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

[Interpreted] This is Manabe. Thank you for attending Daiichi Sankyo's R&D Day at this busy time of year end. Today is the first R&D Day since the announcement of the 5-year business plan. So I would like to talk about how we got off to the start of the 5-year business plan. Please look at Slide 5. This the position of the 5-year business plan for sustainable growth, which was also shown at the 5-year business plan briefing session. The 5-year business plan which covers the period from FY 2021 to FY 2025 is a plan to achieve the FY 2025 target and move to the growth stage toward the realization of the 2030 vision under ESG management. Slide 6 shows the strategic pillars for the 5-year business plan. R&D capabilities are important for the first pillar, which is to maximize 3ADCs. And the third pillar, which is to identify and build pillars for further growth. Regarding the first pillar of strategy to maximize 3ADCs, ENHERTU and Dato-DXd will maximize the product value through a strategic alliance with AstraZeneca and HER3-DXd will be developed in-house to maximize the product value. Regarding the third pillar of the strategy to identify and build pillars for further growth in order to achieve our sustainable growth during the period of the 5-year business plan, we will identify another growth driver following the 3ADCs and we'll aim to select a post DXd-ADC modality. Please look at Slide 7. This slide is a quick summary of the major progress since last year's R&D Day. With regard to the maximization of 3ADCs, ENHERTU's market penetration and the addition of new indications are proceeding smoothly, and we expect that the excellent results of the DESTINY-Breast03 study will serve as a tailwind as well. Also, the development of 3ADCs is progressing well. And in addition to ENHERTU, we have also started multiple pivotal studies of Dato-DXd and HER3-DXd. Regarding the identification of the growth driver following the 3ADCs, the first clinical data of DS-7300, which is the fourth DXd-ADC, will be announced at ESMO and further development is expected for cancer types such as small cell lung cancer, esophageal cancer and prostate cancer. During the past year, the development of DS-5670, which is an LNP-mRNA vaccine as a COVID-19 vaccine has made great progress and is scheduled to be put into practice use next year. In addition, we have obtained approval for Delytact, a virus for treating cancer, and Yescarta, a CAR-T cell therapy. Toward the selection of the post DXd-ADC modality, the establishment of technologies for various modalities has gained headway, and we have accumulated the development experience and the know-how. So in addition to the good performance of the 3ADCs, we are beginning to see the growth driver following the 3ADCs. Furthermore, the number of options for the post DXd-ADC modality is increasing. And we believe that we have made a good start toward the realization of the 5-year business plan and the 2030 vision. Please look at Slide 8. Last month, we held our first ESG briefing session. We will strive for sustainable growth through value creation with our greatest strength, science and technology, as the source of our competitive advantage. Science and technology consists of human resources, corporate culture, core technologies and so on. As for human resources, our strengths include experienced human resources who pursue cutting-edge science with connoisseurship for science and technological capabilities for refining medicines cultivated in small molecules. In addition, the tenacity of such human resources to work on new drug development with conviction that is their close engagement and motivation for innovation are fostered in our free and open corporate culture. The one who leads the size part of the 5-year business plan is Ken Takeshita, who joined our company this year as the Global Head of R&D. In addition to his advanced scientific ability, he has balanced leadership in both research and development, has experience of growing a company that was not a mega pharma, and has a background of being born in Japan and raised in the United States. I hired him in anticipation of his competence of bringing out the goodness of each of Japan and the U.S. With my work experience with Ken Takeshita so far, I'm convinced that I made a right choice at our company. Creating growth drivers after 2025 or 2030 is a major theme, but I feel that Ken Takeshita doesn't focus solely on the 3ADCs in front of us, but he's rather a leader with a mid- to long-term perspective. Further strengthening of science and technology, which is Daiichi Sankyo's strength, is indispensable for our sustainable growth. And I believe that Ken Takeshita is a leader who can achieve this. I am very much looking forward to creating drivers for our sustainable growth together with R&D unit led by Ken Takeshita. That is all for my presentation. Now I'll hand it over to Ken Takeshita.

