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

Thank you for waiting. We are now ready to start Daiichi Sankyo's conference call to present ESMO 2021 highlights. Please note that today's call will be recorded under [ management ] of today's presentation and Q&A is English. Dr. Takeshita, please go ahead.

Thank you very much for the introduction, and thank you to all of you for joining this call. My name is Ken Takeshita, Global Head of R&D at Daiichi Sankyo. And welcome to our conference call to present our ESMO 2021 highlights. And I'm going to follow the slide deck that you have in front of you. Slide #2, you got your usual statement and disclaimers. So we'll go on to the Slide #3 and then 4. 3 represents our agenda for today. We'll give you the introduction, followed by highlights and actual ESMO presentation from 3 clinical trials that we would like to highlight. And then, of course, there is a very lengthy appendix we have in front of you at the end. So Slide #4. We want to emphasize here today that this year's ESMO marks a major turning point in Daiichi Sankyo transformation into a global leader in oncology. We had 4 late-breaking presentations, including one late-breaking presentation in a Presidential Symposium. We also had the chance to present the first clinical data in DS-7300 program, which is the fourth DXd-ADC in clinic. And these data really show this growing leadership of Daiichi Sankyo to create transformative medicines and really also demonstrate the strength of our ADC technology across multiple cancers and also, of course, across multiple ADC. Okay. So now we're going to go through the highlights for ESMO, starting with Slide #6. So just a brief summary of these 4 late-breaking presentations. The first one is in HER2 DESTINY-Breast03 clinical trial. This is a Phase III randomized clinical trial in the second-line setting for HER2-positive breast cancer. And this was the first late-breaking presentation in a Presidential Symposium. And HER2 is a very important clinical trial that ESMO organizes recognized. This is the head-to-head trial in breast cancer, showing superior efficacy of HER2 compared to another ADC called T-DM1. And the data shows the unprecedented highly, highly statistically significant and clinically meaningful improvement in progression revival. So these data provide definitive data for ENHERTU to become the new standard of care in the second-line HER2-positive breast cancer patient. And also, at the same time, really significantly increases our confidence for ENHERTU studies that are going on now in many different settings for HER2-positive breast cancer. So again, a paradigm shift in the treatment of HER2-positive breast cancer. Next one on Slide #7 is the in HER2 clinical trial again, but in a different disease, called DESTINY-Lung01. This is a single-arm Phase II clinical trial of patients with non-small cell lung cancer with HER2 gene patients. And we were able to show a very good response rate and durable responses in patients with these HER2-gene mutated non-small cell lung cancer. And this is very important because currently, there are no drugs specifically approved for these particular groups of patients. And the data were, of course, impressive enough to merit the publication in the New England Journal of Medicine and a simultaneous publication along with the ESMO presentation. And again, has the potential now to transform patient outcomes in these patients with HER2 mutated non-small cell lung cancer. So now this really demonstrates that ENHERTU has activity, not just in breast cancer but also in lung cancer as well, of course, our already approved indication in gastric cancer. Slide #8. I just want to very briefly mention that 2 other late-breaking presentations. One was the ENHERTU DESTINY-Gastric02 clinical trial. This was a single-arm Phase II trial involving Western patients treated with ENHERTU, which are very impressive and durable tumor responses, very similar to the original Gastric01 data that was principally conducted in patients who are of Asian -- in Asia. So this new study Gastric02 allowed us to confirm that the activities seen in Asian patients, it also applies to Western patients. And finally, the fourth late-breaking presentation, the Dato-DXd TROPION-PanTumor01. This is the -- this is not ENHERTU, but the 1062 program, in which the TROP2 is the target and not HER2. And some group analysis of this clinical trial in non-small lung cancer patients with actionable genomic alterations, AGA, shows encouraging efficacy, again, gaining a lot of confidence for us in the development of this agent in AGA population in lung cancers. And finally, in Slide #9, we did present very brand-new data in a brand-new ADC called DS-7300. This was a Phase II -- Phase I/II study in solid tumors, in which 7300 is directed against an antigen called B7-H3. Currently, there are no B7-H3-directed therapy and the 7300 shows very promising clinical data in patients with several types of advance solid the tumors that will get as well as a very good safety profile. And so we're very hopeful that 7300 will follow the footsteps of its older siblings and provide new effective treatment strategy across several types of cancers. So this again is a demonstration not just of 7300 itself but really the underlying ADC technology that we have at Daiichi Sankyo in an area of antibody drug conjugate. Okay. So Slide #10, just to summarize here that we had 18 abstracts that were released at ESMO. And we have included full slide deck in the appendix on all the presentations that we make. And for the rest of our meeting today, our conference today, we're going to focus on 3 presentations that's described in the lower left, ENHERTU DESTINY-Breast03 Phase III data; the Destiny-Lung01 Phase II clinical trial data; and finally, the DS-7300 Phase I/II clinical data. Okay. So now let's now skip on to Slide #12. So the first clinical trial that I will present today is DESTINY-Breast03. This is a randomized Phase III study, in which trastuzumab deruxtecan T-DXd is compared against T-DM1, another ADC. And T-DM1, as you know, is standard of care currently today in pretty much around the globe for the second-line treatment of patients with HER2-positive metastatic breast cancer. Slide #13 shows some important characteristics