Daiichi Sankyo Company, Limited (D4S.F) Earnings Call Transcript & Summary

Thank you for your participation. We will now begin Daiichi Sankyo's Science and Technology Day 2025. I am Asakura from Corporate Communications, your moderator today. First, regarding languages. This briefing will be conducted in Japanese and English. Simultaneous interpretation is available. Please click the Interpretation icon at the bottom of your Zoom screen and select either Japanese, English or original audio . If you select original audio, you will hear the original audio. The Zoom screen and Live stream will display the English presentation material. The Japanese and English presentation materials are available on our corporate website's IR library under the IR presentation materials page. Please download and view them as needed. Today speakers are Okuzawa, President and CEO; Takeshita, Head of Global R&D; Ken Keller, Director and Head of Global Oncology business; Kashiwase, Head of Global Technology; and Abe, Head of Global Research. Following the presentations, we will hold a Q&A session with all speakers. Please note that today's briefing session will be recorded. Okuzawa-san, the floor is yours.

This is Okuzawa speaking. Thank you very much for joining Daiichi Sankyo Science and Technology 2025 today. We sincerely appreciate your attendance. Leveraging greater strength, science and technology. We have delivered numerous innovative medicines to patients. within this effort, our oncology pipeline and product portfolio has grown significantly over the past 6 years through strategic alliances with AstraZeneca and [ Matan ] & Company. ENHERTU has been accrued for 6 indications making a significant contribution to electric cancer patients. And this year, we announced 3 positive Phase III data sets for early-stage with cancer and early line treatment of metastatic breast cancer. And for HER2 positive breast cancer, first-line treatment, we obtained approval yesterday, U.S. time, for early stage breast cancer. We are preparing to link each of those patients. Furthermore, we have initiated 4 new Phase III studies to further expand the product's value. Regarding DATROWAY, we have experienced various things. Following its launch early this year, it has already obtained a second indication and subsequently obtained positive data in [ TNBC ] preparations are now underway to deliver patients. Moreover, we are advancing more than 10 Phase III trials anticipating substantial future expansion of the product value. Regarding I-DXd and R-DXd, favorable efficacy and safety profiles, respectively, were confirmed in the Phase II trial. We are currently engaged in discussions with the authorities to establish new treatment cancers with high methane. We are also exploring various possibilities for expanding the range of applicable cancer types. Through I-DXd and R-DXd, we aim to contribute to cancer patients in waste distinct from ENHERTU and DATROWAY. With respect to HER3-DXd, we are advancing clinical trials targeting solid tumors other than lung cancer, such as breast cancer and simultaneously, we are actively pursuing biomarker discovery. But clinical trials for DS-3939, which we are currently developing in tenant progressing Also, we are preparing to commence clinical trials for DS-3790, our first DXd-ADC-targeting hematological management. Preparations are underway to commence clinical trials. Thus, the DXd ADC platform is not only driving an H2 forward, but also numerous innovative cancer products powerful driving the enhancement of our corporate value. The DXd ADC platform has also obtained high plays from outside the company. In November this year, we won the Best ADC Platform Technology Award, with the recognition of our DXd ADC technology as the best ADC platform capable of providing new standard treatments for cancer patients. Moving forward, we will further leverage science and technology to create innovations following our DXd ADC platform and aim to become a top 10 global company in the oncology field or even more than that by 2030. Today, we first begin with Dr. Takeshita the Head of Global R&D on R&D achievements to date, and future strategy. Following this, Ken Keller, Head of Global Oncology business will discuss the growth and outlook for Oncology business. Then Mr. Kashiwase, Head of Global Technology will explain a global manufacturing for and supply chain strategy. And finally, Abe, Head of Global Research, will introduce onset domino. In the next fiscal year, we plan to announce our 6 other plan. We will continue to prioritize maximizing the value of DXd ADCs and through challenging new innovations, we will strive to contribute to patients and achieve sustainable growth. So first of all, Dr. Takeshita please.