Thank you very much, Manabe Sunao, for the introduction. And thank you to all of you for calling in to our R&D Day today. So for today, I would like to give you an update on the progress in our R&D strategy, including where we stand in terms of clinical trial programs for not just the 3ADCs, but also the additional programs we have earlier in the pipeline as well as a little bit about our research strategy. So it will be a very rich content presentation for the day from a science and technology standpoint. Next slide, please. Okay. These are the topics that will be run through today. And first, just to give you a very -- next slide, on Slide 11. This is really our vision for our R&D. We want to contribute to enrichment of the quality of life around the world. And from us in R&D, we want to serve as a source of innovation. I think the word innovation is key to improve the lives of patients and we want to do this globally, like delivering our strengths in science and technology. So this is our vision. Next slide, Slide #12. And these are some of the details of what we are doing from a strategic standpoint. Many of you are aware that we have a very broad program in the 3ADCs that are listed, ENHERTU, Dato-DXd, HER3-DXd. We also have, in earlier stages, the Alpha program, what we call Alpha, in Oncology specialty medicine. These 3 areas in the Alpha program are what we term to be rising stars and next pillars beyond the 3ADCs that you see here listed. Next slide, please. So where are we with these various ADCs and other critical stage programs. So in terms of our strategy, you will see today that we are greatly expanding the programs of 3ADCs. We are now seeing very good clinical signals, early clinical signals to both our these 2 ADCs 7300 and 6000 rising star ADCs. I'm very hopeful that these are the next generation of ADCs to be developed by us. We also have some new first-in-class, best-in-class early stage assets. And finally, in the research program, we have a lot of scientific and technical modalities that we are using to generate new approaches to attack diseases in which the target is very well developed. And through this we have been able to generate second-generation ADCs beyond the [indiscernible] 3ADC program. We also have additional new concept ADCs that we'll touch on a little bit. We also have some LNP-mRNA technologies, gene therapy, et cetera. Now supporting these clinical trial programs is something that you're not likely to see too often, but we have undergoing right now within the company, transformation of our R&D team. This is probably not very visible if you're outside of our company. But inside, this is a major transformation to change and transform the Daiichi Sankyo R&D Group into a single global R&D team that is streamlined, sustainable for our ever-expanding pipeline of trial programs and most importantly, through this unification of a single R&D team, we want to enhance our global drug development teams. And this includes mentoring, training in things like strategic expertise as well as talent development. These are going to be the pillars or investments in our people that will lead to further able to achieve our strategies with our ADCs and our next pillars. So now we're going to go on to where we stand with our DXd-ADC program. Next slide, Slide #15. Just to give you a little bit of news highlights, I'm very pleased to announce to you, of course, that our HER3-DXd received the World ADC Award as the most promising clinical candidate at the World ADC Conference in San Diego. And I will brag a little bit and say to you that our 3ADCs have won the award 3 consecutive years; ENHERTU in 2019, Dato-DXd in 2020, HER3-DXd in 2021. And this really reaffirms and confirms that our DXd-ADC technology is well recognized on a global level. Next slide, please. There's a little news update again for those of you who are not aware that we have reported our first randomized study of ENHERTU against the standard of care [indiscernible]. And in this clinical trial, ENHERTU was compared directly against an old standard ADC called T-DM1. And I'll get to this a little bit later that there's a dramatic difference in how ENHERTU compares to T-DM1; highly superior with a hazard ratio of 0.28. And now ENHERTU, based on these data, is included in ESMO Clinical Practice Guidelines as well as NCCN breast cancer guidelines as the preferred second-line treatment category 1 recommendation. Next slide, please. This is our list of DXd-ADC franchise that we have publicly announced. There are 7 of them starting with ENHERTU and going all the way down to what we call DS-XXXX, the target for this is undisclosed at the moment. But just really to remind you that this ADC DXd technology has given rise to 7 ADCs so far. And I will try to touch on 5 of these later today. Okay. Slide #18. We're going to start with ENHERTU. This is our first ADC targeting the HER2 target antigen. And this is our vision. Number one at the very bottom is to transform the treatment outcomes for HER2-positive breast cancer patients. And you'll see that we have already started to do that with our clinical trial program. We also want, as a second vision, to redefine the breast cancer treatment paradigm and create a new patient category -- a brand new patient category called HER2 Low, which is different from the HER2-positive patient population. But this HER2 Low patient population is actually rather a very large patient population. And I'll tell you a little bit later how we are addressing this patient population. And also as our third vision, we want to establish ENHERTU in diseases other than breast cancer, where HER2 is expressed by the cancer cells. This includes gastric cancer, non-small cell lung cancer and colorectal cancer. So we are doing a lot of exploratory studies as well as pivotal registrational studies in these diseases other than breast cancer. Next slide, Slide #19. It's just a very [indiscernible] summary of our breast cancer program as well as the non-breast cancer program. You can see that we look at breast cancer world from a HER2 standpoint, in terms of HER2 expression. We have the HER2-positive breast cancer in this middle row. This is classic HER2-positive breast cancer patients that you are mostly familiar with. And you can see that we have a full panel of clinical trials addressing pretty much every single patient segment in this HER2 positive breast cancer patient population. As I alluded to earlier, we are trying to create a new category of patients called HER2 Low breast cancer patients. Right now we have 2 studies going on in this patient population; DESTINY-Breast04 and DESTINY-Breast06. [indiscernible] DESTINY-Breast04 a little bit. And when at the bottom row are the diseases beyond breast cancer such as gastric cancer, non-small cell lung cancer, an colorectal cancer. And we are generating clinical trial data that really gives us confidence that ENHERTU is more than just a best cancer drug. Next slide. Now in the next few slides, I'm going to go over with you the data from the DESTINY-Breast03 clinical trial. Specifically, a slide deck that was presented just most recently last week at the San Antonio Breast Cancer Conference. Next slide. So this is a clinical trial that randomized Phase III study of T-DXd, also known as ENHERTU, compared against another ADC compound called T-DM1 for another sponsor. Patient population are, as listed here, relapsed patients with HER2-positive breast cancer disease. And it's very important for this presentation to note that these patients could have had clinically stable treated brain metastases at the time of treatment. And there were about 80 patients out of 524 patients enrolled who had, had [indiscernible] brain metastases. And that's really the focus of this particular presentation from San Antonio. Next Slide. So this is the data on the primary endpoint of progression-free survival for the entire patient population, and you'll see that there's a dramatic difference with a highly superior ENHERTU data compared to the old standard ADC, T-DM1. The hazard ratio is 0.28. What this really means is that the risk of progression is reduced by 72% a year with ENHERTU compared to T-DM1. These are incredibly dramatic improvements in the progression free survival compared to placebo controlled. You can see that also based on things that median PFS was not reached versus 6.8 months and 12 months PFS rate of about 76% compared to only 34% in the controlled arm. Next slide shows a breakdown of PFS subgroups, really showing that in every single subgroup that we have analyzed thus far, there is superiority of ENHERTU T-DXd compared to T-DM1 whether it's hormone receptor status, visceral disease, et cetera. And of note here at the bottom, patients with brain metastases also showed dramatic benefit to T-DXd compared to T-DM1. Next Slide. And this is a similar analysis of subgroups, again, showing that in every single subgroup analyzed as shown here on the left hand side, there is superior response rate of T-DXd compared to the controlled arm of T-DM1, including the patients with brain metastases. Next slide. Here, we are starting now to look at a specific group of patients who have brain metastases in Phase I in 82 patients [indiscernible]. You can see on the left-hand side here that when we look at progression-free survival, Kaplan–Meier curves, there is superiority of ENHERTU compared to T-DM1, again, with a hazard ratio of 0.25, a very similar hazard ratio to the patients who have no brain metastases with a hazard ratio of 0.30 shown on the right-hand side in slide. Next slide is [indiscernible] response rate. This is very important to see that you can achieve actually [indiscernible] CRs with T-DXd in patients who have brain metastases [indiscernible]. Of course, I think many of you are aware that there's something called blood-brain barrier, which large molecules, such as ADCs were thought not to penetrate the blood-brain barrier. But we can see here in this slide that the blood-brain barrier does seem to be quite open and allows