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

Thank you very much for coming despite your busy schedule. It's time. Now we would like to start the Eisai Company Limited Conference for Media and Investors on traditional approval for LEQEMBI in the U.S. Today's session is in a hybrid manner, on on-site and online. Those who are taking part in the meeting on site, you have a handout, so please confirm them and those who are taking part in online, please continue reviewing the meeting. Let me introduce the presenter and the Director Representative for Corporate Officer and CEO, Mr. Haruo Naito. CEO, Naito, the floor is yours.

So now, so they can be -- we obtained the traditional approval of the LEQEMBI. I would like to explain. So on July 6, and by the FDA that I am extremely happy to announce that Eisai has received the approval since the Aricept Research is at the late 1980 and in the past 40 years, it is a great pleasure for those of us in the pharmaceutical industry, particularly those of us who have interacted with the people living with Alzheimer's disease and the family for many years, so finally offer a treatment that address the underlying pathology of Alzheimer's. And we will do our utmost to deliver, and it is our pleasure. And then also that we will do our utmost to deliver this important treatment as soon as possible to more patients in the U.S. for whom it is indicated in order for patients and their families to fully realize the benefit it may provide. So once again, I would like to give you the recap of the benefit of LEQEMBI. So as shown in the Phase III and for the Clarity AD trial, and this was the largest global studies, so we call the Clarity trial. And as you see on the screen that can be demonstrated the efficacy across all endpoints, including the primary and then all key secondary endpoints with satisfactory significant result. On the far right, and also that the additionally -- so all the p value and then really the robustness of the result for the committees when they accept the p value is at point has to be below the 0.05. That is the one of the condition. So let's say, if there was a less than 0.1 -- 0.01, then data itself is quite innovative. Having said that, so p value is that we have 4 zeroes. It is indeed, I've been in this industry for many years. This is unprecedented. This is really, this is truly the statistically significance we demonstrated. So ARIA, this is the amyloid-related imaging abnormalities. This is the -- in short ARIA, the incident rate is low. That's what we understand. So our clinical benefit. So this is the aggregate form of the AB from the brain that is continuously accumulated in AD and then we have a robust amyloid beta removal. So these two are clinical benefits. And if you draw your attention to a primary endpoint, CDR-SB. So there was a reduction in clinical decline on the primary endpoint was 27%. So for all the loss of the orientation and the social activities, there are so many aspects that the physician will test. So it's all the accumulation. This is still one of the assessment scale for the -- this is the most used Alzheimer assessment scale and here, CDR-SB, so 25%, 27% of the decline was demonstrated, that will mean that -- suggesting that the patient remained in the earliest stage for 2 to 3 years longer. And as discussed by the FDA's advisory committee, the risk-benefit profile of the LEQEMBI was established and also, the Phase III clinical trial data are considered clinically meaningful. That was the conclusion. Additionally, the key point is that the results show a reduction in the clinical decline in ADCS MCI-ADL. So for the care partners, which is assessed by the care partner, just to observing how the patient is going to grocery shopping. So based on that, -- so those scaled assessment was -- clinical decline was 37%. And also as well as exploratory QOL-related endpoint, such as daily activities. So it's called the EQ-5D-5L. So really, it was declined by 49% and also the Zarit Burden interview was at 38% and the QoL-AD was at 56%. So indicating a reduction of decline in daily activities and the quality of life for patient, and this suggests the potential for significant reduction in the -- and this is really the clinical benefit. So looking at the modern society now. So Alzheimer's disease costs associated with the AD nursing, including family members and -- so invisible cost, it's not -- really the cost is not substantiated. So in Japan, those costs comes to JPY 7 trillion or looking at the national reimbursement, the half of it will go for the Alzheimer disease. So this will be the financial and social burden and also that leads to care partners' burdens are really coming from the AD and then this -- really the result suggests to mitigate those burden. So as I said before, LEQEMBI is a clinical meaningful. Even for the aspect of the nursing care, the social value we can create through LEQEMBI. Next, regarding the traditional approval level, I would like to point it out. So our accelerated approval was based on a reduction of the [ Ab plaque ] in the result of Phase II study and this time, our traditional approval was granted in accordance with the result of the confirmatory Phase III and so there was really demons -- with this Phase III study demonstrated the slowing of progression. That is really the key aspect and the difference from the accelerated approval. Indication is for the LEQEMBI is an indicator for the treatment of Alzheimer's disease. And this is the treatment with a LEQEMBI should be initiated in patients with the mild cognitive impairment or mild dementia stage of disease. And that population in which treatment was initiated in clinical trial, those dosing administration, it is administered and in patient with a confirmed presence of amyloid beta pathology, 10-milligram per kilogram is administered as an intravenous infusion once every 2 weeks. No titration is required. So from the initial dose and then there was no need to titrate. Regular monitoring of amyloid-related imaging abnormality also known as ARIA by MRI and also that -- so prior to the 5th, 7th and 14th infusions once the treatment started. So compared to placebo, the most common adverse reactions at approximately 10%. And higher incidents compared are infusion-related reaction and it's quite mild. And as I mentioned before, ARIA and mainly asymptomatic and some are symptomatic, such as headache, or it's rare serious risk, but it's rare. And then