Thank you very much for that introduction, and it's my pleasure to go over with you our clinical development programs for Daiichi Sankyo. Next slide. I do want to emphasize here that we have 4 major themes from my portion of the present in. One is that we have many DXd ADCs. We are just -- we are more than just the inheritor company. We are really becoming a DXd ADC company right now for the next few years. But in addition to the DXd ADCs, we have new concept ADCs with different characteristics in DXd ADC that we have globally. And not only that, we have a lot of interesting compounds in our pipeline that are not even ADCs. So we'll go over that with you also. And finally, do you want to make some points that because of the strength of our internal oncology pipeline that we can create scientifically rational combinations to include not just external combinations with external compounds but also 2 internal compounds. This really is a very big advantage for us in the future. Next slide. Just give you some additional dragging information. You can see the -- a short list of major encompassment for this calendar year. and it includes many, many in HER2 regulatory approvals, breakthrough designations and as well as also regulatory approvals for natural way in lung cancer and now, of course, in breast cancer. And we are, of course, also moving ahead in other DXd ADC programs, including breakthrough designations for I-DXd and R-DXd as well. So we are really forging ahead with all of our DXP ADC programs. Next slide. And additionally, we have published many, many papers in our DXd ADC technology and also have been featured in many articles in top journals like New England Journal and Nature Medicine. And as you just heard, we have received many awards for our technology. Next slide. Okay. So let's just go over now by indication. And this, I think many of you are familiar with this, what we call the disease map. The columns represent different lines of therapy from neoadjuvant on the left column, all the way to second line and later relapse refractory cancers. The rows represent various types or subgroups of breast cancer. And then you can see that each box is represented by the clinical trial that we are conducting. And just to remind you that these are color coded. The orange ones represent ENHERTU clinical trials, blue represent the DATROWAY clinical trials and green represents the HER3 programs. And furthermore, the color scheme is such that the dark colored boxes are already approved. So you can see that with ENHERTU, there are a lot of dark orange boxes. For this year, I would like to note that we have 4 additional new data. that are positive Phase III trials, 3 are in the ENHERTU category; DESTINY Breast11, DESTINY Breast05 and DESTINY Breast09 and one from the DATROWAY program, the TROPION-Breast-02. And as you heard, DESTINY-Breast09 was just approved by the FDA earlier today, U.S. time. And so this one should change color from light orange to darker orange. So of course, it's an amazing set of accomplishments in just 1 year for this entire program. I also want to make a mention of the blue ones in Star. These are the TB series of DATROWAY trials, TB03, 04 and 05. These are going to be the next set of trials in early-stage breast cancer and TNBC, and I'm going to go over with you some early data that really points to a very strong data that predicts for I think what is likely to be a successful clinical trial outcome in the future. Next slide. So just to very briefly go over some of the very interesting and positive clinical trial data DESTINY-Breast11 in the neoadjuvant setting and DESTINY-Breast05 in post neoadjuvant setting. Both of these have very positive end points that are not just statistically important, but also clinically meaningful data. Next slide. This is our data TropionBrest0 study. Again, this is a very important data showing not just positive PFS data but also overall survival data. And just a side note to say that this is a very interesting clinical trial because there are additional comparisons and maybe some of the cross comparisons that we can make with similar ADCs. And we can see that the fact that we achieved the overall survival data here is a very important and meaningful compared to some of the other TROP2 targeting ADCs who have studied a similar patient population that did not achieve overall survival benefit. Next slide. Now going on to the additional ongoing studies TB03, 04 and 05. We have early data from a clinical trial called BEGONIA, which tetra is combined with durvalumab, and we have some preliminary data here from the BEGONIA study really showing us some early data, but very strong in terms of not just response rates, but durability of response. So these are very important. The preliminary data that gives us really good reasons to believe there are eventual Phase III studies, TB03, 04, 05 will eventually report out as positive data. Next slide. Now moving on to lung cancer. Again, this is our disease map. And you can see that we have the EGFR-mutated second-line later box fill in with TROPION-Lung05. We have additional many trials with DATROWAY. And moving on ENHERTU program. As you know, we have our approval already in the HER2-mediated lung cancer in relapsed/refractory setting, and that we are conducting earlier lines of therapy in HER2 as well. Additionally, we have 1 more drug in lung cancer, and that is the I-DXd program. With the IDeate-Lung02 clinical trial data, we were able to obtain some breakthrough therapy designation from FDA, and we are very hopeful that eventually this will lead to approval. Next slide. And moreover, it's important to note here that in small cell lung cancer, we have 2 drugs, not just one but 2 drugs that are very active in small cell lung cancer, IDX-d that you just saw earlier in the previous slide, but also a drug called gocatamig. This is a DLL3-targeting T cell engager very different mechanism of action, but at the same time, very active in small lung cancer. And you can really see that this is a natural place to combine these 2 drugs to really achieve much greater efficacy than just 1 drug alone. And possibly, once we say, generate a combination of data, it may be a path forward into earlier lines of therapy, including newly diagnosed small cell lung cancer. Next slide. Now in terms of the DATROWAY program, I do want to make a mention of this very sophisticated digital pathology, predictive biomarker market program that was originally pioneered by the AstraZeneca team. This is what we call TROP2 NMR. NMR stands for normalized membrane ratio. This is something we used to call quantitative continuous scoring, but we kind of renamed it NMR. So this is what we are calling it now. And this is a fancy way to use digital images, not just regular digital examination of the staining pattern, but the computerized digital image analysis of immunochemistry to allow for prediction of whether or not a patient is likely to benefit from DATROWAY. And next slide, you'll see next slide that indeed, this is something that we can certainly do by looking at the TROP2 NMR positivity versus negativity. In this slide, this is from the TRIPION-Lung01 study, and you'll see that in a docetaxel. This is the gray line, the gray solid line and gray doted data line. The overall benefit from docetaxel is the same, regardless of whether you are NMR positive or negative. On the other hand, if you look at the red colored lines, the dotted and the solid lines, you'll see that the dotted line is about the same in terms of performance as docetaxel. These are the NMR-negative patients, whereas NMR-positive patients have a substantially better outcome because of the ability in which the NMR was able to identify patients who are likely to benefit from DATROWAY. Next slide. And we see a very similar trend, not just in a relapsed/refractory setting, but in the earlier lines of therapy, the frontline setting, even when DATROWAY is combined with chemotherapy. So this is a very important finding because we can now incorporate this NMR into many of our frontline studies. Next slide. So as many of you know, we have a lot of these frontline lung cancer studies going on, not just a TRIPION-07 or 08, but we have the AVANZAR study. And so -- and we also have TL-10,TL-12. All of these have the opportunity to have NMR incorporated into the analysis. So we are very excited with this prospect of having a predictive biomarker for DATROWAY. Next slide. Okay. In addition, this is the gynecologic cancer disease. You see again here that we have some colors already. The orange, the dark orange boxes based on the ENHERTU approvals, but we also have additional clinical trials going on within the ENHERTU program as well as the R-DXd ovarian cancer from REJOICE Ovarian 01. Next slide. This is the data from REJOICE Ovarian 01 study, and you'll see that so far, we are seeing really great efficacy. And based on this data, the FDA granted us breakthrough therapy designation. So we are very helpful that eventually, once we submit the data, this will lead to an approval. Next slide. In GU cancers, prostate cancer and bladder cancer, we also have very extensive programs and that at least in bladder cancer that we do already have an approval with ENHERTU. So we have -- just to show that we have a lot of wide range of disease cancers besides just the breast cancer that you're familiar with, with these ENHERTU programs. Next slide. Okay. New concept ADCs. Next slide. It's very important to note that ADCs are modular in nature. And it's also very important to note that our research team that you'll hear about a little bit later from Yuki Abe, has a huge amount of extensive experience in each of these modules; payload module, linker module, an antibody module. And just by combining different ways in which you can have a payload versus linker versus an antibody, you can create new ADCs. Now I think we are often asked what is our advantage at Daiichi Sankyo compared to other companies that have acquired ACs from other companies, biotech companies technically. And this slide illustrates our major advantage in the field of ADCs. We have extensive understanding of each of the modules and how they -- when they combine in various different ways, they create new properties and new [indiscernible]. So this is our major advantage. We have an extensive history of understanding each of these modules that make up the ADC. Next slide. Next slide. I do want to mention that in addition to our ADC programs, we have started new programs in non-ADC and in oncology. This is some of the ones that are listed here. And of course, as we go for further ahead, we'll be able to report interesting clinical data. But just to give you some understanding of the sophistication of these programs. Next slide, I'm going to go over some of these with you, 2243. This is a T cell engager targeting an HLA-restricted NY-ESO antibody. So NY-ESO, I think many of you are familiar as being a T cell receptor target for tumors. And because this is a HLA-restricted drug. You can imagine that this is a T cell receptor like drug. But it's important to note that this is not a T-score or antibody. So this is a very sophisticated, very innovative way to create T cell receptor like properties for a monoclonal antibody. So we have this starting out in a clinical trial and we're very excited about the scientific aspects of this program. On the right-hand side is 5361. This is another agent, which is designed to enhance tumor immune. This is an NMD inhibitor. This is a drug then that promotes further translation of premature termination codon that may result from frame shift mutations. So typically, when there is a premature termination codon in frameshift mutations that message RNA is degraded so that, that protein coded by the frameshift mutation, messenger RNA is not translated into protein. Using this NMD inhibitor, one can force the tumor cell to translate the messenger on the abnormal RNA into the protein resulting in amino acid sequence within the protein that is for and therefore, recognizable by the patient immune system as being a foreign antigen. So this is a way to enhance immunogenicity of cancer cells. Next slide. And then we also have yet another modality in our pipeline now, a targeted protein degrader. This is something that many companies have, and I just want to let you know that we have this too. And our first one we call the 9051, -- the first-in-human patient study has started in November in solid tumors, including prostate cancer. Next slide. Okay. Next slide, the scientifically rational combinations. Okay. Next slide, please. Now what is important to note here is that based on the assets we have in our pipeline, we can create very interesting scientifically rational combinations that are based on the DXd ADC backbone. So for example, on the left-hand side, we can combine DXd ADCs with an IO agent, not just PD-1 drugs, but other ones that I just mentioned to you. And you can see the durable effect that we can see in our clinical trials. We can also promote engagement ADC and our potential synthetic disparity by combining DXd ADCs with certain drugs that target increased antigen or increased payload or increased affinity of the payload in the sales at the level of the DNA. Next slide. Okay. So we are already doing such combinations with IO agents. And you can see here, not just the TD01 drugs, but also the very different kinds of innovative IO trucks that are available to us within our internal pipeline. Next slide. Okay. And so and this is all represented now in many, many of our combination clinical trials with pembrolizumab, rivegostimib and the other internal assets that are listed here. Next slide. So just to summarize here from left to right, our research program is continuing to focus on both oncology and non-oncology indications as well as to create new ADCs based on technologies that we have in our research program. But in a clinical pipeline, we have prioritized the strength of our clinical oncology pipeline and also that emerging clinical stage non-ADC pipeline can be leveraged to create new novel combinations with existing meds. So that's my section, and I'm going to hand it over to Ken Keller now.

