is shown on this slide. The launch of HER2 during the previous 5-year business plan was a remarkable achievement. As for the first indication, third line treatment for HER2-positive breast cancer, we were able to obtain approval and launched the product in the U.S. with only 4 years after 3 months from the initiation of critical study. Subsequently, Enhertu launched in Japan and was approved in Europe this January. We are currently preparing for the launch in Europe. Furthermore, we were able to gain new indications very quickly. We received approval for third-line treatment of HER2-positive gastric cancer in Japan and launched. And we received approval for second-line treatment for gastric in the U.S. with the same data that was submitted in Japan. In addition, the 2 strategic alliance with AstraZeneca for HER2 and Dato-DXd were both significant achievement. The alliance with AstraZeneca have enabled us to develop optimal strategies to maximize the value of 2 ADCs. Visible achievement from the alliance are upfront payments and development milestones and expansion of the original development plans. In addition, we are building expertise across the entire value chain from the alliance with the company that is very competitive in the oncology area. Current development status of the 3 ADCs is shown in the right-hand box. When the previous 5-year business plan started in April 2016, we didn't even have Phase I result for Enhertu. After 5 years, are currently, 40 Phase III and Phase II registration studies are ongoing for 3 ADCs. Next is Slide 12. I would also like to briefly review the progress made for other strategic targets and shareholder returns. As for edoxaban, Lixiana, we achieved #1 market share in Japan. The market share in Europe and the Asian countries are growing steadily. We achieved consolidated annual revenue target of JPY 100 billion 2 years ahead of plan. And Lixiana is growing substantially as our lead product. And for our Japan business, we achieved #1 share in terms of revenue for 4 consecutive years since fiscal year 2016. We have also launched competitive in-house product such as Tarlige and acquired attractive new product such as Emgality. I view that we have demonstrated our presence as #1 company in Japan. As for our U.S. business, the fact that clinical development of Tarlige did not proceed as planned, which resulted in our exit from the pain business, had a negative impact on achieving our revenue target. On the other hand, the growth of American Regent and the successful launch of Enhertu in the U.S. were extremely important achievement. We now have a good base to expand our U.S. business during the new 5-year business plan, especially with Enhertu. As for the fourth strategic target, continuous generation of innovative drugs. The value of our late-stage pipeline increased substantially, particularly for 3 ADCs. In addition, good progress has been made around drug discovery, utilizing a variety of modalities beyond ADC, particularly for nucleic acid, cell therapy and gene therapy. As for enrichment of profit generation capabilities, we have optimized manufacturing and R&D structure globally, optimize commercial structure in the U.S. and EU and diverse noncore assets as well. However, the critical development of 3 ADCs has progressed substantially beyond expectations and the additional investment were made. That led to us not meeting profit targets for the previous 5-year business plan. On the other hand, given the steady progress being made in the commercialization and development of 3 ADCs, we are planning for significant profit growth during our new 5-year business plan. I will come back to this topic later. As for shareholder returns, we believe we have accomplished our initial commitments with a total return ratio of more than 100%, total JPY 200 billion of acquired [indiscernible] shares and increased dividend. Please see Slide 13. This section describes financial targets for the previous 5-year business plan. As mentioned earlier, the financial targets were revised in fiscal year 2018. And the fiscal year 2020 targets were forwarded by 2 years due to the exit from pain business and aggressive investment for ADCs. Next, Slide 14. As a result of being highly evaluated in the market, particularly our late-stage pipeline, our share price has increased dramatically over the last 5 years. Accordingly, our market cap has risen substantially, reaching the top 10 among all listed companies in Japan. Please see Slide 15. Now our new 5-year business plan. Please see Slide 16. This slide [ represents ] our positioning of our new 5-year business plan for ensuring sustainable growth. As our oncology business has steadily launched, we are confident that we can realize our 2025 vision of being a global pharma innovator with a competitive advantage in oncology. Our new 5-year business plan that covered fiscal year 2021 through fiscal year 2025 is a business plan designed to realize our 2025 vision and to shift towards our growth stage geared to achieve our 2030 vision under ESG management. The specific company that thrive to be in 2030 is global top 10 in terms of oncology revenue, having additional pillars as source of growth, new products being source of profit in each business unit and