Eisai Co., Ltd. (4523) Earnings Call Transcript & Summary

[Interpreted] It is now time. We would like to begin the information meeting of Eisai Company Limited for 2022. The presentation is streamed live and broadcast to those who are participating via telephone lines. Those who are on the call via telephone, please download the slides and click the slides forward to move the slides. Those who are watching live stream, please continue to watch the live streaming. The presenter is Representative Director and CEO, Mr. Haruo Naito. I would like to invite Mr. Naito without further ado.

[Interpreted] Thank you. This is Naito. I hope you can see a drawing of tiger on the screen. Zodiac -- Chinese zodiac for this year is tiger. This is a year that is full of luck. And the days of tiger is fixing its aim and it is trying to achieve its aim. That is the intention of this drawing. Yesterday we issued a press release regarding ADUHELM, economic arrangements or collaboration agreements are to be changed. As for the background of the change, as indicated on this page. Regarding AD-DMT, there's very active discussions in the last year or so. Discussions include, for example, data, whether -- or what is happening with regards to publication. There were some discussions concerning data. And regarding approval, there is accelerated approval discussion and full approval discussion. And there were also discussions of the requirements for approval. Value or price were also discussed. Price setting and value proposition of AD-DMT: What is the appropriate level and is it open? Recently regarding reimbursements, there are various discussions ongoing. Public comments were sent in large number. Antibodies, I related to A-beta. There are about 4 on the horizon. And we are also seeing a new environment in terms of competition. As for access, this is access to deliver the drug to those in need. And there is also very active discussion concerning access. And to put all of these in perspective: Alzheimer's disease, disease modifying therapy is strongly hoped for by the society. Patients and doctors both want to use AD-DMT sooner. That is the type of new therapy. And in order for such a therapy to be recognized in a society and to be accepted in a society, what needs to be satisfied in terms of conditions in the environment. I think that has become clearer through the discussion over the past year. And the direction of these discussions have to be -- has to be clarified so that conditions are met for AD-DMT to be accepted by the society. And I think the direction is becoming clearer. As for the events anticipated going forward related to ADUHELM, on April 11, CMS NCD final policy is expected. This is going to be a major event. Regarding Lecanemab, for accelerated approval, filing is expected to be complete in around April-May of this year. As for Lecanemab pivotal study, Clarity AD, this is also undergoing steadily. Top line results may be obtained in around September this year. As for accelerated approval of Lecanemab, potentially, during 2022, this may be granted. With the results of Clarity AD, filing for full approval may be completed during fiscal 2022 and potentially full approval for Lecanemab may be granted during 2023. These are the anticipated events. In a nutshell, major events, important events will be flowing one after another and we have to be proactive and forward looking in terms of change. As the management, I believe we have to change proactively in a forward looking manner. The background of the change in collaboration agreement is summarized briefly. The existing agreement was entered into in 2014. In 2017, regarding ADUHELM, Eisai exercised its option, which made ADUHELM a jointly developed and commercialized product. And this time, as I explained, we took a decision to amend the collaboration agreement to define new roles and responsibilities. In a way, this is an opening of a new chapter. This is such a forward looking decision. I hope that you will understand this change in collaboration agreement in this way. As for the changes, I would like to discuss the changes. With respect to ADUHELM, effective January 1, 2023, there will be a change from sharing of global profits and losses to a global royalty arrangement, where a certain percentage of revenue will be received as a royalty. As for the sharing of profits and losses -- there was a background of the sharing of expenses in accordance with profits and losses. And regarding ADUHELM, regarding the profit/loss sharing and expense sharing, effective January 1, there will be no obligation for Eisai and no rights for Eisai. As for Lecanemab supply agreement, currently we have 5-year agreement with Biogen. This is extended to 10-year agreement to ensure long-term manufacturing and to receive more long-term commitment. In regards Lecanemab collaboration, basic framework remains unchanged. The current framework of agreement will be continued. Under that framework, Eisai will continue to serve as the lead of development and will have final decision making authority. Upon approval, both companies will co-market and co-promote, and Eisai will book all sales for Lecanemab. Profits and losses will be shared 50:50 between the 2 companies. That framework remains unchanged. I would like to discuss in more detail the existing contract. The current contract was a profit and loss sharing agreement by region and the ratio is determined for each region, for example, Eisai-Biogen, 45:55 in the United States, where is Eisai is 55; and in Japan and Asia, 80:20, 80 for Eisai. And in accordance with that, profit and loss sharing expenses are also shared. Overall, the share is about 46:54. But as of January 1 next year, as I explained earlier, Eisai will be receiving royalties on sales of ADUHELM and there will no longer be expenses and profit sharing related to ADUHELM. Biogen will have sole decision making on commercialization. In calendar year -- as noted in the bottom part of the slide, in calendar year 2022, from January 1, 2022 to December 31, 2022, this period will be a transition period since this is an important change. In calendar 2021, economic arrangements will remain materially unchanged, but Eisai's share of expenses is capped at $335 million. There is a cap on Eisai's share of expenses in $335 million, as shown at the very bottom of the slide, asterisk 5. This cost includes development, commercialization and manufacturing costs related to ADUHELM. All of these are included in manufacturing cost -- manufacturing-related cost. If there is inventory of ADUHELM and if impairment must be recognized, or if manufacturing volume is reduced and if there is an idling cost of the idle manufacturing facilities, those costs will also be handled within this capped amount of $335 million. As for the ratio of royalty, as noted at the very end, up to $250 million, 2%; between $250 million to $500 million, 3.5%; between $500 million to $1 billion, 6%; greater than $1 billion, 8%. Those are the ratios of loyalty. We have to develop the environment and prepare the environment for upcoming events, anticipated events. And prospectively, roles and responsibilities were determined. To summarize, Eisai will increase its focus on Lecanemab to maximize the value of Lecanemab, while Biogen will make swift general decision making regarding ADUHELM and will maximize value of ADUHELM. Large-scale manufacturing of antibodies will be required, and for that, a very sophisticated advanced technologies and stable production are necessary, and this will be committed to over long term by Biogen and will be carried out by Biogen. These roles and responsibilities were defined. These are forward looking changes. From ADUHELM what are the learnings? There are many learnings. And here, I would like to point out that ADUHELM was granted accelerated approval by the FDA. This achievement is quite significant for Eisai. In 1996, Aricept was approved in the United States, and since then, Eisai has been the pioneer of pharmacological therapy development for dementia. And ADUHELM accelerated approval added a new page to the history of development of these pharmacotherapy by Eisai, without doubt. And through accelerated approval of ADUHELM, clinical research, regulatory aspects, ways of value proposition, data publication, reimbursement and access, in these respects, we were able to acquire various experience and knowledge. From Aricept to ADUHELM, we have gathered -- we have gained experience and knowledge. And we will be focusing on Lecanemab and draw on that experience and knowledge while we focus on Lecanemab. Now, today's main topic is Eisai's corporate philosophy -- management based on corporate philosophy, hhc. We put patient first and we put importance on their happiness and sadness. And the modern day interpretation of that is that Eisai aims to realize social good efficiently. What is social good? There are various types of social good. But for Eisai, as noted at left bottom, relieving anxiety over health and reducing health disparities. We believe that these 2 are the social good for Eisai. And efficiency can be interpreted in many different ways. But here, we would like to interpret efficiency as bringing to bear expertise while we pursue partnership and collaboration. And we believe that is the key to achieving something that is big. So gathering expertise is pointed out here. And we would like to realize social good efficiently, but we are not a government agency. We are not an NPO. We are not an NGO either. We are an enterprise, a corporation. We are entrusted with the precious capital by our shareholders, and with that capital, we are deploying business. And we are to provide returns to shareholders. That is the mission as an enterprise. And therefore, the entrusted capital has to be high in productivity. That is the basic premise. When we discuss efficiency, we cannot overlook capital productivity. Efficiency and the gathering of expertise as we pursue efficiency. And what are the expertise or strengths of Eisai? 