once again, headache. In addition, that label contains a boxed warning. Regarding the occurrence of ARIA in regard to anti-amyloid-beta antibodies. So I would like to talk about -- continue to talk about the boxed warning. So for this boxed warning, it's for the entire anti-AV antibodies for the ARIA. So this is the -- there is really happens -- for this system we have to take a cautionary action. So ARIA, the timing of the incident is that we have to be very careful. So it is that really we understand I note that it is important to note, the genotype of the ApoE4 homo patient is about the 10%. So ApoE4 homozygotes and also that the patient for ApoE4 homo are believed to account for approximately 15% of AD patients and have a higher risk of ARIA compared to ApoE4 hetero and noncarriers. So genotype testing should be performed and prior to initiation of the treatment of LEQEMBI, to inform the patient potential relative risk of developing ARIA across those ApoE4 genotype. And prior to testing presenting, a physician should discuss with the patient, the incident of ARIA across genotype and then implication of genetic testing result. After the genetic testing result, the administration decision should be made after providing the patient with the information about the benefits and relative risk of the treatment. If the patient is found to be ApoE4 homozygotes, administration should be made after providing the patient and the family with the information about the consequences; risk and the benefit of the treatment. It's rare. Still, there is a serious side effect and that makes sure that the knowing, understanding and then make a final decision. So in the U.S. -- so it was the first to obtain a traditional approval in the U.S. This is the first anti-amyloid beta drug. This is really the purpose is to reduce the amount of the amyloid-beta plaque in the play. So make sure that all the urge, the consideration of the establishment of the benefit of LEQEMBI for the treatment of Alzheimer's disease and the potential risk of the serious adverse event associated with the ARIA when deciding where to initiate treatment with the LEQEMBI. Eisai will work with the prescribing physicians to fully communicating information with a high level of transparency and translate on our human health care concept. An example of this is the development and deployment of Understanding ARIA. This is a multifaceted educational initiative to further advance understanding in health care professionals of the real-world management and monitoring ARIA called Understanding ARIA. And so far, we received an access of 5,000x. Understanding ARIA is the imaging experts and core subject matter experts. The clinical study and materials and programs are provided in a real-world setting to reduce the risk of ARIA. This program has been significantly contributing for that purpose. As for novel innovative drug, having a boxed warning is not the rare case. Referring to the latest example, the approved by FDA in 2022, 12 out of 32 [ drugs ] accounting for 32% and particularly including the 8 out of 19 first-in-class [ drugs ] accounting for 42% have boxed warning. Now I would like to talk about the readiness for access expansion after traditional approval in the U.S. After the accelerated approval in January, we have been preparing for expansion of access since then. As for the diagnosis, infusion and monitoring, preparations are on progress. And so far, 1,200 neurologists are ready to prescribe LEQEMBI and this figure will grow moving forward. An integrated delivery network adoption, this is quite important. So we are working towards that proactively besides training for infusion center and facilitate understanding of ARIA, understanding ARIA program are proactively implemented for the purpose of the correct use of LEQEMBI. Furthermore, in the field, regional thought leader liaisons, neurology account specialists, market access, medical and MSO are utilizing digital tools and multilayered digitally enabled approach preparing for the launch of the product. As I mentioned earlier, the important IDN in the U.S. are turning to 100 and there has been increase in the number of IDN adopting LEQEMBI prescription and insurance coverage for LEQEMBI initiated by Medicare. According to CMS on the day of granting full approval, a traditional approval, reimbursement started. That was a comment being released, and that was actually practiced. So mild, cognitive impairment or early AD patients, LEQEMBI access will be promoted or accelerated and registry portal is quite simple and easy to use. So the information requiring input is within the conventional range of the required information on the medical record. So burden is limited. Actually, this morning, I viewed CMS video by getting access to the portal site and particularly viewing the instruction video, and that's the -- the total length was less than 10 minutes. It was very easy to understand instruction. The input required time when you get used to it, then it should be completed by 5 minutes. So HCPs and staff members require 5 to 10 minutes to input necessary information. And as for information input, that is not to be done once in every 6 months. So information update will be made in every 6 months. So no complex input is required in [indiscernible](24:36) code, and this is quite important to reimbursement. So the invoicing code is attached. This is already assigned. So from today, reimbursement is available. So practically, it is not quite practical registry in a portal that can be used from the day 1. In conclusion. Allow me to say a few words. Under the corporate concept of HHC, we have been working to relieve anxieties of AD patients and the families as our priority. All employees spend 1%, which is approximately 2.5 days in a year of their working hours in spending time with patients. Through this, we have gained a deeper understanding of the true feelings of the patients and their families and build relationships based on empathy. Now we are proud to offer LEQEMBI on the traditional approval in the U.S., providing these patients as important AD treatment option, which they have been anxiously waiting for. We are committed to closely collaborating with patients, their families, care partners, physicians, nurses, payers and the governments to ensure that LEQEMBI achieves its maximum impact in helping the AD community. Last but not least, we appreciate the collaboration with our global partner, Biogen and BioArctic.