Thank you very much, Ken. Next slide, please. Today, I will cover 3 topics. Number one is what we have accomplished in oncology these past 5 years. Number two, is how we are approaching a time of unprecedented number of growth catalysts, not only for Daiichi Sankyo, but the number of near-term growth catalysts we have is among the highest in and number 3 is where we expect to be in 2030. Next slide, please. Daiichi Sankyo's oncology performance has been driven by ENHERTU. In the first half of this decade, ENHERTU has become the most successful antibody drug conjugate ever and the most successful new oncology drug launched ENHERTU the past 5 years as measured by revenue. More recently, we have launched DATROWAY, our second ADC, which is performing well. As we enter the second half of this decade, we start from a position of strength, which will lead to even greater success in the 2026 to 2030 time frame. In 2026, ENHERTU is expected to obtain new indications, including today's first-line HER2-positive metastatic breast cancer indication, followed by the HER2-positive neoadjuvant indication and then the HER2 positive post new adjuvant indication. DATROWAY is expected to receive its third indication expanding into the first-line triple-negative breast cancer segment. Behind ENHERTU and DATROWAY, our third and fourth DXd ADCs, I-DXd and R-DXd have received breakthrough designation from FDA. With our global oncology organization, now fully established, coupled with our 2 highly productive alliances and multiple new growth catalysts, the years 2026 to 2030 and are poised to be a time of unprecedented oncology growth here at Daiichi Sankyo. Next slide. Our oncology foundation is built on the strength of ENHERTU. ENHERTU has attained 7 indications. It has become the standard of care and achieve market share leadership in the HER2-positive second-line metastatic breast cancer indication, the HER2 low metastatic breast cancer indication, the HER2 mutant small cell lung cancer and the HER2 second-line gastric cancer indication. Impressively, in every country where it has launched, it has become the market share leader and the new standard of care in less than 12 months. This performance is the result of ENHERTU's exceptional clinical profile and the strength of our medical and commercial organizations and our alliances. To date, almost 200,000 patients from across 85 countries have now benefited from ENHERTU. Next slide. Global net sales ENHERTU quarter 2 fiscal 2025 totaled $163.2 billion. growing 24% versus the previous quarter 2. All regions are contributing to this growth, led by the United States with more than half of the total revenue. ENHERTU has made a historic mark in the community of oncology and is now poised to have an even bigger impact in 2026. Next slide. The next 2 years are pivotal for HER2 as it will deliver multiple new standard of care changing data catalysts and new launches. In the metastatic breast cancer setting, as Ken Takeshita just outlined, ENHERTU will move earlier in the treatment sequence with today's HER2 positive first-line metastatic breast cancer approval based on DESTINY-Breast09. DESTINY-Breast09 is the first major improvement in the outcomes in the first-line HER2-positive metastatic breast cancer space in over 8 decades. DESTINY-Breast09 launch will be followed by the expected approvals of DESTINY-Breast11 and DESTINY-Breast05 where ENHERTU enters the early-stage breast cancer setting where cure is the goal. ENHERTU is now at the stage where the launches of these new indications will cascade country by country, providing a constant stream of new growth catalysts throughout our upcoming sixth midterm plan. Importantly, these new growth catalysts layer on top of the existing remaining untapped opportunities of ENHERTU in the HER2 low metastatic breast cancer segment and especially the tumor-agnostic indication in the United States, providing substantial near-term growth upside. Next slide. I'll now highlight each of our key growth opportunities ENHERTU some detail, starting with the existing HER2 low metastatic breast cancer indication. The HER2 low and ultra-low indication was fully launched in the United States ENHERTU Q1 of 25, and it has become the new standard of care reaching 50% of patients ENHERTU quarter 2. This growth is expected to continue in the U.S. as patients and oncologists experienced its substantial benefits in their own hands. And you'll see we've got many, many countries as shown in the bottom right-hand side of the slide that will be obtaining access and hence, will be launching our HER2 low in ultra-low indication across the globe more fully in the coming year. Next slide, please. Now I will describe the opportunity for each of the new growth catalysts I've highlighted, starting with an ENHERTU's HER2 first-line metastatic breast cancer indication that was obtained today. There are 24,000 patients ENHERTU this indicated population across the G7 countries. Today, 30% of these patients never receive a second-line treatment, mainly because their disease advances too quickly to a point that physicians and patients decide to stop treatment. This insight underscores the urgent need to treat with the very best drug immediately. This mindset is shared by the majority of oncologists across the globe. The remarkable benefits ENHERTU in the treatment of first-line HER2-positive metastatic breast cancer cannot be overstated. In DESTINY-Breast09, ENHERTU in combination with pertuzumab reduce the risk of disease progression or death by 44% compared to the standard of care, taxol, tratuzumab and pertuzumab. ENHERTU provided over 40 months of progression-free survival, adding more than a full year free progression compared to today's well-regarded standard of care that has been the standard of care for over a decade. ENHERTU is viewed as the most efficacious drug in this setting by the overwhelming majority of oncologists. This belief, coupled with the urgency to treat with the best drug from the start, and the feedback from the oncology community that we received leaves us very confident that ENHERTU will be quickly embraced by the oncology community and become the new standard of care for these patients. Next slide. Now adding to our growth opportunities in the HER2 low and the first-line HER2-positive metastatic breast cancer segment are these new data from ESMO ENHERTU's DESTINY-Breast11, DESTINY-Breast05 in the early-stage breast cancer curative setting and DATROWAY's TROPION-Breast02 data in triple-negative breast cancer patients. All 3 of these trials demonstrated statistically significant and clinically meaningful benefits over well-respected current standard of care. Based on the feedback we received from the oncology community, we are optimistic about how fast and broad, these new indications will be adopted by the oncology community. And we are very confident these will all become the new standard of care. Next slide. I'll now explain the magnitude of these opportunities and share what we're hearing from the oncology community about their expectations for how these drugs will impact the treatment landscape. In DESTINY- Breast11, ENHERTU demonstrated the highest pathological complete response rate ever reported in this population. Each pathological complete response is potentially another life saved. It is well known and accepted that patients who obtain a PCR have far better overall survival than those patients who do not. In DESTINY-Breast05, ENHERTU in this high-risk population reduce the risk of disease recurrent by 53% compared to the well-respected standard of care. These trials are seen as practice changing by the majority of oncologists treating breast cancer. As you can see on the bottom right of the slide, 72% of oncologists in the syndicated survey said that these data will change how they treat breast cancer patients. And that is absolutely consistent with what we've heard in all of our discussions with key opinion leaders, all of our advisory boards and our own market research. In the G7, there are 29,000 patients in the DESTINY-Breast11 expected indication, and there are 11,000 in DESTINY-Breast05. ENHERTU adoption in these early-stage breast cancer patients brings the potential to have its greatest impact of all to potentially cure more patients. Next slide. In fiscal '26, ENHERTU has 5 major growth catalysts we'll be focused on. We believe ENHERTU's clinical profile creates the mandate for us to make ENHERTU the new standard of care for each of them. Number one is the remaining HER2-low opportunities. Number 2 is the new DESTINY-Breast09 HER2-positive first-line static breast cancer indication. Three and 4 is the expected early-stage breast cancer approvals of DESTINY-Breast05 and 11. And number 5 is the remaining untapped opportunity for patients in the HER2-positive tumor-agnostic indication in the U.S. We are confident ENHERTU is at the beginning of its biggest growth phase to date. Next slide. I'll now transition to an update on DATROWAY, our second DXd-ADC. Global DATROWAY net sales have now exceeded JPY 10 billion in quarter 2. In the U.S., quarter 2 revenue was JPY 6.6 billion, growing 113% versus the previous quarter. In Japan, Q2 revenue was JPY 3.5 billion, growing 59% compared to the previous quarter. Next slide. In the U.S., DATROWAY is approved for HR+ HER2-negative metastatic breast cancer patients and EGFR-mutated non-small cell lung cancer patients. In Japan, it is the first TROP2 ADC approved for our HR+, HER2 negative metastatic breast cancer patients. Early experiences as reported by oncologists have been extremely positive in both regions. Oncologists are becoming more and more comfortable and confident every time they prescribed this medicine. These early experiences will benefit DATROWAY greatly when it receives its expected triple-negative breast cancer indication. The clinical data in triple-negative breast cancer is viewed as best-in-class by most oncologists, and we believe -- it has the potential to become the new standard of care. Next slide. So let's talk a little bit about the expected triple-negative breast cancer indication. For nearly 15 years, there has been no new treatment advances in first-line metastatic triple-negative breast cancer for patients who are PD-L1 negative. Metastatic triple-native breast cancer is the most aggressive breast cancer subtype with the fewest treatment options. 5-year survival is only 14.9%. There are 16,000 patients in the G7. 1 out of 2 patients never receive a second-line treatment. So there is a big urgent unmet need. DATROWAY's TROPIN-Breast02 trial demonstrated a statistically significant and clinically meaningful improvement in progression-free survival. It uniquely delivered a statistically significant improvement in overall survival. It doubled the overall response rate. And we shouldn't forget that DATROWAY provides very convenient Q3-week dosing, which is a significant advantage compared to the other Trop-2 ADC in the market. Next slide. The feedback has been universally positive. The doubling of overall response rate, which is unique to DATROWAY, coupled with the unprecedented overall survival improvement which is unique to DATROWAY, the impressive progression-free survival, the excellent safety profile, have the oncology community eager to adopt DATROWAY and makes us confident it will experience a rapid uptake and has potential to become the new standard of care. Next slide. With ENHERTU and DATROWAY's current indications and expected future indications, these 2 ADCs can potentially improve outcomes for 100% of metastatic breast cancer patients. Our goal is to be the premier company in the eyes of the breast cancer treating oncology community. Next slide. On top of all of the anticipated launches in 2026 and '27, we will see the results of a number of important DATROWAY lung cancer trials. These trials target extremely large patient populations and hold the potential to transform the treatment of lung cancer. The DATROWAY clinical development program, depending on the success of the trials shown on this slide has the potential to benefit an even greater number of patients than the very robust ENHERTU clinical development program. Next slide. This is the full picture of where Daiichi Sankyo is going. In the past 5 years, we have made a successful transition into oncology. So we start our next 5 years from a position of strength. Daiichi Sankyo has now reached a data-rich growth catalyst-rich moment with new highly meaningful new indications expected for ENHERTU and DATROWAY in 2026. Behind these, there are numerous other new pivotal trials reading out over the next few years, as shown in this slide. This clinical development program creates a continuous stream of new launches across at least for ADCs every year through 2030. These pivotal registration trials offer the opportunity to help nearly 6x as many patients live longer, better quality lives and even bring more cures to patients across the global oncology community. Next slide. We are more confident today than ever before that our work over the next few years will cement Daiichi Sankyo's position as a true global oncology leader. I will now hand the presentation over to our Head of Global Technology, Hiroto Kashiwase.