the drug to pass through the blood-brain barrier into the tumor bed within the brain, resulting in [indiscernible]. So this may be a great news for patients who have brain metastases [indiscernible]. Now we're going to go on to other studies. Next slide, Slide #27. This is another study that we are currently conducting, a very important one called Breast04 study. This is a study in the patient population I alluded to earlier, HER2 Low breast cancer patient population. These are the patients who express a small amount of HER2, but not enough to be considered to be HER2 positive. So these are patients who have IHC 1+ or patients who are IHC 2+ or ISH negative. These are patients who are considered to be HER2 Low [indiscernible] clinical trial. In this study, we are comparing ENHERTU and a guest investigator’s choice. This clinical trial is fully enrolled and we expect to see these data sometime in quarter 4 of fiscal year 2021. So therefore, in the spring or the early part of 2022. And we hope to report to you the results of that when we have that result. Next slide. This slide shows a new study that we want to walk you through. This is on Slide #28. This is called DESTINY-Breast11. This is a new study with a neoadjuvant ENHERTU monotherapy or ENHERTU followed by THP compared to the controlled standard doxorubicin-cyclophosphamide followed by THP neoadjuvant therapy in patients with high-risk HER2 positive early stage breast cancer. This is currently enrolling. This is a fairly large study of about 600 patients. And we are very interested in the outcome of this study, which we won't have for a few years, but this is our first study of ENHERTU as neoadjuvant therapy. You can see here that we have ambitions to replace chemotherapy in single-agent ENHERTU. So next slide is yet another new study that we want to alert you to. This is called DESTINY-Lung04 study. This is targeting patients who are newly diagnosed with non-small cell lung cancer, who have mutations within the HER2 gene [indiscernible]. This is a relatively small proportion of patients with lung cancer, about 2% to 3% of the patients, but they appear to be uniquely sensitive to ENHERTU, probably because they have a mutation in the HER2 gene. And so here is our clinical trial design. We are comparing ENHERTU against the current standard of pembrolizumab plus platinum plus pemetrexed. This is enrolling now and we hope to see data from this study in the near future. So in the next couple of slides, I will just show you I think the summary of our ENHERTU program that we have seen before. Really just a highlight for you the new trials that we have launched. They are the ones with the orange color. So DESTINY-Breast11 is one of those new trials that is joining all the ongoing clinical trials. I do want to make sure to remind you that there is no end to the bars on the right, which means that we have not yet announced the end date for a particular trial. Next slide. Here is more of the ENHERTU program in gastric cancer and non-small cell lung cancer. And you'll see here that Lung04 study for HER2 mutated lung cancer patient population in the frontline setting is [indiscernible]. Next slide. Just to complete the picture, on Slide #32 is the colorectal program and also, again, to mention to you that we have multiple other indications we study and we are exclusively [indiscernible] cancer-related trials. Now I'm going to move on to the Dato-DXd on the next slide. Slide #33. Dato-DXd, this is an ADC targeting the TROP2 antigen. This is another ADC that we are developing in partnership with our partner, AstraZeneca. And our vision for this compound is [indiscernible]. We want to establish Dato-DXd as the first and best-in-class TROP2 ADC for non-small cell lung cancer. So we will introduce Dato-DXd as a key monotherapy for patients with relapsed/refractory disease, and we also want to very quickly follow that as a combination with immunotherapeutic agents, checkpoint agents for first-line metastatic disease. Second vision is to establish Dato-DXd as the TROP2 ADC of choice for patients with breast cancer. And I will go over with you some new trials that we are considering in this trial. And of course, TROP2 is expressed in many cancers besides breast cancer and lung cancer and of course we are very interested in exploring and [indiscernible]. Okay. Next slide. Slide #34 and a few slides after that is slides from a recent presentation at San Antonio Breast Cancer Conference. This is the data on triple-negative breast cancer results from Phase 1 TROPION-PanTumor01 Study. Next slide. This is a slide that shows the study design. You'll see that we have 4 cohorts in the study, non-small cell lung cancer, triple negative breast cancer, hormone receptor positive, HER2 negative breast cancer and other tumor types. And for today, we're just focusing on the TNBC cohort. Next slide. So you see that there are 44 patients in the cohort that are divided among U.S. and Japan. And these are the patients who had multiple relapses, including a few patients who have brain metastases. And very important to note here that there are 13 patients who have previously been treated with ADC, including about 10 patients who have been previously treated with TROP2 ADC from another company called [indiscernible]. Next slide. These are the waterfall plots of our anti-tumor responses. You see that response rate here is 34%, which is quite good. And you'll see that [indiscernible] are the patients who have prior treatment with [indiscernible]. You can see that even in those 10 patients, there were responses seen in 3 out of the 10 patients, approximately the same proportion as the overall response we have seen in the entire data set, even those patients who were not previously treated. Now next slide shows the anti-tumor responses among the patients who are not previously treated with our Topo I inhibitor-based ADC. And here now you can see that the response rate jumps to 52%. And that's very interesting because of the observation that there's yet another Topo ADC out there who has reported their response rate in patients previously untreated or without any prior exposure to Topo I inhibitor-based ADC. And we step based on cross-trial comparison, which is always a very tricky one. That percentage, the 52% is a larger number than what was previously reported by [indiscernible]. Okay. Next slide shows the spider plot, again showing that there's not just responses, but the responses are durable. See that patients shown with dark blue lines, they have continued ongoing responses, quite promising based on this early follow-up [indiscernible]. This is a summary of the safety data showing that we're seeing Grade 3 treatment emergent AEs at a rate of 23%. It's very important and very interesting to mention that the most common AEs are nausea and vomiting and various other adverse events. And so far, no cases adjudicated as drug-related ILD in this triple negative breast cancer patient population. Next slide. Okay, so in the next few slides, I want to alert you to some news that TROPION-Breast01 is [indiscernible]. This is a study of Dato-DXd in patients who are hormone receptor positive, HER2 negative metastatic breast cancer in second or third line. We're comparing Dato-DXd versus treatment of choice. This is a 1:1 study design with a sample size of 700. This is a very important study in this patient population with metastatic hormone receptor positive breast cancer. The next slide is another new one called Lung08 study. A very important study because this is for patients who are previously untreated, but diagnosed with non-small cell lung cancer without actionable genomic altered genes. Currently, our standard of care in this population is pembrolizumab monotherapy. So our clinical trial design is to compare standard pembrolizumab versus a combination of pembrolizumab plus Dato-DXd. So this enrolling now and is a very exciting study and we hope to be able to report the results in the near future. Okay. So next couple of slides is a summary of the entire Dato-DXd program. So here, you can see that we have a lot of clinical trials going on with the Dato-DXd, including the one in the white box. This is the Lung08 study that I just mentioned to you previously. Next slide. Slide #45 is a rather complicated slide. But this is a summary of the entire breast cancer program between ENHERTU and Dato-DXd. You can see the ENHERTU clinical trials in this kind of orange box and the Dato-DXd in blue. So you can see how they fit between the ENHERTU and Dato-DXd. And I think it was apparent to you that we are trying to cover as many patient segments as possible of breast cancer between ENHERTU and Dato-DXd because we believe that both of these agents are quite active in breast cancer. Whether it's HER2-positive patients, hormone-receptor positive patients, or triple-negative patient population. Including this, there's a large category of HER2 low patient population that is a combination of some of the patients who are hormone-receptor positive and some patients who are triple-negative. Next slide. On slide #46 is yet another ADC program that we have called the HER3-DXd. This is an ADC that is not partnered with AstraZeneca. This is our own ADC that we are developing ourselves. And the vision for this program, first, is to establish HER3-DXd as a monotherapy standard of care for EGFR-mutated non-small cell lung cancer patients post the frontline EGFR TKI such as osimertinib. And of course, we want to expand this new [indiscernible] HER3-DXd [indiscernible]. The reason for this is that, as many of you are aware, we have obtained very good data with HER3-DXd in this patient population EFGR-mutated non-small lung cancer. At the second part of the session, we also wanted to study and introduce HER3-DXd as a monotherapy with combination treatment for HER3 expressing breast cancers. And finally, as our third quarter vision, we want to expand HER3-DXd beyond the non-small cell lung cancer with EGFR mutations and also explore opportunities across other HER3 expressing