contributing to the sustainable development of society through our business. Let me now take you through the financial targets and the strategic pillars for our new 5-year business plan. Please see Slide 17. First, the financial target for fiscal year 2025 are: consolidated revenue of JPY 1.6 trillion, of which the revenue from oncology will be more than JPY 600 billion; operating profit ratio before R&D expense of 40%; an ROE of 16% or more. We will adapt dividend on equity, DOE, as a KPI for shareholder returns going forward. Our target is DOE of 8% or more in fiscal year 2025. We have established 4 strategic pillars for our new 5-year business plan. The first strategic pillar is to maximize 3 ADCs. We will maximize Enhertu and the Dato-DXd through the strategic alliance with AstraZeneca and our 3 DXd will be maximized without a partner. We will efficiently and gradually expand the workforce and supply capacity, depending on changes around the product potential. The second strategic pillar is profit growth for current business and products. For the products, we will grow Lixiana, Tarlige and NILEMDO. We will secure source of investment for sustainable growth by transforming to profit structure focused on patented drugs and securing high level of profitability in each region. In addition, we will target further profit growth for American Regent and Daiichi Sankyo Healthcare. The third strategic pillar is to identify and build pillars for further growth. Our target is to identify the new growth drivers following 3 ADCs and to select and advance promising post DXd-ADC modality through multi-modality research strategy during the new 5-year business plan in order to achieve sustainable growth. The fourth strategic pillar is to create shared value with the stakeholders for initiatives, how we will identify it as high priority during the new 5-year business plan to advance ESG management from a long-term perspective. For our relationship with patients, we will further contribute to patients through patient-centric mindset. For our relationship with the stakeholders and investors, we will balance investment for growth and shareholder returns. For our relationship with society, we will reduce environment load across the entire value chain and take actions against pandemic risks. In addition, as our oncology business expands, we will define and foster global core behaviors in order to build a unified culture and to further enhance our organization and engagement of our people on a global basis. To support the execution of our 4 strategies, we will implement data-driven management through advancing digital transformation and we'll also advance company transformation with digital technology. In addition, we will implement agile decision-making through our new global management structure. Please see Slide 18. I will present the details of our strategic pillars from here. The first strategic pillar is to maximize 3 ADCs. Please see Slide 19. As for 3 ADCs, which are the growth drivers for our new 5-year business plan, we will maximize the product value by providing new safe and effective treatment solutions to change SOCs for more patients, especially for breast cancer and non-small cell lung cancer. With respect to Enhertu, we will accelerate our efforts around market penetration and new indications through the strategic collaboration with AstraZeneca. We have built a very firm relationship with AstraZeneca. In addition, we will establish advantage of competitive products and we will formally establish HER2 low expression concept for the treatment of breast cancer through providing high-quality information based on evidence gathered through clinical trials and clinical research to health care professionals. And for Dato-DXd, our target is to obtain approval and additional indication as quickly as possible through our alliance with AstraZeneca. We will maximize product value by establishing and implementing an effective launch plan and by establishing advantage of competitive products. For HER3-DXd, we will launch as fast as possible through our in-house development, utilizing the expertise and business infrastructure in oncology that we have gained and strengthened through the development and commercialization of Enhertu and Dato-DXd. After having developed and implemented an effective launch plan, our goal is to establish HER3 as a cancer treatment target and to provide cancer patients with a new, safe and effective treatment option. In addition, we will deliver the product to more patients safely and effectively by promoting appropriate use of the product through ILD monitoring and risk analysis, and by efficiently and gradually expanding the workforce, supply capacity depending on changes around the product potential. Please see Slide 20. This is the launch plan for 3 ADCs. We have launched Enhertu for third line HER2-positive breast cancer; and second, a third line HER2-positive gastric cancer. Approval for these indications were based on data from DESTINY-Breast01 and DESTINY-Gastric01 studies. During our new 5-year business plan, we are planning for additional launches by conducting multiple pivotal studies shown on this slide. For Enhertu, HER2 low breast cancer, second line, HER2-positive breast cancer