Thank you, Ken. Please go to the next slide. First, regarding the development status and the stable supply system of the DXd ADCs. As was already explained in the previous part, this was respect to enhance it since its launch in 2020, demand has been increasing at the pace exceeding expectations. Our technology unit has been suitably building a supply system response to this rapid increase in demand while continuing stable supply. AS for DATROWAY, it was launched this year in Japan, the U.S. and Europe, and we are building an appropriate stable supply system while monitoring market trends and development status. In addition, for I-DXd and R-DXd, favorable clinical trial data have been accumulated. And we are currently constructing a global supply system capable of responding to the future peak demand of the entire R-DXd ADCs. Please go to the next slide. Here is a supply strategy for the 5 DXd ADCs. Since this overlaps with last year's Science and Technology Day, details are omitted. But regarding the expansion of capacity, we are enhancing production capability through capital investment and building a global paste. Regarding the improvement of the capability, we are enhancing productivity by leveraging technological strengths, posting under strengthening biotechnology talent plan transforming into a highly productive organization. By skillfully linking these 2 axis, we aim to maximize ADC supply volume and secure the necessary supply volume. . Next slide, please. Here is a general manufacturing process of ADCs. ADCs consists of multiple components, such as drug inker antibody, ADC drug substance and ADC drug product. and each component is manufactured and managed separately. Compared to conventional small molecule drugs, the manufacturing process is more complex and each time becomes very long. Therefore, in order to secure supply volume that can meet future demand. is necessary to start manufacturing planning adjustments and preparations at an early stage. In the stable supply of ADCs, one of the most difficult points is to appropriately manage the balance between supply and inventory in line with regulatory changing demand. Next slide, please. This is a schematic representation of the manufacturing and the supply routes of ADCs. Among the ADC manufacturing processes, the steps of antibody ADC drug substance and drug product have a large impact on quality and recognized as critical processes. Therefore, focusing on these 3 processes, we are building the manufacturing systems at multiple sites of our company or CMOs and by considering filing strategies and the supply strategies. We combine them to secure multiple supply roads. Such a system not only secures supply capacity to respond to rapid demand increases, but also reduces supply risk since even if an unexpected trouble cost at one manufacturing site and the supply just stopped as supply routes can cover it. Next slide, please. Next, I will explain the policy on utilization of our facilities and CMOs. The graph on the right shows an image where the gray area indicates demand forecast and the back graph shows supply capacity combining our in-house and CMO manufacturing capacities. We always compare the latest demand forecast with supply capacity judge the necessity of capital investment or outsourcing manufacturing to CMOs and work to ensure that supply capacity consistently exceeds demand. We also consider the balance between our in-house manufacturing and the CMOs to be important. Since it takes a very time to construct new buildings. and start-up production lines in-house. In the short term, we promote speed and effectively utilize CMOs with existing facilities to secure supply capacity. On the other hand, in the medium to long term, considering cost and stable supply. We gradually increase the proportion of our facilities, aiming to eventually build a balanced supply system between our in-house and CMO capabilities. We've gotten the final nicest ratio between in-house and CMOs, we refrain from disclosing it. However, from the viewpoint of BCP, utilization of CMOs is one of the important elements, and we will make comprehensive judgments based on the respective advantages and these advantages. Next slide please. This slide summarizes our in-house global ADC manufacturing sites. Currently, the Daiichi Sankyo Group as a whole has 13 manufacturing sites globally. Among them in Japan, we have 4 sites: Onahama, Katebayashi, Hiratsuka and Odawara. Globally, we are building or planning ADC manufacturing systems at 3 sites, Pfaffenhofen in Germany, Shanghai in China, and in Albany in the U.S. Regarding specific numbers of CMOs and related information. we refrain from disclosing them. However, we are building supply systems in cruise collaboration with multiple CMOs mainly in Europe and the U.S. Next slide, please. Now I will explain the status of leading supply systems for each component. First, regarding antibodies. Since there are a considerable number of CMOs capable of manufacturing. At present, we are effectively utilizing the speed and the technology of CMOs to secure the necessary supply capacity. In the mid- to long term, our policy is to strengthen in-house manufacturing and aim to build a low-cost and stable supply system. In fiscal year 2024, a antibody manufacturing facility with 15-kiloliter scale, bioreactors was completed at the Onahama plant and the preparations are underway for stable manufacturing. Next slide, please. Twice the production capacity will be there. Also, we are currently constructing Pfaffenhofen plant in Germany. Completion of this facility is targeted for fiscal year 2028. Next, the supply system of ADC formulation. Regarding the drug product, considering factors such as product transportation costs, we are establishing a supply system in each region with a focus on local production for local consumption. Domestically, the Hiratsuka plant already possesses multiple formulation lines, and we are growing ways to increase production volume and expand our product portfolio. A new formulation line is scheduled for completion at ARI, our new album plant in fiscal year 2026, with plans to extend the U.S. reduction capacity accordingly. Furthermore, construction of new formulation lines is also being advanced at the Pfaffenhofen plant in Germany and Shanghai plant. Next please. Efforts also on the way to establish a one-stop production system. Right now, the various components of ADCs are manufactured as various sites on consolidating key manufacturing processes, but a single site is expected to reduce transportation times between manufacturing sites and enhanced production flexibility, which would enable more efficient production. Already at the Onahama plant, an integrated manufacturing system from antibody to active pharmaceuticals in regions, namely drug substance has already been established within the same build enabling efficient production. Also at the plant, once we drug substance manufacturing building is completed and production commences and integrated manufacturing system for drug substance to drug product and packaging is scheduled to be realized. Next, I should briefly outline our initiatives developing and strengthening our biotechnology workforce. The development and stable supply of ADC products and estimates the cultivation and strengthening of biotesting specialized knowledge particularly in the manufacturing domain as production volumes increase, the required on hours are projected to rise further securing manufacturing personnel and accelerating the development. And this has become an urgent priority. So to that end, we're actively pursuing measures to cultivate and secure the necessary biotechnology personnel. And these include strength formal recruitment activities, development and enhancement of manufacturing operators through training programs and seamless personnel exchanges of course, organizational functional on taking antibodies. As an example, I will now go into details about the actual training program. For antibody manufacturing personnel, we have established a training environment dedicated to operator development. We have formulated training programs, utilizing specific is enabling the efficient development of biotech personnel. Specifically for newly assigned personnel such as new recruits and transferees, we combined theoretical instruction lectures and practical training the laboratories scale. This supports the early acquisition of the knowledge and skills required on the production floor, enabling us to develop personnel who can contribute immediately on site. Separate from this program, each manufacturing site also conducts GMP training and OJT training and other educational initiatives, which enable us now to become evolved in our 2 production as an at operators within approximately 6 months. whether to respond more swiftly and efficiently to tasks related to ADC development and supply, we are optimizing the organizational structure of the technology unit. And our primary production focus is shifting from small molecules to oncology and novel modalities. Approval processes have been accelerated and because of that time frame from formation technology development to the commencement of commercial production has been consequently shorter necessitating reduced lead times. So to address these challenges, we are determined that integrating responsibilities from clinical trials, commercial production, together with enhancing information sharing and collaboration was essential. So we have decided to transition from the previous structure where clinical trials and commercial production were separate to an integrated organization. In fiscal year 2023, we integrated the Biologics division Pharmaceutical Technologies vision and Supply Chain division to establish technician unit capable of providing end-to-end support across the broad spectrum from early development to commercial production. In fiscal 2024, we reorganized functions to create a more efficient structure for advancing the ADC business by establishing 6 functions on in fiscal 2025, we absorbed and matched the production function companies Daiichi Sankyo Pharma and Daiichi Sankyo Chemical Pharma further strengthening collaboration in production functions. Going forward, although we intend to continue examining and implementing optimization to organizational functions to deliver innovations to patients worldwide as quickly and reliably as possible. Next, please.