Thank you. So we would like to move on to QA session. So please ask 1 question per person. If the time allows, you may ask another question. So, first of all we would like to take question from the floor. [Operator Instructions]

My name is [ Miazaki of Asahi ] newspaper. Since I have 1 question, so how the U.S. inform the update back in 2021 accelerated approval and this time, Eisai led for this approval back in 2021 for the accelerated approval. So what worked well? And then which -- what worked better compared to 2021? Just looking into this traditional approval. If you can share your comment Mr. CEO.

So early this morning, I think of the quarter after 4 a.m., I went on in the U.S. and also Lynn Kramer Chief Clinical Officer, they informed me for obtaining traditional approval. So Label discussion has continued with the FDA. And at the end, the FDA granted the traditional approval, I was nervous. I was anxiously waiting for the result. I am relieved or I could really achieve my mission. So the previous approval, just to compare with the previous approval. So Clarity AD study. This is the Phase III study. And this is just to think back, during the pandemic COVID-19, so the peak of the pandemic, so that was when the Phase III study was running, they centralized the clinical trial. So most of them were diagnosed remotely and confirmed clinically and then assessed safety, of course, that we obtain the permission from FDA and also so administration, but HCPs, visited the patient residence, however. So we really increased the number of enrollment because of that. But we could follow our time line to complete the study. So all the endeavors get together, that went to our Clarity AD study. So that just came to my mind. Clarity study result, as I said before, it was in my opinion, was a perfect result. This was a robust data we obtained, it tells the entire story. LEQEMBI, we would like to offer as many as possible. That is what the label is saying and also the CMS reimbursement endeavors. So that's all of them really the result of all the different aspects.

So let's move on to the next question. So there was the second row by the windows.

Thank you. JPMorgan [indiscernible] congratulations on receiving the traditional approval. This is a symbolic event for Japanese pharma industry. So I have a question on diagnosis. Gene testing and PET are used. So as for gene testing, I think this is a newly recommended one. The gene testing penetration into the marketplace, would it play a proactive role for the better penetration and amyloid beta and when the reimbursement timing would you anticipate?

As for gene testing. There are a number of approaches available PCR, [ immunoassay ]. Those are the conventional approaches. And multiple companies are offering their service as well as in a reimbursed under an accelerated approval environment after conducting gene testing and infusion took place. Now that's the majority case. By doing so, whether the infusion decreased or not, actually, that is not the case. So it is an early introduction of gene testing, there will be a huge economic burden. This will not cause any huge economic burden for the patient. And as for the subject population for infusion, no major impact on the figure. And as for PET in the current reimbursement environment that the CMS is announcing to relax the current environment but the substance hasn't been announced yet. Having said that, at the next chance or next opportunity, not too distant future I hope, PET reimbursement condition is anticipated to be mitigated. So Alzheimer's disease diagnosis and treatment, the situation will be hugely improved. That's our assumption. Thank you very much.

In several months' time, could you give us a sense?

That's point we want to know, we are eager to know but that is a decision to be made by CMS. So it's hard to anticipate, but we hope as early as possible.

Let's move on to the next question. So second person, the second row.

My name is Muraoka of Morgan Stanley. So first, I would like to extend a big congratulation for the approval. So this drug, so in order for -- to offer this product to as many patients possible for the subcutaneous and also the steady result of the maintenance dose. So at this point, for the subcutaneous indication, do you have any time line, that timing, if you have any update? Would you please share with us?

We have already announced, there is no change. So we are going to submit NDA filing within the end of this year, but that means that the next March.

So can we expect anything from -- at the CTAD?

Are you talking about the data? So now I would like to hand it over to Ivan Cheung in order to answer to that question, please. Ivan?