tumors besides breast cancer and lung cancer. The next slide is just a very brief summary of where we stand with ENHERTU program, including the ones in breast cancer and non-small cell lung cancer. Next slide. The next slide is a complicated diagram, I suppose, in which we try to show how the 3 programs sit in world of lung cancer. You can see that we have so far 3 active agents, ENHERTU, Dato-DXd, and HER3-DXd in lung cancer. And this is how we have divided the patient population with lung cancer so that we can cover all these patients with 3ADCs we have. We have non-small cell lung cancer divided according to whether or not they have actionable genomic alterations, AGAs. For the most part, we have more of a focus on the patients with AGAs with HER3-DXd and ENHERTU. And for those patients without the AGAs, you can see that there's a preponderance of a TROPION status in the Dato-DXd program. And we are, of course, very interested in [indiscernible] many of these registration trials that we have going on [indiscernible]. Okay. Now so these are that completes the 3 major ADCs we have. And with the next couple of slides, I'm going to go through with you what we call rising stars. Next slide. So this is one of these rising stars. It's called DS-7300. This is a DXd ADC based on the original DXd ADC technology, but the target is a little bit different. The target is something called B7-H3 antigen. This is a target that is expressed in a wide range of tumors with a preponderance of a preferential expression of B7-H3 tumors as opposed to normal cells. And so we are seeing here is a waterfall plot that was shown in a recent conference, indicating a wide range of tumor shrinkage you are seeing in clinical trials so far. Next slide shows that we so far have enough data to understand that we are seeing a definite clinical signal in 3 tumor types so far; esophageal cancer, castration-resistant prostate cancer, and small cell lung cancer. So for these 3 diseases, we are very actively considering what is our next clinical trial program, what are the next steps and what are the paths to registration for 7300. It doesn't mean that these are the only 3 histologies that we will be studying. There are many more cancer types yet to be studied in 7300 program. And I want very much to mention that B7-H3 is likely expressed in many tumor types. And so we are very excited to learn and explore what other types of [indiscernible] responsive to 7300. So we'll have to wait for that. Next slide is yet get another rising star, DS-6000. This is an ADC directed against a protein called cadherin 6, CDH6. This is expressed in various tumors, including renal cell carcinoma and also ovarian cancer. We are completing the dose escalation cohort right now. But already, during dose escalation cohort, we are seeing very good early efficacy signal in both renal cell carcinoma and ovarian cancer. So these are very exciting and offers an opportunity for us to study further these 2 diseases, these 2 cancers, and hopefully that we can help some of the patients with renal cell cancer or ovarian cancer. Okay, next slide. In the next few slides, we're going to go through with you what we call our next pillars beyond ADCs itself. So this is Slide #53. When I say the next pillars, what we're talking about is what is shown on this slide in hash blue. So we can see that the 3ADCs are to support the company for the time being, but the new pillars, let's also call it the Alpha program that will include not just the rising stars that you just saw the 2 ADCs, 7300 and 6000, but also the next pillars. Now what does these pillars look like? So next slide. Next slide is a summary of what these next pillars look like. I won't have enough time to go to every single one of them, but I want to highlight for you that many of these, maybe all of these represent what I would consider to be innovations, technology innovations, site innovations that we are trying to bring to address the [indiscernible]. So for example, from left to right, we spoke already about the 7300 and 6000 rising star ADCs. But in addition to those, we have many, many new programs. The anti-GARP antibody. This is another new immunotherapy target. This is, I believe, a first in human or one of the first clinical trial on [indiscernible]. The darker blue are non-cancer programs targeting diseases like pseudoxanthoma elasticum, fibrodysplasia ossificans progressiva, and systemic lupus erythematosus. These are part of our specialty medicine program in which we have developed highly targeted agents against a known pathogenic target in these diseases, and we're very hopeful to able to help patients with these diseases. In the Phase II program, we do have some new compounds, 3201, [indiscernible], as well as our vaccine program. This is a Japan-only internal program for COVID-19 using our own RNA vaccine and our own rampant technology. And finally, way to the [indiscernible]. We do have launched a new program called DELYTACT. This is a brand new drug. This is an oncolytic virus. Again, this is probably the first or one of the first oncolytic virus therapy ever approved for any cancer. We are approved now for malignant glioblastoma. And this is a really innovative therapeutic regimen [indiscernible] very, very nice and very well [indiscernible] advanced. And we're doing this really to address our innovative way to address unmet medical needs and taking advantage on which strength in modalities [indiscernible] Next slide is a little bit more on one of these next pillars, 3201, it's called valemotostat. This is a duo EZH1/2 inhibitor. So it overcomes that weakness of the EZH1 on the inhibitor because there's a potential that EZH1 expression could overcome the supression of EZH2. So by giving both, we may be able to get a better medicine. And so far, what is really very interesting is that we are seeing activity in both T and B-cell lymphomas which makes this agent quite unique in the world of lymphoma where most -- the vast major of patients are actually on one or the other, but not both [indiscernible] And right now, here is where we stand with this program, we have filed -- we have completed a registration study in oncology [indiscernible] lymphoma and we are about to file an NDA in Japan for this disease in December 2021 this year. We also have ongoing a registration Phase II trial in peripheral t-cell lymphoma. A very bad disease with very bad prognosis. And we have [indiscernible]. And from a patient number standpoint, very important to mention, that we have ongoing right now the B-cell lymphoma program, in collaboration with the French corporate group, [indiscernible] with which we are studying many different types of B cell lymphomas, including peripheral lymphoma and [indiscernible] lymphoma. And we are again seeing some very promising early signals in B-cell lymphoma [indiscernible] Next slide is a couple of additional new programs other than cancer right now. This one is for systemic lupus erythematosus. This is anti-TLR7 antibody targeting what we think is a very important target. In the inhibition of the TLR7, we hope we'll be able to reduce the severity of this [indiscernible] Next slide is the study that we just very recently completed and obtained results with quizartinib. This is a targeted agent against FLT3 targets. And we recently reported at [indiscernible] in this clinical trial called QuANTUM-First. We met the primary endpoint, the overall survival. Our results will be presented in a conference next year. But we are actively planning a global submission in [indiscernible] Next Slide # 58 and 59 we want to go through with the next few slides what we're doing in our research program. So we're going into the preclinical research program. The next slide is Slide # 59. So here is -- I think you saw the slide earlier in the presentation. Well, I think it's very important to recognize that these 3 components, human resources, corporate culture and core technologies, are basis for our strength in science and technology. We have already seen one product of this research program, the DXd ADC technology, which we think is one of the best, if not the best ADC technology in terms of [indiscernible]. Why were we be able to grow such great technology in [indiscernible] and it's because we have 3 combination that really are essential to promoting innovation, innovation in [indiscernible] So next slide is a summary of our [indiscernible] to bring our innovation to [indiscernible] We're going to have a research focused in competitiveness in the global pharma arena. So we have a comprehensive and continuous review in both oncology specialty medicine and special medicine research programs, including a lot of external input from [indiscernible]. We want to emphasize here that we are not doing -- we don't want to be everything. We are really focusing on what we think are our own scientific [indiscernible]. One is our ADC technology. We're also seeing [indiscernible] And I also want to mention here that we provide our researcher centers with a [indiscernible] scientific treatment and its coverage tools. With close access of these researchers [indiscernible] to understand unmet medical needs. Slide #61 is just one example of how we are utilizing our scientific strengths in [indiscernible]. You are familiar now with our DXd ADC technology. It has given rise to, so far, 7 [indiscernible]. We also are also actively working on what we consider to be next-generation ADC, including one that is already named here, the 9606 program. This is next generation because the capabilities are little bit different. And then we have what we call new concept ADCs in which the entire thinking about ADCs and linkers and payloads really -- we focus and reformulated just biological [indiscernible]. So you can see that there's a whole lot of evolution of our original ADC technology in the next generation and new concepts. Okay. Now next slide. We turn to the next slide. I'm going to turn over the presentation to Dr. Takahashi to go over with you our multimodality section.