and differences between the 2 agents. As I mentioned earlier, both are antibody drug conjugates. The one on the right is Daiichi Sankyo and then one on the -- excuse me, the one on the left is from Daiichi Sankyo and of course, one on the right is from Roche, it is the current standard of care. And you can see on this table here that there are some very important differences in how these ADCs were engineered. In terms of the payload, trastuzumab deruxtecan T-DXd has a topoisomerase I inhibitor compared to T-DM1, which is an antimicrotubule agent, the Payload. The antibody drug ratio is quite different. You also see that with T-DXd, there's an average of 8 of these payloads per antibody molecule compared to 3.5 for T-DM1. T-DXd also has been engineered to have a cleavable link that is tumor selective. That is to say that in the tumor micro environment, the linker is cleaved and thereby, releasing the payload. And what is also very important to note here is that the payload itself is cell membrane permeable. What this really means is that tumor cells that are in close proximity to the actual targeted tumor cell can also be killed by live standard tumor antitumor effects, in which the payload is released, passes through the cell membrane to the neighboring tumor cells. So these are very important engineering advances that were made in T-DXd. Okay. So Slide #14 shows the general study design for DESTINY-Breast03 study. It's a randomized study for patients with metastatic HER2-positive breast cancer, previously treated with trastuzumab and taxane. And the patients are randomized one-to-one to T-DXd or TDM-1. The primary endpoint was progression-free survival and the key secondary endpoint of [ safety ]. And what we are showing today is the interim analysis for progression-free survival, the data cutoff of May 21, 2021. And even though this is an interim analysis, the IDMC, the Independent Data Monitoring Committee, recommended that the study be unblinded because efficacy data was already positive. I should note here that the key secondary endpoint, the prespecified P-value have to be less than 0.000265. And we chose that number because it was an interim analysis. And you'll see that the P-value for overall survival did not quite make this boundary. However, you'll see, of course, that the boundary for progression-free survival far exceeded the P-value boundary set forth in the original statistical analysis. Okay. Patient disposition is shown inside Slide #15. There were 699 patients screened, of which randomized patients, 524, distributed evenly between the 2 arms. Slide #16 shows the baseline characteristics. And you'll see that for pretty much all the characteristics, there is even split between the 2 arms, whether it's a region, HER2 status, ECOG performance, hormone receptor status, et cetera, brain metastases and visceral metastases. In terms of prior therapies, again, the 2 arms are evenly split between the 2. And I should also mention that there was a sizable number of patients, who had received not just trastuzumab but also pertuzumab as a prior treatment regime. Okay. Now Slide #18 is really the key slide, and this is really impressive separation of the 2 curves for the progression-free survival. You see that hazard ratio is 0.28, P-value is 0 followed by 22 0s and 78. It's an incredibly impressive hazard ratio and an equally impressive P-value. You can see that the progression-free survival in the control arm was 6.8 months, but has not yet been reached for the experimental arm, the T-DXd arm. Okay. Now Slide #19 shows that progression-free survival analysis in key subgroups. And you'll see that in every single subgroup analyzed, the hazard ratio is far to the left, indicating tremendous benefits in every single subgroup categories that we have analyzed. Okay. Slide #20 is the overall survival data. And you can see that the hazard ratio is 0.56 with a P-value that is quite small, 0.007. As I mentioned, the prespecified boundary for overall survival was as listed at the bottom here, 0.000265. So we did not cross the boundary, most likely because of the immaturity of the overall survival data. It's very likely, of course, that the P-value will be -- will cross the boundary at the time more -- the next overall survival analysis. Okay. So here are the -- some additional information of interest response rate, you can see that the response rate was 79.7% in the T-DXd arm compared to 34% in the TDM-1 control arm. It's very notable that the CR, complete remission rate was 16.1%. So these are patients who are really disease-free, no evidence of disease, 16% in the T-DXd arm. Okay. Now in terms of overall safety, I think you'll see that the safety profile was quite acceptable and manageable. This slide here shows all the drug-related treatment emergent adverse events and drug-related treatment emergent adverse event. Approximately it's the same between the 2 arms. And on Slide #23, it shows some of the detail of the individual adverse events that were reported. You'll see that for the most part, there is somewhat greater incidence of toxic disease in T-DXd, if we look at any great toxicity. But when we look at Grade 3 and worse, I think the numbers are quite acceptable and certainly justifying the risk benefit for T-DXd in this clinical trial. And you'll see that most of the drugs related TEAEs are either gastrointestinal or hematological in nature. Slide #24 shows the 2 adverse events of special interest. One is drug-related ILD, interstitial lung disease. You'll see here that in T-DXd arm, the incidence of 10.5% for any grade ILD. But more importantly, I think you see it's very notable that most of the ILDs were Grade 1 and Grade 2. And we did not see any Grade 4 or Grade 5. In contrast, in a T-DM1 arm, the incidence of ILD was 1.9%. In terms of left ventricular ejection fraction decrease, very few patients show a decrease in LVEF, 2.7% in the T-DXd arm and 0.4% in the T-DM1 arm and none of them were Grade 3 or worse, they were Grade 1 and 2. In conclusion, this is the first randomized Phase III clinical trial in breast cancer for T-DXd. And we demonstrated highly clinically meaningful and statistically significant improvement in PFS compared to the current ADC standard, standard of care T-DM1. PFS hazard ratio of 0.28 with a