5 are listed here. First, manufacturing or production. Our strength is organic synthesis for small molecules, in particular based on natural product chemistry. In this area, many advisors say that Eisai is world class. We also have accumulated clinical trial data. Of course, we have spent much cost and much effort to gather clinical trial data and this is a precious asset. Globally, we have been granted approvals. This is also a difficult thing to accomplish. But we can count this as one of Eisai's strengths. Globally, there are scientific hubs and we have our bases in these scientific hubs in the form of R&D bases. This is not easy. And in each region, in a very balanced way, we are generating profit. And there are gathering of people who achieve that in a regionally balanced fashion. That also is our advantage. I would like to go over these quickly one by one. First, organic synthetic technology based on natural product chemistry. "Mr Naito, that's old, that's classic," you might say. But that is not at all the case. This is a cutting-edge technology that may be worth many Nobel Prizes. What is undruggable is turned druggable and the basic technology for that small molecule science. One such example is our Halaven. In the beginning, as shown in the photograph in the middle, there are blood sponge -- marine sponge in abundance of the coast of Miura peninsula, and they were collected and substance was extracted. And the toxin of this marine sponge was known to have anti-tumor effect. Everyone was paying attention to that. After isolating that, total synthesis was successfully carried out by a group led by Professor Kishi of Harvard University. We have Boston research institute in Andover, and that this research institute was in close collaboration with Professor Kishi's lab. Halichondrin toxin synthesized by Professor Kishi. And out of that, there was a discussion to develop a drug. And in the middle, there is a huge structure shown of halichondrin. And on the right side, we found that there is an active center. And from this, Halaven mesylate was synthesized -- Halaven or eribulin mesylate was synthesized. Circled, chiral carbons, these are difficult to handle substance. These possibly looking at 2 different directions. In Halaven, there are 19 such chiral carbons. This means that 2 to the 19th power. There's a possibility of having different stereoisomers of 2 to the 19th power. This has to be controlled and have to obtain the same stereoisomer constantly. And this is the culmination of modern organic synthetic technology. And this has to be done on a commercial scale, on a mass production scale. And that is done and the world recognizes the strength of Eisai. In synthesis -- total synthesis processes, there are 62 processes and there are 10 very difficult reactions. It takes 1.5 years to manufacture. And this is a very precise effort that is listed even in the Japanese Pharmacopoeia. And in MORAb-202, eribulin is the payload. And with BMS, for gynecological cancer, we are pursuing development with the new modality of ADC. Halaven development that led to this. And I will not cover in detail other developments, but on the right side, this looks at drug resistance. There can be resistance developed for immuno-oncology through Wnt/β-catenin pathway, and this is also an undruggable target, as shown at right bottom. With ordinary substance, it's not possible to engage Wnt/β-catenin pathway. But with our superb molecule -- this is a middle a molecule, but we have been able to develop a molecule that engages this pathway, creating a new modality. Next, clinical trial data. ADD-DMT and Lenvima data set are shown. In ADD-DMT, from 7 RCTs, approximately 10,000 subjects, clinical data are collected. We have specimens from all of the subjects. For Lenvima regulatory studies, including mono and combo studies, approximately from 19,000 subjects we have samples. In contemporary drug discovery, human biology, genomic analysis of human specimen and biomarker studies are the starting point. For the next stage of drug discovery, there will not be an exaggeration to say so. So these are the starting materials for that. For example, in Alzheimer's disease, Aβ42/40 ratio, to be measured by blood biomarker, is developed by Sysmex and others In Elenbecestat, samples are used for validation. Without such samples, it is not possible to validate the accuracy of the blood biomarkers. Accumulation of clinical trial data and associated samples are a treasure trove and only Eisai, only we, have such accumulation of data. As for global approvals: from 1996, Aricept; 1997 period to the recent, ADUHELM. This is the list of products that were globally approved. For a pharmaceutical company, being granted approval is a major milestone. Where -- what approvals were obtained? That is the track record of the company. And looking at that track record, potential partners feel that they would like to work with such a company. So the global approvals are very important. Scientific hubs in the world. We have EMITS in Kawashima Plant regarding the modalities, with manufacturing facilities and 2 in cancers, H3B and G2D2 for genetics and also antibody research center for Exton. And they are capable of making clinical materials. And in Hatfield in the U.K., this is the facility for conducting research sharing with academia. And research facility and manufacturing facilities are present here. And there are physical meetings. In these hubs, people from academia and startups are forming a strong network. Together with them, collaboration and incubation needs to be made. Otherwise, we would not be able to create medicine anywhere and innovation cannot be derived from it. But customers just don't drop in to do something with us. We have such research laboratories for a long period of time, and we have been a member of the local communities. And G2D2 and Kan Research Institute, there are incubation space and other people can join there. And utilizing our facilities, they are doing their own research work there. So they know each other very well. This long established relationship, expertise can be brought forward from each other for conducting joint research. Next, regional balance. Japan; Americas; Asia, including China; and Europe, there are 4 major regions of our business. There may be discussions on which ratio could be ideal. In these regions -- we are able to deploy business at certain levels in each region with earning power. And this is one of the biggest -- big advantage, in which potential partners may be interested in utilizing these capabilities of Eisai. And particularly, we have talents in these regions. I believe this is very critical as one of the advantages of Eisai. Next, let me turn to social good to relieve anxiety over health. Today, I would like to put focus particularly on dementia. Here is the demographics of dementia. On the left-hand side, surprisingly, every 3 seconds someone in the world develops dementia. A little less than 80 million in 2030 are expected to develop dementia. In China or India or other high and upper and middle income countries, the number of people living with dementia are expected to increase. And out of which, 3/4 of those people are not diagnosed yet. So they have not understood their risk of developing dementia yet. On the right-hand side, here is the global dementia prevalence rate by gender. And this shows that female has higher incidence of dementia than men. At the bottom, the number of people living with dementia in Japan is said to be about 7 million or so now, and it is expected to exceed 10 million in 2050. This is a very critical disease. Next big issue is about costs related to this disease. As I said earlier, A and B at the top are both visible costs: medical cost, JPY 1.07 trillion, and public care cost is JPY 4.783 trillion. These are visible costs. The issue here is invisible cost at the bottom. These are the costs borne by family members. Families of the patients with dementia need to take care of the patients. Therefore, if their informal care by family are calculated as costs, then it is estimated to be JPY 6.771 trillion. Please call it C1. And turning to the right, C2, based on different set of statistical data. Because of the families in formal care, they need to reduce employment, for example, reducing the working hours from 7 hours to 2 hours. And then loss of productivity because of that is calculated as such. Then, we come up with this number, 1.547 trillion. A+B+C1 and JPY 12.628 trillion. This huge amount of costs are incurred and spent for taking care of the dementia in Japan. A+B+C2 is JPY 7.403 trillion is spent. And in this country, JPY 5.2 trillion is spent for defense-related expenses. Comparing to that, we see how huge these costs are. Giving impact on this issue: in order to reduce these costs, I believe that it is necessary for us to bring about social good by reducing costs related to this disease. Next. This is to show the potential effect of a number of people living with AD reduced and medical care cost based upon the literature in the United States. Here is the condition. If there is treatment started for people living with AD by delaying onset by 5 years by treatment, 2.5 million people are expected to be reduced in terms of the number of people with dementia in 2030 and approximately 5.7 million in 2050. And then in relation to that, total costs related to AD in the United States. JPY 9 trillion is expected to be reduced if the treatment is introduced in 2025 with the onset of AD, by 5 years of delay, and then USD 367 billion in 2050. Very impactful numbers are shown, showing a very huge impact on the society in the United States. Now, AD is considered to be on the disease continuum. It is generally understood that AD needs to be understood by this continuum, from normal state to preclinical AD without much subjective symptoms, but amyloid beta starts to be accumulated and MCI due to AD and AD stage. These are the 4 major stages in the continuum. The features for each stage are on the left-hand side. First, risk of onset and worsening, one of which is ApoE gene. And the SNP polygenic risk score, which is based on the weighted sum of SNPs. And these data have become available. In order to understand these for individual patients or people in order to understand how much risk they have themselves, it is very important to understand that. Towards the bottom, the imaging-based biomarkers, which are improving, and CSF biomarkers. And at the very bottom, you see blood biomarkers. We believe that these can be game changers. Plasma Aβ40/42 ratio. Sysmex has developed this HISCL, where it is becoming available. And tau-related biomarkers can be measured soon in a simple manner. And HDL cholesterol or LDL cholesterol levels can be simply measured in lifestyle-related diseases, which have contributed to the improvement in diagnostics and treatment. And hemoglobin A1c in [ diabetes ], which is now measurable easily, and therefore, it has contributed to the improvement of the diagnostics and treatment of diabetes. Same changes can be brought about by development of these blood-based biomarkers for AD. Blood biomarkers can be game changers. Next, CLARITY AD, Core study for Lecanemab, which is ongoing steadily. The number of subjects enrolled is 1,795, out of which 152 are Japanese subjects. In the U.S., African-Americans account for 4.54% and Latins account for 22.5%. Therefore, subjects enrolled are reflecting the population mix of the United States, which is important. And discontinuation rate has been lower than estimation, 13.9%. Compared to our expectation as well as the other AD antibody drugs, discontinuation rate is quite low. And the Core study period has been completed. As you can see, now patients are transitioning into open-label extension, where all the subjects are receiving active drugs. Transition has been started and 94.3% of patients who have completed the Core study wish to proceed to this open-label OLE study. I believe that this is one of the signs which suggests the steady progress in the clinical trial. At the