I am Abe, Head of the R&T division and Head of Global Research. I will explain the research part. Next slide, please. building on strength in small molecule drug research and development has long engaged in antibody drug research currently under modality strategy, multi-DC strategy, we are promoting new drug launch using the various approaches such as antibody drugs, including as media molecule drug discovery, nucleic acids, gene therapy, Kraton engineering and mRNA vaccines. In the ADC platform, we have created multiple new ADC technologies, including DXd ADC. By utilizing the various modalities, we are working daily to continuously create innovative medicines that can transform standard of care across a wide range of disease areas, including cancer. Today, I will introduce some of our new drug research by efforts toward the next innovation. First is ADC. I will present the direction of new ADC technology development based on the success of DXd ADC. Second is cancer immuno therapy or immuno-oncology research. In parallel with ADC as a result of more than 10 years of research, we have started clinical trials of multiple assets. And I think this is the first opportunity to present them altogether. Third is the combination strategy of BDC and immuno-oncology therapy. As Takeshita explained in the development part in clinical trials, for example, the combination effect of DXd and immune checkpoint inhibitors has been observed. Our preclinical experimental data are now being validated in clinical settings. For is new modalities. And finally, I've introduced smart research laboratory and our open innovation activities in research. Next, please. Now I introduce DXd ADC and new concept ADC technology platforms. Next slide please. As we have introduced several times, DXd technology is considered one of the outcomes of the merger between Sankyo and Daiichi Pharmaceutical. At Sankyo, since the 1990s, former head of on [indiscernible] and others began antibody drug research. At Daiichi Pharmaceutical at the same time, research was conducted on new drugs of the topo isomerase inhibitors and the drug delivery systems. With the merger in 2007, these insights were integrated. And in 2010, it developed into cross-functional activities for ADC research. At that time, I was assigned by [ Nagatsuma ] as research team leader and together with fellow researchers created GHD-ADC technology and the ADC portfolio. the strong desire to deliver excellent new trucks to patients and equipment to manufacturing and innovation are part of Daiichi Sankyo's continuing research culture. I believe this environment matured mainly with such leaders and became the driving force behind the creation of ENHERTU. Next slide please. As you know, DXd ADC technology is Daiichi Sankyo's proprietary platform and currently clinical trials are being conducted with 7 ADCs. At the time of research as a working hypothesis, to summarize inhibitors were generally not used for breast cancer. Therefore, we advanced research with the idea that delivering that delivering Daiichi Sankyo's propriety topo isomerase inhibitor through ADC technology could become a breakthrough new agent. We also succeeded in developing technology to launch 8 drug linkers or antibody. And for ENHERTU and DATROWAY, which we developed ahead, we obtained approval in breast cancer. We have also launched research programs for other ADCs while formulating working hypotheses regarding which cancer types they may be effective against. For example, DATROWAY has been approved for each mutated and I-DXd has demonstrated favorable clinical data in CMC and R-DXd has shown promising clinical results in ovarian cancer, leading to breakthrough therapy designation. More recently, DS3790, which targets hematologic malignancies, has advanced to the clinical stage. We are hopeful that it will also demonstrate strong efficacy in hematological cancers. At an external evaluation of the DXd ADC technology, we have received FDA breakthrough therapy designation for a total 13 indications to date. In recognition of achievements demonstrated in clinical trials, as shown earlier by Okuzawa, we were honored this fiscal year with the best ADC platform technology award at the World ADC Awards. Next please. Furthermore, Daiichi Sankyo's ADC technology continues to evolve across each of its components, antibody linkers and payloads, as the Takeshita mentioned, development of novel technology, antibody technologies to enhance target selection, Fc engineering and tumor specificity. And in the middle, new conjugation technologies that enable strict control of the DAR for linkers and exploration we have a diverse range of payloads with mechanisms different from DXd are underway. Our strengths lie in over 15 years of ADC research and deep expertise in antibodies linkers and payloads. We will continue to generate novel concept ADC technologies and lead the ADC field going forward. Next, please. As next platform candidates applying DXd ADCs, we have mPBD ADC technology using modified PBD assay as persisting technology, based on cancer immunology concepts, the first asset entered clinical trial stage. If clinical utility is demonstrated we will proceed with the development of second and third assets, utilizing these ADC technologies. Should further improvements be required, we will address and overcome the challenges. We are also researching additional noble concept ADC technologies, and we introduce them as they start clinical trials. Next please. I will explain our cancer immuno-oncology research assets and their combination strategies. Why do we invest in IO? Immuno-oncology therapies exemplified by non checkpoint inhibitors have been reported to provide durable effects in suppressing cancer recurrence, which is thought to be attributable to the immune memory. In addition, many may offer new treatment opportunities even for tumor types with low sensitivity to drugs. Furthermore, through complementary pharmacological effects by combining IO with DXd ADCs, we would like to aim for cure to cancer. Next, please. During a decade of research, as I mentioned earlier, we have identified various molecules involved in cancer immune activation signals as drug target and have generated multiple development candidates and established our proprietary IO franchise. Today's disclosure covers only part of this. But as is illustrated in this slide, we are working to activate cancer immunity against tumors through various mechanisms, including the increasing novel cancer antigens, activating antigen-presenting cells and recruiting activated T cells. In building an IO franchise, we have adopted a multi module strategy, advancing drug discovery using the optimal modality for each target molecule. For instance,DS5361 is a small molecule compound, DS1103 is a monoclonal antibody. DS3610 is a novel IO targeting ADC and DS2243 is a T-cell engager. As DXd ADC induce cancer [indiscernible] and serves as the trigger for tumor immunity, we anticipate that drugs within the IO franchise will offer complementary effects when used in combination with DXd ADCs in addition to the monotherapy applications. Furthermore, there are multiple research themes at the investigational stage and we will also introduce them when we start the global trials. Next please. From within the IO franchise, I will now introduce DS3610. DS361 include novel ADC technology concept utilizing our proprietary STING agonist as the payload. The STING agonist is selectively delivered to the tumor tissue, activating antigen, presenting cells within the tumor microenvironment to promote T cell priming. And in nonclinical studies, we have confirmed that sustained antitumor effects based on immune memory and synergistic effects with multiple drugs has been formed. The concept involves avoiding systemic immune activation by incorporating the STING agonist into the ADC while modifying the antibodies Fc domain to suppress antibody-dependent cytokine lease. We believe that this design achieves the balance ADC with both immune activation on safety. And FIH already has started last month. Next, I will briefly introduce the progress of drug discovery message using novel modalities. Now in the development section, Takeshita already explained this, but we have started the clinical trials for a new modality and medium-sized protein delta. So well compounds that degrade target butane has been reported by other companies aggressively. We have selected the first in line first-in-class novel target and advancing this development as potent as ATPD. We also have multiple projects in preparation at the nonclinical stage and intend to collaborate between the research and development teams to cultivate this into one of our new core technology platforms. Finally, I will introduce the Smart Research Lab, which will form the next-generation research infrastructure and you also get direction for open operation. Our company has long prioritized machine learning and AI-driven drug discovery as a history. Currently under the concept of SmartLab, we suggest themselves are undertaking initiatives to transform the drug discovery process. Essential to this effort is AI-driven drug discovery, high-quality and large-scale experimental data and we are advancing the utilization of this data. We think that the Smart Lab will form the foundation for AI-driven drug discovery. So this purpose, we established the Smart Research Lab in San Diego this January. At the smart usage lab, robots and automated experimental equipment operate 24 hours a day, 365 days a year with plans to generate large volumes of high-quality data. And we have selected and is such professional drug test researchers from Shinagawa and [indiscernible] institutes to the Smart Research Lab. And as one team, we are establishing the lab with talented IT engineers, we plan to start the work from next fiscal year. Well, the smart research lab will be our first in-house drug discovery research facility in the U.S. It will also enable remote experimentation and data analysis from within Japan as well. So I explained before as well, molecular design using AI has already been pursued vigorously at the Shinigawa Tokyo Research Institute, we will tackle new drug discovery through a hybrid model, mobile in San Diego and Tokyo efforts. Finally, I will introduce our open innovation activities at the research stage. Last year, the established Research Institute in Boston and Munich, the key European and American clusters for drug discount message is basis for external collaboration. For this fiscal year, we opened a new research institute in San Diego to access the drug discovery cluster in the U.S. West cost. So Daiichi Sankyo is now advancing collaborations with external institutions in over 10 countries globally centered in existing Tokyo Shinagawa, Kasai facilities. Top scientists from Shinagawa and Kasai are also dispatched to these research institutes, actively promoting joint research and sponsored research with academia and start-up companies. So further collaboration between these bases enables global information sharing and strict compliance with the regulatory frames of each region. Regarding the focus of this research institute, we are not considering the introduction of clinical stage pipelines, but we are concentrating our early-stage research into novel biology and the discovery of new modalities. By incorporating the new science and technologies in merging daily within the Western drug discovery ecosystem and integrating them with Daiichi Sankyo's strength and expertise, we will create new opportunities for drug discovery. Next please. Our strength lies on the based technology and science culture. Our drug discovery achievements, including ENHERTU, DATROWAY, TARLIGE,, LIXIANA and EFIENT are underpinned by precision in manufacturing down to the finest detail. Moving forward, our researches and employees will unite to deliver new value and superior medicines. Craftsmanship is a spirit of manufacturing deeply rooted in Japan's tradition. So even as we globalize, we will propagate this culture, pursue science and technology that embodies Daiichi Sankyo's identity and deliver medicines to as many patients as possible and persist in our challenge towards the lofty goal of curing diseases. Thank you .