very, very small P-value and consistent benefits in all patients subgroups and, of course, encouraging overall survival trend and a safety profile that looks quite good. And these data releases support T-DXd because the standard of care for second-line HER2-positive breast cancer. And Slide #26 shows the next steps for this clinical trial. We were granted the RTOR by the FDA back in August of this year. And of course, we have much more confidence now, of course, in our other clinical trials in which ENHERTU is being studied in HER2-positive breast cancer -- Breast09 study and the Breast05 study. And these are ongoing study, which we hope to report sometime in the future. The next clinical trial that we want to highlight is DESTINY-Lung01 study. This is a Phase II trial of T-DXd again, but in a different disease, HER2-mutated metastatic non-small cell lung cancer. Okay, and the HER2 mutations are seen in about 3% of non-squamous non-small cell lung cancer. And currently, there are no approved HER2-targeted therapies for patients with this disease. And because T-DXd, the HER2 targeting agent, we were very interested, of course, in studying ENHERTU in patients with HER2-mutated non-small cell lung cancer. And these are the data that we have seen so far. So Lung01 study has several different cohorts. They were the HER2 over-expressing cohort, 1 and 1/8 and HER2-mutated cohorts which are called Cohort 2 and Cohort 2 expansion. Cohort 2 studied the dose of 6.4 milligrams 2, 3 weeks, whereas a cohort 1 study, there are 2 different doses of 6.4 milligram and 5.4 milligram every 3 weeks. The primary endpoint was response rate. And so now we're going to focus really on the Cohort 2, which are the HER2 mutated cohort. There are a total of 91 patients, as you can see on Slide #30 now. Of 91 patients, 34% were Asia and 44% were Caucasian. And this was a clinical trial conducted in Asia, Europe and North America. You can see this -- the majority of the patients had a kinase-domain mutation. In terms of prior therapies, the median number of prior therapy was 2. So these are really third-line patients. And most of the patients have been treated with a platinum agent and checkpoint inhibitors, namely an anti-PD-1 or PD-L1 [ agent ]. And Slide #32 shows the overall response rate of 54.9%. This is, of course, a very high number, including 1.1% in the patients who had a complete remission, 53.8% with a partial remission. The median duration of response was 9.3 months. Slide #33 shows the classic waterfall plot. You can see that the majority of the patients had the tumor shrinkage experienced. And down below on the lower half are the details of the kind of mutation that the patients had. There's a lot of detail here, but there will be a take-home message here is that ENHERTU appears to be quite effective in any kind of mutations, whether it's exon mutation or gene amplification. So very encouraging for these patients with many different types of gene alterations of HER2 gene. Okay. And you can see here again that in terms of efficacy analysis by subgroup. You'll see that kinase domain patients had a response rate of 57.6%, very similar to the rest of the patient population. In terms of the prior therapies, patients who had platinum-based therapy only had a 54 -- 53.5% response rate; those who had the platinum plus and anti-PD-L1 still had a very high response rate, 54%; and those patients who had the asymptomatic metastasis baseline did just as well as those who had no CNS metastases. Very encouraging for all these patients. Slide 35 shows the spider chart. You can see that the majority of the patients had a response that was sustained over many, many weeks, some extending as much as almost -- well, really more than 2 years now. So these are really amazingly durable responses. Okay. Slide 36 shows the progression-free survival curve and overall survival curve. And you can see the median progression-free survival of 8 months and median overall survival was 17.8 months. And these are quite encouraging because these are really third-line patients who had [indiscernible] therapy treatment for their disease. Okay. Now we're going to go to a safety data on Slide #37. You'll see that the overall safety summary here are the -- all treatment-emergent adverse events and drug-related TEAEs as listed to you. I think it's very important to really mention that these are very tolerable safety profile. In terms of individual details of what the adverse events were, that's listed on Slide 38. Most frequent adverse events were things like nausea, vomiting, alopecia, vomiting and some hematological adverse events, in terms of Grade 3 adverse events and most frequent Grade 3 adverse event of neutropenia. Okay. Now in terms of drug-related interstitial lung disease, what reported in this clinical trial was that the 26.4% of the patients experienced a drug-related ILD. And some of the details are shown here in terms of the time to onset of 141 days, the median duration of 41 -- 43 days. And we do recommend that steroids be administered with the ILD and pneumonitis. But it was interesting to note that not all steroid treatment was administered as per ILD treatment [ of that ]. Okay. So finally, the conclusion for this slide is in Slide #40. T-DXd demonstrated robust and durable anticancer activity in patients with previously treated HER2 gene mutated non-small cell lung cancer. And the efficacy of about 50% was consistently observed in every subtype of patients, including those patients with stable CNS metastases. And the drug appears to be active in many different kinds of HER2 gene mutation as well as in patients with gene amplification. The safety profile was consistent with previously imported studies and most of the ILD cases were of low grade. And just a reminder that this data was generated with a 6.4 milligram dose. And currently, the 5.4 milligram dose is being [ poured ] in future studies to evaluate optimal dosing regimen for these patients with HER2 mutated non-small cell lung cancer. But for now, I think we can conclude that Lung01 study provides compelling evidence of positive benefit risk in the second-line plus setting and it is a potential new treatment standard for these patients. In terms of next steps for this program, Slide #41. We are discussing the filing