bottom, additional subjects have been enrolled for submission in China in the number of 111 patients. Now, Chinese market is very important. When we started Aricept, AD market in China were not formed. But now, in China -- AD market in China has become a huge market. Lecanemab -- once Lecanemab is approved in China, we believe that it will bring us a very significant advantage in terms of sales. For example, Lenvima of Eisai in China accounts for a little less than 20% of global revenue. Such sales is generated in China. Therefore, new markets opened by new drug is rapidly developing. And that is the case as well for Alzheimer's disease. The real AD market can be increased by the effects of launching new drug. And next. Regulatory status for Lecanemab is explained here. As I said earlier, for FDA, we aim to complete rolling submission for accelerated approval, which will be completed soon. Therefore, accelerated approval is expected to be granted by the end of this year. And we aim to submit toward full approval during this fiscal year based on the results of Clarity AD. For full approval, we believe that the review will be conducted in prompt manner. As for PMDA, under the prior assessment consultation system, we agreed with PMDA that we will be able to utilize this system. We are expecting to shorten the review period by this system, and the submission of application data has been already initiated. And we aim to submit toward approval in around the same time frame for the Japanese regulatory authorities as well. EMA as well. Therefore, in U.S., Japan and Europe, we aim to submit at the same time and also potentially getting approval at the same time. What clinical trials are ongoing for Lecanemab? Clarity AD and the Clarity AD-OLE and a Phase II study, 201-OLE study is also ongoing. And please consider the disease continuum. Preclinical AD part is targeted by this study, AHEAD 3-45. Preclinical AD is targeted here. This trial is ongoing steadily. And another is DIAD, or Dominantly Inherited Alzheimer's disease, is targeted. In this study, tau nexgen -- E2834 (sic) [ E2814 ], this is anti-tau antibody drug and anti-amyloid beta treatment is to be provided. And before that treatment, Lecanemab has been selected as the anti-tau antibody. And DIAN-TU tau nexgen study is also ongoing. And what AD treatment paradigm is going to be opened by Lecanemab? As I said earlier, in early stages of disease continuum for each individual Eisai is going to support the disease-related information: walking, sleep, PHR, including meals and ApoE4 status, polygenic scores. These could be captured for each individual. We like to support that. And simply and conveniently, digital tools are available to confirm on the status of cognitive function. We'd like to promote that. Like in the case of Sysmex plasma biomarker, test will be introduced, which can be provided in easy manner. And diagnosis and the treatment will be promoted. And once diagnosed as AD or early AD, Lecanemab treatment shall be initiated in order to potentially realize robust reduction of brain amyloid beta and the clinical efficacy. And for Lecanemab, first dose is effective dose. Therefore, there is no need for titration. And ARIA incidences are expected to be about 10%. Subcutaneous self-injection by 2022. We have been trying to develop this administration, subcutaneous injection once it becomes available. And then they will be able to realize the home infusion and remote medicine will be promoted once the amyloid beta and the tau levels are reduced. And then regarding the treatment level, regimen can be changed to optimize frequency and dosing, which is being developed. And E2814, our anti-tau antibody, and Lecanemab can be combined. These tau treatments can be combined once combination therapy is realized, and then the pathophysiology of AD can be improved further with further robust disease-modifying effect. In preclinical AD, once Phase III study is completed, then we will be able to broaden the coverage of disease continuum to expand into the preventive treatment. Lecanemab, what we need to be mindful of is that we need to keep transparency and trust. That is applicable to data publication. There will be pricing to be fixed. And there needs to be supporting data for pricing that should be proposed to the public in order to seek the understanding of the general public. And there are various underserved populations in the society for whom -- what about the processes for providing access to those people? We need to explain that with high transparency, and we have to be accountable for regulatory studies and advocacy activities and so forth with high level of transparency in order to gain trust. Without this, we would not be able to facilitate the introduction of AD-DMT. Now, next-generation treatment. We have been focusing on in-house projects. But today, based upon the topic of expertise, I would like to talk about collaboration between Keio University Hospital and Eisai. On the right-hand side, EKID, Eisai-Keio Innovation Lab for Dementia. The School of Medicine of Keio University is located in the Shinano-machi campus, where this EKID is located. And started in FY 2017 to 2020 -- there has been the AMED support from 2017 to 2026. And there are 3 milestones. For milestone 1, enhance brain clearance. And milestone 2 is to get information regarding the improvement of brain homeostasis. And milestone 3 will provide information about activation of neural network. Eisai's strength is, of course, centering around extensive drug discovery experience from Aricept to -- and biomarker research backed by state-of-the-art omics technology. Keio University has various strengths. But in this area of dementia, centenarian cohort is held by them, 100, 105, 110 years old people. They have samples of those centenarians. And based on the modern therapies, they have high-quality cohorts and biosamples from those cohorts. And Professor Okano of physiology are well known in the world's advanced stem cell research technology, using human iPS as cells. So this is a very busy chart. Let me briefly explain. Start point is human sample, shown at the left bottom. And centenarian sample, people who are above the age of 110. And we have a sample of 141 super centenarians above the age of 110 and 6,500 above the age of 105, and 79,000 people who are above the age of 100. Even with ApoE, there are people who haven't developed Alzheimer's disease. Is it because of environmental factors? Or is it because of [ LL ]? We have these questions. And in a very sophisticated way, we are able to obtain testing results. And this is the state-of-the-art human samples, which can serve as the start materials. And on the right side, Multiomics studies. We have a state-of-the-art mass spec machines. 10,000 proteins, hundreds of metabolites, thousands of lipids can be identified and quantitated. And biomes and lipid metabolism or various diabetes disease information, et cetera, can be gathered. A very comprehensive omics analysis is possible combining clinical data and omics data and by applying artificial intelligence, as shown in the schematic diagram. Virtually using something similar to a digital twin, we may be able to analyze the brain. And by changing variables, new hypothesis may be built and new drug discovery targets, candidates may be created. And on the left, a verification. Professor Okano was the -- this lab was the first to develop human iPS cell-derived system, which is similar to biosystem, which is a brain organoid. And in AP4-- in Aβ accumulation, something similar to actual human brain is replicated. And these models can be utilized. As for drug targets, potential drug targets. Microbiomes, lipids, cytokines come from -- come through ordinary aerated brains. And when drainage does not work, there will be degeneration. What are the genes and what are the molecules that activate the drainage system? These are more or less elucidated. And based on these, research for drug discovery is initiated. And secondly, we are focused on astrocyte. Astrocytes are important nerve cells, regulating micro environments and maintaining functions of nerve cells in brains. And ApoE4 protein is produced in astrocytes. By focusing on astrocytes, we may be able to obtain a handful of drug discovery that leads to improvement of brain homeostasis. And the third is activation of neural networks. From neural stem cell, there is differentiation, a normal network of nerves that will be developed. But with neural degeneration, this is damaged. And this can be regenerated or reactivated. That is the ultimate objective. And EKID research is underway towards that end. And the focus is on maintaining and enhancing the brain's robustness and protective mechanisms, innate mechanism against genetic backgrounds, aging and environmental changes. Eisai has been the top runner in AD. And the starting point is that we take pride in the fact that we understand the anxieties of people living with dementia. Globally, over 20 years, annually, our people have spent time together with people living with AD through more than 300 hhc projects, doing something together or having meals together. And through these, we are able to understand the anxieties of people living with dementia. These anxieties are -- when will the symptoms appear? Is there any way to prevent the onset? And is there any way to prevent causing trouble to the family members? We have a strong belief that we have to address and relieve these anxieties. And that strong belief is held by all of our 10,000 employees. And we are opening new chapters continuously in treatment, starting from Aricept in 1996, and in 2014, DLB approval was given for Aricept after LOE -- this was after LOE. And ADUHELM approval was granted. And we hope that approval may be granted for Lecanemab this year. New page of treatment has always been opened by Eisai. And therefore, we take pride in that we are the top runner in AD. Next. Future wealth is potentially brought from businesses for people, including prevention. Our people's business is hhceco. We are bringing together expertise through collaboration in this ecosystem. And the collaborative partners are shown on the outside frame of this diagram. From different industries. For example, from telecommunications industry, FCNT that has introduced an easy-to-use smartphone, which has NouKNOW pre-installed as an app. We would like to have various content that we developed installed on their smartphone through collaboration with telecommunications provider. Using a delivery method of easy-to-use smartphone, we are able to deliver solutions to the people. That is the approach. A similar approach is possible with food industry with ITO EN through the sales of tea products. With insurance industry, there's a dementia insurance product. In designing dementia insurance product -- those people who buy the insurance the probability of onset of dementia is a very important information. Capturing such information, if an insurance product can be designed, then it will enhance the service