[Interpreted] Thank you, Ken. I'm Takahashi, the General Manager of Research division. As Ken has just mentioned, following on from DXd ADC, I will introduce some of the modalities generated from our science technology, which is Daiichi Sankyo's strength, and points we are focusing on today. For the past 10 years, in addition to small molecule drug discovery, we have also developed our own technology for drug discovery modality at cells, such as antibody drugs and nucleic acid drugs. Currently, as shown here, we have various modalities such as antibodies, ADCs, next-generation medical chemistry of TPDs and peptides, nucleic acid drugs and bispecific antibodies. Until 10 years ago, there was a strong tendency to attack one target or one type of modality. But now we have adopted a multimodality strategy that puts multiple modalities in the company into one target at once. While small molecule drug discovery is the most excellent modality in terms of convenience, such as oral administration and COG, it takes a certain time to separate it from any side effects. On the other hand, antibodies and ADCs can be expected to have high safety and high specificity. But on the other hand, initial investments such as manufacturing equipment is required. Our mission is deliver innovative medicines to patients faster. And to save time, we prioritize the creation of candidates with multiple modalities in the early stages of research. On the other hand, what I learned from DXd ADC is that once it's made into a platform, knowledge of pharmacology, synthetic chemistry or regulatory science can be shared with hardware aspects such as manufacturing equipment. We are looking at multiple ongoing themes within the company from a bird's eye view to identify the next growth driver following DXd ADC. I'd like to introduce the modality that can be a growth driver, though it is part of it. Please go to Slide 63. The first is about the LNP messenger RNA vaccine. Regarding this technology, in fact, we have been paying attention to this even before the COVID-19 pandemic shook the world, and we have been advancing several themes. This is the reason why we were able to respond quickly this time. But the competitiveness of our technology includes the cationic lipids that make up lipid nano particles selected from the viewpoint of safety and the drug efficacy that can even activate cellular immunity together with humoral immunity. Also, regarding the DS-5670, the messenger RNA that is only for receptor binding domain instead of the entire spike protein is included this time. We are aiming for higher neutralizing antibody production by including only the domain involved in infection. The point of this technology is that you can easily create a new vaccine simply by changing the sequence of the messenger RNA to be put inside. Therefore, as soon as the pathogen gene sequence of emerging infectious disease is identified, it is possible to make a mockup by using the existing manufacturing equipment and quality control know-how as it is. In addition, since antigen proteins are expressed in the human body, they do not require large-scale manufacturing equipment. And the quality control and biosafety level control are much easier than before. Currently, we are conducting research on multiple virus vaccines other than COVID-19. Regarding COVID-19, we are participating in the vaccine development support program supported by AMED. Please go to Slide 64. Next, I'd like to introduce siRNA platform. siRNA is a method of suppressing the production of a pathogenic protein producing messenger RNA in the body by decomposing it. Attempts have been made to discover siRNA for a long time. But due to problems such as sustainability of drug efficacy and organ specificity, it has been difficult to produce a commercial product after patisiran sodium. In order to overcome this problem, we have combined our proprietary 2’-O-methyl RNA and DNA to prolonge blood retention. Although I cannot discuss the details this time, by conjugating a specific ligand, we have a feeling of achieving various organ specificities. This modality can also be mocked up and multiple research themes are currently underway. Slide 65, please. Finally, regarding gene therapy, this is no doubt that gene therapy is a modality that can be expected to have [indiscernible] making effects that cannot be achieved with conventional small molecule drugs and antibody drugs. We want to improve our technical capabilities and increase the success rate of clinical trials by first entering the field of rare diseases that require high efficacy and launching products. And beyond the manufacturing capacity backed by our technological foundation, we want to expand to serious non-hereditary general diseases and provide a transformation of SOC. The disease areas include central nervous system and retinal diseases, which have high unmet medical needs. For this reason, in addition to Ultragenyx, this year, we have also partnered with Regeneron, which has strength in ophthalmology as well as with LogicBio Therapeutics, which can possibly resolve the problem with gene therapy of reduced efficacy with [indiscernible]. Please move to Slide 66. On the other hand, I'd like to introduce the status of our alliance with Ultragenyx, which is signed in March 2020. We, Daiichi Sankyo, unfortunately, have been behind in the development of antibody drugs and decided to partner with Ultragenyx because we thought that it was essential to introduce excellent manufacturing technology from an early stage of gene therapy. Initially, we were planning a technical transfer on site. But as you know, we could not go to the United States due to the situation of COVID-19. So as a countermeasure, we tried online virtual transfer. Fortunately, by last month, we achieved the same level of vector production capacity as Ultragenyx for both the triple transfection method using HEK293 cells and HeLa cells stable expression strain, which is one of Ultragenyx's competitiveness. We have achieved the goal of technology transfer. In the future, we will expand this technology to multiple in-house projects, aiming to manufacture investigational drugs by the mid-2020s as targeted. Now I will hand it back to Ken.