strategy for these data in the second-line HER2-mutated non-small lung cancer with the various health authorities. And I would also like to note that we have a new study called Lung04 study in the frontline in the previously untreated patients with locally advanced or metastatic non-small cell lung cancer with the HER2 mutation. This is a randomized study against our standard of care, which we just initiated, in the last month. Okay. So the next few slides are just a summary of the entire clinical development program for ENHERTU. I think this you have seen previously. So there's really no change really in breast cancer program. In the gastric cancer program, there are -- in the lung cancer program, there are 2 new studies that are shown as with white bar. One is called the Gastric06 China Phase II study. This is ready for registration in China. And of course, the lung cancer 04 study, I just mentioned, this is the randomized study comparing ENHERTU versus standard of care chemotherapy for patients with previously untreated HER2 gene-mutated non-small cell lung cancer. So we just initiated that very thing. And just to complete the picture, we do have other cancer indications that are being studied, colorectal cancer and other tumors. But we don't -- I don't have any new studies to report to you for today compared to our last update from ASCO. Okay. Finally, I would like to go with you data from a brand-new ADC called 7300. This is the ADC directed against an antigen called B7-H3. Okay. Now Slide #46 shows the background and rationale. So B7-H3, also known as CD276, is a transmembrane protein that's overexpressed in various cancers, including lung cancer, prostate cancer, esophageal cancer, breast cancer, head and neck cancer et cetera. So wide spectrum of cancers, which makes us very interested to really understand that whether or not there is a broad profile of activity with this particular ADC. And then as of today, we're just in the very early stages of having a good understanding of how widely or how broadly efficacious this ADC is going to be. Slide #47, just a little bit on the background and the scientific rationale. It is an IgG1 directed against B7-H3 with the standard payload of deruxtecan. The antibody drug antibody ratio is 4 drugs to 1 molecule of antibody. And as with the -- in HER2 and other ADCs, it has some of the features that we have engineered into the ADCs, such as a stable linker payload, tumor-selective cleavable linker and a bi-standard antitumor effect. And this is a very -- Slide #48 is a schematic of our Phase I study design. It was a dose escalation study, studying various doses. And you can see that we started at the 0.8 milligram per kg. And we actually reached a very high dose of 16 milligrams per kilogram, okay? And so we're really going to be reporting to you some of the early data from this clinical trial. Okay. So Slide 49 shows a summary of the patients enrolled with their various types of cancers at the various doses that were studied from 0.8 all the way up to 16 milligrams. And you can see that so far, we have studied a total of 70 patients at various doses that are listed here with the various different baselines for cancers. Slide #50. This is a summary of the overall safety divided by dose. And you can see that in general, there is a suggestion of a dose-dependent increase in the incidence of Grade 3 TEAE, including a couple of cases of ILD at the 2 highest doses at the 12- and the 16-milligram doses. The most common AEs are listed here, and they were typically gastrointestinal, nausea, vomiting, appetite, et cetera. But these are really low grade as Grade 1 or Grade 2. In terms of Grade 3 toxicity, the most frequent was anemia. Okay. Now let's get to the sort of the interesting part. The efficacy is shown on the Slide #53. Of the 70 patients enrolled, there were 15 partial responders. It's quite encouraging as well as, of course, the 33 patients with stable disease. Slide #54 is a waterfall plot, again, showing activity of this agent in patients with quite refractory cancers. And it is -- we think that there is a very interesting pattern of responses in patients with small cell lung cancer and possibly prostate cancer. So we're very interested in these indications that's possibly something to pursue initially, although as I said that this antigen is broadly expressed in many cancers. And we are very anxiously waiting to see what activity of this ADC will have in the other cancer besides small cell lung cancer and prostate cancer. Yes, conclusion for Slide #55. This is the first in-human trial of a single agent DS-7300 and our novel ADC directed against B7-H3. And we observed, of course, very encouraging partial responders, 15 of them actually had 70. And we're particularly focused on small cell lung cancer, prostate cancer and possibly esophageal cancer that we may see some signal. But of course, we're not anywhere close to having a good look at other cancers, either such as non-small cell lung cancer, breast cancer et cetera. So very -- a lot of high hopes for this ADC. Okay. So in conclusion, what I'd like to show here on Slide #56 is that these are really evidence of further maturation of Daiichi Sankyo's ADC program and really growing leadership in creating transformative medicines for patients with cancer. So what is important here? So first of all, we can see that Breast03 study will have a direct comparison head-to-head against another ADC. And so we can see now that the superiority of the ADC technology, all the engineering that went into creating these new technologies, new ADCs within the Daiichi Sankyo research labs, that really paid off. So it's a confirmation of the technology we have here in Daiichi Sankyo to create new ADCs. And I think the second significance of this is that we are able to identify many different ADCs beyond just the HER2 ADC. As you know, we have ADCs directed against HER2, TROP2, HER3 and now a new on B7-H3. So it really -- it's again a testament to the robust technology capabilities we have to create new ADCs beyond just the HER2 ADC. And as noted on this slide, our entire R&D portfolio will be updated at the R&D Day on December 2. Okay. So that concludes my slide presentation. And we'll stop here on the slides and go on to the question-and-answer session.