[Operator Instructions] The first question is from Yamaguchi-san, Citigroup.

This is Yamaguchi from Citi. I have 2 questions. First question goes to Ken Keller-san this time in science and technology, you mentioned the Gabe expansion about marketing especially that truly on details were given in the presentation. Regarding ENHERTU, within 1 year since the launch, you had achieved the marketing share over 50%. What is trend we have seen regarding the market share obtained by DATROWAY? And also, I believe that there will be more coming data available for DATROWAY. Can we expect that the same trend will be followed by that DATROWAY like ENHERTU? And also if you have any peak expected sales in number, please. also let us know. .

Yes. Thank you for your question. So the early uptake of DATROWAY in both Japan and the U.S. has exceeded our expectations. It's a little bit different in both markets. In the U.S., we've got about 50% of the use in the breast cancer indication. And about 50% of the use in the lung cancer indication. In Japan, it is the only TROP2 approved for HR-positive, HER2 negative, and so a lot of it is the breast cancer indication, obviously. In terms of what we expect, we expect that the triple-negative breast cancer indication for DATROWAY is going to be very well received. As Kashiwase mentioned earlier, the data is truly unique. DATROWAY demonstrated a doubling of the overall response rate. That's unique to it. it demonstrated an improvement in overall survival. That is unique to DATROWAY. The safety profile was excellent as well. And I mentioned the Q3 dosing is more convenient than other options. So we are very confident that DATROWAY will become the new standard of care in the first-line triple-negative breast cancer space for those patients that are PD-L1 -- not able to receive a PD-L1 drug. The data is truly excellent. And I think all the positive experience from the 2 existing indications will serve it very well in terms of physicians being comfortable with it from day 1. I hope that answers your question.

I have another question to Abe-san. In Takeshita-san's section, in Page 25, new ADCs, 3 of them were introduced. And of that, 2 are new DXd ADC. Another one -- should I repeat the question?

Well, I am, yes, now looking at Page 25. May I answer it? Could you repeat your question please?

New ADCs, there are 1, 2, 3, 3 of them. you'd like to ask you to explain what are the differences amongst these 3? And what are the specific targets of each? .

Yes. And so there is the new ADC 12 and also at the bottom. So the modified payload or the new ADCs. This is new list of DXd ADCs. So with that new concept, it's being promoted in the research. Although I cannot disclose the details, the tissue selectivity meaning that there is more cancer-specific delivery system within sales more durable effect can be demonstrated. These are what we are targeting to achieve with these ADCs. Although I cannot give you more details, when it comes to the clinical trial stage, we will give you more details. And also, the third one is a new payload ADC. And that [ MOA ] is different from 3 ADCs that we have introduced to you, we have started researching this new payload and research is going well. So at the time that all those assets, stand critical trials. We will give you more details. But we think highly likely, I believe that all those 3 programs, we'll be able to move on to the advanced stage in clinical development.

And if it's all right, can we expect that these will be entering into the clinical stage within several years? .

Well, if we can, then we may say so. And all the research development and mashing units are doing our best efforts so that we'll be able to promote the implementation with the plan.

Next question, please. Daiwa Securities, Hashiguchi-san please.

Hashiguchi speaking. The first question is to Abe-san or Okuzawa-san. Fifth NTP 2021 announced as one of the objectives post DXd ADC selection. That initiative, in today's presentation, how much is that reflected DXd ADC franchise? I like that, a large backbone pillar just one of that rather than that with the various initiatives that you have introduced today a sustainable growth you're going to achieve, is that the understanding? Or within what you have introduced a post-ADC modality? What is expected as a major pillar, the franchise whether there's a possibility that, that is included as well? So within what you have introduced the weight, the difference of weight, whether there are any or not, we would like -- I would like you to comment, please.

So from Abe, I would like to respond. Thank you very much for the question. Now I personally feel that DXd ADC-like platform technology can be built and we do have that confidence. But the IO research taking 10 years, there are a lot of development candidates. So not only one, but multiple number of platforms or franchises, we will be building the pipeline, I think. And what is the pillar of that? This time, I would like to refrain from clearly responding. But in our research division, we do have confidence that we could advance this forward. I would repeat that in today's asset, we are expecting the IO assets and then protein degrader with that we are starting the clinical trial so that we have a research structure as well as achievement that we could lead it to the next stage. And new ADC we are expecting for also. So I don't know whether this is an answer to you, but not only one but we think that we'll be able to build multiple numbers of platform. But on the other hand, as you know, up until 2030, DXd ADC, the business, we will further expand the business. Under such circumstances, these new initiatives that have been rolled out. Please understand that. That's all from me.

The second question is also the question directly to Abe-san. As you mentioned earlier, on Page 25, new ADC 123, for these, the target, for instance, had 2 or TROP02 like that, the conventional DXd ADC. It's the same as that further stronger efficacy safety targeted ones are included or the past the new targets that you were not able to obtain. And for those new patients, it's a kind of effort for you to provide a treatment option, which is closer to what you are aiming at as a company?