level of insurance industry substantially. And we're assisting correctly in designing the insurance product. So we are collaborating with insurance industry players. In automotive industry, a drive recorder included, MCI risk projection, alerting. These are the areas we are collaborating. And collaboration with other industries is business for the people in hcceco, where expertise can be brought together. And in the middle, we have Eisai Universal Platform, and the basis of this is R&D. What is important is data and R&D. As we have seen in the example of EKID, this is a repeat of deep learning processes. Collaboration, incubation of academia, start-up in industry are actively pursued. And we have clinical trial data, medical data and cohort data. And data from daily life, including diet, sleep and walking, PHR data is obtained. Based on that data, various content can be created by Eisai. And that can be offered -- delivered to people in different segmentations, people who are interested in maintaining health. Preventative package can be delivered. And for example, prediction of onset of dementia or ApoE measurement or [ PREPA ] size. This is a brain performance maintenance exercise. Or consultation, navigation system for dementia worries. These packages can be delivered in various ways. One such way is easy-to-use smartphone, Raku-Raku Smartphone. And we would like to deliver such package in collaboration with other industries. And this is a business for people with a focus on preventative aspects. One example of content is shown here. This is a personalized algorithm for prognosis called AD continuum curve. This is a content to our service. What this is, is that -- as you can see in the chart in the middle, there are 3 lines. This is personalized. Red line is in case Lecanemab treatment is given, change of cognitive function over time for that person, person A. And blue line is if this person does not receive Lecanemab treatment, what the change in cognitive function over time may be. And green line, this is irrespective of Lecanemab. This is average transition in cognitive function in people with dementia. All of these require data. Lecanemab treatment effect and without using Lecanemab. So this is actual drug data and placebo data. And green line requires cohort data. For example, ADNI data -- U.S. ADNI, J-ADNI data can be a powerful data. Based on such data, we are developing this. And more precise sophisticated data is what we are trying to collect. How effective can this be -- or in what way can this be effective? Well, people might be wondering about receiving Lecanemab treatment: "Is it going to be truly effective for that person?" If there is a worry, undecisiveness, then the physician can show the data: "This is the predicted prognosis and this kind of therapeutic effect is expected." Such information can be shown to a patient. Or patients may be wondering if they should continue with Lecanemab. And by continuing with the treatment, effect -- treatment effect can be greater rather than stopping in comparison to when they stop. Such information can be shown to motivate patients. This is an advantageous information and only we are able to provide such information from great efforts that we have spent in developing and gathering such information. We are now engaged in Greek cohort project, Greek national project. 3,500 people are targeted in this project, targeting AD patients as well as healthy adults over the age of 50 to classify subjects based on ATN biomarkers. And we are participating in this project. With this, we will be able to have more precise curve based on cohort data for prognosis or we may be able to obtain better ATN biomarkers. We are hoping to obtain such advantageous results, and we are making efforts in cohort data area as well. Now, we believe that future wealth is potentially brought from the East. What is East? Well, there are many interpretations. But here, China, India, Africa, the great economic region is what I have in mind with the word East. China, India and looking at Africa, there are EAC, SADC and ECOWAS, the economic communities. There are these economic communities in Africa. EAC is East African Community centering around Kenya. And SADC is Southern African Development Community. These communities are already in place in Africa and we would like to bring wealth from these regions. In China, a 100% held Eisai subsidiary was established, and in 25 years, we were able to grow business to a JPY 100 billion business. So we are bringing wealth from China. And JPY 100 billion is a result of achievement from many new drugs. And Lecanemab, I'm sure will immediately be making commercial contribution in China. There is a matter of it being included in national reimbursement list, but once -- if it is on the list, it can have an effect and we believe that we can expect a contribution to revenue immediately. And investments toward potential wealth from the East are shown here. The Suzhou plant photograph is shown. This has the largest capacity in Eisai plant, and there are 2,000 employees in China with more than JPY 100 billion of revenue. And the middle photograph is Vizag plant. This is a huge plant with a capability of synthesization -- synthesis. And DEC tablets are 100% produced here for tropical disease and various other products are produced. And we have 630 employees in India and the revenue is somewhat smaller, at JPY 1.9 billion. And this year, we plan to initiate efforts in Africa. In South Africa, in Johannesburg, a subsidiary is established. And in Nairobi, a branch is to be established. These are the plants. Now in China -- we believe that a digital and telecommunications giant is in China called Jingdong Group and which has Jingdong Health. And together with them, we have formed a joint venture, bringing about each other's expertise. And Yin Fa Tong, centering on the Internet hospital to provide one-stop online health platform. This has been already opened. What about the Internet hospital? Please look at the chart below. The picture on the left hand -- is going to be conducted offline. You need to receive initial medical examination first off-line. But after that, everything can be done online. Second medical examination onward -- and there are -- 1,000 specialty physicians are registered now. So patients are free to choose own doctor. And if necessary, the examination can be done at the nearby facility and the results can be communicated online. Once prescription is issued, the drugs will be, of course, delivered by logistics system. And we aim to contribute to relieving anxiety of people living with dementia and reducing health disabilities by delivering high-quality drugs and medical services throughout China, regardless of time and location. In India as well, we are collaborating with an e-pharmacy company for areas of AD and sleep disorder. Africa, we need to establish dementia center of excellence centering on South Africa. And Eisai India will be utilized as the base for growth in Africa. In Kenya, to contribute to global health and achieve SDGs to resolve the issue of tropical diseases and utilizing the remote system like in India and China in order to develop the business in African market. And we have joined technology with Allm Inc. in remote telemedicine, very -- services are available. The definitive diagnosis and remote diagnosis and decision and measurement, these can be brought about in these wide areas of markets. Towards potential wealth from the East, we aim to realize remote medicine in China, India and Africa. That does not depend on medical infrastructure. We like to relieve anxiety of the people over health in societies with underdeveloped medical infrastructures. I am approaching the end of my presentation. Please bear with me. I would like to talk about the tropical diseases, regarding the reduction of health disparities. Eisai has been one of the most aggressive companies in dealing with the NTD issue. In 2012, there was a London declaration, where I participated. There were 13 pharmaceutical companies, but I was the only one from Japan at the time. WHO, the U.K., the U.S. and Gates Foundation and Bill Gates was well were present. And by 2022, the NTD needed to be eliminated. And global health was largest public partnership. And a lot of treatments have been provided. And all of the -- and most of the NTDs have been eliminated; however, not completely yet, far away from completion. In filariasis, we have provided over 2 billion DEC tablets at price 0 business. From this year onward, this will be changed into a new PPP called the Kigali declaration. And this is to enhance an ownership in NTD endemic countries. And there are new tropical diseases where we would like to utilize our expertise. We have such a rich pipeline for tropical disease treatments. I believe we are one of the pharmaceuticals with richest pipeline. We do not have any single project that we have developed on our own. The University of Kentucky or Liverpool School of Tropical Medicine or Broad Institute in Boston affiliated with Harvard and MIT, these have cutting-edge technologies and we have been working with them. We received their derived project and we collaborated with them. And in the middle, at the bottom, GHIT Fund. Japan established this fund in 2013, Japanese government and private companies, including pharmaceuticals. Gates Foundation and other drug-related industries participated later. And JPY 26.7 billion has been provided as funding, and most of the projects have been funded from this fund. And on the right-hand side, a Geneva-based NPO called DNDi. Many of the physicians are from Doctors Without Borders. And they are -- they provide a network on the ground and they are collaborating with us as well. And therefore, this is the typical example of the efficient collaboration network in modern days. Lastly, I would like to talk about the capital productivity in terms of efficiency. WACC and ROA and ROIC and ROE, return on asset, return on invested capital and return on equity, we believe that it is very important to keep the right balance between these. And we always tried to realize the stable dividends and the improvement of profitability and a shortening cash conversion cycle, or CCC, and a divestiture of assets. We like to continue to improve the efficiency of the capital. And in the middle, of course, in the medium to longer term, we like to aim at expanding PBR to enhance the capital productivity. To pursue efficiency, we believe that it is an important and indispensable measure. And lastly, to cap. I have focused on dementia today. And the future wealth is potentially brought from business for the people, including prevention; and future wealth is potentially brought from the East; to reduce health disparities, tropical diseases mainly in Africa; and the capital productivity is also a very important metric. We would like to improve and realize these with good efficiency. And I would like to seek your continued support and understanding. Thank you very much for your kind attention.