[Operator Instructions] The first question is from Mr. Hidemaru Yamaguchi from Citigroup.

This is from Yamaguchi Citi. A quick question. The first one on [indiscernible], as you talk about the -- some earlier discussion with the US FDA, which was, I think it's called RTOR. So can you remind me, is this the -- what is the relationship with this event in August and the filing?

So the August conversation around RTOR was what kind of a review process does the Fed FDA wish to pursue. The Real-Time Oncology Review is something new to the agency, where they are willing to review dossier as they become available from the sponsor. So it's a way to expedite the approval process. And we were granted that. And it is a very fortunate thing for -- really for patients because they will likely -- very much likely get access to the drug much earlier than usual for the FDA process.

I see. So -- which -- I'm kind of confused about it is given by the DA in August, but it doesn't mean you have a meeting in August, rather you have this RTOR pathway now?

Well, I do want to make it clear that in August, the FDA did see the preliminary data from this clinical trial. And that really resulted in a decision to grant us the RTOR.

Right. So then this RTOR itself can give you approval with sometimes?

It is one step towards the submission. Yes.

But if you -- sorry, is it before submission?

Yes, it is before submission.

Okay. So the next event...

Yes, that's correct. Next event will be the submission.

Oh, I see. So when do you think submission to happen?

That should be happening sometime this year.

Sorry, this year?

Yes, this year.

That's right. Okay. Second question on this one, DB03, is that it's efficacy is really, really good. I've never seen. But 2 quick questions. What do you see? It's kind of your opinion, but what do you see? Because given this big difference between the T-DM1 and ENHERTU or DXd, including a bystander effect, which was discussed at ESMO as well, do you see the chance to get the low HER2 data or even at the first line, which is early stage data? The probability of success within Daiichi Sankyo's projection is going to get higher given this better expected data or it's not really changing?

No, it is higher now. The probability of success is higher.

It is higher now?

Yes.

Right. So it's fair to say that probability of success given this data may go up, right?

Yes, that's right.

And finally on DB03, ILD was also a discussion all the time. But at this time, there are a few, but the probability of happening is getting lower and lower, especially on the high grade, is getting lower and there is no grade 4 and 5, which may be a good -- which may be a good condition to go to the earlier line. So is it also fair to say that given this low risk of higher -- high-grade ILD, which gives you confidence to go for the earlier line including once again, the low HER2 and also the first line?

Yes, I think that's a good interpretation.

Okay. And quickly on the other 2 things. The 7300, you selected 3 cancers, which as you know is exploratory or preliminary cancer. But at the same time, there's no overlap with your current other ADCs. So I feel like there are some strategic selection on this one, even though they are the biological selection as well. But are you going to go for these 3 cancers so-called to get the first-to-market strategy, including [indiscernible] or small cells, which is not -- there are not many drugs available? Or it's really just a meeting of everything else?

Well, so first of all, the cancer that we chose to highlight here was not strategic, it was more data-driven. We just see the data and say, oh, this looks good. And as I said that we haven't really fully studied 7300 in other cancers, like breast cancer, for example, or other type -- the non-small cell lung cancer. But having said that, the data that we are seeing so far in some of these indications are very intriguing. And I don't think we have actually announced a formal pivotal registration program, but it is, of course, certainly on our mind.

Right. And it's also fair to say that you can plan first-to-market, meaning no kind of ORR plus DOR to get the approval type of thing coming out of these 3 cancers?

Yes, absolutely.

Okay. Sorry for that. Finally, ENHERTU lung, the data is still good, but you are changing the dosage. And this dose change, will this have an impact to your filing process? Meaning you're going to file, but the filing time itself officially announced was delayed a little bit so far. Can you make a comment on this -- those changes may have an impact to filing or not going out?

Well, I think the best I can say here is that we're in discussion with the regulatory agencies on how to go about this, should we file with the current data we have or with the data that we will have in the future. But the data we have is still good for patients who don't have much other options. And ultimately, it's a risk-benefit analysis. It's really a judgment call about that. So we are -- I think suffice it to say that we're discussing all these things with the regulatory agencies.

The next question is from Mr. Seiji Wakao at JPMorgan.

Well, this is Wakao from JPMorgan. Can you hear me?

Yes, yes.

I'm surprised that you have presented most exciting data. So my question was about DB03, especially about PFS. PFS by BICR was not reached [indiscernible] PFS assessed by investigators was 25 months. Did this result exceed your expectations or be in line with your expectations? Could you comment on this point?

Are you asking about the difference between the 2 arms?

No. [ They revealed it was ] 25 months. I think this is very tough.