and indications for multiple cancer types, such as gastric, lung and colorectal cancers. Lung cancer will be the launch indication for both Dato-DXd and HER3-DXd. Beyond the fiscal year 2026, we will apply to obtain approval for broader cancer types and treatment lines for each product, which we believe will lead to maximizing the value of 3 ADCs. Next is Slide 21. When we achieve the plans on the previous slide, we will be able to provide as 1 of 3 ADCs, our treatment for major subtypes of breast cancer and non-small cell lung cancer within the next 5 years. Beyond fiscal year 2026, we will accelerate development further so that we can contribute to many more patients with additional new indication. Please see Slide 22. The slide is about enhancing ADC supply. Considering the launch plan for 3 ADCs and the development of -- following the DXd ADCs, we will make capital investments of up to JPY 300 billion during our next 5-year business plan to expand supply capacity of our ADCs. The timing of investment based on demand is shown by factory icon on this slide. I would like to note that the scale of investment varies by each icon. Under this plan, we'll enhance our global supply chain with resilience that can maintain stable supply of products in times of natural disasters, pandemic and the other contingencies. Please see Slide 23. Oncology revenue target is shown on this slide. Our target is revenue of more than JPY 600 billion in oncology in fiscal year 2025 by maximizing 3 ADCs. The graph is an image of revenue growth during our new 5-year business plan and the 2 growth drivers after fiscal year 2025 are Enhertu and Dato-DXd. Next is Slide 24. The second strategic pillar is profit growth for current business and products. And profit growth for current business and products during our new 5-year business plan will be extremely important as we continue to invest for sustainable growth. Please see Slide 25. I will first touch on profit growth for our anticoagulant, Lixiana. We will leverage the momentum gained from the previous 5-year business plan to bring consolidated annual revenue to JPY 200 billion at the earliest timing, and we'll target for peak annual revenue of more than JPY 220 billion. Major investment in this product has been made and we expected this highly profitable product to generate stable profit during our new 5-year business plan. Now Slide 26. This slide describes our plan for quicker growth of the new products, such as pain therapy agent, Tarlige, and cholesterol-lowering treatment, NILEMDO. We plan to grow through obtaining additional indications as well, such as central and neuropathic pain for Tarlige and ischemic stroke for our antiplatelet agent, Effient. We will pass through quick growth of Emgality, prophylaxis of migraine attacks, leveraging the high product potential. We also expect to expand indication for the cholesterol-lowering treatment, NILEMDO and NUSTENDI in Europe through the ongoing cardiovascular event prevention trial. Through the growth of these new products, we will also aim to achieve sustainable growth in our business outside of oncology. Moreover, our goal is to achieve profit growth in all of our current business and products by growing revenue for our highly profitable products, such as Effient and Tarlige in addition to Lixiana. Please see Slide 27. In our new 5-year business plan, we aim to transform ourselves into a business structure that supports sustainable profit growth through transformation to patented product, best-profit structure in each region. In the U.S. and Europe, we will further strengthen our patented product-based profit structure with the aim of achieving patented drug ratio of approximately 100% by fiscal year 2025. The ratio of oncology drug will also rise in each region. Growth of products such as Lixiana and NILEMDO is also extremely important in Europe, and we will aim to achieve our target for the products with high priority. Please see Slide 28. The ratio of patented drugs versus off-patent drugs will also increase in Japan. As for ASCA, Asia, South and Central America, we aim to shift to a patented product, best profit structure over a longer term by assessing the business environment in each country. In fiscal year 2025, we are expecting the ratio of patented drug in Japan to be approximately 80% and ASCA, approximately 45%. And Slide 29, American Regent is already making significant contribution to our consolidated profit. And our plan calls for American Regent to continue the contribution to generating funds for investment towards our sustainable growth through increasing revenues for Injectafer and generic injectable products during the next 5-year business plan. Leveraging the high expertise around injectable iron and the ability to provide stable supply of top-quality generic injectable products, our view is that American Regent product will continue to be a part of the 3 [ top ] solutions we provide in the U.S. Daiichi Sankyo Healthcare is also a unit contributing to consolidated profit. Our new 5-year business plan calls for Daiichi Sankyo Healthcare to contribute to generating a fund for our growth investment through expanding Japan domestic in-store sales and online business. We believe that Daiichi Sankyo Healthcare