Okay. Thank you very much. Well, I have 2 more slides and I will finish up. So I want to be talking so far about mostly science and technology. In the next 2 slide, next slide, Slide 68, I want to tell you about what we are doing internally to transform our R&D organization to something that is fitting for the global pharmaceutical company. We know already DXd ADC technology is producing world-class drugs. And now we are creating an organization and really truly support the development of these work [indiscernible]. So previously, many of you might be aware that we are developing organization especially or divided into regional teams, one located in Tokyo and another one located in New Jersey [indiscernible]. And there are a lot of multiple layers of decision making resulting in inefficiency and a lot of redundancy in resource [indiscernible]. We are creating now a unified global R&D approach with a highly simplified governance system and more empowerment of individual strategies and asset [indiscernible] to make decisions. We want to make a streamlined, scalable and sustainable [indiscernible]. We especially we want to enhance our capabilities. And by capabilities, what I mean is capabilities to conduct global drug development. We see in research that our -- especially our oncology research platform is very solid. Our ADC technology is first class and will really compete with very [indiscernible]. We already heard today that we have many other unique scientific strength in both oncology and specialty medicine, including a lot of applications of therapeutic modalities far beyond the traditional small molecules and antibody technologies. We also have in place now of what we call procedure medicine, translational research and translational science programs that really get at to how well is a drug doing in patients as opposed to cell line models and [indiscernible] models. They really give us a lot of information about what is going on in patients. And we are now creating new project teams, cross-functional teams that are going to be enable and empower growth to develop our drugs. We're really, therefore, enhancing our drug developing capabilities. And it's very important here to note that our vision here is to develop these capabilities regardless of the geographic location [indiscernible] whether it be in Tokyo or U.S. We are going to be creating global [indiscernible] office everywhere and anywhere in the world. Okay. So with this, I want to end the presentation portion of meeting and go to the Q&A session.