Okay. So first of all, there is always some difference between investigator-assessed progression-free survival and centrally reviewed progression-free survival. So it's not a surprise that with centrally reviewed, it was not yet reached. And we have a number of 25 months with the investigator assessment. So the fact that they don't exactly match, it's perfectly fine. It's often seen in clinical trials. But in terms of the actual number of 25 months, which is quite long actually compared to the control arm, it's almost a threefold improvement in progression-free survival if we just go by the investigator assessment of the progression-free survival. And I don't know that -- I think we all expected that ENHERTU will be superior to T-DM1. But I don't think anyone really expected that the difference will be so large, a threefold increase.

Okay. So second about brain metastasis. So ENHERTU was confirmed for patients with brain metastasis and DB03. Can we assume that this will lead to its use in clinical practice for patients with brain metastasis as well? I'd like to know the data is competitive against Takeda in population with brain metastasis? Do you think the data to be sufficient to grab the market share from Takeda among population with brain metastasis?

So let me just comment on this. In this clinical trial, the patients who were enrolled, they could have had brain metastasis, but they have to have clinically stable, treated brain metastasis, okay? So that's very important to note. So those patients, who had clinically stable, treated brain metastasis, for example, with a radiation therapy, you can see that in our data set that those patients benefited just as well from ENHERTU as the patients with no brain metastasis.

Okay. Okay. So next, about DB01. So the efficacy of the drug was confirmed in patients [indiscernible] expression. What do you think is the mechanism behind this? And I'd like to know if you have any implications for HER2-low in breast cancer settings?

Okay. So the first question, I believe, was about patients who had HER2 gene mutations, but their HER2 expression was low. Is that correct?

Yes, that's right.

Okay. So I think I'm just going to speculate that for a gene mutation to be an active part of the oncogenesis or the pathogenesis of disease, it's not always necessary that the expression of HER2 is high. It's more of that the mutation confers a signaling advantage which doesn't always require high levels of protein expression. And I think we can see this in many other examples where protein level expression doesn't always correlate with aggressiveness of the disease or efficacy of agents or drugs and antibodies that are directed against a particular target. So I think that the mutation itself as opposed to the expression is a more important parameter to look at it. But I think for these ADCs as a class, what is important also as a kind of a separate matter is to understand that the level of expression of the target could be quite low, meaning lower than the currently standard acceptable range of what a HER2 positivity is. So this is the reason why we are very interested in a category of patients who have low levels of HER2 expression, but not 0. And to see whether or not ENHERTU is active in patients with low levels of HER2 expression and, in fact, we are conducting a clinical trial of breast cancer patients with this HER2-low expression. And we hope to be able to report that data to you in the future.

Okay. Okay, I understand. So last about DS-7300. So grade 5 ILDs at 16 milligram per kilogram have been identified. Do you think this is simply dose issue or is it due to the mechanism? Could you comment on this point?

Okay. So I think my guess, and this is just a guess, it's a dose-related issue.

The next question is from Mr. Kazuaki Hashiguchi at Daiwa Securities.

I'm Kazuaki Hashiguchi from Daiwa. I have 2 questions. My first question is on ENHERTU for NSCLC with HER2 mutation. It's encouraging data, I think. But in the previous presentation, in ASCO 2020, for Cohort 2 before expansion in the same study, median PFS was 14 months and ORR was 62%. The data in the expansion cohort is really worse. What do you think about the reason?

The reason is that the prior data that we showed was, what I would call, immature data with a smaller sample size. And typically, in a clinical trial as the data matures, these numbers, the progression-free survival, for example, they will move around quite a bit. And so it is expected that oftentimes the progression-free survival numbers, duration of response numbers will vary over time over the course of the clinical trial.

My second question is on DS-7300. Which dose is tested in those expansion part?

I think we are still discussing that. So I don't know that we have anything to disclose to you today, but we can say that -- what we can say is that in the Phase I trial, we went to a very high dose of 16 milligrams. And I'm not really sure that 16 milligrams is really necessary because we can see activity of the drug at much lower doses. So we have a fairly wide range of doses to examine.

The next question is from Mr. Shinichiro Muraoka at Morgan Stanley.

This is Shinichiro Muraoka of Morgan Stanley. Can you hear me?

Yes.

Great. Congratulations for your great achievement of DB03. So my first question is about DB03. So 25 months PFS is, as you showed, much longer than the CLEOPATRA first line data of Perjeta plus Herceptin. So my question is about future first line, actually DB09 study. According to clinical trial that took off, the study is ENHERTU in combination with Perjeta, such a dosing design. So what's the dosage of ENHERTU in the DB09 study? I think for first line earlier was used, so dose reduction or less frequency would be, I think, necessary. So what dose do you adopt? And what's the rationality behind? Could you share your view, please?

Yes, yes, we did conduct some early safety studies of the combination. And so we're using the dose based on that data, and it is the standard dose.

I'm sorry. So can you comment about that dosage is high, lower than the...

So we're using the standard dose.

Standard. So 5.5, 5.4 milligrams?

Yes, 5.5.

So do you think the ILD risk is manageable with first line study, right?