products will also be a part of the treatment solution we provide in the future, doing all the strength in multiple categories, such as OTC, skin care and oral care. From Slide 30, I will cover the third pillar of our strategy: identify and build pillars for further growth. Please see Slide 31. In order to achieve sustainable growth, it is essential that we continue to generate products and modalities that will be the pillars for our growth after 3 ADCs. From the projects in early clinical phase and for all the multiple modalities that are planned to enter clinical phase during our new 5-year business plan, we will identify post-3 ADC growth drivers and select and advance the promising modalities that will become post the DXd-ADC growth drivers. Please see Slide 32. We believe that the post-3 ADC growth drivers can be identified from the 4 areas shown on this slide. While the DXd-ADC family, which, as we noted last December at R&D Day, include DS-7300 with [ confirmed ] early efficacy. Our expectations are high on DS-7300, including the fact that B7-H3 is expressed in a wide variety of types of cancer. In addition, there are several attractive candidates for second-generation ADC, new concept ADC and modified antibody, and we will accelerate the development of each project. We also have the ENA family aside from DS-5141. We have several other projects for Duchenne muscular dystrophy, and there are several projects for other rare diseases. Nonclinical work is underway. And we will move them to the clinical as quick as possible. Next is Slide 33. Technology development for our new modalities are also underway. I will not discuss in detail today, but from this fiscal year onward, multiple projects using new modality technologies are planned to enter the clinic. We're also working on in-house manufacturing technology development for these modalities to be prepared for emerging needs in the future. As for LNP messenger RNA, our plan is to utilize this modality for nonpandemic vaccines, that is vaccines for noninfectious disease as well. Our view is that, vaccines are an important part of the treatment solution we provide in the future. Please see Slide 34. The fourth pillar of our strategy is create share value with stakeholders. This section describes the initiatives for our stakeholders, patient, society and environment and our employees. Please see Slide 35. We have put the patient at the center of our WACC at all times. For example, we have been engaging in activity to incorporate the voices of patients in drug development, such as better understanding unmet needs through interaction with patient associations and reflecting them to clinical development plan. We have also been engaging in social contribution activities, such as donation for patient associations and volunteer activities. Going forward, we will develop new drug formulation that consider a patient's perspective, in addition to orally disintegrating tablets that we are providing for many of our products, and we will provide easier-to-understand and more accessible safety information. Through these activities, we will further incorporate patient-centric mindset into the entire value chain. In our new 5-year business plan, patient-centric mindset will become even more important for us as 3 ADCs expand to various types of cancer and our activities in Alpha target more rare diseases. We will further contribute to patients through patient-centric mindset will contribute to the enrichment of quality of life around the world. Next is Slide 36. We consider the conservation of the global environment, the foundation of our life activities and the lives to be one of the most important business challenges in ensuring the sustainable growth of our business. We have established 3 long-term target for 2050: be a carbon neutral; 100% recycling; and environmental risk minimization for social and environmental challenges, such as decarbonization society, cyclicality economy and the society in harmony with nature. In our new 5-year business plan, we will implement various initiatives to reduce environmental impact throughout the value chain and contribute to society and environment. Now Slide 37. We are currently stably supplying seasonal influenza and other vaccines from an internal manufacturing site. And we will contribute to society by establishing technology and manufacturing expertise for COVID-19 and future epidemics. And we have started Phase I/II study for our messenger RNA COVID-19 vaccine last month. We are working to build platform production technology that can be used to create vaccine for COVID-19 and future emerging, reemerging infectious diseases. During times of future pandemic, our target is to achieve early stable supply through mobilizing all efforts within the pharmaceutical industry. Please see Slide 38. As we expand our oncology business, we will recruit diverse talent people from many countries and region to create an inclusive culture where people can give their best to serve patients. We have engaged over 12,000 of our employees and leaders to define 3 core behaviors, which, together with our core value [ employee ], who we stand for as a company. The core behaviors were selected with the aim of valuing the people for who they are as