[Interpreted] [Operator Instructions] First, we have Yamaguchi-san from Citigroup. Mr. Yamaguchi from Citigroup, can you hear me? Can you hear me?

[Interpreted] Yes.

[Interpreted] Please go ahead.

[Interpreted] I have 2 questions. This year, focusing on Lecanemab, there will be many anticipated events. I agree. April 11 -- final decision on NCD is still not known. As of now, NCD on ADUHELM, if we presuppose that it will not change much, then when Lecanemab becomes available with accelerated approval, situation will not change. And when data becomes available in September, then NCD circumstances might change as a result of the data. Seeing from outside, it seems NCD is very stringent. And in what way you can break through is difficult to understand. So these are based on assumptions and hypothesis, but could you share your views on this?

[Interpreted] The benefit of accelerated approval is that ahead of others in the world approval was granted for a pharmaceutical company. This is something that we can be proud about. First, we are the top runner in the AD field. If there is a possibility of becoming the first to receive approval, naturally, we will pursue that as a business behavior. As for the accelerated approval, there is also effective advantage. That is, the review will be moving ahead. Clarity AD results are required for a clinical module. But for preclinical module and CMC package, accelerated approval review will be carried out. Review is done during accelerated approval phase ahead of full approval. So only the remaining part for full approval review is Clarity AD data. And up to the full approval, review period we expect will be substantially shortened. That is the added advantage we are expecting. And in accelerated approval, during that time, what is the size of the commercial opportunity? There is also a question mark on this point. But in the meantime, there is much that we need to do. For example, it so happens that accelerated approval and CLARITY AD data becoming available, if they fall in the same time frame, then major medical institutions will be considering adoption of the drug. And at the time of the accelerated approval, we are able to engage in activities. And we cannot expect a large size of actual sales yet. But products given accelerated approval and without accelerated approval, there is much difference in terms of what we can do before we obtain full approval.

[Interpreted] There is a follow-up question. NCD decision on the basis of ADUHELM is expected to be difficult. And for full approval, if data is good, I think data will be used. But NCD decision -- if Lecanemab data is good, do you think that there will be a different NCD decision?

[Interpreted] So actually, in what way final decision will be given in relation to NCD, this is very difficult to foresee. Approved drug, there is only ADUHELM. Other antibodies are not yet approved.

[Interpreted] What will happen to that classification?