Thank you very much for your question once again. If I say all, you might say we're doing too much. But there are two areas, with that herceptin [indiscernible], the standard of care, and those were used as SoC for 10 years and 20 years, we're in the process of reforming it and changing it. On the other hand, we research so that the ENHERTU's challenges could be overcome even they are working on the drug development. And also what we have not done and the diseases that we have not been able to provide cure, there are many such in existence. Therefore, for the new target for them or for new tumors, with that objective, we are working on developing and discovering drugs, which pain. And we are working on both of those that you have mentioned.

I have 2 questions for Takeshita-san. Firstly, Page 20. I'd like to ask about the potential in conversion of the QCS methodology into the TL-07 and TL-08. We understand from my discussions that you have been discussing with the FDA about the potential use of QCS NMR in TL-07 or 08. Could you provide an update on the status of these discussions and whether any conclusion have been reached? If QCS were to be incorporated, should we understand that it used to be limited to that respective? Or is there a possibility of prospective integration? In addition, I appreciate your perspective on whether others benches to be considered acceptable or supportive in the context of [indiscernible]. This is the first question.

Yes. Thank you very much for that question. So in terms of where we stand on NMR or also known as QCS incorporation into our lung cancer studies. We are in discussion. And so once we have some conclusions, we will be able to report them to you. But unfortunately, not today, but perhaps in the future.

When can I hear the conclusion?

Well, I don't have a specific date for you. But as you know, we already have reported that the top line results of the TL07 will be available sometime in the next fiscal year. So certainly, we need to have these issues about NMR concluded some time before the we see the top line results for TROPION-Lung07.

Second, about ENHERTU, Page 11. I ask about the development of drug for ENHERTU in earlier line settings for the HR-positive population, including neoadjuvant, adjuvant and [ ET ]. Could you share what discussions you are comping having with AstraZeneca regarding development in the settings? Over the past years, you have indicated that you have assessing the potential in this area. But there have been no update. Does AstraZeneca have limited interest in developing hearing settings? Or are you concerning by doing development in this space using products other than ENHERTU?

Yes. So your question refers to the bottom half of the slide, the hormone receptor positive patient population. Is that correct?

Yes.

Okay. So no, this is a patient population that is in the adjuvant neoadjuvant setting, et cetera. Much of the work is really being done through endocrine-based treatments. And so other than some exploratory studies that we are conducting it, we just need to wait to see how much progress we can make using even a drug like inherit that is quite corrective in the neoadjuvant adjuvant space because these are -- in these earlier lines of therapy, hormone receptor positive breast cancer is typically less sensitive to drugs like chemotherapy or even see a more responsive to endocrine therapy. So at the moment, what is stated here about beating the potential or preparing certain plans is unchanged.

Next question, Matsubara-san of Nomura Securities please.

I'm Matsubara of Nomura Securities. So I think the NMD, not only actions in messenger RNA quality control, but also plays a role in degrading the gene expressions. So is there a risk inhibiting an AMD could cause of target effects such as an intended change in GE expressions or activation of abnormal metabolic class?

Okay. So this is a very -- you're asking a very interesting biological question. So in a normal cell, certainly, there are termination codes. These are not premature termination point, but just regular termination codons. For reasons that are still not completely clear the messenger RNAs with standard termination codons, are unaffected by NND inhibitors. That is to say that if you have a regular standard termination call on in your messenger RNA. That does not undergo mRNA depreciation. It is these premature termination codon as a result of, for example, frame imitation that is specifically affected through this mechanism called MRI degradation, which we are inhibiting with this NMD inhibitor. So what is expected is that this NMD inhibitor would not substantially affect the normal sales with its own set of termination codons, but have a selective effect on tumor cells that have these premature [ termination codones ].

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

Muraoka of Morgan Stanley. My first question goes to [ Okuzawa-san ]. Here in today's presentation at Daiichi Sankyo today, you have all those assets and you need such a touch assets, I could understand it very well. But the question is about the external resources in corporation that you have been touching upon from this spring from time to time. You do have your in-house resources, but based upon presentations made today, by when, at which scale you'd like to incorporate external resources? Could you tell me those once again?

Thank you for your question, Muraoka-san. My answer is that within the 6 5-year business plan, we'd like to clarify those and would like to let the investors and analysts now. And as the business scale, expands and as we rapidly have been growing, we would like to further strengthen our toward the future growth. And as we have introduced, we have rich growth catalysts in-house and always, we are always watchful of potential external opportunities. And it is going to be a new 5-year business plan. Therefore, growth driver sees both in-house and outside, in order to effectively obtain those and make use of them, we would like to establish a management system supporting those within the new 5 business 5-year business plan. Therefore, at an appropriate timing, I would like to provide you a discussion.

So it will be probably prior to a 5-year business plan. So within 3 months, I think my understanding is that you will be able to give us an update by that timing?

Yes. In the next fiscal year, for sure, yes. we would explain about our new 5-year business plan.

Next, I would like to ask a question probably to Abe-san, Abe-san or Takeshita-san but also probably to Abe-san regarding the new protein degrader 9051, it is midsized molecule. Is it oral or injectable? And what is the desirable administration routes? I think Astellas has been working on the injectables and target this might be different, but the start showed very positive data oral administration to my surprise. So other companies demonstrating very positive data, what kind of differentiation available in your probably the target disease is different, but could you tell us a little more?

Thank you for your question. Concerning this program, please give us a little more time. so that we'll be able to give you more details later on. And whether it's oral or injectable, we have been conducting researches on multiple routes. And oral is considered to be better but the injectable has its own benefit, like every 3 weeks or every 4 weeks dosing may be available. Or if it's overall on a daily basis, the patient would be able to take it. Therefore, what's most important is in that targeted disease, what kind of treatment is being provided and compared to the existing one, we should demonstrate something superior or more advantageous. So including that, we have been conducting results. So these different formulations or administrative routes we have been researching. And I myself consider and believe that this asset will become a very good drug. Sorry, I cannot give you specific answers, but could you get what I wanted to say?

Yes, I could get the nuance very well. But just to reconfirm what you said, newer molecule, Well, naturally, it includes injectable, but also potentially, it is possible to make it in oral, right? And especially, it is CRPC-9051, and it's going to be long-term administration. Therefore, naturally, in my view, I think this should be oral. Can I say that my idea is not much different from yours Will appreciate it thinks that way. And in the next fiscal year, we would like to take opportunity to introduce this. So I believe that this is going to be excellent product and that we would like to continue research efforts.

Next question, Jefferies Securities, Barker-san please.

Right. Steve Barker from Jefferies. They're both for Ken Takeshita. The first question with reference to Page 9 and 10. Company obviously has a lot of history with ADCs. There's a narrative in the stock market that some other companies, which are developing a lot of ADCs and their own very rapidly. They don't have the same level of history, but the idea is that they can run clinical trials much faster and therefore, should be able to catch up and overtake Daiichi Sankyo in ADCs. Would you like to comment on that, please?

I hope you understand that we have already reported Phase III clinical trial data outcome in many of these diseases and in many different types of patient segments. For example, in breast cancer, we have all kinds of approvals now and positive data not just enter but also actually the TROP03 ADC. And so I think just -- if you -- because you referred to Slide 9, if you look at TROP02 data, for example, I think we are a very, very competitive. And even if we compare to other TROP02 ADCs that have already reported their Phase III data, we believe that we are very competitive and in many ways, better set of clinical trial data, more clinically meaningful than other competing drugs. So I think that we are -- I don't know. I hate to brag, but I think we're quite ahead of other competing TROP02 ADCs and other ADCs in general. I think it's made really a time element that's here as well as the big set of control data that shows that there are -- even with the same TROP02 targeting ADC, there are very important clinical data and safety data differences. Between this one versus other ones as well as what's listed their little more convenient administration schedule. I think that's important.

But then presumably also for new types of ADCs, your long history with this modality should give you an advantage, you should be able to come up with new ADCs ahead of the competition, I should think?