Well, yes, I mean we don't -- we have not seen the data yet. We can only speculate based on the data from the DB03 study, which is second line.

All right. And why don't you -- in the DB09 first line study, why don't you incorporate the monotherapy of ENHERTU in the study? I think it's not included.

Well, I think it really has to do with study design and whether or not each arm contribute significantly to how we can interpret the clinical detail. And at some point, having too many arms complicate things. And I think when the original study was designed, it was felt that having a single arm -- single agent arm may not be in the best interest of the patients, first of all. And second, that the key comparisons were the ones that are really what we're using now in clinical trials.

Okay, got it. And I know it looks -- it's about -- question about the commercial strategy. So I know that it's not appropriate for you. But so given this impressive DB03 data, I think the price of ENHERTU can be raised or should be raised compared with the current standard of therapy. Don't you think about raising the price in the U.S. or not?

Well, I am the clinical development person, but I will certainly relay your comments with the commercial people.

Great. And finally, about the DESTINY-Lung01 study. So the data is quite impressive. But -- so -- but I want to -- I'm not sure whether physicians take -- sorry, HER2 test -- whether it will be penetrated into the lung cancer area. Now, as you know, [indiscernible] many gene tests are required for lung cancer area. So I think HER2 test [indiscernible] 1% or 2% of patients. Do you think it will take time for educating the physicians or once after the approval, it will become the standard of test soon?

Okay. That's a good question. So it's always difficult to predict the behaviors of prescribing physicians. But in lung cancer, this is one disease area where mutational analysis is essential part of clinical practice because we know now that the few percent of the patients who have actionable genomic alterations or mutations, their treatments are substantially altered and affected by the result of the DNA analysis. And so analysis of HER2 mutations for lung cancer patients, I think that it's probably very easily adopted as standard practice because that's what lung cancer doctors do these days, to look for many other gene besides just HER2 mutations.

The next question is from Mr. Fumi Sakai at Crédit Suisse.

This is Fumiyoshi Sakai from Crédit Suisse. First of all, congratulations for great data setting and probably setting a new standard of therapy as far as DB03 is concerned. I have 3, 4 questions. One is AstraZeneca was highly praised of Daiichi Sankyo ADC technology. So do you think that this DB03 data driven by overwhelming efficacy from ADC technology? Is that your observation as well? That's my first question.

Well, I think the answer is absolutely, yes. It's a technology that's important.

Right. So that could update other, obviously, ADC technologies. That's where Daiichi Sankyo is heavily invested right now?

Yes. I mean we're using the basic -- the same basic technology for other ADCs besides ENHERTU. So I think it's very important for that.

Yes. You updated the technology in your presentation. The second question is more like a translational research side. Could you say highly expressing HER2 cells in HER2-low tumors, that could probably drive or getting benefit for some patients in HER2-low expression tumors? I'm not talking about just a breast or lung or tumors in general.

So the question is whether or not in HER2-low patients there maybe some...

Yes, HER2-low patients who are having HER2 -- highly expressing HER2 among HER2-low patients that can be found. And if it can be found? Yes, then that drives the benefit for -- or at least could apply for DB03 data?

Yes, I think that's a possibility. I don't think we have looked into this in great detail. But as you know -- as you point out, patients with HER2-low disease, if you actually look at the microscope, there is some heterogeneity in the level of expression of HER2. It's not uniformly low all the time. There are patients who have these scattered cells that are very highly positive for HER2, as you mentioned, and perhaps those patients that drive greater benefit. I don't think we have enough data to know this. I think once we complete the trial of the HER2-low patients, then I think we'll be in a better position to understand.

Okay. So that's next year?

Yes, next year.

Third question, the safety side. I know that ILD may not be as big issue as it used to be, but still I think you're having the ILD management protocol, mediocre size probably. Can you lower this protocol given this data set from DB03, Lung01? And my question is what about the resetting or not really resetting? Question #4, the adjuvant use. Can you see any prospect from this safety data?

Well, I think as others have pointed out, the safety data that -- for the DESTINY-Breast03 study is better than what we have been reporting previously. Why is that? I think they really -- and we can only speculate, but the one reason, of course, could be that it's early lines of therapy. It also could be that we know much more about how to manage interstitial lung disease. And we have been able to incorporate the ILD management details into our clinical trial protocols. So whatever the reason, we know that the ILD incidence is much less. And of course, that is very important, as you point out, for earlier lines of therapy, adjuvant therapy, et cetera. So yes, it's really our hope that in these earlier lines of therapy, ILD incidents will remain low.

The next question is from Mr. Tatsuyuki Arai at BoFA Securities.

This is Tatsuyuki speaking from BoFA Securities. Can you hear me?

Yes.

My question is about your thought on the market size. How the market size could change in HER2-positive breast cancer second line? Given the strong response rates and longer progression-free survival duration, I think more patients will stay on the treatment in second-line setting under ENHERTU rather than it is now under Kadcyla. So could you share your thoughts on how the market size in second line could change after the approval of ENHERTU? That is my first question.