Now we'd like to move on to our Q&A session. First, Mr. Yamaguchi from Citigroup Securities.

Can you hear me? Okay. So quickly, first, on ENHERTU. Several question on ENHERTU, first of all. Page 19, you showed the highlight of -- a basically a strategy of ENHERTU. And you already conquered almost all the HER2-positive breast cancer. As far the HER2 low is concerned, of course, you're trying to get the DB04 and DB06. But they are wide open space on the first line and also neoadjuvant. So on a closer loop and natural strategy, if the DB04, DB06 works, it does makes sense to go for all the first line and the neoadjuvant on HER2 low in the near future? That's the first question.

I thought that was a comment rather than a question. But I agree absolutely with your comment that if [indiscernible] 04 and 06 clinical data, then we are certainly going into [indiscernible] radiology therapy in the HER2 low patient population. So I am in complete agreement with your statement.

The second quick question on the -- you talked about the brain meds control group study on DB03 this time. But also you are saying that this is a stable brain meds rather than active meds. And I understand it's more of a marketing side of strategy, but your competitor is always trying to get share on the brain med patients. So is this DB03 subgroup data is good enough to battle this segment? Or you already have to show the active brain meds to compete directly on this front as far the evidence is concerned?

Well, so this is a very important question. And the patient population that we study are basically patients that have what we call stable [indiscernible]. It is a very different [indiscernible] really means our patients who have [indiscernible] treatment [indiscernible] radiation therapy and [indiscernible]. But at the same time, I do want to emphasize this observation that we observe complete remissions in the brain metastases in [indiscernible] patients. And that is I am happy to say a remarkable observation knowing that we're dealing with very large molecule ADCs. I'm not going to speculate really [indiscernible] data. But I'm going to speculate that there was enough permeability in the blood-brain barrier that allow these large [indiscernible] ADCs get into the brain and [indiscernible] opportunities.

Okay. So finally, this is the -- you're not -- it's not in your presentation, but it was on the [indiscernible] from France, from Paris, which is called the DAISY study. I don't want to get into detail. But there are some comments from the investment community that DAISY study, including HER2 low that the effects is rather low compared to what you have been done in the past. So can you give me a quick comment on how you see DAISY study given their low PFS. But it sound like patient condition might be a little bit different from your controlled study as well. So if you can make comments.

I guess I can only say that at the moment that we will be looking at all the data in this patient population and really make data-driven decisions. There's all kinds of data coming in this patient population. So we're very anxiously allowing collective data and collective wisdom on how to think about this [indiscernible] Gilles, do you like to make comment [indiscernible]?

Thank you, Ken. The DAISY study that you are mentioning, Yamaguchi-san, is a study that is run by [indiscernible] and UNICANCER drug, France. It includes breast cancer patients that are very advanced and that had HER2 low and HER2 0 as well, HER2 0 as seen on IHC. And what they reported at San Antonio is actually that the drug has activity not only in HER2 low, but in a good number of patients with HER2 0 as well. So I think that's important information that is coming out from this study. In terms of PFS, these patients indeed are very advanced. And so more follow-up are needed to be able to actually evaluate this entire population. But I think the study is ongoing, and we'll get more results in the future about this study.

Next is Mr. Wakao from JPMorgan Securities.

This is Wakao from JPMorgan. Hello, everyone. Can you hear me? So I'd like [indiscernible] HER2. So regarding the result in analysis in HER2, the data for patient who received more [indiscernible] peers could be better than the data for patients who -- data for patient who received HER2 1 line. What [indiscernible] I'd like to know that over 2 line appears better than data of patient who receive 0 to 1 line. So in general, I think that patients with fewer lines of therapy have higher efficacy. And we are seeing this trend with T-DM1.

I guess I would say that I made agreement with your statement. And also, [indiscernible] observation that this drug only appears to be active in every line of treatment. [indiscernible]

Okay. Next question about the TROPION-Breast01 study. So addressing the background to the launch of TROPION-Breast01 study. Is this correct to understand that you are moving ahead with the development of HR-positive, HER2 negative rather than triple-negative breast cancer? Also, I think you have not announced the data on HER2 positive and HER2 negative. Do you have data on this study in your company? If so, what kind of data do you have? And do you plan to announce it? And also, what is the development plan for triple-negative breast for their aprroval application? Is there any possibilities for providing application with the data of the TROPION [indiscernible]? Those are my questions.

Okay. So I think there's a lot of data not yet published or not -- data not yet made public in this [indiscernible]. So yes, I think we recognize that the triple-negative breast center data that was publicly presented at San Antonio looks quite good. And we're not ignoring this. We're actively working on our triple-negative breast cancer strategy. It's just that we have not yet announced it. And you correctly pointed out that the Breast01 study is a hormone-receptor positive patient population that we have announced. We actually have presented the data in [indiscernible] part data that we have in [indiscernible]. So really looks in other clinical trials that really [indiscernible]. It's kind of a mix of public data and nonpublic data. [indiscernible] but just to mention that we are very interested in both types of [indiscernible] Gilles, any additional comment on this?

No, just to remind everybody that this particular drug is we're thinking it's possibly best-in-class. And so -- and we're in a very competitive area with another drug already on the market. The data that you're mentioning has not been presented, but we can assure you will be presented probably in 2022 at some point at one of the major medical meetings.

Okay. Last question for me. So about next-generation ADC. Can I assume the DS-9600 [indiscernible] as well in next year? Also, could you tell us about the strategy for targeting RGNs and their cancer type indication for the next-generation ADC? So will you be targeting RGNs and cancer types that are different from the first generation ADCs? Or will there be some overlaps?

Let's say, for the next-generation ADCs, I don't think we have made any announcements. So I don't want to disclose too much, except to say that these are very important scientifically validated targets as well as scientifically validated and extremely interesting payloads.

Next, Mr. Muraoka from Morgan Stanley Securities.