[Interpreted] There's a lack of visibility here. And when NCD final decision is given, then to overturn that, full approval data may be necessary. That is what we are assuming. But this is not certain. However, in case of Lecanemab, the time between accelerated approval to full approval can be very short, we are hoping. And in terms of insurance reimbursement, we currently do not foresee any major hindrance for Lecanemab in terms of insurance reimbursement.

[Interpreted] Then very briefly. Alzheimer-related drugs, there are antibodies and other therapies that are developed. But Aricept was an oral drug, which was advantageous. You discussed organic synthesis of small molecules. But BACE inhibitor, you did not mention. But eventually, I believe you want to develop oral formulations, including ASO.

[Interpreted] Small molecule potential is fully pursued in exploratory stage. We have multiple potential candidates. There are candidate compounds. So we are not completely giving up small molecule potential. With a BACE inhibitor, there was some failure, but that experience can be leveraged. Elenbecestat clinical samples are held in large quantity, and that can be turned into an advantage after that challenging experience.

[Interpreted] Next question is from Nomura Securities, Mr. Kohtani of Nomura Securities.

[Interpreted] This is Kohtani of Nomura Securities. Do you hear me?

[Interpreted] Yes.

[Interpreted] I think this is the same question I must repeat regarding the lessons that you have learned from aducanumab. The FDA approved aducanumab saying that there is a -- seems to be effect. However, it is not available for use now. And compared to your expectation, there was a higher hurdle from the general public. At the financial results briefing session, I think this question was asked. And this is the question I would like to ask you, Naito-san. And what is the lessons that you learned from aducanumab? And how are you going to utilize that lessons for Lecanemab. Could you please give us your CEO's opinion on that?

[Interpreted] Utilizing several slides today in my presentation -- first, data is important. We need to keep transparency in data. Publishing in peer-reviewed journals. Whether or not such data are published in such peer-reviewed journal is a very important point. I believe that is a very important lesson that we have learned. At the outset, I said we need to create a facilitating environment. And regarding the data to be captured, we need to publish that data promptly in peer-reviewed journals. Then that will lead to the further adoption by major medical institutions, and such fact of a publication may become a key. And in terms of pricing proposition, these could be important data sets. So lessons learned. The major lessons learned is to keep transparency in data, and we needed to proceed with the publication of such data.

[Interpreted] Honestly speaking, I agree with you. Aducanumab is still -- well, a part of the data related to ARIA-E has been published, but the peer-reviewed journal has not published the data for aducanumab. But these are to be published by physicians. So how much acceleration you are able to make is unknown. And principal investigators -- once that data becomes available, we needed to ask the principal investigators to publish and prepare paper immediately. Have you asked such cooperation from PIs? I believe that the data to be published in the well-known and prestigious journals. And that will be the quickest way for improving the situation. Have you prepared for that?

[Interpreted] Yes, we have. I am not able to give you information today. But at which time point are we going to publish the data? We have come up with a schedule as well. As you, Kohtani-san, pointed out, at such timing, accomplishing the publication securely is already targeted in our time line. That's what I can say.

[Interpreted] This is my last question. On Page 23, these are the -- there is the list of the Lecanemab clinical trial, CLARITY AD and OLE. I think everyone knows this. But AHEAD 3-45, DIAN-TU, Tau NexGen, is this the trial that you are collaborating with physicians, if your therapy or antibody has been selected to be included in the regimen? But this is not a trial that you are running on your own. So how is it going to be competitive? That's what I'd like to -- gantenerumab and donanemab are catching up now. In my understanding, still not only in treatment, AHEAD 3-45. Covering the prevention area is not conducted by competitors. So what is going to be the differentiating advantage for you once a trial for Lecanemab succeeds?

[Interpreted] As you said, AHEAD 3-45 is conducted at academia consortium ACTC, which had selected Lecanemab to be included in the regimen without need of titration. And ARIA-E incidence is also low. ACTC in the trial covering preclinical space, they didn't want to have a possibility of causing side effects. And this was one of the top priorities in evaluation by ACTC. That has been cleared by our drug. But this is the regulatory study. So this is the pivotal study for regulatory submission. And this trial is ongoing on track with accumulation of patients enrolled. DIAN-TU is, as you know, led by the cohort -- is a cohort study led by Washington University. Just because there is a drug, it does not mean that the drug will be selected for sure to be included in this trial. They are selective and we were selective. And anti-tau antibodies, we were elected, selected. For amyloid beta antibodies, Lecanemab has been selected. And TAU NexGen protocol is, of course -- anti-tau antibodies are the main targets to be evaluated. And with one single group, anti-amyloid beta antibodies are to be administered in advance. So professional academic researchers have agreed to select Lecanemab. That means that among various antibodies, an excellent profile has been shown to be held by this drug.

[Interpreted] Gantenerumab and donanemab, these other antibodies, do you think that these can pose as the differentiating factors against them?

Yes. [Interpreted] As you may know -- because of the binding portion is different from other antibodies, therefore, making a difference in the incidence of ARIA-E. And the period for titration can be very long. Therefore, I believe that these are very strong differentiating factors against others.

[Interpreted] Next, [ Akama-san ] from Nikkei Newspaper, please. Akama-san from Nikkei, please.

[Interpreted] This is Akama from Nikkei. Can you hear me?

[Interpreted] Yes. Please go ahead.

[Interpreted] I have one question. So this is an old question. But in June 2021, FDA approval was granted. At the time, it wasn't foreseeable that ADUHELM would be in this kind of situation. Is that the correct understanding? For Eisai, that ADUHELM will be in such a situation today. Back in June 2021, was it something that was difficult for Eisai to foresee? That is the first question.

[Interpreted] When accelerated approval was given, the advisory committee had a major debate. And the majority -- it seems that the majority had opposition views. I was closely following the discussion, but these were discussions held remotely. And it seems that it was difficult to conduct discussions. That is my impression. And no matter what the voting is at the advisory committee, in principle -- irrespective of the voting results at advisory committee, in principle, FDA should be able to give its own decision. And accelerated approval -- given majority opposition in advisory committee, even despite that, approval -- accelerated approval was given. And I did not anticipate obstacles. And FDA taking its independent decision, I respected that. And -- but advisory committee debate has lingering effects, and various opinions were issued and there were countering opinions. And in the ministry of health -- or Department of Health, a survey or a study was to be conducted. And a huge debate began. As for NCD by CMS -- at least as far as the drug approved by FDA is concerned, the restriction -- the drug will not be made available unless a patient is enrolled in RCT, such a strong limitation to be given. Unfortunately, that was beyond our expectations. At the time, I thought that as the first approved drug ever, ADUHELM will be supported by many patients and many HCPs and will be introduced into the market. That was the expectation back in June 2021. And you may blame that on my incompetence. However, such a controversial development, unfortunately, was beyond our expectation, to be honest.

[Interpreted] I have a second question, if I may. Looking at competitors, I think they are following closely. Eli Lilly, of course, is starting with ELA submission, and Roche is also conducting clinical trials. And this may be also somewhat repetitive, but how can you differentiate Lecanemab? How will Eisai utilize disadvantages of other drugs?