I can only speculate on what's going to happen in terms of physician prescribing behaviors. But because the data is so compelling, I think it's very likely that ENHERTU will become the standard of care in the second line patient population and replace T-DM1 as standard care. And I think we're also suggesting that for each patient, the duration of therapy is going to be longer with ENHERTU than with T-DM1. And I think that's the correct observation.

Okay. Could you give a number like the duration of like treatment on average of ENHERTU in this DESTINY-Breast03?

So I don't think we reported in our data set the duration of therapy. But what we did show was that the progression-free survival was almost threefold increase compared to T-DM1.

Okay. Great. My second question is about the DS-1062 and 2 more 01 study results for lung cancer with actionable gene mutation. It had shown a strong response rate for EGFR-mutated lung cancer, although it has -- like the higher dose, 8 milligram per kilogram, as some safety course related to ILD. So could you share your expectation on the development strategy of this drug in this EGFR-mutated lung cancer? You have [indiscernible] in this indication. And I think you need to see data more closely in middle dose, 6 milligram per kilogram, in the future in order to see like the risk/benefit profile of the drug. But yes, anyway, could you share your [indiscernible]

Yes, I think your observation is correct. We're very encouraged by the activity of Dato-DXd in EGFR-mutated patients, but we just need to do a bit of a more work on it.

[Operator Instructions] The next question is from Mr. Naoya Miura at Jefferies Japan.

This is Naoya Miura from Jefferies Tokyo. I have one question on the Page 34 for the ENHERTU [indiscernible]. In the prior treatment received for [indiscernible], platinum-based therapy and anti-PD-L1 therapy had shown better ORR than other cases. So for the scientific purposes, what do you think this is the kind of any benefit with -- using which PD-L1 subgroup, HER2-mutated lung disease or is it possible to be shown in the other tumor types like breast cancers or gastric cancers?

Okay. Well, so I think you're referring to the fact that the response rate was a little bit higher in patients who had the anti-PD1 therapy, correct?

Yes.

Okay. So these are kind of small patient numbers, and I'm not completely sure that this is a true increase in the response rate. The 95% confidence interval, there's quite a bit of overlap between 64.9% and 53.5%. And so is there a true difference or not? I don't know. But if there is indeed a difference and that the response rate is higher, I mean it could be certainly that the prior PD-L1 or PD-1 therapy has resulted in a better immune environment such that when the patient is treated with ADC, like T-DXd, there is a release of some tumor antigens, resulting in lifting of some antitumor immune response. Maybe that is the reason why the response rate is higher. I think it's a little bit too early to speculate definitively on these sorts of matters. I just -- we just need a little bit more patient numbers to know for sure if prior treatment with a PD-1 agent makes a difference.

[Operator Instructions] The next question is from Mr. Hidemaru Yamaguchi at Citigroup.

Once again from Yamaguchi. Can I add 1 more additional question, if I may?

Yes.

Okay. Great. So it's a little bit different question, but I have to ask because so-called NCCN guidelines on the metastatic breast cancer, so-called category of evidence-wise, as of today, ENHERTU is the 2A Grade or to continue at 1 at this moment. But given this Phase III study, which is the second line, but it did show a very robust data rather than ORR data where you get your first indication. Is it fair to say that you can change this category of evidence from 2A to 1? Or even before fighting or getting approval, is there any chance this regimen will be categorized as the second line? The 2 questions at the same time.

I don't want to make any statements on behalf of the NCCN. It is really up to them to review any clinical data and make their own judgment. But as you know, sometimes they can make a decision before the FDA does or sometimes around the same time or sometimes later. It's a very different time line for both FDA and NCCN.

Okay. It will be in a different way, right?

Well, of course, it's a different group of people reviewing the data.

Yes, yes, yes. So in a sense that it's nearly nothing up to you to communicate with, rather they try to explore the data and decide by themselves other guideline. Is that the way how it works?

Yes. Sometimes they do ask the sponsor to provide some data for them to review. That certainly happens quite frequently.

The next question is from Mr. Stephen Barker at Jefferies Japan.

Steve Barker from Jefferies. My question is about the performance of the linker in the tumor microenvironment. It seems that that's one of the key reasons why ENHERTU works so well. You get the disassociation between the toxic compound and the antibody. I was just wondering if the microenvironment is the same across different tumor types from breast to lung? Any comments on that would be appreciated.

Okay. So I don't think I can comment on this, the chemistry of the tumor microenvironment. I don't think I'm the right person. I think you're probably correct, also, however, that the microenvironment is not the same in every patient, but there's going to be some heterogeneity for sure.

Do you think that's going to have -- be a factor in how ENHERTU performs across different tumor types?

I guess the possibility does exist although we can see, with these waterfall plots, that the majority of patients do benefit with the tumor shrinkage from this drug. I mean, for example, in the breast cancer study, the 03 study, the response rate was above 80%. So does that really mean that the microenvironment was the same? Or was it heterogeneous but still good enough for the drug to get in there and do its job, right? It's kind of a speculation.

[Operator Instructions] As there are no more questions, we will conclude the Q&A session.

Okay. Well, thank you very much. And we'd like to close today's conference call. So ladies and gentlemen, thank you very much again for your interest and participation. Stay safe and healthy, everyone. Goodbye.

This is the end of the call. Thank you for your participation.