individuals and welcoming diverse perspective, which enable us to achieve more as Daiichi Sankyo; treating each other with respect and building trust through transparent and willingness to listen, which enable us to collaborate simply and productively; learning, experimenting and taking initiative, which enable us to grow together every day to strengthen Daiichi Sankyo's capability. Next is data-driven management through DX and transformation through advanced digital technology, which supports our strategic pillars. Please see Slide 40. In fiscal year 2020, we integrated the digital functions that were spread across the company and have established DX management unit. To strengthen our DX activities, we are currently developing our IT infrastructure and our integrating data held by each function through our data-driven management. Also, we will introduce AI and other digital technologies to each function of the value chain, and we will aim to enhancing our competitiveness to increase operational efficiency. We plan to commence operation, such as smart laboratories for 24-hour continuous collection and analysis of data and smart factories for fully automatic manufacturing. Now well-balanced investment for growth and shareholder returns, please see Slide 42. During the new 5-year business plan, we will prioritize R&D and capital investment on 3 ADCs for sustainable growth and will enhance shareholder return through dividends that take account of our profit growth. Adding the planned operating cash flow before R&D expense, the next 5 years to our current cash in hands, available source for cash allocation during the next 5-year business plan is estimated to be approximately JPY 2.8 trillion. Our plan is to allocate approximately JPY 1.5 trillion to R&D prioritizing 3 ADCs, and to allocate approximately JPY 500 billion to capital expenditures focusing on enhancing ADC supply capabilities. Depending on the pipeline progress, we will flexibly allocate our resources to investment around building pillars for further growth and acquisition of own shares considering the best balance between sustainable growth and shareholder returns. As for dividends, we will further enhance shareholder returns through stable dividends and through dividend increase that take account of our profit growth. Next is shareholder returns, please see Slide 43. During the next 5-year business plan, we will aim to maximize shareholder value by improving capital efficiency and enhancing shareholder returns considering equity cost. With increased profitability through the growth of 3 ADCs and with flexible acquisition of own shares, we will aim for ROE of 16% or more in fiscal year 2025, and we'll enhance capital efficiency. And for shareholder returns, in addition to maintaining the current ordinary dividends of JPY 27 per share, we will increase dividends that take account of our profit growth. We will also flexibly acquire our own shares and we'll enhance shareholder returns. We will adapt dividend on equity DOE based on shareholders' equity as the KPI for shareholder returns going forward. Our target is DOE of 8% or more in fiscal year 2025, exceeding cost of shareholders' equity and also stable shareholder return. We will continue to aim for maximizing shareholder value. Slide 45 is our financial targets for fiscal year 2025. By steadily implementing strategies for the new 5-year business plan presented today, our target is to achieve consolidated revenue of JPY 1.6 trillion and oncology revenue of JPY 600 billion or more in fiscal year 2025. We expect our operating profit to change depending on R&D investment, which will also change with the progress of our pipeline. Our targeted to increase the operating profit ratio before R&D expense to 40% in order to secure profitability for our sustainable growth and for increasing shareholder value. Adjustment for profit share with AstraZeneca regarding Enhertu and Dato-DXd will lead to an increase in our SG&A expenses, but we will optimize cost of goods and the other expenses, transform to profit structure focused on patented products and we'll secure high level of profitability. Moreover, we will take equity cost into account and we'll aim for ROE of 16% or more and the DOE of 8% or more through improving capital efficiency and further enhancing shareholder returns. We have been investing aggressively on 3 ADCs during the previous 5-year business plan. Through the new 5-year business plan, we expect to see significant revenue and profit growth, and we'll shift to a new stage for realizing our 2030 vision. Finally, please see Slide 46. Today, I presented our ESG management for sustainable growth of Daiichi Sankyo and society. Our 2030 vision, which is the company that we want to be in 10 years from now, and our new 5-year business plan have started this month to realize our vision. With a goal to solve social challenges through creation of innovative pharmaceuticals, while targeting SDGs, we will continue to aim for providing innovative treatment solutions, utilizing our strength in science and technology. Daiichi Sankyo will continue to contribute to enrichment of quality of life around the world. This is all from me today. Thank you. Now we would like to take any questions that you may have.