Thank you very much for your question. We are in the planning to share more data about the subcutaneous auto-injector formulation at CTAD later this year. As you know, in the current open-label extension study of Clarity AD, we have the subcutaneous auto-injector cohort enrolling both patients converting from IV into subcutaneous in the open-label extension as well as the novel patients newly recruited into the subcutaneous cohort, so we can see the data of subcutaneous in both settings.

Moving on to the next question.

My name is Sakai from Credit Suisse. Since the accelerated approval in the U.S. hospitals LEQEMBI has been utilized inclusive of the reimbursement. I think the military hospital, the LEQEMBI has being utilized on almost a full-fledged basis. How is the progress of the prescription in the U.S. so far? And at the last session, Mr. Ivan Cheung mentioned the accumulated number of the patients as of March, it was 10,000. So are you on track of that? I also would like to invite Mr. Ivan Cheung to respond to the question.

Thank you for the question. We believe to get to that exit number of 10,000 individuals, but the work starts now with the traditional approval and most importantly, the broad access by the CMS as you heard from CEO Naito earlier. The past 6 months under accelerated approval, yes, of course, we have patients on LEQEMBI, but the primary goal in the past 6 months have been to get these in health systems across the country ready for the patient journey. We've made good progress. So starting tonight, tomorrow, we will be working very hard to stop helping health systems across the country to bring these patients on to LEQEMBI.

Ivan, could you please touch on the VA?

Yes, with regard to the VA. As you know, the VA allows use of LEQEMBI under a criteria that the VA has published and similar to other health systems across the country, the VA is working towards setting up the patient journey in different VA hospitals across the country.

Next question. Next one, the third from the front by the window.

My name is Haruta of the Credit Suisse. So congratulation on the traditional approval. This time, according to the Nikkei paper, so in the U.S., you are equipped with the 400 MR in place. So what is really the magnitude of the commercial activities, not just MR, but all the medical or the market access in total, you mentioned the 400 in the past. What is really the U.S. organization, but what is really the 400 personnel can really equip the magnitude of the commercially. If you can explain, please.

Yes, this is Ivan. Thank you very much for the question. The 400 number you mentioned covered different teams that you heard from CEO Naito earlier, not only the MRs, but also different market access teams, the thought leader management team, also the medical teams. In the United States for this launch, the key is to get all the health systems ready for the patient journey. We believe a different model is required not only based on the MRs, but a multidisciplinary, multifunctional approach is what we will be deploying which has seen good success so far, and we will now be expanding that model and the 400 number is the total. Thank you.

I'm [ Morokawa ], the reporter of [ Kyoto ] News. After receiving U.S. approval, of course, now they will be increasing expectation in the Japanese market. What are the [indiscernible] in Japan and opportunity? Could you comment on that?

On that question, Japanese AD Medical Affairs person Nakahama will respond.

Thank you for the question. I'm Nakahama. I'm in-charge of regulatory affairs in Japan. Japanese, the review, the situation has been making the smooth progress in amyloid, PET, testing, drug, additional indication for MCI, we are making on track progress. It's now still under review. So I apologize that I'm not able to disclose the details, but we are at the final phase. The committee and the meeting by the Minister of Health. When the meeting is held prior to the announcement timing, I think, you can get to know the details. So by September, we are hoping to receive approval. The AD patients and family members are waiting to receive prescription and testing. We want to deliver drugs as early as possible.

On to next question, the second and then the third from the front.

My name is Simoyama of the nonfiction rider. Congratulations. So regarding the boxed warning explanation, I have a question on this. So according to your explanation, prior to testing, so physicians, genetic testing. So undergo genetic testing and then have a discussion with the patient.

So having that result, so the patient, so they have a right not to go through receiving a genetic testing. That is correct. So ARIA, depending on the genotype, so the incident rate different from the genotypes, however. So patient or patient family or I understand that. But no, I do not wish to receive the genetic testing. But even for that situation, they have -- they can receive the LEQEMBI. So for the Alzheimer's genetic testing in Japan, I think the same goes for the same in the U.S. So there was really the series of the genetic testing to receive the treatment. But for the ApoE4 that's not really followed that patient flow. Once that patient is informed by the physician and then you can take any options. Well, that's according to part label. So physicians and the patient have a discussion on both ends. And then come to conclusion. So there was no genetic counseling personnel. No. So that's -- Ivan Cheung, would you please?

Thank you. As CEO Naito explained, patient autonomy needs to be respected and the FDA understands this point very well. Thank you.

Ivan, I think prior to the prescription, they need to discuss with the patient what is the meaning of the result of the genotype testing, right? Could you please explain that?

As you can see in the boxed warning, the FDA is asking prescribers before any test job. Prescribers need to talk to the patients about the implications of genetic testing results. Thank you.

So isn't it necessary for genetic counselor to intervene that process?

Lynn or Michel, could you please answer to the question? Lynn, please.