[Interpreted] Okay. Please allow me to speak in Japanese. I'd like to hear about your philosophy behind the DB04 study once again. I think this is a PFS study. If the results are good, you can file your submission just based on PFS data. Is my interpretation correct? Have you mostly reached agreement with FDA on that? Again, with regards to DB04 study, I wonder which page it was. On Page 19, I'd like to know the number of patients. Among the HER2 low patient population, how many patients in the first-line segment? How patients in the second-line and the third-line settings? If you have information by region like U.S., for example, that would be great. I'd like to know the number of patients in each segment.

Okay. So just a comment on the Breast04 study, it is intended to be a registration study. It is on PFS as the primary endpoint. And the study have been discuss with various regulatory agencies including the FDA. And in terms of patient numbers, I have to say, [indiscernible] like the commercial people. So I don't know the exact numbers. I have -- I can only say I feel they largely [indiscernible]. Gilles, do you have any numbers [indiscernible].

Unfortunately, Ken, I don't have the numbers. As you mentioned, this is a fairly large patient population. And as everybody understand HER2 positive is about 20% of the entire breast cancer population. So HER2 low would be probably around -- I would estimate at 60% to 65% potentially of the breast cancer population, so a significant number.

[Interpreted] As for DB04 study, there's no need to wait for OS data inquiring the submission? Is my understanding correct?

That's correct. The primary endpoint is key endpoint. There are other key secondary endpoints that are listed on the slide in that Breast04 study. I think there are key important secondary endpoints, the important one is ENHERTU.

It is on Slide #27.

[Interpreted] Understood. And also, I understand this is a little bit out of scope for this R&D Day meeting today. But I appreciate your comment on your litigation with Seagen. The schedule has been shifted to the January-March period according to Seagen. Are you fine with the sequence of events? I am curious timing-wise, which do you think is going to be earlier, the timing of the result of arbitration with Seagen or the timing of DB04 study results becoming available? Do you have any idea?

[Interpreted] Seagen has disclosed the timing of arbitration results. And our understanding is almost the same. But we cannot say clearly here that it is really going to be the case. So we cannot say here as of today which timing will be earlier.

Next is Mr. Sakai from Credit Suisse.

Two questions, please. Just coming back to DB04 results. We do we really expect, what we should expect, what you expect in terms of PFS because DB04 [indiscernible] data [indiscernible] so you set your bar already high. So even you said you are going to [indiscernible] the endpoint, probably some of us [indiscernible] that 04 data [indiscernible] unless you meet with the 03 standard or you will exceed 03 data [indiscernible] data coming soon next year. So we've got to be prepared for positive surprise or negative surprise? So what would you say at this moment, what we should really expect?

It is difficult to predict exactly what the data is going to look like. I have to say that the results of DB03 surprised many of us [indiscernible]. Now whether that magnitude and superiority in HER2-positive patients, how is that going to translate into the HER2 low patient population. I have to say that we all have our hopes and guesses. But ultimately, we're not going to know until we see the actual clinical trial [indiscernible]. I do believe and I think I did, as you suggested, that the results of DB03 allows us to think that the likelihood of a positive study with DB04 has increased quite a bit based on the 03 study. I think [indiscernible] we'll have to [indiscernible].

Yes, that is what I expected. How do you plan to release the result for 04 is just to [indiscernible] release or you say the result [indiscernible].

Yes, typically, it's -- once we have some data, we will issue a press release saying that it's positive data with the details of the data to be presented at a scientific conference later in the year.

Right. Just a last question. I'm getting quite impressed with your, let's say, capability of finding new target. Now this probably is something to do with France [indiscernible], like this time you said you are very optimistic with the [indiscernible], for example. This may not be a question, but do we have an opportunity to see your basic [indiscernible] progress? Are you coming up with all these new targets because with ADC you could find the target that wasn't easy, but [indiscernible] make it technology available when you have the [indiscernible]. Is my understanding right?

Yes. I think you understand right. I think what you were suggesting is that this ADC technology can be applied to many, many diseases as long as we have the right targets. Yes, I think that's a correct statement. And I think I also agree with you that translational research could be a very important component of the target discovery and binder generation.

Yes, yes. Okay. Yes. I mean then if you have to present your first research through this, we will be very much appreciated. That's my comment.

Okay. So perhaps we can do that in one of our next investor calls [indiscernible].

Next Mr. Hashiguchi from Daiwa Securities, please.

[Interpreted] Hashiguchi speaking. Today, you also talked about your strategy for sustainable growth beyond DXd ADC. In order to further reinforce this strategy, what about the need to pay a large amount of money to a third-party to acquire assets? I'd like to know the opinion of the research function on this point. With the 3 ADCs, there's a possibility that your operating cash flow will increase substantially more than before. Is it going to be fine to use the increase in operating cash flow mainly in areas other than the research functions such as returns to shareholders? If the research function also requires a huge investment, what kinds of assets are still missing at Daiichi Sankyo where you would need acquisitions in the future? I think this can change a lot, particularly depending on how broadly and how deeply you're going to implement your multi-modality strategy. So I'd like to hear the opinions of the research function.

So maybe if I can just make a brief comment, and then I can [indiscernible]. I think that we can see that this ADC program at Daiichi Sankyo has been incredibly [indiscernible]. And that's investments in that program has generated so much into our [indiscernible]. So yes, there is, of course, an interesting need to think in future beyond ADCs. So that's what modality strategy. [indiscernible]

[Interpreted] Acquiring pipelines or ventures are not within the scope of our responsibilities. So I cannot say anything in my capacity. But regarding the future potential of multimodalities, through our open innovation activities, we're also engaging activities to apply our own modalities to seats from academia. In that sense, I'd like to focus on activities to generate next pipelines by matching with seats from academia in Japan and abroad. Did I answer your question?

[Interpreted] In other words, you think major acquisition will not be necessary in implementing your multi-modality strategy, correct?

[Interpreted] Correct. That's our view as of now. Thank you very much. We are running over, so we'd like to close Daiichi Sankyo's R&D Day meeting here. Thank you very much for joining today. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]