[Interpreted] I don't think that there are disadvantages. The target is protofibril, soluble substance. And because of that target, insoluble plaque is not targeted. And that leads to lower incidence of ARIA-E. However, Aβ reduction effect is faster and more potent in comparison to other drugs. In the end, these 2 other drugs also reach Aβ negative, but the speed of reaching Aβ negative -- well, this is not a head-to-head comparison. So there is no way of telling. But according to literature, we can say that Lecanemab is the fastest. And the biggest advantage is lower incidence of ARIA-E and no need of titration. The first dose is the effective dose. Onset of the effect is early. And that is by far a major advantage. Subcutaneous injection formulation is being developed. And by around 2024, with subcutaneous injection formulation, it may be possible to inject Lecanemab at home or at work. And looking at the data of progression, when it is in the maintenance stage for patients, let's say, after Aβ turns negative -- in the maintenance period on a bimonthly should 10 milligram be given or dosing can be less frequent or those can be reduced, such regimen is also being studied. Optimal dosing scheduling, we hope we will be able to show that eventually. So with the other competitors, we believe we are a step or 2 steps ahead. And looking at this antibody, Lecanemab, in comparison to other antibodies, absolutely, there are no disadvantages.

[Interpreted] Next is from JPMorgan Securities, Mr. Wakao. Mr. Wakao of JPMorgan Securities, if you are ready, please.

[Interpreted] This is Wakao of JPMorgan Securities speaking. My first question is about Biogen's commitment to Lecanemab. Could you please tell me -- now the agreement for Lecanemab has been changed, but both companies continue to try to maximize the value of Lecanemab. And once Lecanemab is approved and launched, Biogen, including the sales and marketing, will continue to maximize their efforts. I'm not sure whether this is appropriate to say. But are they continuing to make efforts to maximize the value of Lecanemab based upon the agreement? Royalty rates and sharing of the profits will be larger for Biogen. And aducanumab is in such a state now, so it's very difficult. But Lecanemab will be more focus area rather than aducanumab? So regarding the commitment of Biogen to Lecanemab, after launch, are they also making commitments to sales and marketing of Lecanemab?

[Interpreted] The performance of Lecanemab as drug is very understood -- very well understood by Biogen. And also, the fact that this is a very advantageous candidate drug. That is also understood by Biogen. So maximization of the value of Lecanemab, this will be done. And then as a result, 50% of profits will be brought about from that. Jointly, Lecanemab, the more maximization of the value is achieved. And then what will be shared between the 2 companies will be maximized and increased further. And the CEO and other staffers below the CEO, all understand this very well. Therefore, I don't think that they will reduce the efforts for maximization of the value of Lecanemab.

[Interpreted] Understood. Second question is -- well, you talked about the commitment, and also we have a high expectation to Lecanemab based upon the track record of Lecanemab so far. But because of the past situation, I'd like to ask this. Amyloid beta approval -- and there is a necessity for presenting the clinical efficacy. And the CEO also explained very well the efficacy side in clinical setting. And in terms of that Lecanemab, regarding the data, which will become available by the end of September, and the suppression of the progress of the disease, how -- what will be the level of values that you will need to obtain in order to penetrate the understanding of this CBR-SD -- CDR-SB? What will be the level of CDR-SB? I believe that there is not a consensus formed regarding the level of CDR-SB to be achieved. What is the opinion of Eisai based upon the Lecanemab data? Minus 0.5 or so was the data. So do you think that statistical significance is obtained and then it will be a success and can be commercially successful? Or with the statistical significance and then published in the peer-reviewed journal, do you think that there is not much big issue regarding the data.

[Interpreted] In the designing of the CLARITY AD, we agreed with FDA. In Study 201, CDR-SB data was the basis for that discussion and the statistical significance needs to be demonstrated with the power which has been incorporated in the design agreed between Eisai and FDA. Therefore, if we are able to proceed with the trial according to the protocol, that results will be obtained.

[Interpreted] Then what is the target in the data? Even if FDA grants an approval, but -- in NCD, there is a term, clinical usefulness. Even with statistical significance, how much expansion can you expect? And the access to the drug is not foreseen. But the target set by Eisai in recent discussions -- do you think that if the target is achieved and -- then access shall be also expanded accordingly? Do you think in that way?

[Interpreted] Yes. Of course, that is correct.

[Interpreted] Next, Morgan Stanley MUFG Securities, Muraoka-san, please. Can you hear me?

[Interpreted] Hello. This is Muraoka from Morgan Stanley. Can you hear me?

[Interpreted] Yes. Please go ahead.

[Interpreted] I have a question. Aducanumab. At this time, you have changed the royalty scheme. That I understand. And this may sound opportunistic. But aducanumab Phase IV is underway. And if there is undisputed results from aducanumab studies in the future, then in the future is there room for negotiation to increase the take for Eisai under this revised collaboration agreement?

[Interpreted] The answer is no.

[Interpreted] So the royalty scheme is fixed for the future?

[Interpreted] That is correct.

[Interpreted] I see. One more question. This is a hypothetical question. And I know that this is a rude question. But CLARITY AD results expected in September. If it does not show statistical significance, if that is the result, then what is your plan B at Eisai, to the extent that you're able to share with us, please?

[Interpreted] As I have been saying, large-scale Phase II study, 201 Study, was conducted as placebo-controlled comparative study based on that data. Phase III study is designed to show sufficient statistical significance. A number of patients are enrolled. So I believe that -- I'm confident that -- or I firmly believe that we will be able to show results. And beyond that -- this is not a shareholders meeting. But beyond that, I'm not able to answer a hypothetical question. And that is not something that I anticipate.

[Interpreted] Next question is from Daiwa Securities, Mr. Hashiguchi. Mr. Hashiguchi of Daiwa Securities.

[Interpreted] Yes. This is Hashiguchi speaking. My question is related to Page 32. You introduced the algorithm to predict the effect of the therapy. Regarding this algorithm to be provided, what kind of regulatory rules are needed to be met, including the differences among regions? Could you please tell us pathway to realize this algorithm? And at which timing do you think this algorithm will be realized? And also the progress made to date? And also regulations related to that? Could you please elaborate on these?

[Interpreted] Of course, when data is to be utilized, we need to obtain the informed consent. That is the precondition. And this is for Lecanemab. So for Lecanemab, there needs to be regulatory approval. So after going through such milestones for getting regulatory approval -- without doing so, we won't be able to utilize data for this kind of service. You're concerned, Mr. Hashiguchi, about the regulations and how to handle the data. We will make sure that we will not do this wrongly, and we will put focus on the compliance with regulations.

[Interpreted] As Mr. Naito mentioned, informed consent. With whom? From whom do you need to obtain informed consent?

[Interpreted] Data on hand or data from U.S. ADNI shall be utilized even for that purpose. The consent has been already taken from those patients in the past.

[Interpreted] Do you think that you need to obtain consent again? Or do you mean that informed consent needs to be obtained from those from whom data will be newly obtained?

[Interpreted] Mr. Hashiguchi, I would like to call upon specialists in this area to answer your question. Regarding this question, in charge of Japanese clinical side, Mr. [ Ogawa ], is going to respond.

[Interpreted] Do you hear me? I am in charge of the clinical development in Asia and Japan. My name is [ Ogawa ]. Regarding the development of the algorithm, as you pointed out, various -- different regions have different regulations. And informed consent was mentioned by Mr. Naito. The data that is being obtained so far will be utilized. So within what is specified in the informed consent, we are going to utilize the data. That is what we meant to say.

[Interpreted] Mr. Naito said that is important to obtain informed the consent, U.S. ADNI or J-ADNI or clinical trials for Lecanemab. Such consent to use the data for algorithm development has been already obtained?