Today, in addition to Sunao Manabe, Toshiaki Sai, our Executive Vice President; Hiroyuki Okuzawa, our new CFO; and Wataru Takasaki, our Head of R&D division, will be on hand to answer your questions. We will answer your questions through the conference call. So if you have questions, please join the call. The conference call details, including telephone number will have been sent to you by e-mail upon registration through the entry form, which we sent in advance. Participants who do not ask questions may continue to watch the Q&A session through the live webcast.

The Q&A session will start at 9 a.m. Japan standard time. Thank you for your patience. Thank you for your waiting. Now let's begin the Q&A session. [Operator Instructions] The first question is from Mr. Yamaguchi from Citigroup.

This is Yamaguchi from Citi. Can you hear me?

Yes.

Is it okay to ask a question?

Yes.

Okay. So the first question is that you showed 3 ADC chart and also a new product other than 3 ADC chart. And it seems to be the case that 3 ADC peak sales is coming relatively quicker. And also, you showed some 6 billion -- 600 million -- sorry, JPY 600 billion kind of sales in 2025. So can you remind me what's your peak sales assumption for Enhertu, which is around for JPY 400 billion at 2025? And also, Dato is just starting to contribute around that 2025 fiscal year. So can you remind me of which is -- what your peak sales assumption for Enhertu and also Dato by 2030? That's the first question.

Thank you for your question. In terms of Enhertu peak sales, it's not so easy to forecast, but we will say around 2025 would be the peak sales. In addition to Enhertu and actually Dato-DXd, this is more difficult to predict -- forecast. Around 2030, I may say.

That's the timing, you're talking about, right?

Yes.

Yes, but it's difficult to give us some kind of a ballpark figure at this time because of [indiscernible] once trial is going away -- it's going on, right?

Right. Right.

Second question is that Ken Takeshita is coming as the Head of Global R&D, and an R&D top management structure will change. And given Takeshita's good experience in the industry and the scientific, especially in the United States, we -- the CV is public. But can you give me some color about what he has done to create new products? In short, can you give me some example of track record he did show in the industry if you have?

His background, we have received his CV. So today, I cannot explain the detail, but to development experiences he has, maybe we can provide you later on if you want.

Yes. The third question -- finally, a very short but -- the Daiichi Sankyo's relationship with AstraZeneca has been very important and will be very important in the future as well. But given the 2 members of top 4 is now leaving a bit, and Manabe-san, you are the really key person to keep this relationship. But are you comfortable with keeping very good relationship with AstraZeneca in the future with the new members coming into the kind of a top committee Board between AstraZeneca and Daiichi Sankyo?

For Daiichi Sankyo, these 2 collaborations are critical for our future. Also from AstraZeneca side, priority of these 2 collaborations are important also. Thus, 2 executive members are leaving from the committee. However, we are providing best talent. Also, AstraZeneca is probably providing to the committee best talent. So now I am very confident we can manage these 2 products and the projects very well.

[Operator Instructions] It seems there are no further questions. So this concludes Daiichi Sankyo's new 5-year business plan presentation. Thank you for your participation today.