Yes. So yes, that was, I think -- sorry about that. I think that was the second part of your question. And as I alluded to, these ADCs are really modular drugs by creating a different combination with these 3 modules, you can create new ADCs with different properties. That is one of our biggest research advantages compared to other companies that are mostly buying a single ADC drug for further development. And so as you saw earlier, we are producing next-generation ADCs with different payloads. And in the future, we expect to have more ADCs with get more different payload linkers or sometimes engineered antibody the binding target. So this is really our strength here. And if you ask us what is different about our ADC program compared to others? This is one of them. This is one of our biggest differentiating factors compared to other companies.

Next question. Sogi-san, Sanford C. Bernstein.

I have 2 questions to Dr. Takeshita. So first one is Doctor, TROPION15 , that is slated to be read out next year. This is for second-line EGFR muted in non-small cell lung cancer. We understand that you are testing in data as a monotherapy as well as the combination with TAGRISSO versus chemotherapy. And first of all, we believe that this is a really important study for DATROWAY, the commercial opportunity as well as the exciting opportunity because the top 2 targeted ADC has have shown really promising the efficacy so far. And so we believe that this combination approach with the 3 is a differentiating part of DATRO comparing to Merck's [ Kelens ], which is currently only tested as a monotherapy. But on the other hand, there is -- there are overlap the adverse event, the profile between DATROWAY and TAGRISSO notably for stomatitis and also ILD. We'd like to understand what do you understand this overlapping AE profile in terms of the safety risk for this combination? And would you actually think that the monotherapy is more in a base case success scenario from this trial and the combination is more the upside opportunity?

I think ultimately, it's going to be the clinical data that will tell us which is more important, the monotherapy or combination. It's also -- obviously, with the monotherapy, you could expect to see less toxicity. But with a combination, we might expect to see even additional efficacy beyond just monotherapy. But as you pointed out, there's a potential for additional safety concerns. So ultimately, I think we're going to have to see the totality of both clinical data including efficacy and safety to make some judgment in terms of a risk benefit, not just for regulatory agencies, but also for the prescribing physician.

Is it correct to understand that currently, you don't have any support in clinical data to understand the potential safety profile for the combination?

So we are doing those clinical trials right now, yes. So we have some understanding.

Okay. Great. And then there's another question regarding HER3 DXd. Okuzawa-san mentioned that you continue to explore the HER3 DXd opportunity. And we also understand the hard HER3 first of a target has been of great interest among the oncology drug development. On the other hand, it's been quite elusive. And we'd like to understand that as you continue and we understand you are exploring the biomarker approach to achieve the better patient selection. Have you actually had any kind of initial success? Or where you stand in terms of understanding how to approach the patient selection strategy? Have you had any kind of design of the optimism, what you have achieved with the DATROWAY NMR?

Yes. So as you know, with the HER3 program, there are a couple of big indications of interest, breast cancer and lung cancer. And the breast cancer data that we are -- the bulk of the early breast cancer data that we have is from our collaboration with the French IGR and they have produced all kinds of very sophisticated biomarker analysis that we are working with. In addition, in lung cancer. As you know, we have a lot of experience now in doing the administration of for 3D in EGFR mutated patient population as well as now extending into the non-EGFR-mutated patient population. And then there, we are starting to apply the standard IHC assay as well as some more sophisticated assays beyond just the standard immunochemistry. And I think there is -- here again, just like in breast cancer, so there's a lot of interesting emerging data so that it is quite conceivable that there could be a biomarker-based clinical development path for HER3 DXd. I think this is the one interesting avenue that we are pursuing, but we have not -- we had really reported it up.

The next question is from Tony Ren-san from Macquarie.

Can you guys hear me?

Yes.

Okay. Perfect. My first question is probably to Mr. Keller. So this is about Slide 44. The number of patients you guys estimated for DESTINY-Breast11 and DESTINY-Breast05. It appears to have increased slightly compared to the estimates coming out of ESMO 2025 conference. Are you guys still prioritizing DESTINY-Breast11 over DB05? And if so, could you explain to us the considerations? Is it because you hope to release drug exposure and therefore, reduce toxicity, I believe it's 4 cycles versus 14 cycles, right? So much shorter drug exposure? Or is it because of the larger patient population or other considerations?

Thank you very much for that question. After seeing the clinical results for both of these trials, what we're hearing from the oncology community is that ENHERTU in both of these settings is highly, highly attractive. Now as you mentioned, in DESTINY-Breast11, these are for higher-risk patients and there is a larger number of these patients because it's neoadjuvant before surgery. But as you can see on this slide, the magnitude of benefit in terms of those patients who receive a pathway complete response is highest that it's ever been reported. And so based on that data, and then let's go to DESTINY-Breast05. These are patients who have received neoadjuvant therapy. They've received surgery, and they still have residual disease. This study compares ENHERTU to the established standard of care, Kadcyla. And the magnitude of benefit, again, is really astounding. And so I wouldn't say that we're prioritizing one over the other. As I've been speaking to the oncology community, they see it attractive in both settings. And you're 100% correct, in DESTINY-Breast11, it's only 4 cycles. And so the exposure is very, very limited. The safety profile is really excellent. And so what we believe is going to happen is physicians will adopt ENHERTU in the neoadjuvant setting, DESTINY-Breast11. And then for those patients that unfortunately, still have residual disease after surgery, it's not going to automatically exclude those same patients from receiving ENHERTU in the DB-05 setting. Now it will get down to risk of patients. But based on the data we've seen so far, Tony, we see this drug being embraced in both settings. And so both are important to us. Does that answer your question?

Yes, that does Mr. Keller. My next and final question is to Kashiwase-san. You mentioned a couple of times in your presentation that it takes over a year to make an antibody drug conjugate drug. Could you explain to us is most of the time taken by making the entity or the conjugation process or something else?

Thank you very much for your question. ADC for that monocolonal antibodies production, starting from that conjugation step and filling and also freezing and also as a whole, you need more than 1 year. starting from production of monoclonal antibody up into the formulation of it. It takes that much time. As you envision, as for the production of antibody, this is a very long step. But it is not the case that, that is the longest part and is taking all almost all the period, but rather as a whole, it takes more than 1 year. Please understand it that way.

Last questions are from Michael Nedelcovych-san from TD Cowen.

I have 2. My first is actually a follow-up on incorporation of the NMR biomarker into TL07 and-TL08. Is the reason for the prolonged discussion with FDA because there's some sort of debate or negotiation ongoing? Or is it simply how long changing a protocol in a meaningful way takes at the agency? That's my first question. And then my second question regards use of ENHERTU in the frontline HER2-positive metastatic breast cancer setting. Are you aware of any efforts ongoing and maybe it's an investigator-initiated trial to test ENHERTU as an induction therapy in that setting as opposed to treat to progression?

Okay. So let me take the first question then maybe Ken Keller or if you are aware of the medical fee. Okay. on the NMR question, this is a very complicated question. So it takes time to come up with a specific plan that we are ready to announce publicly. Okay. Are you okay with that answer?

Yes. Thank you. Appreciate it.

Okay. Okay. Okay. Then the other question? Yes, I'll answer the second question, and then Ken, you can jump in. The concept of induction and maintenance in the first-line HER2-positive metastatic breast cancer setting, that's been around for quite some time. At the recent ESMO meeting, there were -- there was a trial presented looking at testing a new regimen in the maintenance part of that. That study was positive and it has the oncology community interested in really how to optimize both the induction part and the maintenance part. Now for DESTINY-Breast09, that trial was not induction maintenance that was treatment to progression. And that's where it delivered the 40 months of progression-free survival. And so, one, we do believe treating to progression with that kind of data is going to be very, very attractive. But to specifically answer your question. Yes, there are studies right now looking at optimizing ENHERTU for a certain amount of time and then transitioning to a maintenance-type arm. There's at least 2 or 3 studies I know of. Those studies will take many, many years to read out. So we really won't have definitive data on what approach is better, treating to progression or doing maintenance reduction for many, many years. personal team is that the DESTINY-Breast09 data is so compelling that most people will treat for a tilt progression as long as patients can tolerate it.

So with this, we would like to finish the Daiichi Sankyo Science and Technology Day 2025. Thank you so much for your attendance today.