[Interpreted] Well, Mr. Hashiguchi, I think you are asking questions which are too technical. I am trying to explain the overall direction of the business. Could you please ask such technical questions on a different occasion?

[Interpreted] Yes. Understood.

[Interpreted] The next person with a question is the last person in the queue for question. But we still have some time for questions. If you would like to ask a question, please raise your hand. But right now, we have Sakai-san from Credit Suisse. Mr. Sakai from Credit Suisse, please.

[Interpreted] Mr. Naito, what is your view -- or that is not a good way to start my question. Even before approval of ADUHELM -- and I think this is not limited to Alzheimer's, but value-based medicine has been always the focus for Mr. Naito. And you always also kept in mind patient access as the priority. And the philosophy, was it put to good use in the lessons of ADUHELM? The price is $56,000, as I understand. And I do understand that this is something that is not controllable by Eisai and half is held by Biogen. And what is value-based? Amongst HCPs, there is confusion. And there is also a negative reaction from HCPs, I think. So based on that, if Lecanemab has a very clean data, then it will not be a problem. But price setting, especially in the United States, since it will be a trailblazer, it will be important. And then in Japan and in Europe, the public health drug price setting is also important. So about Lecanemab price setting, the lessons are from ADUHELM. Do you think that you will be able to apply the lessons from ADUHELM?

[Interpreted] Mr. Sakai, what you pointed out is quite correct, I think. So -- for example, in rheumatoid or in cancer, there are antibodies and there is a certain price and at certain price these products are accepted in the society. But such argument is not understood. Alzheimer's disease is a disease that can happen to anyone. Many people have people or people who are close to them who are living with Alzheimer's disease. And the devastating effect of AD is well understood. And therefore, it has to be treated with a medicine. And the price range, what is the appropriate price range? This is very sensitive, beyond comparison with the drugs for other diseases. Now there are several models, and based on models from clinical trial data, how much delay in onset was achieved, including such parameters, the value of the drug is calculated. As far as calculation, applying formula is concerned -- and the price should be below what is suggested from such calculation formula because Alzheimer's disease is such an urgent pressing matter which can happen to anyone. So unless otherwise, I don't think it will be socially acceptable. That is my thinking. I hope this answers your question.

[Interpreted] I believe in a way, this is related to ESG. This can be a very important factor in ESG. And also -- you also have to achieve at the same time return for shareholders. This is difficult to achieve both at the same time. And I think Biogen is under enormous pressure from shareholders, much more so than Eisai, if I may say so. And the change in collaboration agreement may have been triggered by that, I suspect. So in that sense, you have a successful track record of having developed Aricept. You have an outstanding track record. And the stakeholders, including shareholders, they have high hopes on our company for 30 years. My question is -- this is related to final page, Page 40, on capital efficiency. I don't know if I pose this question to Mr. Naito. But PBR is around 3.5x. This is much higher than 1x. But it's moving in a very choppy way. Alzheimer's disease and oncology, these are risky areas. Mr. Naito has taken on the challenge of these risky areas. And in this information meeting, I think what you have indicated is that you will continue to take on the challenge of developing in these difficult therapeutic areas.

[Interpreted] Sakai-san, as you rightly mentioned, expectations from shareholders include tangible and intangible expectations. For example, tangible way in revenue, in terms of revenue. In the end, sales equals price multiplied by a certain number. Even if the price is high, the number multiplied by is -- if it's low, the sales will not be large. We have to look at price sensitivity and we have to establish appropriate price and maximize the multiple N. That is the basic principle. Lower price does not necessarily mean that the tangible revenue -- it doesn't mean that we are not meeting the expectations of shareholders by providing a tangible form of revenue. Rather, I believe that maximization of revenue at the appropriate price level is the way to satisfy shareholders' expectations. And regarding the latter part of the question, I think that is the nature of the pharmaceutical industry. So -- because of the high risk, sometimes it yields higher returns and sometimes it's all or nothing. And that is sometimes described as volatility. And sometimes, you criticize us for that volatile performance. But I think this is linked to the nature of the business we are in, in the pharmaceutical industry. Of course, the management has to make efforts and show their capabilities to level the performance and reduce volatility. But people who come to pharmaceutical companies must take on the challenge of unmet medical needs. Otherwise, we don't have raison d'etre. So please support us in that respect. Please understand the nature of the pharmaceutical industry. And I hope as an investor, Mr. Sakai, you will support Eisai. And Mr. Hashiguchi, I hope that you will support Eisai. Understand the nature of the pharmaceutical industry.

[Interpreted] It's been a while since I was able to hear such an enthusiastic comment.

[Interpreted] Maybe I have spoken too much.

[Interpreted] No, no.

[Interpreted] Thank you very much. It's a limited time available, so we'd like to ask Mr. Shimoyama of Sophia University to be the last person to ask.

[Interpreted] This is Shimoyama speaking. Do you hear me?

[Interpreted] Yes.

[Interpreted] First time in past 1 year to talk with you. In 2020 -- since November 2020, when advisory committee was held, I have been watching Eisai through financial results briefing. And ADUHELM has been discussed much. And I was impressed during this period of time. I think you have just touched upon oncology area of Eisai, the track record and performance growth in oncology, which impressed me a lot after Aricept. And it was very difficult to launch other Alzheimer's disease treatment. But you talked about Halaven and Lenvima. These are the 2 drugs that have been approved. And now there has been a lot of discussions about ADUHELM. But still we have seen the growth in revenue of Eisai, and that has been mainly driven by Lenvima. So I am now covering the business in oncology. You said that the pharmaceutical companies need to take on the unmet medical needs. I have 2 questions. In Eisai, I think in 1987, you started the research on oncology at Eisai when Mr. Naito was at Tsukuba Research Laboratories. And research on oncology was started at Eisai. What was the trigger for you to consider starting research in this area? And what was the belief of Mr. Naito when starting the research?

[Interpreted] I think there was a group which was specializing in the immunology, which was not making any drugs and they are just spending a lot of money. And they were a small group of 5, 6 people. And they did not leave the company, even -- they were like [Foreign Language]. Because of their persistence, which stimulated me on the extension of immunology, there was a potential business of oncology. Maybe I was convinced by them. I think that was how we started the research in oncology. After that -- well, sorry, taking time in important information meeting. Dr. Takashi Owa -- very edgy people are available in oncology research. They are very stubborn and they stick to their own belief and they continue to -- continue on the research to pursue and explore excellent compounds.

[Interpreted] My second question. You said that on the extension of immunology. I think it was interesting. Within yourself, Mr. Naito, I think after approval was granted, when did you start to think that Lenvima was going to be prominent? First approval was granted for thyroid cancer. The population of patients with thyroid cancer is very limited to about 1,000 in Japan. And when did you think that this is going to be promising with the expanding populations who will be indicated for this treatment?

[Interpreted] This is because of the Merck deal, deal with Merck. When we were approached for the deal, I thought that this drug could be very prominent and promising.

[Interpreted] Understood. Then immune checkpoint inhibitors and combination with such inhibitors may be promising. That's what you thought at the time as well.

[Interpreted] Well, Merck is a company which is drawing respects in the global pharmaceutical industry. If Merck recognizes value in this drug, we thought that we are sure -- we can be sure that there is such a promising value in that.

[Interpreted] I'm sorry. Now the time is ended for information meeting. So with this, we would like to conclude the meeting today. Thank you very much for taking time out of your busy schedule to participate in this meeting. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]